M/S. INDIAN OVERSEAS BANK vs. THE JOINT COMMISSIONER OF IN

T.C.A.Nos.478 & 479 of 2019 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 13.10.2020 CORAM THE HONOURABLE MR.JUSTICE T.S.SIVAGNANAM and THE HONOURABLE MRS.JUSTICE V.BHAVANI SUBBAROYAN T.C.A.Nos.478 & 479 of 2019 M/s.Indian Overseas Bank Funds & Accounts Department 762, Anna Salai Chennai – 600 002 .. Appellant in both T.C.As Versus The Joint Commissioner of Income Tax, Special Range-I, Chennai – 600 034. .. Respondent in both T.C.As Common Prayer:- Tax Case Appeals filed under Section 260-A of the Income Tax Act, 1961, against the order of the Income Tax Appellate Tribunal, Madras 'A' Bench, dated 30.08.2011 made in I.T.A.No.780/Mds/2001 and I.T.A.No.781/Mds/2001 relating to the Assessment Years 1990-91 and 1991-92 respectively. 1/8 http://www.judis.nic.in T.C.A.Nos.478 & 479 of 2019 For Appellant : Mr.Vikram Vijayaraghavan [in both T.C.As] For Respondent : Mr.T.Ravikumar Senior Standing counsel [in both T.C.As]

JUDGMENT [Common Judgment was delivered by

T.S.Sivagnanam,J.

These appeals have been filed by the assessee, a Nationalized Bank, under Section 260 A of the Income Tax Act, 1961 ('the Act' for brevity), challenging the common order passed by the Income Tax Appellate Tribunal, Madras, 'A' Bench ('the Tribunal' for brevity), Chennai dated 30.08.2011 made in I.T.A.No.780/Mds/2001 and I.T.A.No.781/Mds/2001 for the Assessment Years 1990-91 and 1991-92 respectively. These Tax Case Appeals are admitted on 19.07.2019 on the following Substantial Questions of Law: “1. Whether on the facts and in the circumstances of the case the Tribunal was right in law in holding that reopening of assessment is valid on the ground that assessee has challenged the reopening only in respect of one of the two reasons recorded for reopening ignoring the grounds of appeal taken before it? 2. Whether on the facts and in the circumstances of 2/8 http://www.judis.nic.in T.C.A.Nos.478 & 479 of 2019 the case the Tribunal was right in confirming the order of the CIT(A) that the ground relating to estimated disallowance of deduction u/s 80M does not arise out of the order of the reassessment without verifying the computation of income?” 2. We have heard Mr.Vikram Vijayaraghavan, learned counsel for the appellant / assessee and Mr.T.Ravikumar, learned Senior Standing counsel appearing for the respondent / Revenue. 3. A short issue, which is involved in the instant case is whether the assessee had challenged the reopening of the assessment, raising certain grounds. The Assessing Officer completed the assessment under Section 143(3) read with Section 147 of the Act by order dated 22.12.1998. The assessee preferred the appeal before the Commissioner of Income Tax (Appeals) – V, Chennai ['CIT(A) for brevity]. The CIT(A) has recorded a finding that the contention, which was raised by the assessee before him that the Assessing Officer has done a roving enquiry by re-examining the facts already in record, was not raised before the Assessing Officer at the first instance in response to notice under Section 148. Accordingly, the CIT(A) did not decide the validity of the reopening proceedings. Before the 3/8 http://www.judis.nic.in T.C.A.Nos.478 & 479 of 2019 Tribunal, the first ground raised by the assessee is on the validity of the reopening which reads as follows: “1. The learned CIT(A) had erred in confirming the order of assessing officer in reopening the assessment and charging to tax interest accrued but not due to securities and disallowing loss on revaluation of investments. The appellant had filed details of these claims along with the return of income and the assessing officer in the original assessment had allowed these only after examination of the details filed. Hence the reopening was based only on change of opinion and the assessment needs to be struck down as invalid on these grounds itself.” 4. Though such a ground was raised, the Tribunal in Paragraph No.3 of the impugned order, records that only two grounds have been raised by the assessee. We find that when a specific plea has been raised by the assessee, contesting the validity of the reopening proceedings, the CIT(A) and the Tribunal could have considered the same. In fact, it is in the assessee's own case for the Assessment Years 1990-91 and 1991-92, similar issue arose in T.C.A.No.949 of 2019 dated 05.08.2020, we had remanded the matter to the Tribunal for fresh consideration. The operative portion of 4/8 http://www.judis.nic.in T.C.A.Nos.478 & 479 of 2019 the judgment reads as follows: “4. Finding of the Tribunal in respect of the first ground raised by the assessee is as follows: 4. Thus, we find that the ground no.1 of the appeal of the assessee for both the years does not arise out of the reasons recorded by the learned assessing Officer. Hence, this ground of appeal of the assessee is dismissed for both the years under consideration. 5. The finding of the Tribunal in respect of the second ground is as follows: 14. After hearing the rival submissions, we find that the learned Authorised Representative has not controverted the findings of the learned Commissioner of Income Tax (A) that this ground does not arise out of the order of reassessment of the learned Assessing Officer. Therefore, the ground of appeal of the assessee is dismissed. 6. A bare reading of the above shows that the Tribunal has not given any independent reasons as to why the grounds canvassed by the assessee before the Tribunal does not merit consideration. The Tribunal is required to record reasons as to why there is disagreement with the finding of the Lower Appellate Authority and why the grounds raised by the assessee cannot be entertained. Since the order is devoid of 5/8 http://www.judis.nic.in T.C.A.Nos.478 & 479 of 2019 reasons, we are constrained to interfere with the impugned order to the extent indicated and remand the matter back to the Tribunal for fresh consideration.” 7. In the light of the above discussion, the Tax Case Appeal is allowed and the impugned order in I.T.A.No.782/Mds./2001 dated 30.08.2011, insofar as the above two issues are set aside and remanded to the Tribunal for fresh consideration in accordance with law. Consequently the substantial questions of law are left open. No costs.” 5. As noticed above, the assessee has specifically raised a plea regarding the validity of the reopening. Infact, the assessee being a Nationalized Bank, does not stand to gain by not raising such a plea, especially when they have got a large team of Legal Experts and Chartered Accountants advising them in these matters. Therefore, the validity of the reopening needs to be considered by the Tribunal on merits and in accordance with law. 6. In the light of the above, the common order passed by the Tribunal in I.T.A.No.780/Mds/2001 and I.T.A.No.781/Mds/2001 dated 30.08.2011 is set aside and the matter is remanded to the Tribunal to decide 6/8 http://www.judis.nic.in T.C.A.Nos.478 & 479 of 2019 the validity of the reopening proceedings. 7. In the result, the Tax Case Appeals are allowed and consequently, the Substantial Questions of Law are left open. No costs. (T.S.S.,J) (V.B.S.,J) 13.10.2020 Kak Index: Yes / No Internet: Yes / No Speaking Order/Non-Speaking Order To The Income Tax Appellate Tribunal, 'A' Bench, Chennai. 7/8 http://www.judis.nic.in T.C.A.Nos.478 & 479 of 2019 T.S.SIVAGNANAM, J. AND V.BHAVANI SUBBAROYAN, J. Kak T.C.A.Nos.478 & 479 of 2019 13.10.2020 8/8 http://www.judis.nic.in