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Facts
The assessee, a District Level Co-operative Bank, appealed against a CIT(A) order for AY 2016-17, which confirmed additions made during an assessment initiated under Section 147 read with Section 144B. The assessee contested disallowances related to "Cost of Management due" and "Deduction under Section 36(1)(vii a)", filing additional evidence before the ITAT.
Held
The ITAT admitted the additional evidence filed by the assessee under Rule 29 of the Income Tax (Appellate Tribunal) Rules, 1963. It directed the Assessing Officer to verify this evidence and re-adjudicate the issues concerning "Cost of Management due" and "Deduction under Section 36(1)(vii a)", granting the assessee another opportunity to substantiate its claims.
Key Issues
Whether disallowances for "Cost of Management due" and "Deduction under Section 36(1)(vii a)" were justified, and if the additional evidence should be considered by the Assessing Officer.
Sections Cited
147, 144B, 143(1), 36(1)(vii a)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, ‘A’ BENCH, CHENNAI
Before: SHRI ABY T VARKEY & SHRI S. R. RAGHUNATHA
आदेश /O R D E R
PER S. R. RAGHUNATHA, AM:
The present appeal is filed by the assessee against the order dated 20.03.2025 passed by the learned Commissioner of Income Tax(Appeals), National Faceless Appeal Centre (NFAC), Delhi, (hereinafter referred to as “CIT(A)”), dismissing the appeal filed by the assessee against the assessment
:-2-: ITA. No.:1415//Chny/2025 order dated 21.09.2021 passed u/s.147 read with section 144B of the Income Tax Act, 1961 (hereinafter referred to as the “Act”) for the A.Y.2016-17.
The assessee is a District Level Co-operative Bank formed under Tamil Nadu Co-operative Societies Act. It is under the control of Rules and Regulations Governed by RBI. The main activity of the bank is to accept the deposits and lend money to the borrowers and also invest in various deposits and securities as allowed by the Co-operative Societies Act and RBI. The return of income for the year under consideration i.e. for A.Y.2016-17 has been filed on 17/10/2016 declaring total income at Rs.NIL. The said return was processed u/s.143(1) of the Income Tax Act,1961.
Subsequently, the case of the assessee was taken up for scrutiny and various additions were made, against which the assessee preferred an appeal against a few additions, which were further confirmed by the first appellate authority, against which the assessee is in appeal before us. The details are tabulated as below.
Particulars Amount In Allowed/ Allowed/ Whether appeal is Rs. Disallowe Disallowed preferred before d by the by the CIT ITAT Assessing (Appeals) Officer Provision for Standard Provision 6,43,60,332 Disallowed Disallowed No Provision for sundry Dr Advance 2,28,31,424 Disallowed Disallowed No Provision for I Account
:-3-: ITA. No.:1415//Chny/2025
74,90,705 Disallowed Disallowed No Cost of Management due 86,06,865 Disallowed Disallowed Yes Contingent 1,20,43,357 Allowed NA NA Deduction under section 36(1) (vii a) 20,70,41,743 Disallowed Disallowed Yes
With respect to the additions that are contested before us, i.e., “Cost of Management due” and “Deduction u/s.36(1)(via) of the Act”, the Ld.AR of the assessee filed additional evidence in terms of Rule 29 of the Income Tax (Appellate Tribunal) Rules, 1963 and also written submissions in support of its case and prayed that the additional evidence may be taken on record and prayed that the appeal may be allowed in its favour.
Per contra, the Ld.DR vehemently opposed the additional evidence that are filed and submitted that the order of the authorities below needs no interference and prayed that the appeal may be dismissed.
After going through the documents filed by the Ld.AR and the submissions made before us by both the parties, we are inclined to admit the additional evidence. Since, these additional evidence filed by the assessee needs to be verified by the Assessing Officer, we are of the view that the assessee could be given one more opportunity before the Assessing Officer to substantiate its case. Hence, we direct the Assessing Officer to decide the issues concerning “Cost of Management due” and “Deduction u/s.36(1)(via) of :-4-: ITA. No.:1415//Chny/2025 the Act” after considering the relevant submissions made by the assessee. The assessee is directed to be diligent in appearing before the Assessing Officer as and when called for and entitled to file the required relevant documents and records before the Assessing Officer, in support of its claim.
In the result, appeal filed by the assessee is allowed for statistical purposes.
Order pronounced in the open court on 09th October, 2025 at Chennai.