Appeals partly allowed, remanded for fresh adjudication on deductions. Depreciation disallowance confirmed.

The tribunal partly allowed the appeals, remanding the matter back to the AO for fresh adjudication on the eligibility and computation of deductions under Section 36(1)(viia). The tribunal confirmed the disallowance of depreciation under Section 32.

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Issues Involved:
1. Validity of the assessment orders.
2. Disallowance of provision for bad debts under Section 36(1)(viia).
3. Disallowance of depreciation under Section 32.
4. Status and eligibility of the appellant as a Cooperative Bank for deductions under the Income-tax Act.

Detailed Analysis:

1. Validity of the Assessment Orders:
The appellant contended that the assessment orders dated 23.03.2013 and 06.02.2014, determining income significantly higher than the returned income, were void ab-initio due to non-compliance with the "scheme" of the Act for scrutiny assessment and issuance of notice under Section 143(2). The tribunal did not find merit in this argument, dismissing the objection regarding the legality of the assessment orders.

2. Disallowance of Provision for Bad Debts under Section 36(1)(viia):
The appellant claimed deductions for provisions for bad and doubtful debts under Section 36(1)(viia). The AO allowed a deduction of 7.5% of the total income but disallowed the additional 10% of aggregate average advances made by rural branches, citing the appellant's failure to provide necessary details and the legislative intent excluding cooperative banks from this provision. The CIT(A) upheld this view, noting the appellant did not hold a banking license during the relevant period and failed to provide details of rural branches and advances.

The tribunal, however, observed that the Finance Act, 2007 extended the benefits of Section 36(1)(viia) to cooperative banks, allowing deductions for provisions made for bad and doubtful debts. The tribunal noted that the appellant's eligibility for such deductions depended on whether it held a banking license during the relevant period. The tribunal remanded the matter back to the AO to verify if the banking license granted on 10.01.2012 covered the relevant assessment years and to compute the deduction based on aggregate average advances made by rural branches if the appellant was eligible.

3. Disallowance of Depreciation under Section 32:
The AO disallowed part of the depreciation claimed by the appellant due to insufficient evidence of fixed asset purchases and incorrect depreciation rates. The CIT(A) upheld this disallowance, and the appellant did not contest this issue before the tribunal. The tribunal confirmed the disallowance, noting the appellant's failure to provide purchase invoices and evidence of asset usage.

4. Status and Eligibility of the Appellant as a Cooperative Bank:
The tribunal examined whether the appellant, as a cooperative bank, was entitled to deductions under Section 36(1)(viia). The tribunal referred to the Finance Act, 2007, which included cooperative banks within the ambit of Section 36(1)(viia), allowing them to claim deductions for provisions for bad and doubtful debts. The tribunal also considered relevant case laws and legislative amendments, concluding that cooperative banks could be classified as non-scheduled banks for the purposes of Section 36(1)(viia), provided they held the necessary banking license.

The tribunal directed the AO to verify the appellant's banking license status during the relevant period and to compute the allowable deductions accordingly. The tribunal emphasized the need for the appellant to provide complete details of aggregate average advances made by rural branches to substantiate their claim.

Conclusion:
The tribunal partly allowed the appeals for statistical purposes, remanding the matter back to the AO for fresh adjudication on the eligibility and computation of deductions under Section 36(1)(viia), while confirming the disallowance of depreciation under Section 32.

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