2024 (6) TMI 656

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....S/250/2023-24/1058150642(1), dated 22/11/2023 arising out of the order passed u/s. 143(3) of the Income Tax Act, 1961 [in short 'the Act'], dated 12/12/2019 for the AY 2017-18. 2. Briefly stated the facts of the case are that the assessee being a Cooperative Bank filed its return of income for the AY 2017-18 on 30/10/2017 admitting a total income of Rs. 3,22,16,210/-. The assessee Bank is under the control of Reserve Bank of India and carrying on banking business as per Banking Regulation Act, 1949. The case was selected for limited scrutiny and statutory notices u/s. 143(2) and 142(1) of the Act were issued from time to time calling for information. In response, the assessee field the details before the Ld. AO. The Ld. AO observed that ....

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....cular, dated 14/11/2016, issued by Reserve Bank of India, hence in this view of the matter the orders passed u/s. 250 and as well as order passed u/s. 143(3) of the Act are not legally sustainable order. 3. The Ld. CIT(A) while coming to adverse conclusion with regards to applicability of RBI Circular dated 14/11/2016 that was relied upon by the assessee in support of its case, totally missed himself by observing in his order "it is clear from the Circular RBI addressed to the banks......not to give exchange facility against SBN or deposit of such notes....." by this observation it is clear that Ld. CIT(A) did not understand the Circular in proper manner. 4. The Ld. CIT(A) failed to take note that additions made by the AO ....

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....d 30/12/2016. The Ld. AR further submitted that the Circular No. DCM(Plg) No. 1273/10, 27.00/2016-17, dated 14th November, 2016 placed at page 13 of the paper book clearly states that the exchange facility against the SBNs was restricted only with respect to District Cooperative Central Banks (DCCBs) and not to Urban Cooperative Banks. The assessee being an Urban Cooperative Bank is not covered under the Circular (supra) and hence the acceptance of the SBNs is valid in law and as per the directions of the RBI. The Ld. AR also submitted a copy of the assessment order in the case of The Gandhi Cooperative Urban Bank Limited passed by the same Assessing Officer ie., ACIT, Circle-1(1), Vijayawada vide order u/s. 143(3) dated 19/03/2019 wherein ....

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....ks/ District Central Cooperative Banks Dear Sir, Withdrawal of Legal Tender Character of existing Rs. 500/- and Rs. 1000/- Bank Notes - Applicability of the Scheme to DCCBs Please refer to our Circular No. DCM (Plg) No.1226/10.27.00/2016-17 dated November 08, 2016 on the captioned subject. It is clarified that District Central Cooperative Banks can allow their existing customers to withdraw money from their accounts upto Rs. 24,000/- per week upto November 24, 2016. However no exchange facility against the specified bank notes (Rs. 500/- and Rs. 1000/-) or deposit of such notes should be entertained by them. 2. All banks are advised to permit withdrawal of cash by DCCBs from their accounts based on need. ....