ARYAVART BANK,LUCKNOW vs. DY. COMMISSIONER OF INCOME TAX, RANGE-1, LUCKNOW

On the facts and in the circumstances of the case and in law, the Id. CIT(A) erred in invoking the provisions of proviso to section 251(1)(a) and setting aside the order to AO without appreciating that the order was not passed u/s 144. 3. On the facts and in the circumstances of the case and in law, the Id. CIT(A) failed to appreciate that the DIN was issued in the name of non-existing entity and hence the order passed is invalid.

On the facts and in the circumstances of the case and in law, the Id. CIT(A) erred in not deciding on the issue of reopening when the reopening was after 4 years from the end of the assessment year and there was no failure on part of appellant to fully and truly disclose all information and there was no new tangible material based on which the reopening was made.

On the facts and in the circumstances of the case and in law, the Id. CIT(A) erred in not deciding the ground on deduction u/s 80P.

Without prejudice to above, on the facts and in the circumstances of the case and in law, the Id. CIT(A) erred in not deciding on disallowance of deduction u/s 36(1)(viia) and the alternate grounds raised on the said issue.

Without prejudice to ground 4, on the facts and in the circumstances of the case and in law, the Id. CIT(A) erred in not deciding on the issue of considering the provision made for assets with overdue of less than 90 days as provision made for bad and doubtful debts in terms of section 36(1)(viia).

On the facts and in the circumstances of the case and in law, the Id. CIT(A) erred in not deciding on disallowance of provision made for frauds, theft/ embezzlement.

On the facts and in the circumstances of the case and in law, the Id. CIT(A) erred in not deciding on the issues of short credit of TDS, interest u/s 244A, Interest u/s234A, 2348 and set off of brought forward losses.

On the facts and in the circumstances of the case and in law, the Id. CIT(A) erred in not deciding on disallowance of amortization of premium on HTM securities.”

The facts of the case are that the assessee is a Cooperative Society engaged in the business of banking. The assessee, in its present status has been formed by way of a chain of amalgamation. Erstwhile Shreyas Gramin Bank and erstwhile Aryavart Gramin Bank amalgamated into the Gramin Bank of Aryavart, which in turn amalgamated into Aryavart Bank, which is the present entity. As no return had been filed by Gramin Bank of Aryavart, a notice under section 148 was issued to that assessee. In response, it was submitted that the entity Gramin Bank of Aryavart had come into existence w.e.f. 1.04.2013, hence the return of income for A.Y. 2012- 13 had not been filed. However, the entity Aryavart Gramin Bank filed a return on 25.09.2012 and subsequently revised it on 20.04.2013. The assessment had been completed on 4.12.2014 at the returned loss. Thereafter, the ld. AO took up the assessment proceedings in the hands of the assessee (being the successor entity to Aryavart Gramin Bank and Gramin Bank of Aryavart) and it made additions to the Aryavart Bank

On the other hand, Sh. R.K. Agarwal, CIT DR pointed out that no prejudice had been cause to the assessee as the matter had been restored to the file of the ld. AO for a de novo assessment. It was submitted that the assessee would have every opportunity to place all submissions before the ld. AO and the ld. AO would consider them on its merits. He pointed us to the first page of the assessment order wherein it was clearly stated that the order had been passed under section 147 r.w.s. 144 of the Income Tax Act and submitted that the ld. CIT(A) was well within his powers to restore the matter to the ld. CIT(A). 6. We have duly considered the facts and circumstances of the case. It is observed that the assessee had challenged the reopening of the assessment under section 147 of the Income Tax Act (as the case of the assessee had been completed under section 143(3)) after the end of four years from the end of the assessment year and without reference to any new tangible material. It has been contended that the ld. AO had erred in reopening the assessment even when there was no failure on the part of the assessee to fully and truly disclose all the material facts required for re-assessment. It is seen on perusal of the assessment order that the ld. Assessing Officer has acted on account of the judgment of the Hon’ble Madras High Court in the case of CIT vs. Indian Overseas Bank 151 ITR 446 and the judgment of the Hon’ble Supreme Court in the case of Shree Sajjan Mills Limited vs. CIT 156 ITR 585, but has not recorded how the said claims made by the assessee are in the nature of contingent liabilities. The matter had been raised before the ld. CIT(A) but the ld. CIT(A) has not addressed this legal issue. We are of the opinion that before the ld. CIT(A) could restore the matter back to the file of the ld. Assessing Officer on the merits of the case, he was obliged to first decide whether the reopening of the case was in accordance with the law, in view of the specific grounds raised before him by the assessee in this regard. Therefore, we allow ground no. 4 of the assessee’s appeal and restore the matter back to the file of the ld. CIT(A), so that he may decide the legal issue. Accordingly, ground no. 4 of the assessee’s appeal is allowed while the remaining grounds being infructuous are dismissed as such. Aryavart Bank

In the result, the appeal of the assessee is partly allowed.