CHENNAI CENTRAL CO-OPERATIVE BANK LTD.,CHENNAI vs. PRINCIPAL COMMISSIONER OF INCOME TAX -8, CHENNAI

These appeals by the assessee are directed against the orders passed by the Principal Commissioner of Income Tax (Appeals), Chennai both dated 22.08.2017 in C.No.852(14)/PCIT- 8/2017-18 & 852(15)/PCIT-8/2017-18 for the assessment years 2009-10 & 2010-11 respectively passed U/s.263 of the Act. appeals however the crux of the issue is that the Ld.PCIT has erred in invoking his jurisdiction U/s.263 of the Act.

The brief facts of the case are that the assessee is a co- operative bank, filed its return of income for the assessment year 2009-10 electronically on 30.09.2009 admitting total income of Rs.31,45,31,341/- and subsequently filed revised return on 10.02.2010 admitting total income of Rs.38,55,67,390/- and for the assessment year 2010-11 the assessee filed its return of income electronically on 01.10.2010 admitting total income of Rs.47,42,79,440/-. Initially the returns were processed U/s.143(1) of the Act on 30.03.2011 & 19.04.2011 for the assessment years 2009-10 & 2010-11 respectively. Subsequently the cases were selected for scrutiny under CASS and finally assessment orders for both the assessment years were passed U/s.143(3) r.w.s. 147 of the Act on 26.03.2016 wherein the Ld.AO made addition of Rs.12,40,67,151/- & Rs.13,18,75,435/- for the assessment years 2009-10 & 2010-11 respectively towards non-deduction of tax at source towards interest payments above Rs.10,000/-. the Act for both the assessment years for the following reasons:

The Ld.AR submitted before us that the two conditions which must be satisfied for invoking the provisions of Section 263 of the Act, by the Ld.PCIT is absent in the case of the assessee such as:-

The Ld.DR on the other hand argued stating that both the issues were not discussed by the Ld.AO in the respective orders which the Ld.PCIT has pointed out. He further argued stating that discussed in his Order and pass appropriate order in accordance with merits and law. Hence it was pleaded that the order of the Ld.PCIT is appropriate and hence may be confirmed.

We have heard the rival submissions and carefully perused the materials available on record. From the facts of the case it is apparent from the order of the Ld.AO, that he has not discussed the issue with respect to levy of interest U/s.234A(3) of the Act and the issue with respect to crystallization of the expense incurred towards wage arrears. It also appears that the Ld.AO has not examined the agreement between the assessee and its employees with respect to the wage arrears, the terms & conditions of the employment of the assessee’s employees etc. In these circumstances, we are of the considered view that the Ld.PCIT was very much right in his realm to invoke his jurisdiction U/s.263 of the Act by relying on the decisions cited in his order. It is pertinent to mention that the decisions relied by the Ld.AR is not applicable to the facts of the case of the assessee because in the case of the assessee, the Ld.AO has omitted to examine certain material facts which might influence while deciding the issues. Therefore we

In the result the appeals filed by the assessee are dismissed.