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Facts
The Revenue filed appeals against CIT(A) orders denying deduction under Section 80P(2)(a)(i) on interest income for multiple assessment years, including 2015-16, 2016-17, 2017-18, and 2020-21. The assessee filed cross-objections against additions made due to unexplained differences in closing balances with five banks.
Held
The Tribunal dismissed the Revenue's appeals, confirming the assessee's eligibility for Section 80P(2)(a)(i) deduction by following judicial precedents in the assessee's own case. However, the assessee's cross-objections regarding bank balance discrepancies were partly allowed, and the issue was remanded to the Assessing Officer for reconciliation as they pertained to earlier years' closing balances.
Key Issues
1. Whether the assessee is entitled to deduction under Section 80P(2)(a)(i) of the Income Tax Act on its interest income. 2. Reconciliation of differences in closing balances with various banks for previous assessment years.
Sections Cited
80P(2)(a)(i)
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Income Tax Appellate Tribunal, “B” BENCH, KOLKATA
Before: SHRI GEORGE MATHAN & SHRI SANJAY AWASTHI
आदेश / O R D E R Per Bench : The revenue has filed four appeals against the separate orders passed by the ld. CIT(A), National Faceless Appeal Centre (NFAC), all dated 15.11.2023 for assessment years 2015-2016, 2016-2017, 2017-2018 and 2020-2021, respectively. The assessee has also filed cross objections arising out of the appeals filed by the revenue in ITA Nos.153-155/Kol/2024.
CO Nos.28-29 & 31/KOL/2024 There is no cross objection filed by the assessee in respect of the appeal of the revenue in ITA No.156/Kol/2024.
Shri Nicholas Murmu, Sr. DR appeared on behalf of the revenue. None appeared on behalf of the assessee, however, an adjournment application has been filed by the assessee. As it is noticed that the issues in all the appeals and cross objections are similar, therefore, the adjournment application filed by the assessee is rejected and we proceed to decide the appeals of the revenue and cross objections of the assessee accordingly, with the assistance of ld. Sr. DR 3. At the outset, on perusal of the appeal record, we find that all the four appeals of the revenue are delayed by 10 days each. In this regard, the revenue has filed necessary application for condonation of delay. We have perused the reasons submitted by the revenue for condonation of delay which are found to be plausible and as the delay is only for 10 days in each file, therefore, the delay in all the four appeals of the revenue are condoned and appeals are heard and disposed off.
In respect of revenue’s appeal, it was submitted by the ld. Sr. DR that the issue in all the appeals was in respect of deduction u/s.80P(2)(a)(i) of the Act. It was the submission that the Assessing Officer had held that the interest income of the assessee was not a disclosed income and consequently the Assessing Officer denied the assessee the benefit of deduction u/s.80P(2)(a)(i) of the Act. It was the submission that on appeal, the ld. CIT(A) had followed the decision of the coordinate bench (SMC) of the Tribunal in assessee’s own case for A.Y.2014-2015 in ITA CO Nos.28-29 & 31/KOL/2024 No.274/Kol/2021, dated 22.06.2023. It was the submission that the ld. CIT(A) has extracted the finding portion of the coordinate bench in para 7 of the order. It was the submission that the revenue being aggrieved has filed the present appeal. It was further seen that in the cross objection the assessee has challenged for difference in the closing balance in the case of five banks against which the addition has been confirmed by the ld. CIT(A). It was the submission of the ld. Sr. DR that the assessee has claimed that the said discrepancy has been continuing for a long time. It was the submission that the assessee has not explained the difference. It was the submission of the ld. Sr. DR that consequently the addition as made by the Assessing Officer and as confirmed by the ld. CIT(A) in respect of difference in the closing balance in the case of five banks was liable to be upheld.
We have considered the rival submissions. In respect of revenue’s appeals, a perusal of the facts clearly shows that the coordinate bench of the Tribunal in assessee’s own case has held that the assessee was entitled to the deduction u/s.80P(2)(a)(i) of the Act. A perusal of the order of the ld. CIT(A) shows that the ld. CIT(A) has also followed the judicial discipline in following the decision of the coordinate bench of the Tribunal in assessee’s own case for the assessment year 2014-2015. A further perusal of the paper book shows that under similar circumstances, the Division Bench of the Tribunal in the case of Arambagh Cooperative Agricultural and Rural Development Bank Limited, passed in ITANo.206/Kol/2022, order dated 23.09.2022 has also held that similarly CO Nos.28-29 & 31/KOL/2024 placed banks were entitled to the deduction u/s.80P(2)(a)(i) of the Act. This being so, we are of the view that as the issue is squarely covered in favour of the assessee in assessee’s own case for the assessment year 2014- 2015, referred to supra, we find no reason to interfere in the order of the ld. CIT(A) on this issue. Consequently, the appeals filed by the revenue stand dismissed.
In respect of cross objections filed by the assessee, it is noticed that the difference in the closing balance of the five banks are admittedly from earlier years. In these circumstances, in the interest of justice, this issue is restored to the file of Assessing Officer to grant the assessee adequate opportunity to reconcile the said difference since apparently these are closing balances and would be reconcilable as well. Accordingly, the cross objections filed by the assessee for the assessment years 2015-2016, 2016-2017 & 2017-2018 are partly allowed for statistical purposes.
In the result, appeals of the revenue are dismissed and cross objections of the assessee are partly allowed for statistical purposes. Order dictated and pronounced in the open court on 05/05/2025. Sd/- Sd/- (SANJAY AWASTHI) (GEORGE MATHAN) लेखा सदस्य/ ACCOUNTANT MEMBER न्यधनयक सदस्य / JUDICIAL MEMBER कोलकाता Kolkata; ददनाांक Dated 05/05/2025 Prakash Kumar Mishra, Sr.P.S. आदेश की प्रनतललपप अग्रेपर्त/Copy of the Order forwarded to : 1. अपीलार्थी / The Appellant- प्रत्यर्थी / The Respondent- 2.