TaxTMI 
TaxTMI 
2025 (5) TMI 1791
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....ity. 2. The assessee is in appeal before the Tribunal raising the following grounds of appeal: I. I.T.A. No.: 1886/KOL/2024; A.Y. 2015-16: "1. THAT on the facts of the case, the order of the Ld. Commissioner of Income Tax (Appeals)-National Faceless Appeal Centre herein after referred to as the Ld. CIT(A)-NFAC is arbitrary, illegal and bad in law. 2. THAT on the facts and circumstances of the case, the Ld. CIT(A)-NFAC has grossly erred in law and not justified by not adjudicating the issue of denying sufficient opportunity to the appellant to produce the necessary documents and information as sought by the Ld. AO 3. That on the facts and circumstances of the case, the Ld. CIT (A)-NFAC has grossly erred in law and not justified by upholding the change of Status of the appellant under the Income tax Act, 1961 from "Co-operative Society" to "Domestic Company" disregarding the order of this Hon'ble Court in appellant's own case in A.Y. 2007-08, A.Y. 2009-10 and A.Y. 2010-11 and confirmed by the Hon'ble Jurisdictional High Court, though aforesaid orders were on record. 4. THAT on the facts and circumstances of the case, the Ld.....
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....und of appeal regarding addition of provision for Income Tax of Rs. 1,56,56,307/- which has already been included with return income of Rs. 6,58,23,127/- thereby making the said addition of Rs. 1,56,56,307/- as duplicate one. 11. THAT the Ld. CIT (A)-NFAC, has grossly erred in law and not justified by confirming the disallowance of provision on standard assets of Rs. 14,61,740/- without considering the prudential norms on Income Recognition, Assets Classification and Provisioning Pertaining to Advances issued by the Reserve Bank of India. 12. THAT the Ld. CIT (A)-NFAC, has grossly erred in law and not justified by confirming the disallowance of Donation and Subscription of Rs. 40,000/- which has already been included with return income of Rs. 6,58,23,127/- thereby making the said addition as duplicate one. 13. THAT your petitioner reserves the right to add/delete/modify ground(s) and/or modify arguments, submit documents before the final disposal of this appeal." II. I.T.A. No.: 1887/KOL/2024; A.Y. 2017-18: "1. THAT on the facts and circumstances of the case, the order of the Ld. Commissioner of Income Tax (Appeals)-National Faceless App....
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....he case, the Ld. CIT (A)-NFAC has grossly erred in law and not justified by upholding the change of Status of the appellant under the Income tax Act, 1961 from "Co-operative Society" to "Banking Company" disregarding the order of this Hon'ble Court in appellant's own case in A.Y. 2007-08, A.Y. 2009-10 and A.Y. 2010-11 and confirmed by the Hon'ble Jurisdictional High Court, though aforesaid orders were on record. 3. THAT on the facts and circumstances of the case, the Ld. CIT (A)-NFAC has erred in law and not justified by upholding the imposition of dividend distribution tax of Rs. 12,89,658/- under section 115-O of the Income Tax Act, 1961 and interest thereon Rs. 4,25,587/ under section 115-P of the Act considering the appellant as a Domestic Company instead of Co-operative Society, and also without considering the fact that amount of dividend distribution tax and interest thereon was not claimed in Notice of Demand under section 156 of the Income Tax Act, 1961. 4. THAT on the facts and circumstances of the case, the Ld. CIT (A)-NFAC has grossly erred in law and not justified by confirming the disallowance of Law Charges of Rs. 4,99,738/- u/s 40(a)(ia....
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....h returned income without considering the fact that tax has been deducted wherever applicable and also without considering the audited statement of accounts, tax audit report, facts and other information on record. 10. THAT on the facts and circumstances of the case, the Ld. CIT (A)-NFAC has grossly erred in law and not justified by confirming the disallowance of Employees' Contribution to Provident Fund of Rs. 6,23,893/ as income u/s 2(24)(x) read with section 36(1)(va) of the Income Tax Act, 1961 and adding the same with returned income without considering the fact that due date under the relevant Act includes grace period allowed under the said Act. 11. THAT on the facts and circumstances of the case, the Ld. CIT (A)-NFAC has grossly erred in law and not justified by confirming the disallowance of Donation and Subscription of Rs. 44000/- as the expenses were in the nature of advertisement in souvenirs, sponsorships, etc. and all of which are incidental and for the purpose of business. 12. THAT your petitioner reserves the right to add/delete/modify ground(s) and/or modify arguments, submit documents before the final disposal of this appeal." A. ....
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....assessee in his return had claimed the status as 'cooperative bank' and the nature of business activities of the assessee was banking business and hence, according to the Ld. AO the provisions of Part V of the Banking Regulation Act, 1949 were equally applicable to the cooperative banks. Hence, for the purpose of income tax, the cooperative bank has to be treated as a banking company and all provision of the Income Tax Act as applicable to the Banking Company are also applicable to this Co-operative Bank. Therefore, the Status of the assessee bank has been treated as "Banking Company" (Co-operative Bank to be treated as a Non-Scheduled Bank) for the purposes of income-tax. 6. It was submitted before us by the Ld. AR that the issue is covered by the assessee's own case for AYs 2007-08, 2008-09 and 2010-11 and the Revenue had filed the appeal but did not press the order of the Tribunal before the Hon'ble High Court on this issue therefore this issue has become final and the status of the assessee may be treated as cooperative bank. It was submitted before the Ld. CIT(A) that on the face of the assessment order, the status of the appellant was mentioned as cooperative bank unde....
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....e assessee's change of status from a cooperative society to company is without any basis. Hence, we restore the status of the assessee as cooperative society and this issue of assessee's appeal is allowed." 8. Similarly, in AY 2010-11 the assessee also relied upon the assessee's appeal for AY 2007-08 and AY 2009-10 in ITAT No. 162 of 2015, and the judgment of the Hon'ble Jurisdictional High Court dated 17.04.2017 wherein the issue of change in status has been decided in favour of the assessee and the relevant para of the order is as under: "Alter hearing rival contentions, we find that the assessee's appeal is covered in favour of the assessee and against the Revenue by the decision of the Hon'ble Jurisdictional High Court in the assessee's own case for the Assessment Year 2007-08 and Assessment Year 2009-10 in ITAT No. 162 of 2015, Judgement 17/04/2017, where in the Hon'ble High Court confirmed the order of the Tribunal dt. 07/04/2015 in ITA. No. 895/Kol/2012 for the Assessment Year 2007-08 & ITA. No. 149/Kol/2013, for the Assessment Year 2009-10, wherein it was held that the there is no basis for the Assessing Officer to change status of the as....
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....x at source u/s 194C of the Act. v) Ground no. 8 is related to disallowance of Security Charges Rs. 10,01,650/- u/s 40(a)(ia) for non-deduction of tax at source u/s 194C of the Act. vi) Ground no. 9 is related to disallowance of Advertisement Expenses Rs. 3,47,852/- u/s 40(a)(ia) for non-deduction of tax at source u/s 194C of the Act. 12. The issue has been discussed by the Ld. CIT(A) from pages 47 to 87 of the appeal order in which reliance has been placed on the decision of the Hon'ble Apex Court in Shree Choudhary Transport Co. vs Income Tax Officer in Civil Appeal No. 7865 of 2009 order dated 29th July, 2020 which relates to disallowance of expenses for non-deduction of tax. It is concluded that in view of the factual matrix of the case at hand and the judicial precedent cited above, these grounds of appeal adduced by the appellant are not upheld. However, no justification has been given as to why the disallowance in the case of the assessee is required to be confirmed. 13. Before us, the assessee submitted in this regard that the Ld. AO had disallowed various expenses incurred by the appellant for not submitting the confirmations of TDS returns file....
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....t was held that TDS u/s 194C of the Act is applicable for such payment but the issue here is not the applicability of TDS. The appellant is not challenging the applicability of TDS under the Act but the issue here is that the appellant had made TDS and deposited to the credit of Central Government and filed TDS returns in Form-26Q. So, the question of disallowing entire amount u/s 40(a)(ia) of the Act does not arise at all but the Ld. CIT(A) dismissed the grounds of appeal simply by observing that "In view of the factual matrix of the case at hand and the judicial precedent cited above, these grounds of appeal adduced by the appellant are not upheld." It is also submitted that the appellant has submitted necessary evidence to substantiate that it had deducted tax at source under various section of the Income Tax Act, 1961 and deposited the tax so deducted to the credit of the Central Government; and filed the TDS returns in Form-26 but the Ld. CIT(A) without considering the above documents, simply dismissed the grounds of appeal which is illegal and against natural justice. The assessee has prayed that the additions made u/s 40(a)(ia) of the Act be deleted as the assessee has deduc....
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....3 for Rs. 3,21,280/- (due date 15-09-2013) and for February, 2014 for Rs. 3,02,613/- (due date 15-03-2014) totalling Rs. 6,23,893/- for A.Y. 2014-15 but the contribution for February, 2014 Rs. 3,02,613/- was deposited on 18-03-2014 i.e. within the grace period of 5 days allowed under the relevant Act. The details were given in the appellant's written submission to the Ld. CIT (A). From the details submitted and the Tax Audit Report, it was very much evident that though there was a delay in depositing the employees' contribution within the due date under the relevant Act in some months but the amounts were deposited within the grace period of 5 days allowed under the said relevant Act which ought to have been allowed as a deduction u/s 36(1)(va) of the Act. Application of grace period of 5 days was available up to December, 2015 and was withdrawn with effect from February, 2016 for depositing contributions for the month of January, 2016 which is payable in the month of February, 2016. Out of the total disallowance of Rs. 6,23,893/- for the A.Y. 2014-15, the appellant deposited Rs. 3,02,613/- within the grace period allowed under the relevant Act. Those amounts deposited within t....
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....16 payable in the month of February, 2016, the assessee has submitted that out of the total disallowance of Rs. 6,23,893/-, the appellant deposited Rs. 3,02,613/-within the grace period allowed under the relevant Act, therefore, these amounts deposited within the grace period ought to have been allowed as a deduction u/s 36(1)(va) of the Act. The assessee has relied upon the decision of Hunsur Plywood Works Ltd. (supra) in support of the claim that all the consequences of making payment within the said 15 days should be considered to follow if the payment is made within the grace period following the said period of 15 days. 19. We have considered the submissions made. Since the concerned authority of Employees' Provident Fund had extended the due date and allowed a grace period of 5 days which was available up to December, 2015, therefore, on this issue also, the order of the Ld. CIT(A) is hereby set aside and the matter is remitted back to the Ld. AO to verify the amount paid within the grace period and delete the same and the rest of the addition made shall be upheld. The assessee shall file a copy of the challans before the Ld. AO in support of the claim that the amounts were....
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....ssee shall be a cooperative society and not a cooperative bank and no dividend distribution tax under section 115-O and interest under section 115P of the Act shall be charged. 25. As regards Ground Nos. 5 to 8, in view of the finding in para 14 relating to A.Y. 2014-15, the order of the Ld. CIT(A) is hereby set aside and the issue is restored to the Ld. AO for verification of TDS made or non-applicability of the same and the decision in A.Y. 2014-15 shall mutatis mutandis apply for A.Y. 2015-16 as well. Hence, these grounds of appeal are allowed for statistical purposes. 26. Ground No. 9 is also allowed for statistical purposes in view of the finding in para 19 and the decision in A.Y. 2014-15 shall mutatis mutandis apply for A.Y. 2015-16 as well. The Ld. AO is directed to allow the required relief after the assessee furnishes necessary evidence for the claim made. 27. As regards Ground no. 10 for AY 2015-16 relating to addition for provision for income tax for Rs. 1,56,56,307/- being a duplicate addition, the assessee has submitted that the appellant had given detailed submission to the Ld. CIT(A) in this regard. The appellant had also enclosed the computation of total i....
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....cheduled bank and provisions of section 36(1)(viia) is applicable to the appellant. During the year, the appellant debited in its Profit and Loss Account the aforesaid sum of Rs. 14,61,740/- complying with the norms of Income Recognition, Assets Classification and Provisioning pertaining to Advances norms issued by the Reserve Bank of India. The said guidelines issued by the Reserve Bank of India are mandatory in nature and the appellant has to adhere to them. It is submitted that the said amount is deductible u/s 36(1)(viia) of the Act as Provision for Bad & Doubtful Debts and the claim of the appellant is within the limit fixed u/s 36(1)(viia) of the Act. But the Ld. AO failed to appreciate this fact and added the said amount of Rs. 14,61,74/- with the returned income. Provision on standard assets of Rs. 14,61,740/- is said to be eligible for deduction u/s 36(1)(viia) of the Act as provision for bad and doubtful debts and as such the said addition is wrong and requires to be deleted. Reliance in this regard has been placed on the following decisions: i) ACIT, Khandwa vs. M/s. Jila Sahakari Kendriya Bank, Khandwa Road, Khargone ITA No.455/Ind/2018 Assessment Year: 2014-15....
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.... produced the supporting bills and vouchers, in the absence of which the genuineness of the expenses could not be verified and the possibility of claiming excessive expenses on the basis of internally maintained vouchers could not be ruled out. The Ld. AR submitted before us that the Ld. AO disallowed 15% of Vehicles Hire Charges Rs. 11,86,339/-, Petrol & Mobile Expenses Rs. 5,42,386/- and Entertainment Rs. 6,49,444/-. The appellant had made a detailed submission before the Ld. CIT(A) but this ground also was not adjudicated by him. The Ld. AO had added back the same on the basis of suspicion and surmises and there was no material on record to prove that the appellant had made self-made vouchers to evade tax. The Ld. AO had not rejected the books of account and the addition on the basis of estimation is arbitrary and bad in law and require to be deleted. Reliance in this regard is placed on the decisions of the Hon'ble ITAT, Ahmedabad in the case of Samir Kishore Parekh, Ahmedabad vs. The ACIT, Circle-5(3)(2), Ahmedabad, ITA Nos.265 & 266/Ahd/2020 (Date of Order 22-06-2022). 29. Before us, no further submission in this regard was made except for stating that the expenditure ....