BANK OF MAHARASHTRA,BANK OF MAHARASHTRA CORPORATE OFFICE vs. DEPUTY COMMISSIONER OF INCOME TAX RANGE 1 PUNE, SWARGATE PUNE

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ITA 493/PUN/2026Status: DisposedITAT Pune30 October 2026AY 2008-20098 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal noted that the assessee had raised a specific ground before the CIT(A) challenging the invocation of section 154. However, the CIT(A) had not adjudicated this specific issue, despite it being raised. Under these circumstances, the Tribunal deemed it proper to restore the issue to the file of the CIT(A) without going into the merits of the case. The Tribunal directed the CIT(A) to adjudicate the validity of the rectification proceedings initiated under section 154, as per the grounds raised before him, after providing the assessee with due opportunity of being heard. The grounds raised by the assessee were accordingly allowed for statistical purposes. The appeal filed by the assessee was allowed for statistical purposes.

What were the facts?

The assessee, Bank of Maharashtra, filed its return of income for assessment year 2008-09, which was later revised. The Assessing Officer (AO) passed an order under section 143(3) and subsequently a rectification order under section 154. During scrutiny of the Profit and Loss account and tax audit report, the AO noted that the assessee had paid interest on deposits and had not followed TDS provisions for certain instances. The assessee contended that TDS was paid within the due date but after the branch audit, or not deducted due to valid Form 15G/15H. The AO disallowed Rs.7,59,34,069/- under section 40(a)(ia). The CIT(A) upheld this addition after obtaining a remand report. The assessee appealed to the Tribunal.

What were the issues?

1. Whether the disallowance of Rs.7,59,34,069/- under section 40(a)(ia) made pursuant to the rectification order under section 154 is legally sustainable? 2. Whether the CIT(A) erred in holding that there was a mistake apparent from the record, thereby upholding the rectification order under section 154, especially when the issue involved verification of facts and was beyond the scope of section 154? Assessee's contentions: The assessee argued that the issue involved verification of facts and thus could not be rectified under section 154. They contended that the disallowance was made in a rectification order based on factual verification and re-computation, which is beyond the scope of section 154. The assessee also argued that in several cases, TDS was not deductible due to valid Form 15G/15H, and in other cases, TDS was deposited subsequently, though not reflected during the branch audit. They relied on audit objections raised by the Revenue audit party which suggested verification with NSDL and TDS return was not done, leading to underassessment. Revenue's contentions: The Revenue heavily relied on the orders of the Assessing Officer and the CIT(A).

Which sections of the Income-tax Act were involved?

Section 40(a)(ia),Section 154,Section 143(3),Section 234B

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, PUNE BENCH “A”, PUNE

Before: SHRI R. K. PANDA & Ms. ASTHA CHANDRA

For Appellant: Shri S Ananthan &
For Respondent: Shri Mithun Shete, CIT-DR and Rajesh Haladkar, Addl. CIT

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH “A”, PUNE BEFORE SHRI R. K. PANDA, VICE PRESIDENT AND Ms. ASTHA CHANDRA, JUDICIAL MEMBER ITA No.493/PUN/2026 Assessment year : 2008-09 Bank of Maharashtra DCIT, Range – 1, 4th Floor, Montclair, 134/1, Baner Pashan Vs. Pune Link Road, Pashan, Pune – 411021 PAN: AACCB0774B (Appellant) (Respondent) Assessee by : Shri S Ananthan & Mrs. Lalitha Rameshwaran Department by : S/Shri Mithun Shete, CIT-DR and Rajesh Haladkar, Addl. CIT Date of hearing : 27-10-2026 Date of pronouncement : 30-10-2026

O R D E R PER R.K. PANDA, VP:

This appeal filed by the assessee is directed against the order dated 27.11.2025 of the Ld. Addl / JCIT(A)-3, Bengaluru relating to assessment year 2008-09.

2.

Facts of the case, in brief, are that the assessee is a banking company and carries on the business of banking. For the impugned assessment year the assessee filed its return of income on 30.09.2008 declaring total taxable income of Rs.533,25,89,605/-. Subsequently the return was revised declaring net taxable income of Rs.459,53,67,194/-. The Assessing Officer passed the order u/s 143(3)

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of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) on 31.12.2010 determining the total income of the assessee at Rs.479,47,76,780/-. An order u/s 154 of the Act was passed on 19.01.2011 determining the total income of the assessee at Rs.482,42,42,118/-. Subsequently on examination of Profit and Loss Account the Assessing Officer noted that the assessee had paid interest on deposits to the extent of Rs.21,20,52,12,000/-. Further scrutiny of tax audit report clause 27(b) and Annexure XIX to Form 3CD revealed that the assessee had not followed the TDS provisions as mentioned below:

3.

He, therefore, issued a notice u/s 154 of the Act on 17.09.2012. The assessee in its reply submitted that the branch audit generally takes place in the month of April, therefore, the subsequent TDS payment is not reflected in the branch audit report. As such, in many cases the payment of TDS is made within the due date but after the date of branch audit. The assessee submitted challans as proof of payment of TDS after the audit is completed in the respective branches for the instances reported in Annexure XIX of the tax audit report for assessment year

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2008-09. It was stated that the branches deduct TDS as per rules, wherever applicable except in cases where Form 15G or 15H is submitted by the depositors. It was argued that TDS is also deducted by the system even in cases where Form 15G/H are submitted by the deductee but not fed in the system inadvertently and in such cases the branches reverse the entry / deduction in view of Form 15G/H submitted by the eligible deductees in time. However, the Assessing Officer was not satisfied with the arguments advanced by the assessee. After verification of payment of challans of TDS, he disallowed an amount of Rs.7,59,34,069/- by invoking the provisions of section 40(a)(ia) of the Act.

4.

In appeal the Ld. Addl / JCIT(A) after obtaining the remand report from the Assessing Officer, upheld the addition made by the Assessing Officer by observing as under:

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5.

Aggrieved with such order of the Ld. Addl / JCIT(A) the assessee is in appeal before the Tribunal by raising the following grounds: 1. The order of the learned CIT(A) is against facts of the case and also against the law. 2. The learned CIT(A) erred in law and on facts in confirming the disallowance of Rs.7,59,34,069 under section 40(a)(ia) made pursuant to the rectification order under section 154. 3. The learned CIT(A) erred in holding that there was a mistake apparent from record and thereby upholding the rectification order u/s 154. 3.1. The learned CIT(A) failed to appreciate the fact that the issue involved verification of facts and as such cannot be rectified u/s 154. 4. The learned CIT(A) failed to appreciate the fact that no disallowance was made in the original assessment order and the same was rectified u/s 154 based on factual verification and re-computation of the disallowance which is beyond the scope of Sec 154. 5. The learned CIT(A) erred in not appreciating that in several cases, TDS was not deductible due to valid Form 15G/15H, and in other cases TDS was deposited subsequently, though not reflected during the branch audit. For all of these and the other grounds, which may be urged at the time of hearing, the appellant prays that its appeal be allowed.

6.

The Ld. Counsel for the assessee at the outset drew the attention of the Bench to the audit objections raised by the Revenue party dated 23.11.2011, copies of which are placed at pages 13 to 14 of the paper book and submitted that the Revenue audit party has observed that since the tax auditor has given the details of

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actual dates of payment, amount of interest and the corresponding TDS and the month in which it was due and when it was paid was needed to be verified with NSDL and TDS return which was not done, therefore, the omission to do so has resulted in underassessment of income of Rs.13,20,29,173/- with consequent short levy of tax of Rs.4,48,76,715/- and interest u/s 234B of Rs.1,48,09,315/-, totaling to Rs.5,96,86,030/-. He submitted that based on this the Assessing Officer has issued notice u/s 154 of the Act. He submitted that this is not a case of 154 since there is no apparent mistake on record. He submitted that although a specific ground was raised before the Ld. Addl / JCIT(A), however, the Ld. Addl / JCIT(A) has not adjudicated the same. He accordingly submitted that the order of the Ld. Addl / JCIT(A) be set aside and the grounds raised by the assessee be allowed.

7.

The Ld. DR on the other hand heavily relied on the orders of the Assessing Officer and the Ld. Addl / JCIT(A).

8.

We have heard the rival arguments made by both the sides, perused the orders of the Assessing Officer and the Ld. Addl / JCIT(A) and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us. We find the assessee before the Ld. Addl / JCIT(A) has taken a specific ground as per ground No.2 challenging the invocation of the provisions of section 154 of the Act. However, the Ld. Addl / JCIT(A) has not adjudicated that issue though specifically taken before him. Under these circumstances and without going into the merit of the case, we deem it proper to restore the issue to the file of

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the Ld. Addl / JCIT(A) with the direction to adjudicate the validity of rectification proceedings initiated u/s 154 of the Act as per the grounds raised before him. Needless to say the Ld. Addl / JCIT(A) shall decide the issue as per fact and law after providing due opportunity of being heard to the assessee. We hold and direct accordingly. The grounds raised by the assessee are accordingly allowed for statistical purposes.

9.

In the result, the appeal filed by the assessee is allowed for statistical purposes.

Order pronounced in the open Court on 30th October, 2026.

Sd/- Sd/- (ASTHA CHANDRA) (R. K. PANDA) JUDICIAL MEMBER VICE PRESIDENT पुणे Pune; दिन ांक Dated : 30th October, 2026 GCVSR आदेश की प्रतितिति अग्रेतिि/Copy of the Order is forwarded to: 1. अपील र्थी / The Appellant; प्रत्यर्थी / The Respondent 2. 3. The concerned Pr.CIT, Pune 4. DR, ITAT, ‘A’ Bench, Pune ग र्ड फ ईल / Guard file. 5. आदेशानुसार/ BY ORDER, Digitally signed by Sunil Kumar Sunil Kumar More // True Copy // More Date: 2026.11.03 Assistant Registrar 11:55:57 +05'30' आयकर अपीलीय अदिकरण ,पुणे / ITAT, Pune

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S.No. Details Date Initials Designation 1 Draft dictated on 29.10.2026 Sr. PS/PS 2 Draft placed before author 30.10.2026 Sr. PS/PS Draft proposed & placed before 3 JM/AM the Second Member Draft discussed/approved by 4 AM/AM Second Member Approved Draft comes to the 5 Sr. PS/PS Sr. PS/PS 6 Kept for pronouncement on Sr. PS/PS 7 Date of uploading of Order Sr. PS/PS 8 File sent to Bench Clerk Sr. PS/PS Date on which the file goes to 9 the Office Superintendent Date on which file goes to the 10 A.R. 11 Date of Dispatch of order

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