M/S JILA SAHKARI KRISHI AUR GRAMIN VIKAS BANK MYDT.,HOSHAGABAD vs. THE ACIT RANGE, ITARSI

M/s Jila Sahkari ITA 105/2017

आयकर अपील�य अ�धकरण, इंदौर �यायपीठ, इंदौर IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER

ITA No.105/Ind/2017 Assessment Year: 2012-13

M/s Jila Sahkari Krishi & Asstt. Commissioner of Gramin Vikas Bank Vs. Income Tax, Circle Maryadit, Hoshangabad Range Itarsi (Appellant) PAN No.AAAAJ-1482A

Appellant by Shri Anil Khabya Respondent by Shri K.G. Goyal Date of Hearing 24.4.2018 Date of Pronouncement 27.4.2018

ORDER PER MANISH BORAD, AM.

This appeal filed by the assessee pertaining to Assessment

Year 2012-13 is directed against the order of ld. Commissioner of -

Income-tax (Appeals), Bhopal, dated 25.11.2016 which is arising

out of the order u/s 271(1)(c) of the Act(1)(c) of the Income Tax Act

dated 31.8.2015 framed by the ACIT, Range Itarsi.

M/s Jila Sahkari ITA 105/2017 2. The sole grievance of the assessee is against the order

of the learned Commissioner of Income Tax (Appeals) confirming the

penalty of Rs. 12 lacs u/s 271(1)(c) of the Act(1)(c) of the Act

imposed by the Assessing Officer towards disallowance of provision

for bad and doubtful debts at Rs. 41,30,455/- and disallowance of

provision for standard assets at Rs.1,85,865/-.

district cooperative agricultural and rural development bank andit

declared loss of Rs. 7,08,37,442/- in the return of income filed on

26.9.2012. The assessment u/s 143(3) of the Act was completed on

9.2.2015 assessing the loss at Rs. 3,46,08,356/- after making

various disallowances totaling to Rs.3,62,29,086/- which, inter alia,

included disallowance of provision for bad and doubtful debts and

provision for standard assets at Rs.41,30,455/- and Rs.1,85,865/-.

Subsequently the Assessing Officer initiated penalty proceedings

u/s 271(1)(c) of the Act. None attended on behalf of the assessee

during penalty proceedings u/s 271(1)(c) of the Act(1)(c) of the Act.

The Assessing Officer accordingly computed the penalty at Rs. 12

lacs on the disallowance as referred to above at Rs. 43,16,320/-.

M/s Jila Sahkari ITA 105/2017 4. Aggrieved, the assessee preferred appeal before the learned

Commissioner of Income Tax (Appeals) but failed to succeed as the

learned Commissioner of Income Tax (Appeals) was of the view that

as the assessee has not appealed against the order of the Assessing

Officer passed u/s 143(3) of the Act it connotes that the assessee

has accepted that it is not covered by the provisions of section

36(1)(viia) of the Act which allowed certain categories of the

assessees engaged in banking business for making provisions for

bad and doubtful debts and standard assets.

assessee submitted that the alleged disallowances for bad and

doubtful debts and provision for standard assets were duly reflected

in the return of income and it is not the case of furnishing

inaccurate particulars of income or concealment of particulars of

income. He submitted that the assessee was not able to appear

before the Assessing Officer for unavoidable reasons and, therefore,

requested that the issue may be remitted back to the file of the

M/s Jila Sahkari ITA 105/2017 Assessing Officer for de novo adjudication. The learned DR raised

no objection to this plea of the assessee.

record placed before us. The grievance of the assessee is against

finding of the learned Commissioner of Income Tax (Appeals)

confirming the action of the Assessing Officer levying penalty of Rs.

12 lacs u/s 271(1)(c) of the Act for disallowance of provision of bad

and doubtful debts and disallowance of provision for standard

assets at Rs. 41,30,455/- and Rs. 1,85,865/-, respectively. Perusal

of record shows that during penalty proceedings the assessee made

no submissions and failed to appear before the Assessing Officer to

plead its case. It is also discernible from record that the alleged

disallowances are in the nature of claims made by the assessee

under the provisions of section 36(1)(viia) of the Act. The case is

purely of the nature that the claim has been made by the assessee

which was denied by the Assessing Officer. It is also evident from

records that the assessee has not filed appeal before the learned

Commissioner of Income Tax (Appeals) against the disallowances

made by the Assessing Officer u/s 143(3) of the Act as there was

M/s Jila Sahkari ITA 105/2017 huge loss and even the assessed income was a loss. However,

looking to the fact that none attended on behalf of the assessee

during the penalty proceedings u/s 271(1)(c) of the Act(1)(c) of the

Act, we, in the interest of justice and to give a fair chance to the

assessee, set aside the issue to the file of the Assessing Officer for

de novo adjudication and also direct the assessee to be compliant

and not to take unnecessary adjournment and also direct it to file

necessary evidence and submissions in support of its claim.

The order pronounced in the open Court on 27.4.2018.

sd/- sd/-

( KUL BHARAT) (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER �दनांक /Dated : 27 April, 2018 Copy to: The Appellant/Respondent/CIT concerned/CIT(A) concerned/ DR, ITAT, Indore/Guard file. By order Private Secretary/DDO, Indore

M/s Jila Sahkari ITA 105/2017 2. Date on which the typed draft is placed before the Dictating Member : 9.2.2018 3. Date on which approved draft comes to the Sr.P.S./P.S: 4. Date on which the fair order is placed before the dictating Member for pronouncement: 5. Date on which the fair order comes back to the Sr.P.S./P.S.: 6. Date on which the file goes to the Bench Clerk: 7. Date on which the file goes to the Head Clerk: 8. The date on which the file goes to the Assisstant Registrar for signature of the order. 9. Date of Despatch of the Order: