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Facts
The assessee, a cooperative bank, filed its return of income declaring 'NIL' income for AY 2017-18. The assessment order made various additions, and the CIT(A) dismissed the assessee's appeal against these additions.
Held
The Tribunal noted that the expenditures disallowed needed verification by the Assessing Officer. Therefore, the assessee was granted another opportunity before the Assessing Officer to substantiate its case with supporting evidence.
Key Issues
Whether the disallowances made by the Assessing Officer and sustained by the CIT(A) are to be upheld, or if the assessee should be granted an opportunity for further verification.
Sections Cited
143(3), 143(2), 36(1)(viia)
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 25.03.2025 passed by the Commissioner of Income Tax (Appeals) (hereinafter referred to as “CIT(A)”), dismissing the appeal filed by the assessee against the assessment order dated 28.12.2019 passed u/s.143(3) of the Income Tax Act, 1961 (hereinafter referred to as the “Act”) for the A.Y.2017-18.
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
:-2-: ITA. No.:1417//Chny/2025 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.2017-2018 has been filed on 31.10.2017 declaring total income at Rs. NIL.
The said return was taken up for scrutiny by CASS and notice u/s.143(2) of the Act was issued on 28.09.2018.
While passing the assessment order, various additions were made, against which, the assessee preferred appeal against a few additions, which further came to be disallowed by the first appellate authority, against which the assessee is in appeal before us. The details are tabulated as below.
Sl. Particulars Amount in Allowed/ Allowed/ Whether No Rs. disallowed disallowed appeal is by the by the CIT preferred Assessing (appeals) at ITAT officer 1 Provision for Corpus 4,00,00,000 Disallowed Disallowed No Fund 2 Disallowance of 3,67,48,180 Disallowed Disallowed Yes Interest Expenses Disallowance of 3 6,39,11,973 Disallowed Disallowed No Interest expenses for non-deduction of TDS 4 Contingent 1,20,22,260 Disallowed Disallowed Yes composite Expenses 5 Disallowance of 78,71,135 Disallowed Disallowed No Reserve for jewel loan 6 Disallowance of 2,25,00,000 Disallowed Disallowed Yes Reserve for Government waiver
:-3-: ITA. No.:1417//Chny/2025
Deduction under 7 20,52,17,357 Disallowed Disallowed Yes section 36(1) (vii a)
With respect to the additions that are contested before us, i.e., “Disallowance of Interest Expenses”, “Contingent Composite Expenses”, “Disallowance of Reserve for Government Waiver” and “Deduction u/s.36(1)(viia) of the Act”, the Ld.AR of the assessee filed written submissions along with the paper book in support of its case and prayed that the appeal may be allowed in its favour.
Per contra, the Ld.DR submitted that the order of the authorities below needs no interference of the Tribunal and prayed that the appeal may be dismissed.
We have heard the rival contentions perused the material available on record and gone through the orders of the authorities along with the paper book filed by the ld.AR. On perusal of the documents filed by the Ld.AR and the submissions made before us, we find that the expenditures disallowed needs to be verified by the Assessing Officer with the corresponding records and documents filed by the assessee. Therefore, we are of the view that the assessee could be given one more opportunity before the Assessing Officer to substantiate its case, in the light of the supporting evidence filed by it. Hence, we direct the Assessing Officer to decide the issues concerning “Disallowance of Interest Expenses”, “Contingent Composite Expenses”, “Disallowance of Reserve for Government Waiver” and “Deduction u/s.36(1)(viia) of 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.
:-4-: ITA. No.:1417//Chny/2025
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.