TaxTMI 
TaxTMI 
2025 (12) TMI 68
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.... Prin. CIT has erred in holding that provisions of Sec. 14A of the Act are applicable to the appellant when in fact there being surplus of interest income only, provisions of Sec. 14A of the Act are not applicable at all. 1.4 The appellant respectfully submits that the order passed by ld. Assessing Officer is neither erroneous nor prejudicial to the interest of revenue as both the deductions have been rightly claimed as per the provisions of law and therefore the order passed u/s. 263 of the Act should be annulled. 1.5 The appellant therefore submits that the order passed u/s. 263 of the Act be annulled. 1.6 The appellant craves leave to add, alter or amend any of the grounds of appeal before final hearing of the appeal." 3. The brief facts of the case are that the assessee filed its return of income for AY 2020-21 on 23.12.2020 declaring total income of Rs.17,15,35,440/-, and the assessment was completed under section 143(3) read with section 144B of the Act on 29.08.2022 at the same income returned by the assessee. While examining the assessment records, the Principal CIT noticed two major issues. First, the assessee had claimed deduction under secti....
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....icer to apply section 14A read with Rule 8D and make appropriate disallowance in respect of the exempt interest income. Since the Assessing Officer had failed to make necessary enquiries and had allowed incorrect claims resulting in short levy of tax, the Principal CIT held that the order was erroneous and prejudicial and therefore required fresh assessment under section 263. 6. The assessee is in appeal before us against the order passed by CIT(Appeals) dismissing the appeal of the assessee. 7. Before us the Counsel for the assessee submitted that the present revision under section 263 has been wrongly invoked on both issues raised by the Principal CIT. The Counsel for the assessee submitted the chronology of the case by stating that the assessee had filed its return of income on 29.06.2021 declaring Rs.17.15 crores, followed by filing of the tax audit report in Form 3CA and 3CD on 16.07.2021. The assessment was completed under section 143(3) of the Act at the same income, and throughout the assessment proceedings the Assessing Officer had issued notices under sections 143(2) and 142(1), to which detailed replies were filed, all of which are placed in the paper book. The cou....
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....revising the assessment on the second issue regarding section 14A, the revision on the first issue relating to section 36(1)(viia) must be quashed because the Assessing Officer had already examined the deduction during the original assessment. 8. We have heard the rival contentions and perused the material on record. The first issue for consideration before us is whether deduction u/s 36(1)(viia) of the Act is applicable to "total income" including capital gains or whether the deduction is only restricted to "total income" under the head "Profits and Gains of Business or Profession". Section 36(1)(viia) of the Act allows certain banks to claim a deduction for the provision they create for bad and doubtful debts. In simple terms, this section gives specified banks such as scheduled banks, non-scheduled banks (other than foreign banks), and cooperative banks a special benefit by permitting them to set aside a percentage of their business income as a deduction to cover possible future loan losses. The deduction is not linked to actual write-off of loans but is allowed on the basis of a provision created in the books. The section allows a deduction of up to 7.5% of the bank's "total....
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....a) is explicit and unambiguous, as it permits a deduction "not exceeding seven and one-half per cent of the total income (computed before making any deduction under this clause and Chapter VIA)." The phrase "total income," when read with section 2(45) and section 5, refers to the total amount of income from whatever source derived, computed in accordance with the provisions of the Act. The Statute does not carve out any exception excluding capital gains or income under any other head for the limited purpose of computing this deduction. Therefore, when the law itself employs the expression "total income" without qualification, it is impermissible to read into the statute any limitation that the Legislature has consciously omitted. 11. It is well settled that when the language of the statute is clear, plain, and unambiguous, it must be applied as it stands, and no interpretation can be imported to give it a meaning different from what is expressed. The Hon'ble Supreme Court in CIT v. Tara Agencies (292 ITR 444) has held that where the words of a statute are clear, they must be given effect to regardless of consequences. Similarly, in Orissa State Warehousing Corporation v. CIT (23....