M/s District Co operative Bank Ltd., Barabanki V. Income Tax Officer-V(1), Lucknow

MA 68/LKW/2015

• Counselvise Citation: [2015] 124 COUNSELVISE.COM (IT) 3465 (ITAT-LUCKNOW)
• Duration Of Justice: 2 month(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 13-08-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 12-06-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: T P SINGH
• Assessee Lawyers: B P YADAV COST ACCOUNTANT
• Keywords: Opportunity of being heard; Bad and doubtful debts

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH A , LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV , JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER M.A. NO.68 /LKW/20 15 (ARISING OUT OF I.T.A.NO.75/LKW/2012) ASSESSMENT YEAR:2007 - 08 DISTT. CO - OPERATIVE BANK LTD., FAIZABAD ROAD, BARABANKI. PAN:AAAAD2777N VS. INCOME TAX OFFICER - V(1), LUCKNOW. (A PPLICANT ) (RESPONDENT) APPLICANT BY SHRI B. P. YADAV, COST ACCOUNTANT RESPONDENT BY SHRI T. P. SINGH, D. R. DATE OF HEARING 24/07/2015 DATE OF PRONOUNCEMENT 1 3 /08/2015 O R D E R PER A. K. GARODIA, A.M. THIS MISC. APPLICATION IS FILED BY THE ASSESSEE POINTING OUT CERTAIN MISTAKES IN THE TRIBUNAL ORDER DATED 16/01/2015 IN I.T.A. NO.75/LKW/2012. 2. IT IS SUBMITTED BY THE ASSESSEE THAT THE TWO APPEALS OF THE ASSESSEE FOR ASSESSMENT YEAR 2006 - 07 AND 2007 - 08 WERE HEARD TOGETHER AND REGARDING THE ISSUE RAISED IN ASSESSMENT YEAR 2006 - 07, IT WAS SUBMITTED BY LEARNED A.R. OF THE ASSESSEE THAT THE PROVISION OF RS.389.89 LAC MADE IN ASSESSMENT YEAR 2006 - 07 AND DENIED BY THE DEPARTMENT WAS TAKEN BACK AS INCOME IN SUBSEQUENT ASSESSMENT YEAR I.E. 2010 - 11 AND ONWARDS AND THEREFORE, SUITABLE DIRECTION MAY BE GIVEN TO THE ASSESSING OFFICER FOR EXCLUSION OF THE INCOM E IN THE YEAR OF WRITING BACK OF THE PROVISION BUT REGARDING ASSESSMENT YEAR 2007 - 08, IT WAS ARGUED BY LEARNED A.R. OF THE [ 2 ] ASSESSEE THAT AS PER THE REQUIREMENT OF THE ACT, CLAIM OF PROVISION FOR BAD AND DOUBTFUL DEBTS IS ALLOWABLE BUT THE DECISION OF THE T RIBUNAL IN ASSESSMENT YEAR 2007 - 08 IS ALSO IN LINE WITH ASSESSMENT YEAR 2006 - 07 AND THIS IS APPARENT MISTAKE, WHICH SHOULD BE RECTIFIED AND THE DECISION IN ASSESSMENT YEAR 2007 - 08 SHOULD BE AFTER CONSIDERING THE AMENDED PROVISIONS OF SECTION 36(1)(VIIA) OF THE ACT. IN COURSE OF HEARING , LEARNED A.R. OF THE ASSESSEE REITERATED THE SAME CONTENTION S WHICH WERE RAISED IN THE MISC. APPLICATION. 3. LEARNED D.R. OF THE REVENUE SUBMITTED THAT THERE IS NO MISTAKE IN THE TRIBUNAL ORDER. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FIND THAT THERE IS AN AMENDMENT IN SECTION 36(1)(VII A ) WITH EFFECT FROM 01/04/2007 AND THEREFORE, IN ASSESSMENT YEAR 2007 - 08, THE AMENDED PROVISIONS ARE APPLICABLE. AS PER THE AMENDMENT IN SECTION 36(1)(VII A ) OF THE ACT, A CO - OPERAT IVE BANK OTHER THAN A PRIMARY AGRICULTURAL CREDIT SOCIETY OR A PRIMARY CO - OPERATIVE AGRICULTURAL AND RURAL DEVELOPMENT BANK IS ALSO ELIGIBLE FOR DEDUCTION U/S SECTION 36(1)(VIIA) OF THE ACT WITH EFFECT FROM ASSESSMENT YEAR 2007 - 08. IN VIEW OF THIS AMENDME NT WITH EFFECT FROM ASSESSMENT YEAR 2007 - 08, IT APPEARS TO BE QUITE POSSIBLE THAT SUCH AN ARGUMENT WAS RAISED BY LEARNED A.R. OF THE ASSESSEE THAT IN ASSESSMENT YEAR 2007 - 08, THE MATTER SHOULD BE DECIDED IN LINE WITH THE AMENDMENT IN SECTION 36(1)(VIIA) OF THE ACT BUT IN THE IMPUGNED TRIBUNAL ORDER, THE DECISION HAS BEEN TAKEN BY THE TRIBUNAL IN BOTH THE YEARS I.E. ASSESSMENT YEAR 2006 - 07 AND 2007 - 08 TOGETHER AND THE AMENDMENT IN SECTION 36(1)(VIIA) WITH EFFECT FROM ASSESSMENT YEAR 2007 - 08 HAS NOT BEEN CONS IDERED AT ALL. SINCE THE AMENDMENT IS THERE IN THE ACT FROM ASSESSMENT YEAR 2007 - 08, IT IS AN APPARENT MISTAKE IN THE TRIBUNAL ORDER BECAUSE THE AMENDMENT WAS NOT CONSIDERED AND HENCE, WE DECIDE THE APPEAL OF THE ASSESSEE IN [ 3 ] ASSESSMENT YEAR 2007 - 08 AFTER CONSIDERING THIS AMENDMENT IN SECTION 36(1)(VIIA) OF THE ACT WITH EFFECT FROM ASSESSMENT YEAR 2007 - 08. 5. WHEN WE DO SO TO DECIDE THE APPEAL FOR ASSESSMENT YEAR 2007 - 08 IN LINE WITH AMENDMENT IN SECTION 36(1)(VIIA) OF THE ACT, WE FIND THAT AS PER PARA 4(3 ) OF THE ORDER OF LEARNED CIT(A) IN THAT YEAR, THE DECISION OF CIT(A) IS ON THE BASIS THAT AS PER SECTION 36(1)(VIIA), THE DEDUCTION U/S 36(1)(VIIA) ON ACCOUNT OF PROVISION FOR BAD AND DOUBTFUL DEBTS BY A SCHEDULED OR NON SCHEDULE D INDIAN BANK IS ALLOWABLE AS A DEDUCTION WITHIN THE PRESCRIBED LIMITS AND AS PER EXPLANATION BELOW THE SECTION, THE EXPRESSION SCHEDULED BANK DOES NOT INCLUDE A CO - OPERATIVE BANK. HENCE, IT IS SEEN THAT THE CIT(A) HAS ALSO NOT CONSIDERED THE AMENDMENT IN SECTION 36(1)(VIIA) WITH EFFECT FROM 01/04/2007. MOREOVER, WHEN WE GO THROUGH THE PROVISIONS OF SECTION 36(1)(VIIA) AFTER AMENDMENT, WE FIND THAT APART FROM THIS AMENDMENT IN SECTION 36(1)(VIIA) THAT A CO - OPERATIVE BANK OTHER THAN A PRIMARY AGRICULTURAL CREDIT SOCIETY OR A PRIMAR Y CO - OPERATIVE AGRICULTURAL AND RURAL DEVELOPMENT BANK IS ALSO ELIGIBLE FOR DEDUCTION U/S SECTION 36(1)(VIIA) OF THE ACT IN RESPECT OF PROVISION FOR BAD AND DOUBTFUL DEBTS , TH ERE IS ALSO ONE MORE AMENDMENT IN THE SAME SECTION BY WAY OF IN CLUSION OF EXPLANA TION (VI), WHICH DEFINES THE TERM CO - OPERATIVE BANK, PRIMARY AGRICULTURAL CREDIT SOCIETY, PRIMARY CO - OPERATIVE AGRICULTURAL AND RURAL DEVELOPMENT BANK AND IT IS SPECIFIED IN THIS EXPLANATION THAT THESE TERMS SHOULD HAVE SAME MEANING AS ASSIGNED TO THEM IN THE EXPLANATION TO SUB SECTION (4) OF SECTION 80P OF THE ACT. 6. AS PER SUB SECTION (4) OF SECTION 80P, IT IS SEEN THAT IT IS SPECIFIED THEREIN THAT CO - OPERATIVE BANK AND PRIMARY AGRICULTURAL CREDIT SOCIETY SHALL HAVE THE MEANINGS RESPECTIVELY ASSIGNED TO THEM IN PART V OF THE BANK ING REGULATION ACT, 1949. IT IS ALSO SPECIFIED IN THE SAME EXPLANATION THAT PRIMARY CO - OPERATIVE AGRICULTURAL AND RURAL DEVELOPMENT BANK MEANS A SOCIETY HAVING ITS AREA OF OPERATION CONFINED TO A TALUK AND THE PRINCIPAL [ 4 ] OBJECT O F WHICH IS TO PROVIDE FOR LONG TERM CREDIT FOR AGRICULTURAL AND RURAL DEVELOPMENT ACTIVITIES. HENCE, IT IS NECESSARY TO EXAMINE AND FIND OUT AS TO WHETHER THE ASSESSEE IS SATISFYING THE REQUIREMENT S OF EXPLANATION IN SUB SECTION (4) OF SECTION 80P OR NOT. SINCE THERE IS NO FINDING OF ANY OF THE AUTHORITIES BELOW ON THIS ASPECT AND NO MATERIAL HAS BEEN PLACED BEFORE US IN THIS REGARD, WE FEEL THAT THIS ISSUE SHOULD GO BACK TO CIT(A) FOR FRESH DECISION IN THE LIGHT OF AMENDMENT IN SECTION 36(1)(VIIA) OF THE ACT AFTER CONSIDERING THE DEFINITION OF RESPECTIVE TERMS AS PER AMENDMENT IN SECTION 36(1)(VIIA) OF THE ACT ETC. AND AS PER EXPLANATION BELOW SUB SECTION (4) OF SECTION 80P OF THE ACT. HENCE, WE SET ASIDE THE ORDER OF CIT ( A) IN A.Y. 2007 08 AND RESTORE THE MATTER BACK TO HIM FOR FRESH DECISION IN THE LIGHT OF ABOVE DISCUSSION AFTER AFFORDING REASONABLE OPPORTUNITY OF BEING HEARD TO BOTH THE SIDES. 7. AS PER ABOVE PARA , WE HAVE RECTI FIED THE IMPUGNED TRIBUNAL ORDER AND AS A RESULT, THE APPEAL OF T HE ASSESSEE FOR ASSESSMENT YEAR 2007 - 08 STANDS ALLOWED FOR STATISTICAL PURPOSES AS AGAINST EARLIER DECISION OF THE TRIBUNAL THAT THE APPEAL OF THE ASSESSEE STANDS DISMISSED. 8. IN THE RESULT, THE MISC. APPLICATION OF THE ASSESSEE STANDS ALLOWED IN THE TERM S INDICATED ABOVE. (ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE) SD/. SD/. (SUNIL KUMAR YADAV) ( A. K. GARODIA ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 1 3 /08/2015 *C.L.SINGH COPY OF THE O RDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. CONCERNED CIT 4. THE CIT(A ) 5. DR, ITAT, LUCKNOW ASSTT. REGISTRAR