2020 (9) TMI 613

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....t case is a Co-operative bank which is registered u/s 9(1) of Maharashtra Cooperative Societies Act, 1960. The return of income for the year under consideration was originally filed by it on 30.09.2012 declaring a loss of Rs. 9,65,89,324/-. The case of the assessee was selected for scrutiny and notice u/s 143(2) of the Income-tax Act, 1961 (hereinafter referred to as "the Act") was issued by the Assessing Officer on 12.08.2013, which was duly served on the assessee bank. During the course of assessment proceedings, the revised return of income was filed by the assessee on 02.03.2015 declaring a loss of Rs. 28,39,60,085/-. In the said revised return, a deduction inter-alia, of Rs. 7,03,26,586/- was claimed by the assessee on account of penal....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....assessing officer had not considered the claim because the revised return was filed beyond the due date. During the course of appellate proceedings the assessee stated that this issue is covered in the favour of the assessee by the decision of the Hon'ble ITAT, Mumbai, Bench 'H' in the case of Bank of America, N.A. Vs. JCIT, Special Range-32 for the assessment year 1997-98 in ITA No.4408/Mum/2000 dated 27/11/2013. In the aforesaid decision it has been held as under : "7. Ground No.7 and 8 are regarding disallowance in respect of amount paid to RBI for shortfall in maintenance of Cash Reserve Ratio (CRR) and Statutory Liquidity Reserve (SLR). The AO disallowed a sum of Rs. 3,74,704/- paid to RBI for shortfall in maintena....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....o as to disallow the interest claim. The Tribunal following the decision in the case of DCIT V/s Dhanalakshmi Bank Ltd. (Cochin) reported in 76 TTJ 439 held that the interest paid to the RBI was not penalty and accordingly the interest expenditure is allowable. SLP filed by the revenue against similar decision of the Tribunal in the case of Dhanalakshmi Bank Ltd. (supra) has been dismissed by the Apex Court as reported in [2005] 277 ITR (ST) 3. In this view of the matter, we find no merit in the appeal and the same is dismissed with no order as to costs." 7.3 Following the decision of the Hon'ble High Court we decide this issue in favour of the Assessee and against the Revenue." 10. Thus the decision in the case of Ban....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....n account of penal interest charged by RBI for non-maintenance of SLR and CRR was not entertained by the Assessing Officer as the same was not made by way of revised return validly filed by the assessee bank. The Ld. CIT(A) not only entertained the said claim at the appellate stage but also allowed the same on merit. It is observed that the action of Ld. CIT(A) in entertaining the said claim at appellate stage is duly supported by the decision of the Hon'ble Supreme Court in the case of Goetze (India) Ltd. Vs. CIT (2006) 284 ITR 323 (SC) and even the decision rendered by him in allowing the claim of assessee for deduction on account of penal interest charged by RBI for non-maintenance of SLR and CRR on merit is duly supported by the dec....