TaxTMI 
TaxTMI 
2019 (10) TMI 256
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....of the assessee neither through intention nor through action. The reasons for delay in filing the appeal late were beyond the control of the assessee and even the Ld. DR stated that he has no objection, if the delay is condoned. In view of the matter, we condone the delay and proceed to hear the appeal on merits. 3. These two cases were heard together. Since facts common, issues are similar, these appeals are being disposed of vide this consolidated order. For the sake of convenience, we would first take up ITA No.165/PUN/2019 as lead case for adjudication. ITA No.165/PUN/2019 A.Y.2013-14 4. In this appeal, the assessee is challenging the validity of the revisionary jurisdiction assumed by the Pr. Commissioner of Income Tax u/s.263 of the Income Tax Act, 1961 (hereinafter referred to as "the Act‟) and the contentions of the assessee are that the requisite specific enquiry has been conducted by the Assessing Officer on the area where the Pr. Commissioner of Income Tax passed order u/s.263 of the Act. 5. The brief facts in this case are that the assessee is a Co-operative Bank and engaged in the business of lending and borrowing and providing banking facility to the....
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....sed u/s.263 of the Act. The Ld. DR specifically pointed out at Para 4.1.2 of the order of the Ld. Pr. Commissioner of Income Tax wherein it has been mentioned that though the assessee claimed that the issue was enquired into by the Assessing Officer the letter dated 17.11.2015 claimed by the assessee is not on record. 8. We observe that on one hand, the Ld. AR of the assessee demonstrated before the Court that specific questions have been asked by the Assessing Officer and reply of the assessee filed thereon is placed in the paper book filed before us. However, contention of the Ld. DR that there is nothing on record to show that the Assessing Officer has conducted necessary enquiry and that further, statement in the order of the Ld. Pr. Commissioner of Income Tax wherein categorically it is stated that letter dated 17.11.2015 of the assessee is not on record. That therefore in the given facts, we had directed the Ld. DR to check from the records whether necessary enquiry has been conducted by the Assessing Officer on the aspects viz. (i) claim of deduction u/s.36(1)(viia) of the Act; (ii) provision for NPA interest. The Ld. DR is further directed to state on record whether the ....
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.... been no specific enquiry conducted or there is no exercise of thought culminating into reasons to show that he has arrived at a satisfaction regarding the assessment order to be erroneous so as to be prejudicial to the interest of the Revenue. 11. It is pertinent to mention that the ld. CIT can exercise revisionary power u/s.263 of the Act on finding the assessment order erroneous and prejudicial to the interest of the Revenue. Simply because the Assessing Officer did conduct enquiry during the course of assessment proceedings would not automatically lend credence to the authenticity of the assessment order making it immune from revision, if it turns out that the AO decided the issue wrongly in favour of the assessee. Such a situation would render the assessment order erroneous and prejudicial to the interest of the Revenue, thereby clothing the CIT to invoke the revisionary power u/s 263 of the Act. 12. Adverting to the facts of the present case, we find that the ld. CIT found the assessment order lacking to the extent of allowing deduction towards Provision for bad and doubtful debts to the tune of Rs. 3,29,84,041/-. In his opinion, the deduction ought to have been granted....
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....missioner of Income Tax Vs. Uttarbanga Kshetriya Gramin Bank in G.A. No. 291 of 2016 ITAT No.76 of 2016 vide its judgment dated 07.05.2018 has dealt with the question as to whether the Tribunal erred in allowing deduction u/s.36(1)(viia) of the Act for the rural advances made for all previous years leading to multiple deductions in every assessment year by misinterpreting the Rule 6ABA of the I.T. Rules, 1962. Answering the question in negative, the Hon‟ble High Court upheld the view taken by the Tribunal in overturning the computation of aggregate of monthly rural advances made by the rural branches during the year only. The net effect of this judgment renders the claim of the assessee correct as against the argument of the ld. DR that it should be restricted only to the rural advances made during the year alone. From this categorical finding of the Hon‟ble High Court, it becomes evident that the assessee is entitled to get deduction at 10% of aggregate average rural advances, which in the instant case, is Rs. 200.55 Crore and 10% of such advances comes to Rs. 20.05 Crore. 17. If we adopt the qualifying amount of Rs. 20.05 Crore, being, the second part of the deduct....
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....the Tribunal. It is not as if the Assessing Officer did not enquire the issue of NPA interest. To this extent, the finding recorded by the ld. CIT is not correct. 20. On merits, it is seen that the ld. CIT has held that the Assessing Officer did not examine that the assessee debited Rs. 1,86,66,695/- in P & L account on account of NPA interest. In principle, the question of NPA interest arises in the context of recognizing income and not claiming deduction. The factual position is that the sum of Rs. 1.86 Crore is the amount of NPA interest which was not credited during the year as is evident from page 5 of the impugned order. The opening balance of the NPA interest stood at Rs. 15.50 Crore. The assessee recovered the NPA interest amounting to Rs. 1,71,40,806/- and credited the same to the P & L account. The amount of Rs. 1.86 Crore is an amount of NPA interest which is not credited during the year, which if added makes the total figure of Rs. 13.51 Crore, shown in the balance sheet. In this connection, it is relevant to note the legal position on the taxability of NPA interest, which has been dealt with by the Hon‟ble Bombay High Court in Commissioner of Income Tax Vs. CI....