TaxTMI 
TaxTMI 
TaxTMI 
2023 (11) TMI 1022
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....opening of the assessment u/s 147 and learned CIT(A) failed to appreciate the fact that the re-opening of Assessment u/s 147 was bad and not tenable in law. 2.1. The learned CIT(A) failed to appreciate the fact that the re- opening was mere change of opinion as such, bad in law. 2.2. The learned CIT(A) failed to appreciate the fact that the re- opening was based on existing material and evidences and not based on any new evidences 2.3. The order of the learned CIT(A) is beyond the provisions of section 147 since no disallowance was made with regard to the recorded reasons. 2.4. The learned CIT(A) failed to appreciate the fact that once an addition is not made with respect to the recorded reasons, no other item can be disallowed without issuing fresh notice. 2.5. The learned CIT(A) failed to appreciate the fact that the re- opening is without obtaining proper approval. 2.6. The learned CIT(A) failed to appreciate the fact that some of the additions are hit by the third proviso to section 147 of the Income Tax Act, 1961. 2.7. The learned CIT(A) failed to appreciate the fact that the order of the learned Assessing Officer is based on surmises & conjunctures. 3. The lea....
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....dify, alter, revise, substitute, delete any or all grounds of appeal, if deemed necessary at the time of hearing of the appeal." 3. The brief facts of the case for AY 2014-15 are that the assessee filed its return of income on 29.11.2014 declaring loss of Rs. 108,96,44,000. The case was selected for scrutiny and assessment u/s. 143(3) was completed on 28.12.2016 assessing total income at Rs. 2028,45,47,130 under the regular provisions of the Act and deemed total income of Rs. 3597,88,20,720 under the MAT provisions. During the scrutiny proceedings u/s. 143(3) for AY 2016-17, the AO noticed that the assessee claimed depreciation on land & building including vacant land @ rate applicable for the building for the previous years and the assessee is claiming excess depreciation. Accordingly, the case was reopened u/s. 147 after due procedure and notice u/s. 148 was issued to the assessee on 24.08.2018. In response, the assessee filed return of income on 10.10.2018 wherein excess claim of depreciation was rectified. The AO issued other statutory notices. The objections of the assessee were disposed by order dated 22.11.2019. The breakup of depreciation on land for FY 2013-14 provided by....
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....A No.207 of 2019 C/W ITA No. 208/2019 [2023 (1) TMI 243 (Karnataka HC). The assessee has filed written synopsis in respect of ground No. 4 which is as under:- "Ground No. 4 - Applicability of the provisions of section 115JB: 1. Brief facts: 1.1. The Appellant Bank (the Bank) is constituted u/s 3 of the Banking Companies (Acquisition and Transfer of Undertaking) Act, 1970 (Acquisition Act). It is not a Company registered under the Companies Act. It did not compute its income under the provisions of section 115JB of the Income Tax Act, 1961 since according to the Bank, the provisions of section 115JB dealing with Minimum Alternate Tax (MAT) are not applicable to them. The learned Assessing Officer held that the MAT provisions are applicable to the Bank and computed the Book Profit by applying the provisions of section 115JB. He made various additions to the Book Profit. On an appeal by the Bank, the learned CIT(A) held that the provisions of section 115JB are applicable to the Bank. Further, he also held that the various additions made by the learned Assessing Officer to the Book Profit are as per the provisions of section 115JB and upheld the same. The Appellant Bank has file....
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....e company at its annual general meeting in accordance with the provisions of section 129 of the Companies Act, 2013 (18 of 2013): Provided further that where the company has adopted or adopts the financial year under the the Companies Act, 2013 (18 of 2013), which is different from the previous year under this Act,- (i) the accounting policies; (ii) the accounting standards adopted for preparing such accounts including statement of profit and loss; (iii) the method and rates adopted for calculating the depreciation, shall correspond to the accounting policies, accounting standards and the method and rates for calculating the depreciation which have been adopted for preparing such accounts including 37[statement of profit and loss] for such financial year or part of such financial year falling within the relevant previous year. Explanation. 1 ...................." 2.4. From the above amended section, it can be seen that the provisions of sub clause 2(a) are not applicable to the Bank as decided by various appellate authorities and the High Court. 2.5. Sub clause 2(b) is applicable to a Company to which the second proviso to sub section (1) of section 129 of the Compan....
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...."public company", shall, subject to the provisions of sub-section (2), have the meanings specified below: - (i) "company" means a company formed and registered under this Act or an existing company as defined in clause (ii); (ii) "existing company" means a company formed and registered under any of the previous companies laws specified below : - (a) any Act or Acts relating to companies in force before the Indian Companies Act, 1866 (10 of 1866), and repealed by that Act ; (b) the Indian Companies Act, 1866 (10 of 1866) ; (c) he Indian Companies Act, 1882 (6 of 1882) ; (d) the Indian Companies Act, 1913 (7 of 1913) ; (e) the Registration of Transferred Companies Ordinance, 1942 (54 of 1942) ; and (f) any law corresponding to any of the Acts or the Ordinance aforesaid and in force- (1) in the merged territories or in a Part B States (other than the State of Jammu and Kashmir), or any part thereof, before the extension thereto of the Indian Companies Act, 1913 (7 of 1913) ; or (2) in the State of Jammu and Kashmir, or any part thereof, before the commencement of the Jammu and Kashmir (Extension of Laws) Act, 1956 (62 of 1956), insofar as banking, insurance and fin....
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....No 1 Greater Bombay Co-op. Bank Ltd Versus M/s United Yarn Tex. Pvt. Ltd. & Ors 2007 (4) TMI 679 -SUPREME COURT 10, 11,13, 14,16, 17,18, 19,20, 21 & 25 2 Larsen & Toubro Ltd & Others 2015 (8) TMI 749 -SUPREME COURT 20 - 25 41 - 43 3 ING Vysya Bank Limited [2020] 422 ITR116 (Kar) 6 - 11 50 - 52 4 Punjab National Bank (successor of Oriental Bank of Commerce) ITA No. 740 /Del / 2020 - order dated 31-03-2023 for Asst Year 2016-17 10 217 -227 5 Indian Overseas Bank 2020 (3) TMI 897 - ITAT CHENNAI 29 - 30 181 -182 6 Damodar Valley Corporation 2017 (8) TMI 1363 - ITAT KOLKATA 4 - 6 104 -106 7 Rajasthan Financial Corporation 2023 (1) TMI 623 - ITAT JAIPUR 12 199 -201 2.20. In the case of Greater Bombay Co-Op. Bank Ltd vs United Yarn Tex. Pvt Ltd. & Ors - 2007 (4) TMI 679 SUPREME COURT, the Apex Court was considering a question whether the Recovery of Debts due to banks and Financial Institutions Act, 1993 (the RDB Act) is applicable to certain Co-operative Banks established in Maharashtra & Andhra Pradesh. After analysing various provisions of the BR Act, RDB Act, the Hon'ble Supreme Court held as under: "Co-operative banks" established under t....
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....he newly inserted clause (cci) and "primary co- operative bank" was similarly separately defined by clause (ccv). The meaning of 'banking company' must, therefore, necessarily be strictly confined to the words used in Section 5(c) of the BR Act. If the intention of the Parliament was to define the 'co-operative bank' as 'banking company, it would have been the easiest way for the Parliament to say that 'banking company' shall mean 'banking company' as defined in Section 5(c) and shall include 'co- operative bank' and 'primary co-operative bank' as inserted in clauses (cci) and (ccv) in Section 5 of Act 23 of 1965." Page 11 The provisions of the RDB Act, which are relevant, are referred to in the following paragraphs. Section 2(d) defines "banks" to mean (i) a banking company; (ii) a corresponding new bank; (iii) State Bank of India; (iv) a subsidiary bank; or (v) a Regional Rural Bank. In terms of clause (e) "banking company" shall have the meaning assigned to it in clause (c) of Section 5 of the BR Act. Page 12 Mr. S. Ganesh, learned Senior Advocate appearing on behalf of the appellant in Civil Appeal Nos.432 to 434 of ....
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.... (ccv). The Parliament was simply assigning a meaning to words; it was not incorporating or even referring to the substantive provisions of the BR Act. The meaning of 'banking company' must, therefore, necessarily be strictly confined to the words used in Section 5(c) of the BR Act. It would have been the easiest thing for Parliament to say that 'banking company' shall mean 'banking company' as defined in Section 5 (c) and shall include 'co- operative bank' as defined in Section 5 (cci) and 'primary co-operative bank' as defined in Section 5 (ccv). However, the Parliament did not do so. There was thus a conscious exclusion and deliberate commission of co-operative banks from the purview of the RDB Act. The reason for excluding co-operative banks seems to be that co- operative banks have comprehensive, self- contained and less expensive remedies available to them under the State Co-operative Societies Acts of the States concerned, while other banks and financial institutions did not have such speedy remedies and they had to file suits in civil courts.(* emphasis applied) Page 20 The language of the Sections in these enactments defining &#....
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....parately defined u/s 5(cci) of the BR Act. This clause 5(cci) is inserted vide section 56 of the BR Act contained in Part V of the said Act which deals with Co-Operative Banks. The Hon'ble Supreme Court held that since the co-operative banks are defined separately under the BR Act, they cannot be included in the definition of the banking company contained in the said Act. 2.23. The above decision of the Hon'ble Supreme Court squarely applies to the facts of this case also. In this case also, the Appellant Bank is separately defined u/s 5(da) of the BR Act as "corresponding new bank" and therefore, it cannot be included within the term "banking company" as per the said Act. 2.24. Without prejudice to the above, even assuming, but not admitting, that the Appellant Bank has to be treated as a company covered u/s 115JB(2)(b), then, also, the provisions are not applicable since the computation of Book Profit fails. As per first proviso to section 115JB(2), the Assessee has to follow the same accounting policy, accounting standards and method and rates adopted for calculating depreciation as have been adopted for the purpose of preparing a Profit & Loss Account and laid down at its A....
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....ed on the decision of the Hon'ble Mumbai Tribunal in the case of Bank of India (supra). The decision of the Hon'ble Tribunal in the case of Bank of India, with due respect, is per incuriam for the following submissions: * The decision has mainly relied on the deeming fiction contained in section 11 of the Acquisition Act. It has been clearly established that the deeming fiction deems the Bank as a company for the purpose of Income Tax Act and not more than that. Therefore, unless the Bank is a banking company as per the provisions of the BR Act, then, it is not covered by the second proviso to section 129(1) of the Companies Act 2013 and as such, it is not covered by section 115JB(2)(b). With due respect, this fact has been overlooked by the Hon'ble Tribunal. * In para 29 of the said decision, the Hon'ble Tribunal has extracted the observations of the Hon'ble Bombay High Court in the case of Union Bank of India (supra). In the said decision, the Hon'ble High Court has noted the second proviso to section 129(1) of the Companies Act 2013. It also noted that the second proviso refers to insurance or banking companies or companies engaged in the generation or supply of electricity ....
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....sons as to why in this scheme of taxation of book profits, an assessee like the assessee before us, i.e. a bank distributing dividends on the basis of books profits but paying tax on a substantially lower amount of taxable profits, should be excluded. It is a corporate entity treated as such for the purposes of Income Tax Act 1961 by the virtue of specific legal provisions to that effect, it pays dividends, its taxable profits are substantially lower than book profits, and, therefore, in our humble understanding, there is no good reason not to treat it as a company- at least no good reasons are shown to us. All that has been said is that there is a drafting error in the legislation, by not specifically including the nationalized banks- as for the purpose of some other deduction provisions, but then what this argument overlooks is that definition provision is not the same thing as charging provision or even computation provision, and that the statutory definitions- on account of specific provision to that effect in the definition itself, have to yield to the contextual meanings." * In any case, the above observations, based on which the Tribunal concluded its decision, are per inc....
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....one has to look merely at what is clearly said. There is no room for any intendment. There is no equity about a tax. There is no presumption as to tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used." 33. This Court has, in a plethora of judgments, referred to the aforesaid principles. Suffice it to quote from one of such judgments of this Court in Commissioner of Sales Tax Commissioner, Uttar Pradesh v. Modi Sugar Mills, 1961 (2) SCR 189 at 198:- "In interpreting a taxing statute, equitable considerations are entirely out of place. Nor can taxing statutes be interpreted on any presumptions or assumptions. The court must look squarely at the words of the statute and interpret them. It must interpret a taxing statute in the light of what is clearly expressed; it cannot imply anything which is not expressed; it cannot import provisions in the statute so as to supply any assumed deficiency." (*) 34. We are, therefore, of the view that this appeal must be allowed and the judgment of the High Court of Kerala is, accordingly set aside and that of the learned Single Judge restored." (* emphasis applied) 3.3. Base on the above, it ....
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....he language is very clear. The CIT(Appeals) has rightly decided the issue. Further in respect of applicability of provisions of section 115JB, she submitted that in para 14.4, the CIT(Appeals) has relied on the decision of the coordinate Bench of the Tribunal in the case of Bank of India v. ACIT [2020] 122 taxman.com 247 (Mum Trib) in which it has been held that Bank of India is to be treated as a company since the activities of the Bank of India and the assessee Bank are quite similar and both are engaged in banking business. Bank of India is also a Nationalized Bank which was formed as per the Acquisition Act, 1969 by the Govt. of India and the formation of the assessee Bank is also as per the same Act. Therefore, the amendment made in section 115JB is very much applicable to the assessee. Hence the orders of lower authorities should be upheld. 9. After considering rival contentions, we note that the issue of allowance u/s. 36(1)(viia) has been settled by the Hon'ble jurisdictional High Court of Karnataka in the case of CIT, LTU v. Canara Bank, [2023] 147 taxmann.com 171 (Karnataka)[05-12- 2022] in which it has been held as under:- "6. Insofar as question No. 4 is concerned, a....
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....ase has attained finality and the Revenue has not challenged the said order. Further, the High Court of Calcutta, while considering an identical situation as recorded thus, "Mr. Khaitan, learned senior Advocate appeared on behalf of the assessee and submitted that the computation to be made as prescribed by rule 6ABA is for the purpose of fixing the limit of the deduction available under section 36(1)(viia). Clauses (a) and (b) in rule 6ABA cannot be given the restricted interpretation. The amounts of advances as outstanding at the last day of each month would be a fluctuating figure depending on the outstanding as increased or reduced respectively by advances made and repayments received. The assessee might provided for bad and doubtful debts but the deduction would only be allowed at the percentage of aggregate average advance, computation of which is prescribed by rule 6ABA. We find from the amended direction made by the Tribunal that such direction is in terms of rule 6ABA. The ITO has made the computation of aggregate monthly advances taking loans and advances made during only the previous year relevant to assessment year 2009-10 as confirmed by CIT(A). The Tribunal amen....
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....that provisions of section 115JB(2)(a) of the Act will be applicable to the assessee-bank as it is an Indian Company as per Section 11 of Banking Companies (Acquisition & Transfer of Undertaking) Act, 1949. 13.3 Aggrieved by the order of the CIT(A), the assessee has raised this issue before the Tribunal. The learned AR submitted that in assessee's own case for assessment year 2013-2014 an identical issue was considered and the matter was remitted back to the CIT(A). It was submitted by the ITA No.1885/Bang/2018 & 237/PAN/2018 M/s. Canara Bank (Erstwhile Syndicate Bank) 16 learned AR that since the facts being identical, a similar view may be taken by the Tribunal for this assessment year also. 13.4 The learned DR was duly heard. 13.5 We have heard rival submissions and perused the material on record. The Tribunal in assessee's own case for assessment year 2013- 2014 (supra) had restored the issue to the files of the CIT(A). The CIT(A) was directed to examine whether the assessee being a banking company would be liable for book profits u/s 115JB of the Act. The relevant finding of the Tribunal in assessee's own case, reads as follows:- "7.4 We heard the parties on this i....