SHANKARRAO MOHITE PATIL SAHAKARI BANK LTD,SOLAPUR V. ACIT CIRCLE 1, SOLAPUR

ITA 491/PUN/2025

AI Insights

The case involves Shankarrao Mohite Patil Sahakari Bank Ltd., which appealed against the order of the Ld. CIT(A) / NFAC confirming an addition of Rs.37,22,813 made by the Assessing Officer under sections 143(3) r.w.s. 147 of the Income Tax Act, 1961. The bank, a cooperative society, had its activities halted due to liquidation as directed by the Reserve Bank of India, which affected its compliance and submission of details during the assessment proceedings. The Tribunal considered the circumstances of the bank's liquidation and the lack of submissions due to the cessation of activities, deciding to provide another opportunity for the bank to present its case.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 705958 (ITAT-PUNE)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-07-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: 2011-2012
• Laws Referred To: Income Tax Act, 1961, Banking Regulation Act, 1949
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AKHILESH SRIVASTVA
• Assessee Lawyers: PRAMOD S SHINGTE
• Keywords: Competent authority; Liquidation
• Section: 148; 143(3); 142(1); 56; 40(a)(ia)

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH “B”, PUNE BEFORE SHRI R. K. PANDA, VICE PRESIDENT AND MS. ASTHA CHANDRA, JUDICIAL MEMBER ITA No.491/PUN/2025 Assessment year : 2011-12 Shankarrao Mohite Patil Sahakari Bank Ltd. Post Box No.9 at Post Akluj, Malshiras, Solapur – 413101 Vs. ACIT, Circle 1, Solapur PAN: AAAAS1270P (Appellant) (Respondent) Assessee by : Shri Pramod S Shingte Department by : Shri Akhilesh Srivastva, Addl.CIT Date of hearing : 01-07-2025 Date of pronouncement : 01-07-2025 O R D E R PER R.K. PANDA, VP: This appeal filed by the assessee is directed against the order dated 27.01.2025 of the Ld. CIT(A) / NFAC, relating to assessment year 2011-12. 2. Although a number of grounds have been raised by the assessee, however, these all relate to the ex-parte order of the Ld. CIT(A) / NFAC in confirming the addition of Rs.37,22,813/- made by the Assessing Officer in the order passed u/s 143(3) r.w.s. 147 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’). 3. Facts of the case, in brief, are that the assessee is a co-operative society and filed its return of income on 16.08.2011 declaring total income of Rs.2,50,27,313/-. 2 ITA No.491/PUN/2025 The case was selected for scrutiny. Accordingly, statutory notices u/s 143(2) and 142(1) of the Act were issued and served on the assessee in response to which the AR of the assessee filed the requisite details. The Assessing Officer completed the assessment on 24.01.2014 determining the total income at Rs.3,01,06,640/- by making addition on account of interest on sticky advances of Rs.45,89,499/-, amortization of premium on Govt. securities of Rs.4,60,592/- and excess deduction claimed u/s 36(1)(viia) of Rs.29,242/- totaling to Rs.50,79,333/-. The assessee preferred an appeal and the Ld. CIT(A) deleted the addition on account of interest on sticky advances and amortization of premium on Govt. securities. The Revenue filed appeal before the Tribunal which was decided in favour of the assessee. 4. Subsequently, a notice u/s 148 of the Act was issued on 24.03.2018 after recording reasons and obtaining the approval from the competent authority. The assessee in response to the same field its return of income declaring total income of Rs.2,50,27,310/-. Subsequently statutory notices u/s 143(2) and 142(1) of the Act were issued and served on the assessee in response to which the assessee filed the requisite details from time to time. The Assessing Officer completed the assessment u/s 143(3) r.w.s. 147 of the Act on 30.11.2018 determining the total income of the assessee at Rs.2,87,50,130/- by making the following additions: a) addition of Rs.1,63,489/- on account of disallowance of interest paid to HUF u/s 40(a)(ia) of the Act; b) addition of Rs.35,30,082/- on account of disallowance of interest paid to co-operative society u/s 40(a)(ia) of the Act; and 3 ITA No.491/PUN/2025 c) addition of Rs.29,242/- on account of disallowance of excess deduction claimed u/s 36(1)(viia) of the Act. 5. Since the assessee did not file any submission before the Ld. CIT(A) / NFAC despite number of opportunities granted, the Ld. CIT(A) / NFAC dismissed the appeal filed by the assessee. 6. Aggrieved with such order of the Ld. CIT(A) / NFAC, the assessee is in appeal before the Tribunal. 7. The Ld. Counsel for the assessee submitted that the bank has gone under liquidation for which the activities were stopped and therefore, there was no compliance from the side of the assessee. He filed a copy of the direction of the Reserve Bank of India u/s 35A r.w.s. 56 of the Banking Regulation Act, 1949 dated 23.02.2023 to this effect. He submitted that the issue involved in the present appeal is squarely covered in favour of the assessee by various decisions of the Co- ordinate Benches of the Tribunal. He accordingly submitted that either relief should be granted to the assessee or the matter may be restored to the file of the Ld. CIT(A) / NFAC or the Assessing Officer with a direction to grant one more opportunity to the assessee to substantiate its case by filing the requisite details. 8. The Ld. DR on the other hand heavily opposed the arguments advanced by the Ld. Counsel for the assessee and submitted that despite number of opportunities granted the assessee never bothered to make any submission before 4 ITA No.491/PUN/2025 the Ld. CIT(A) / NFAC. He accordingly submitted that the order of the Ld. CIT(A) / NFAC dismissing the appeal filed by the assessee should be upheld and the grounds raised by the assessee be dismissed. 9. We have heard the rival arguments made by both the sides, perused the orders of the Assessing Officer and Ld. CIT(A) / NFAC and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us. It is an admitted fact that despite number of opportunities granted the assessee did not make any submission for which the Ld. CIT(A) / NFAC dismissed the appeal filed by the assessee. It is the submission of the Ld. Counsel for the assessee that given an opportunity, the assessee is in a position to substantiate its case by filing the requisite details before the Assessing Officer. Considering the totality of the facts of the case and in the interest of justice, we deem it proper to restore the issue to the file of the Assessing Officer with a direction to grant one final opportunity to the assessee to substantiate its case by filing the requisite details and decide the issue as per fact and law. The assessee is also hereby directed to appear before the Assessing Officer on the appointed date and make its submissions, if any, without seeking any adjournment under any pretext failing which the Assessing Officer shall be at liberty to pass appropriate order as per law. We hold and direct accordingly. The grounds raised by the assessee are accordingly allowed for statistical purposes. 5 ITA No.491/PUN/2025 10. In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open Court at the conclusion of hearing itself i.e. on 1st July, 2025. Sd/- Sd/- (ASTHA CHANDRA) (R. K. PANDA) JUDICIAL MEMBER VICE PRESIDENT पुणे Pune; दिन ांक Dated : 1st July, 2025 GCVSR आदेश की प्रतितिति अग्रेतिि/Copy of the Order is forwarded to: 1. अपीलार्थी / The Appellant; 2. प्रत्यर्थी / The Respondent 3. 4. The concerned Pr.CIT, Pune DR, ITAT, ‘B’ Bench, Pune 5. गार्ड फाईल / Guard file. आदेशानुसार/ BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अधिकरण ,पुणे / ITAT, Pune S.No. Details Date Initials Designation 1 Draft dictated on 01.07.2025 Sr. PS/PS 2 Draft placed before author 01.07.2025 Sr. PS/PS 3 Draft proposed & placed before the Second Member JM/AM 4 Draft discussed/approved by Second Member AM/AM 5 Approved Draft comes to the Sr. PS/PS Sr. PS/PS 6 Kept for pronouncement on Sr. PS/PS 7 Date of uploading of Order Sr. PS/PS 8 File sent to Bench Clerk Sr. PS/PS 9 Date on which the file goes to the Head Clerk 10 Date on which file goes to the A.R. 11 Date of Dispatch of order "