Mahalakshmi Cooperative Bank Ltd.,, Udupi v. DCIT, Udupi

ITA 659/BANG/2010 | misc
Pronouncement Date: 29-12-2010 | Result: Allowed

Appeal Details

RSA Number 65921114 RSA 2010
Bench Bangalore
Appeal Number ITA 659/BANG/2010
Duration Of Justice 7 month(s) 16 day(s)
Appellant Mahalakshmi Cooperative Bank Ltd.,, Udupi
Respondent DCIT, Udupi
Appeal Type Income Tax Appeal
Pronouncement Date 29-12-2010
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted A
Tribunal Order Date 29-12-2010
Date Of Final Hearing 29-12-2010
Next Hearing Date 29-12-2010
Assessment Year misc
Appeal Filed On 13-05-2010
Judgment Text
SP.107 & ITA.659/BANG/2010 PAGE - 1 IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCH 'A' BANGALORE BEFORE DR. O. K. NARAYANAN VICE PRESIDENT AND SMT. P. MADHAVI DEVI JUDICIAL MEMBER I.T.A NO.659/BANG/2010 (ASSESSMENT YEAR : 2007-08) AND STAY APPLICATION NO.107/BANG/2010 (IN I.T.A NO.659/BANG/2010) (ASSESSMENT YEAR : 2007-08) M/S. MAHALAKSHMI CO-OP BANK LTD. I FLOOR 'SHIVAKRUPA' MARUTHI VEETHIKA UDUPI 576 101 .. APPELLANT V. DEPUTY COMMISSIONER OF INCOME-TAX CIRCLE -1 UDUPI .. RESPONDENT APPLICANT BY : SHRI. R. VIAYARAGHAVAN ADVOCATE RESPONDENT BY : SHRI. G. V. GOPALA RAO COMMISSION ER OF INCOME-TAX-I O R D E R PER DR. O. K. NARAYANAN VICE PRESIDENT : THIS APPEAL IS FILED BY THE ASSESSEE CO-OPERATIVE BANK. THE RELEVANT ASSESSMENT YEAR IS 2007-08. THE APPEAL IS DIRECTED AGAINST6 THE ORDER OF THE COMMISSIONER OF INCOME-TAX(A) MAN GALORE DATED 26.03.2010. THE APPEAL ARISES OUT OF THE ASSESSMEN T COMPLETED U/S.143(3) OF THE IT ACT 1961. SP.107 & ITA.659/BANG/2010 PAGE - 2 2. IN THE PRESENT CASE THE ASSESSING OFFICER HAS D ENIED THE ASSESSEE THE BENEFIT OF CARRY FORWARD AND SET OFF O F BUSINESS LOSSES AND UNABSORBED DEPRECIATION OF ASSESSMENT YEARS 2003-04 2005-06 AND 2006-07 AGGREGATING TO ` 2 42 63 927/- AGAINST THE CURRENT YEAR'S NET PROFIT OF ` 1 43 68 029/- ON THE GROUND THAT THE ASSESSEE HAD NOT FILED RETURNS OF INCOME FOR THOSE ASSESSMENT YEARS WITHIN THE TIME ALLOWED U/S.139(1). HE ANYHOW ALLOWED SET OFF OF UNABSORBE D DEPRECIATION TO THE EXTENT OF ` 21 86 923/- AND DETERMINED THE TAXABLE INCOME AT ` 1 21 81 110/-. THIS ASSESSMENT ORDER HAS BEEN CONF IRMED IN FIRST APPEAL. THE ASSESSEE IS AGGRIEVED AND THEREFORE T HE SECOND APPEAL BEFORE US. THE GROUNDS RAISED BY THE ASSESSEE IN T HIS APPEAL READ AS BELOW : '1.1. THE LEARNED DCIT CIRCLE -1 UDUPI HAS ERRED IN PASSING THE ORDER IN THE MANNER PASSED BY HIM AND THE LEARN ED COMMISSIONER OF INCOME-TAX (A) MANGALORE HAS ERRED IN CONFIRMING THE ORDER PASSED BY THE DCIT CIRCLE-1 UDUPI. THE ORDERS PASSED BY THE LOWER INCOME TAX AUTHORITIES A RE BAD IN LAW AND LIABLE TO BE QUASHED. 2.1 THE LEARNED DCIT CIRCLE-1 UDUPI HAS ERRED IN DENY ING THE SET OFF OF BUSINESS LOSSES IN THE PROCESS OF COMPUTATIO N OF TOTAL INCOME CHARGEABLE FOR THE YEAR UNDER CONSIDERATION AND THE LEARNED COMMISSIONER OF INCOME-TAX(A) MANGALORE HAS ERRED IN CONFIRMING THE ACTION OF THE LEARNED DCIT CIRCLE-1 UDUPI. 2.2 ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND LAW APPLICABLE THE ENTIRE LOSSES (INCLUDING UNABSORBED DEPRECIATIO N ALLOWANCE) RELATING TO AYS 2003-04 2005-06 AND 2006-07 AMOUNT ING TO ` 2 42 63 927/- IS ELIGIBLE FOR SET OFF IN COMPUTING THE TOTAL INCOME CHARGEABLE FOR THE YEAR UNDER CONSIDERATION. 3.1. THE LEARNED DCIT CIRCLE-1 UDUPI HAS ERRED IN LEVY ING INTEREST U/S.234B AMOUNTING TO ` 12 29 019/- AND THE LEARNED COMMISSIONER OF INCOME-TAX(A) MANGALORE HAS ERRED IN NOT ADJUDICATING THE ISSUE OF CHARGEABILITY OF INTEREST U/S.234B. ON THE SP.107 & ITA.659/BANG/2010 PAGE - 3 FACTS AND CIRCUMSTANCES OF THE CASE INTEREST U/S.2 34B IS NOT LEVIABLE. THE APPELLANT DENIES ITS LIABILITY TO PA Y INTEREST U/S.234B. 4.1 IN VIEW OF THE ABOVE AND OTHER GROUNDS TO BE ADDUCE D AT THE TIME OF HEARING THE APPELLANT PRAYS THAT : (I) THE ORDERS PASSED BY THE LOWER INCOME TAX AUTHORITI ES BEING BAD IN LAW IS LIABLE TO BE QUASHED : (A) THE SET OFF AND CARRY FORWARD OF BROUGHT FORWARD LO SSES TOTALLY AMOUNTING TO ` 2 42 63 927/- BE ALLOWED OR IN THE ALTERNATIVE AND WITHOUT PREJUDICE THE LOWER AUTHOR ITIES BE DIRECTED TO ALLOW SET OFF AND CARRY FORWARD OF BROUGHT FORWA RD LOSSES ON CONDONATION OF DELAY IN FILING OF INCOME TAX RETURN S FOR AYS 2003- 04 2005-06 AND 2006-07 BY THE CBDT. (B) INTEREST LEVIED U/S.234B BE DELETED.' 3. WE HEARD SHRI. R. VIJAYARAGHAVAN THE LEARNED CO UNSEL APPEARING FOR THE ASSESSEE AND SHRI. G. V. GOPALA R AO THE LEARNED COMMISSIONER OF INCOME-TAX APPEARING FOR THE REVENU E. 4. THE ASSESSEE BANK HAS FILED A PETITION BEFORE TH E CENTRAL BOARD OF DIRECT TAXES AT NEW DELHI PRAYING FOR CONDONATI ON OF THE DELAY CAUSED IN FILING THE RETURNS FOR THE ASSESSMENT YEA RS 2003-04 2005-06 AND 2006-07 AND CONSEQUENTLY TO ALLOW THE ASSESSEE TO CLAIM THE CARRY FORWARD OF THE LOSS FOR SETTING OFF AGAINST THE PRO FITS OF SUBSEQUENT ASSESSMENT YEARS. THE MAIN GRIEVANCE OF THE ASSESS EE BANK IS THAT THE RETURNS COULD BE FILED ONLY AFTER OBTAINING THE AUD IT REPORT AND THE AUDITORS ARE APPOINTED BY THE STATE COOPERATIVE DEP ARTMENT ON WHICH THE ASSESSEE BANK HAD NO ROLE TO PLAY AND THE STATE GOVERNMENT HAD SP.107 & ITA.659/BANG/2010 PAGE - 4 APPOINTED THE AUDITORS BELATEDLY AND THE AUDIT REPO RTS WERE DELIVERED BY THE AUDITORS TO THE ASSESSEE BANK BELATEDLY BECA USE OF WHICH THE ASSESSEE BANK HAD NO OPTION BUT TO FILE THE RETURNS OF INCOME BEYOND THE TIME PRESCRIBED U/S.139(1) OF THE ACT. 5. THE SAID PETITION IS NOW PENDING ADJUDICATION BE FORE THE CENTRAL BOARD OF DIRECT TAXES. THE BOARD HAS ALREADY INTER ACTED WITH THE ASSESSEE BANK THROUGH LETTERS DT 6.11.2010 15.11.2 010 AND ALSO TO THE CHIEF COMMISSIONER OF INCOME-TAX OF PANAJI VIDE LE TTER DATED.12.11.2010. THE MATTER IS UNDER THE ACTIVE C ONSIDERATION OF THE CBDT. 6. WHEN THE MATTER IS SUBJUDICE BEFORE THE CENTRAL BOARD OF DIRECT TAXES HAVING DIRECT JURISDICTION OVER THE ISSUE U/S .119(2)(B) IT IS NOT FAIR ON OUR PART TO JUMP IN BETWEEN AND ADJUDICATE THE MATTER. IT WILL BE AN EXERCISE PREMATURE. 7. THE LEARNED COUNSEL APPEARING FOR THE ASSESSEE H AS ALSO PRODUCED BEFORE US A COPY OF THE JUDGEMENT OF THE H ON'BLE BOMBAY HIGH COURT DATED.20.09.2010 PASSED IN THE CASE OF M /S. BOMBAY MERCANTILE CO-OP BANK LTD IN WP NO.1544 OF 2010. ON THE VERY SAME ISSUE THE HON'BLE COURT HAS CONDONED THE DELAY CAUSED IN FILING SP.107 & ITA.659/BANG/2010 PAGE - 5 THE RETURNS AND DIRECTED TO EXTEND THE BENEFIT OF C ARRY FORWARD AND SET OFF OF EARLIER LOSSES TO THAT ASSESSEE. THE HON'BL E HIGH COURT HAS HELD THAT THE DELAY WAS CAUSED FOR REASONS BEYOND THE CO NTROL OF THE ASSESSEE AND FOR THAT MATTER THE ASSESSEE SHOULD NO T BE DEPRIVED OF THE BENEFITS CONFERRED ON IT BY THE STATUTE. 8. IN FACT THIS DECISION OF THE BOMBAY HIGH COURT S QUARELY APPLIES TO THE ASSESSEE'S CASE. BUT AS WE HAVE ALREADY STA TED THE MATTER IS PENDING BEFORE THE CENTRAL BOARD OF DIRECT TAXES. WE SHOULD AWAIT THE OUTCOME OF THAT PROCEEDINGS BEFORE THE CENTRAL BOARD OF DIRECT TAXES IN ACCORDANCE WITH LAW. 9. IN THE FACTS AND CIRCUMSTANCES OF THE CASE WE S ET ASIDE THE ORDERS OF THE LOWER AUTHORITIES AND REMIT THE MATTE R BACK TO THE ASSESSING OFFICER TO DECIDE THE ISSUE AFRESH IN THE LIGHT OF THE ORDER THAT MAY BE PASSED BY THE CBDT AND ALSO IN THE LIGH T OF THE JUDGEMENT OF THE BOMBAY HIGH COURT MENTIONED ABOVE. WE MAKE IT CLEAR THAT THE ASSESSING OFFICER MAY WAIT FOR THE ORDER OF THE CENTRAL BOARD OF DIRECT TAXES. 10. AS THE APPEAL ITSELF HAS BEEN DISPOSED OFF T HE STAY APPLICATION NO.107/BANG/2010 FILED BY THE ASSESSEE-BANK HAS BEC OME INFRUCTUOUS. SP.107 & ITA.659/BANG/2010 PAGE - 6 11. IN RESULT THE APPEAL FILED BY THE ASSESSEE IS T REATED AS ALLOWED FOR STATISTICAL PURPOSES AND THE STAY APPLICATION I S DISMISSED AS INFRUCTUOUS. ORDER PRONOUNCED AT THE TIME OF HEARING IN OPEN COU RT ON WEDNESDAY THE 29TH DECEMBER 2010 AT BANGALORE. SD/- SD/- (P. MADHAVI DEVI) (DR. O. K. NARAYANAN) JUDICIAL MEMBER VICE PRESIDENT