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

T.C.A.No.947 of 2019 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 05.08.2020 CORAM THE HONOURABLE MR.JUSTICE T.S.SIVAGNANAM and THE HONOURABLE MRS.JUSTICE V.BHAVANI SUBBAROYAN T.C.A.No.947 of 2019 M/s.Indian Overseas Bank Funds & Accounts Department 762, Anna Salai, Chennai 600 002. .. Appellant Versus The Joint Commissioner of Incometax Special Range-I Chennai 600 034. .. Respondent Prayer:- Tax Case Appeal filed under Section 260-A of the Income Tax Act, 1961, against the order of the Income Tax Appellate Tribunal, ''A'' Bench, Chennai dated 30th August 2011 in ITA No.782/(Mds)/01. For Appellant : Mr.R.Vijayaraghavan, Senior Counsel for Ms.Subbaraya Aiyar Padmanabhan For Respondent: Ms.R.Hemalatha Senior Standing counsel 1/8 http://www.judis.nic.in T.C.A.No.947 of 2019 JUDGMENT [Order of the Court was made by

T.S.SIVAGNANAM

, J.]

This appeal, filed by the assessee, an authorised Bank, under 260A of the Income Tax Act, 1961 ('the Act' for brevity) challenging the order dated 30.08.2011 passed by the Income Tax Appellat Tribunal, Bench 'A' Chennai in I.T.A.No.782/Mds./2001 for the assessment year 1992-93. The appeal has been filed raising the following substantial question 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? 2. 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 the appeal of the assessee does not arise out of the reasons recorded for reopening ignoring the grounds of appeal taken before it? 3. Whether on the facts and in the circumstances of 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? 2/8 http://www.judis.nic.in T.C.A.No.947 of 2019 2. We have elaborately heard Mr.R.Vijayaraghavan, learned Senior Counsel for Ms.Subbaraya Aiyar Padmanabhan, learned counsel for the appellant / assessee and Ms.R.Hemalatha, learned Senior standing counsel for the respondent Revenue. We have carefully perused the impugned order passed by the Tribunal. We find that it may not be necessary for us to go into the merits of the matter. We say so because the Tribunal has not rendered any finding as to why the grounds raised by the assessee cannot be decided in their favour. The two contentions which are subject matter of this appeal are reopening of the assessment under Section 147 of the Act and the second issue is with regard to the computation of deduction under Section 80M of the Act. 3. To be noted that the assessee has succeeded on merits and this appeal has pursued by the assessee only on the above mentioned two grounds. We note that the following were the grounds of appeal raised by the assessee before the Tribunal on the aforementioned two issues: 3/8 http://www.judis.nic.in T.C.A.No.947 of 2019 i. 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 on 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 theses grounds itself. ii. The CIT(A) had erred in confirming the reduction of Rs.4,79,494 being 5% of dividend income towards expenditure in computing the deduction under Section 80M. The CIT(A) should have noted that the appellant has not incurred any expenditure for earning the dividend income and hence no amount should have been disallowed. Besides the appellant has huge interest free funds and hence the question of apportionment of any interest towards earning the income also does not arise. This view is supported by a number of judicial decisions including that of Supreme Court and hence no amount should have been disallowed in computing the deduction u/s 80M. 4/8 http://www.judis.nic.in T.C.A.No.947 of 2019 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 5/8 http://www.judis.nic.in T.C.A.No.947 of 2019 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 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. (T.S.S.,J) (V.B.S.,J) 05.08.2020 sk Index: Yes / No Internet: Yes / No Speaking Order/Non-Speaking Order 6/8 http://www.judis.nic.in T.C.A.No.947 of 2019 To The Joint Commissioner of Incometax Special Range-I Chennai 600 034. 7/8 http://www.judis.nic.in T.C.A.No.947 of 2019 T.S.SIVAGNANAM, J. AND V.BHAVANI SUBBAROYAN, J. sk T.C.A.No.947 of 2019 05.08.2020 8/8 http://www.judis.nic.in