2026 (5) TMI 185

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....on. 2. Brief facts necessary to decide the issue raised in this appeal, are as below: (a) For the Assessment Year 2001-2002, the appellant/Indian Bank, which is a Nationalised Bank, filed its Return of income admitting the loss of Rs. 836,73,14,639/-. (b) After scrutiny, proceedings were initiated under Section 143(2) of the Income Tax Act. The appellant filed a petition for rectification of certain errors that had crept in, in the order of assessment, dated 31.03.2004. (c) While considering the rectification application and allowing part of the prayer sought for in the rectification application, the Assessing Authority has reduced the loss by dis-allowing the specific portion of the loss claimed under the head....

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....g to the claim of allowances to a Bank in terms of Section 36(1)(vii-a)(a) and the proviso thereunder, is not a debatable issue and consequently, is liable to rectification under Section 154 of the Income Tax Act ? 4. At the outset, learned counsel appearing for the appellant/Bank submitted that the issue as to whether the expression "at its option" used in the proviso to subsection (vii-a) of Section 36(1), refers the option of the assessee or the option of the Assessing Officer, has been given a quietus by the Honourable Supreme Court in the case of Commissioner of Income Tax, Chennai, Vs. Tamilnadu Industrial Investment Corporation Limited, reported in 2019 (112) Taxmann.com 387 (SC). The Honourable Supreme Court has upheld the order ....

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....come Tax Act, should be applied to the case on hand and hence, the substantial questions of law (ii) and (iii) are hereby held in favour of the assessee. 6. Insofar as the substantial questions of law (i) and (iv) are concerned, learned counsel for the appellant/assessee/Indian Bank submitted that in the rectification petition filed by the assessee under Section 154, the Commissioner of Income Tax has gone beyond the scope of the rectification application and without notice to the assessee, which is mandatory, he had reduced the loss, which is in excess of the power conferred under Section 154(3) of the Income Tax Act. 7. In response, learned Senior Standing Counsel appearing for the Income Tax Department submitted that the Honourable....