SHIVESHWARI NAGARI SAH. BANK LTD,,HINGOLI vs. INCOME-TAX OFFICER, WARD - HINGOLI, , PARBHANI

आदेश / ORDER PER ANIL CHATURVEDI, AM :

This appeal filed by the assessee is emanating out of the order 1. of Commissioner of Income Tax (A) – 1, Aurangabad dated 06.03.2018 for the assessment year 2012-13.

Assessee is a Co-operative Bank engaged in the banking business. It electronically filed its return of income for A.Y. 2012-13 on 18.09.2012 declaring total income at Rs.29,33,550/-. The case was selected for scrutiny and thereafter assessment was framed u/s

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143(3) of the Act vide order dt.27.03.2015 and the total income was

determined at Rs.32,91,210/-. Aggrieved by the order of AO, assessee

carried the matter before Ld.CIT(A), who vide order dt.06.03.2018 (in

appeal No.ABD/CIT(A)-1/190/2015016) dismissed the appeal of

assessee. Aggrieved by the order of Ld.CIT(A), assessee is now in

appeal before us and has raised the following grounds :

“1. Honorable CIT(A) has erred in confirming the disallowance of claim of deduction u/s 36(1)(viia) of Rs. 2,37,855/- . Same may please be allowed.

assessee had not made any provision for bad and doubtful debts in

the books of accounts but in the computation of income had claimed

deduction to the tune of Rs.2,37,855/- u/s 36(1)(viia) of the Act.

The assessee was asked to explain as to why the deduction in the

computation of income not be disallowed as no provision was made in

the books of accounts, to which the assessee made submissions

which were not found acceptable to the AO. AO noted that as per

provisions of Sec.36(1)(viia) of the Act, assessee will get deduction for

provisions of bad and doubtful debts only of the amount of such

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provision actually debited to the Profit and Loss account. He noted

that since assessee has not created any provision of bad and doubtful

debts in the books of accounts no deduction of Rs.2,37,855/- as

claimed in the return is allowable u/s 36(1)(viia) of the Act. He also

relied on the instructions of CBDT Instruction No.17/2008 dated

26.11.2008. He thus disallowed Rs.2,37,855/- on account of

deduction under Sec.36(1)(viia) of the Act and also disallowed

Rs.1,00,000/- on account of excess provision for standard assets and

Rs.19,805/- on account of revenue receipts. Aggrieved with the

disallowance of Rs.2,37,855/- u/s 36(1)(vii) of the Act made by the

AO, assessee carried the matter before Ld.CIT(A), who vide ex-parte

order upheld the order of AO. Aggrieved by the order of Ld.CIT(A),

assessee is now before us.

passed an ex-parte order and not on merits. He further submitted

that due to unavoidable circumstances, assessee could not appear

before Ld.CIT(A) and for non-appearance before Ld.CIT(A), reasonable

costs as deemed fit may be imposed. He also undertook that if given a

chance, assessee shall appear before the lower authorities and furnish

all the required details to substantiate its case. Ld.D.R. seriously

objected to the prayer for remitting the matter back to Ld.CIT(A) and

submitted that despite various opportunities given by AO and

Ld.CIT(A), assessee choose not to appear before the revenue

authorities. He submitted that in case the matter is restored to the

file of either of the Revenue authorities, then exemplary cost should be

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levied on the assessee so that in future he will appear before the

Revenue authorities.

on record. The issue in the present case is with respect to the

disallowance of Rs.2,37,855/- u/s 36(1)(viia) of the Act. In the

present case due to non-appearance on various occasions, Ld.CIT(A)

has passed an ex-parte order dismissing the appeal of assessee on the

basis of statement of facts enclosed with Form No.35 filed by the

assessee.

the appeal of the assessee without going into the merits of the issue

before him. Even in an ex-parte order, the Ld.CIT(A) should have

decided the grounds of appeal of the assessee on merits thereof.

Since there was non-appearance by assessee before AO and Ld.CIT(A),

we are of the view that it cannot be said that there was no negligence

on the part of the assessee. However, considering the fact that Ld.A.R.

has given an assurance that assessee will co-operate and appear

before lower authorities and in view of the well settled principle of

natural justice that sufficient opportunity of hearing should be

afforded to the parties and no party should be condemned unheard,

we are of the view that the one final opportunity may be granted to

assessee subject to levy of cost of Rs.5,000/-. We therefore restore

the matter back to the file of Ld.CIT(A) to decide the issue on merits in

accordance with law subject to assessee depositing Rs.5,000/- with

Army Welfare Fund and producing the challan before Ld.CIT(A).

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Subject to deposit of costs, the appeal of the assessee shall be taken up for adjudication by the Ld.CIT(A). Needless to state that Ld.CIT(A) shall grant adequate opportunity of hearing to both the parties. Assessee is also directed to promptly furnish all the details called for by the authorities. In view of our decision to restore the issue to Ld.CIT(A), we are not adjudicating on merits the grounds of the appeal raised by the assessee. Thus, the grounds of assessee are allowed for statistical purposes in the terms aforesaid.

Order pronounced on the 3rd day of June, 2019.

Sd/- Sd/- (PARTHA SARATHI CHAUDHURY) (ANIL CHATURVEDI) �या�यक सद�य / JUDICIAL MEMBER लेखा सद�य / ACCOUNTANT MEMBER

पुणे Pune; �दनांक Dated : 3rd June, 2019. Yamini

आदेश क� ��त�ल�प अ�े�षत/Copy of the Order forwarded to :

आदेशानुसार/ BY ORDER // True Copy // व�र�ठ �नजी स�चव / Sr. Private Secretary आयकर अपील�य अ�धकरण ,पुणे / ITAT, Pune.