ACIT CIRCLE 3(2)(1), MUMBAI, MUMBAI vs. THE NATIONAL BANK FOR AGRICULTURE AND RURAL DEVELOPMENT, MUMBAI

ITA 1962/MUM/2026Status: DisposedITAT Mumbai02 June 2026AY 2022-2312 pages
AI SummaryDismissed

What were the facts?

The Revenue appealed against the deletion of additions made by the Assessing Officer (AO) concerning interest payments on deposits and promotional activities. The assessee, NABARD, argued that the interest was diverted at source and not its income, and that promotional expenses were allowable under Section 36(1)(xii) after being notified.

What did the Tribunal hold?

The Tribunal affirmed the CIT(A)'s decision, holding that the interest on funds held for government schemes was not taxable in NABARD's hands as it acted as a nodal agency. It also held that promotional expenses were allowable as NABARD was notified under Section 36(1)(xii) for the relevant assessment year.

What were the issues?

Whether interest on funds held for government schemes is taxable in the hands of NABARD, and whether promotional expenses are allowable under Section 36(1)(xii) for NABARD.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 144B,Section 250,Section 36(1)(xii)

AI-generated summary — verify with the full judgment below

Before: SHRI AMIT SHUKLA & SHRI PRABHASH SHANKAR

For Appellant: Shri J.D. Mistri, Sr. Adv. & Shri Niraj
For Respondent: Shri Ganesh Sudhakar Bare, CIT-DR
Hearing: 13.05.2026Pronounced: 02.06.2026

PER PRABHASH SHANKAR [A.M.] :- The present appeal emanating from the appellate order dated 03.12.2025is preferred by the Revenue against the order passed by the Learned Commissioner of Income-tax (Appeals)/National Faceless Appeal Centre, Delhi [hereinafter referred to as “CIT(A)”] pertaining to P a g e | 2 A.Y. 2022-23 The National Bank for Agriculture and Rural Development assessment order passed u/s. 143(3) r.w.s. 144B of the Income-tax Act, 1961 [hereinafter referred

The order continues below.

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