TaxTMI 
TaxTMI 
2025 (5) TMI 1791
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....he 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. CIT (A)-NFAC, has erred in law and not justified by upholding the imposition of....
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....urn 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 Appeal Centre, Delhi 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,....
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....ing 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) of the I. T. Act, 1961 and adding the same with 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, fac....
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....e 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. I.T.A. No.: 1923/KOL/2024; A.Y. 2014-15: 3. We will take up ITA No. 1923/KOL/2024 for AY 2014-15 first as the lead case for adjudication. Brief facts of the case are that the assessee filed its return of income for the A.Y. 2014-15 on 06.12.2014 declaring total income of Rs. 3,61,22,....
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....nce, 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 under the Income Tax Act, 1961 and there is no status as cooperative bank but the status is of Cooperative Society and the status of the assessee was clearly mentioned as Cooperative Society in the Income Tax Computation Form and the tax was computed at the rate of tax applicable to a Cooperative....
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.... 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 assessee from a co-operative society to a company" 9. Since the issue is decided in favour of the assessee by the order of the Coordinate Benches of the Tribunal in AYs 2007-08, 2009-10 and 2010-11, therefore, following the order of the coordinate benches, the change of status of the assessee from cooperative S....
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.... 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 filed in Form No. 26Q. it is stated that demonetisation of Specified Bank Notes was declared on 08-11-2016 and all employees became very much busy to contain the sudden work load which had increased. The date of hearing was fixed on 16-11-20116 but due to events beyond the control of the appellant and the work pressure, the requisite documents could not be submitte....
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....ng 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 deducted tax at source wherever applicable and complied with the other provisions of the TDS under the Act. 14. We have considered the submission made. The assessee submitted before us in the course of appeal that on account of demonetization and the assessment proceeding being done in AY 2016-17 and due to lot of work, the assessee could not reply to the Assessing....
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....o 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 the grace period of the relevant Act ought to have been allowed as a deduction u/s 36(1)(va) of the Act. The assessee has relied upon the decision in the case of Hunsur Plywood Works Ltd. vs Deputy Commissioner of Income-Tax (1995) 54 ITD 394 (Bang-Trib) dated on 21st March, 1995 wherein the Hon'ble Tribunal has held: "Hence, we ultimately hold that from practic....
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.... 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 paid within the grace period. In view of the decision of the Hon'ble Supreme Court in the case of Checkmate Services (P) Ltd. Vs Commissioner of Income Tax-1, [2022] 143 taxmann.com 178 (SC)/448 ITR 518 (SC), the rest of the amount shall remain confirmed. Hence, this ground of appeal is partly allowed. 20. Ground no. 11 is relating to the Ld. CIT(A) erring in law and not being justi....
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....ability 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 income for the A.Y. 2015-16 but the Ld. CIT(A) has not adjudicated this ground of appeal. The Ld. AO added back a sum of Rs. 1,56,56,307/- with the returned income of Rs. 6,58,23,127/- on the ground that "the appellant had debited a sum of Rs. 1,56,56,307/- as provision for Income Tax under the head "Other Expenditure". As a matter of fact, the provision for any kind of expenditure is not allowable under th....
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.... 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 (ITAT-Indore). ii) The State Bank of India (Successor to State Bank of Patiala) vs. Asst. CIT Circle-Patiala, ITA No. 510/CHANDI/2017 AY 2013-14 & ITA No. 538/CHANDI/2017 A.Y. 2014-15 & ITA No.1259/CHANDI/2017 A.Y. 2015-16 (ITAT-MUMBAI) 26. We have considered the submission of the assessee. The Bench was of the view that the Ld. CIT(A) has not adjudicated this issue and therefore, the same maybe remitted to the L....
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....d 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 being for the purpose of business was allowable. However, the claim of expenditure u/s 37(1) of the Act needs to be supported by primary documents which are the bills and vouchers and since the assessee could not produce the same before the Ld. AO therefore, the same was partly disallowed. However, we find that the disallowance of expenditure is excessive and the same is reduced to 10% from 15% made by the Ld. AO with consequential relie....