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Facts
The assessee, a private scheduled bank, filed its return of income for AY 2017-18 declaring an income of Rs. 446,81,29,140/-. The assessment was initially completed at a higher income after disallowances under various sections. Subsequently, a PCIT directed a review under Section 263, leading to a revised assessment where the AO restricted a deduction and allowed depreciation on investments.
Held
The Tribunal held that the issues raised in the present appeal were additional claims made before the CIT(A) and did not emanate from the consequential assessment order passed under Section 143(3) read with Section 263. It was also held that revisionary proceedings under Section 263 are prejudicial to the assessee, and no additional or new claims are admissible in proceedings consequent to such an order.
Key Issues
Whether additional claims, not arising from the original assessment or subsequent revisionary proceedings, are admissible before the appellate tribunal.
Sections Cited
143(3), 14A, 36(1)(viii), 263, 36(1)(viiia)
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Income Tax Appellate Tribunal, COCHIN BENCH
Before: SHRI INTURI RAMA RAO, AM & SHRI SONJOY SARMA, JM
O R D E R Per: Inturi Rama Rao, AM This appeal filed by the assessee is directed against the order of the National Faceless Appeal Centre, Delhi [CIT(A)] dated 07.02.2024 for Assessment Year (AY) 2017-18.
Brief facts of the case are that the assessee is a private scheduled bank, engaged in the business of banking. The return of income for the A.Y. 2017-18 was filed on 31/03/2018 declaring income of Rs. 446,81,29,140/-. Against the said return of income, the assessment was completed by the DCIT, Circle-1(1) & TPS, The South Indian Bank Ltd. Thrissur (for short, 'AO') vide order dated 31/03/2018 passed u/s. 143(3) of the Income Tax Act, 1961 (for short, 'the Act') at a total income of Rs. 526,91,03,478/- after making disallowances of Rs. 11,94,53,780/- u/s.14A of the Act; Rs. 65,64,94,855/- u/s. 36(1)(viii) of the Act; Rs. 86,00,775/- under ESOS employee expense and Rs.97,43,48,563/- under non-remitted NPS. Subsequently, the learned Principal Commissioner of Income Tax, Kozhikode (PCIT) in exercise of powers conferred on him u/s. 263 of the Act, set aside the assessment to the file of the AO for verification of the claim in respect of bad debts written off and depreciation on investments. Pursuant to the order of learned PCIT, the AO passed the consequential order u/s. 143(3) r.w.s. 263 of the Act vide order dated 25/03/2022 at a total income of Rs. 534,66,04,672/-. While doing so, the AO restricted deduction u/s. 36(1)(viiia) to 7.5% of the total income, however allowed the claim of depreciation on investments.
Being aggrieved, the assessee filed an appeal before the learned CIT(A) contending that AO ought not have disallowed a sum of Rs.14,10,36,183/- being difference in bad debts written off and also not allowed the additional claim of provisional bad and doubtful debts of Rs. 52 crores. However, learned CIT(A) considering the movement of the provisions for NPAs held that AO had rightly disallowed the bad debts written off and also the provisional bad debts of Rs. 52 crores which cannot be allowed in The South Indian Bank Ltd. the assessment made pursuant to the revisionary order passed by the learned PCIT.
Being aggrieved, the assessee is in appeal before this tribunal in the present appeal.
We have heard the rival submissions and perused the material on record. The issues raised in the present appeal does not emanate from the consequential assessment order passed u/s. 143(3) r.w.s. 263 of the Act. These are the additional claims made before the Ld. CIT(A) against the order of assessment passed u/s. 143(3) r.w.s. 263 of the Act. The revisionary proceedings u/s. 263 are prejudicial to the assessee, no additional claim or new claim is admissible in the proceedings consequent to the order passed u/s. 263 of the Act. It is also settled position of law that the AO while passing the consequential order to the order of revision u/s. 263, should not travel beyond the scope of the revision order. In view of this legal position, we do not find any merit in the grounds of appeal
filed by the assessee.
6. In the result, the appeal filed by the assessee stands dismissed. Order pronounced on 04th August, 2024 under Rule 34 of The Income Tax (Appellate Tribunal) Rules, 1963.
Sd/- Sd/- (SONJOY SARMA) (INTURI RAMA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER Cochin, Dated: 04th August, 2025