TaxTMI 
TaxTMI 
2022 (11) TMI 1463
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.....s. 263. 3. The CIT(A) erred in ignoring the fundamental principle that a higher authority cannot direct a lower authority to frame an assessment order in a particular manner unless such a power is specifically granted by the statute itself. The PCIT has not exercised the power of enhancement or modification of the assessment. The PCIT has exercised the power of cancelling the assessment and directing a fresh assessment. The directions in the order of the PCIT are only indicative of the areas to be looked into by the assessing officer. The PCIT does not have any power to issue a closed direction while cancelling the assessment and directing a fresh assessment. 4. There can be no estoppel against law. If the assessment order u/s. 143(3) r.w.s. 263 dated 15/12/2017 suffers from the vice of incorrect interpretation of Section 36(1)(viia), the Tribunal has the power to direct the lower authorities to apply the correct interpretation of a provision of law. 5. The interpretation of Section 36(l)(viia) adopted by the assessing officer, i.e., the deduction u/s. 36(l)(viia) cannot exceed the provision made in the books of account is incorrect. There is no such explicit restriction in ....
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....lopment bank, an amount not exceeding seven and one-half per cent of the total income computed before making any deduction under this clause and Chapter VIA and an amount not exceeding ten per cent of the aggregate average advances made by the rural branches of such bank computed in the prescribed manner: Considering the provisions, Ld. AO held an opinion that any provision for bad debts made by the assessee in the Profit and Loss account alone is eligible to be considered for deduction under this section. This was supported by CBDT Instruction No. 17/2008 which provide that the deduction for provision for bad and doubtful debts should be restricted to the amount of such provision actually created in the books of the assessee in the relevant year or the amount calculated as per provisions of Sec.36(1)(viia), whichever is less. The Ld. AO noted that the assessee created actual provision for Rs. 1.04 Lacs only. The Ld. AO, in terms of various judicial decisions, held that the assessee would be eligible to claim the deduction to the extent of actual provisions made and accordingly, disallowed excess deduction of Rs. 887.43 Lacs to the assessee. 4.3 Regarding OTS-interest waiver, it ....
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....er dated 09.04.2021 as under: - 8. In this case, the assessee has made a provision for NPA for Rs. 17,52,92,029/-. He has actually claimed in the return of income at Rs. 20,73,99,433/-. The case of the AO is that the assessee is only eligible to the extent of provision made for NPA not for entire claim claimed by the assessee. On appeal, the Ld. CIT(A) allowed the entire amount claimed by the assessee. The similar issue has been considered by the Hon'ble Punjab & Haryana High Court (supra) and has held that making of provision for bad and doubtful debt equivalent to an amount claimed as a deduction in account books is necessary for claiming deduction u/s. 36(1)(viia) of the Act. For the sake of convenience, the relevant portion of the judgment is extracted as under: "5. Section 36(1)(vzza) of the Act as applicable to the assessment year 1985 86 reads as under: "in respect of any provision for bad and doubtful debts made by a scheduled bank [not being a bank approved by the Central Government for the purposes of clause (vii) or a bank incorporated by or under the laws of a country outside India] or a non scheduled bank an amount not exceeding ten per cent of the total inco....
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....this court. 10. The appeal is, accordingly, dismissed. No costs." 9. The decision of the Co-ordinate Bench of this Tribunal in the case of M/s. Nazareth Urban Co-operative Bank Ltd. (supra) has considered the decision of the Hon'ble Punjab & Haryana High Court (supra) and held as under: "6. We heard the rival submissions and gone through relevant material. It s clear from the decision of the Hon'ble High Court of Punjab & Haryana, supra, that making of provision equal to the amount claimed as deduction, in the account books is necessary for claiming deduction u/s. 36(1)(viia). Since the assessee has not made any provision in the books of accounts, as admitted by the assessee before the AO by its letters dated 21.12.2016, in the respective assessment years, the assessee is not entitled for the impugned deductions for the respective assessment years. Further, the relevant portion of the order of the co-ordinate Bench of this Tribunal in the case of M/s.The Salem Dt. Central Co.Op Bank Ltd., Salem vs. The DCIT, Salem in ITA No.1168/Chny/Mds/2016 for the AY 2008-09 dated 07.06.2017, is extracted as under: 7.1 We heard the rival submissions and perused the material placed be....
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....s of accounts for the relevant Assessment Year. This view is supported by the decision of the Hon'ble Punjab & Haryana High Court cited supra. Therefore, we do not find any infirmity in the order of the Ld.CIT(A) and the same is allowed. Ground Nos.6 - 12 of the assessee are dismissed. 7. Since the co-ordinate Bench of this Tribunal has applied the decision of the Hon'ble Punjab & Haryana High Court, cited supra, and dismissed the appeal in the above case, following the same, the appeals filed by the assessee are also dismissed." 10. In the case of M/s. The Salem Dt. Central Co.op. Bank Ltd. (supra) has considered the Circular No.17/2018 issued by the Department held as under: "9.0 The Circular is very clear that the deduction is permissible only to the extent of provisions actually created in the books of accounts for the relevant Assessment Year. This view is supported by the decision of the Hon'ble Punjab & Haryana High Court cited supra. Therefore, we do not find any infirmity in the order of the Ld.CIT(A) and the same is allowed. Ground Nos.6 - 12 of the assessee are dismissed." 11. In so far as the case law relied on by the ld. counsel for the assessee in the case of DC....