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Income Tax Appellate Tribunal, ‘D’ BENCH, CHENNAI
Before: SHRI N.R.S. GANESAN & SHRI SANJAY ARORA
आदेश /O R D E R
PER N.R.S. GANESAN, JUDICIAL MEMBER:
All the three appeals of the assessee are directed against the common order passed by the Commissioner of Income Tax (Appeals)-5, Chennai, dated 22.11.2016 and pertain to assessment years 1996-97, 1997-98 and 1998-99. Since common issue arises for consideration in all these appeals, we heard these appeals together and disposing of the same by this common order.
There was a delay of 2 days in filing these appeals by the assessee. The assessee has filed petitions for condonation of delay. We have heard the Ld.counsel for the assessee and the Ld. Departmental Representative. We find that there was sufficient cause for not filing these appeals before the stipulated time. Therefore, we condone the delay and admit the appeals.
The only issue arises for consideration is disallowance of interest income earned by the assessee on the fixed deposit made with Tamil Nadu Industrial Co-operative Bank Ltd.
Ms. S. Sriranjani, the Ld.counsel for the assessee, submitted that the Assessing Officer disallowed the claim of the assessee under Section 80P(2)(d) of the Income-tax Act, 1961 (in short 'the Act') on the ground that the interest was received from the fixed deposit and not on the securities. According to the Ld. counsel, the Assessing Officer has also found that the assessee is not doing any banking business. Referring to the copy of certificate said to be issued by Tamil Nadu Industrial Co-operative Bank Ltd., the Ld.counsel submitted that the Tamil Nadu Industrial Co-operative Bank Ltd. was registered as co-operative society under the Tamil Nadu Co-operative Society Act and it is under the administrative control of Commissioner of Industries and Director of Industries and Commerce. Referring to the judgment of Himachal Pradesh High Court in CIT v. Kangra Co-operative Bank Ltd. (2009) 309 ITR 106, the Ld.counsel submitted that the Himachal Pradesh High Court after following the judgment of Apex Court in CIT v. Navanshahar Central Co-operative Bank Ltd. (2007) 289 ITR 6, found that interest on such investment is eligible for deduction under Section 80P(2) of the Act. In this case also, according to the Ld. counsel, a fixed deposit was made by the assessee with Tamil Nadu Industrial Co- operative Bank Ltd., which is otherwise a co-operative society under the administrative control of Industries Commissioner and Director of Industries and Commerce, therefore, the interest income received by the assessee is eligible for deduction under Section 80P(2)(d) of the Act. The Ld.counsel further clarified that the assessee is also a co-operative society registered under Tamil Nadu Co-operative Society Act. It is also functioning under the control of Commissioner and Director of Industries and Commerce, Government of Tamil Nadu, hence, the CIT(Appeals) is not justified in confirming the order of the Assessing Officer.
On the contrary, Shri Shiva Srinivas, the Ld. Departmental Representative, submitted that in the assessment made under Section 143(3) of the Act, the Assessing Officer found that the assessee is not eligible for deduction under Section 80P(2)(d) of the Act in respect of interest income on the fixed deposit with Tamil Nadu Industrial Co-operative Bank Ltd. Subsequently, the assessee filed petition under Section 154 of the Act claiming that the interest income is eligible for exemption under Section 80P(2)(d) of the Act. The Assessing Officer rejected the claim of the assessee on the ground that there is no rectifiable error. On further appeal, the CIT(Appeals) found that in a proceeding under Section 154 of the Act, the Assessing Officer was empowered to rectify an error which is apparent on the fact of the record. In this case, according to the Ld. D.R., all the issues raised by the assessee in a petition under Section 154 of the Act were duly and elaborately considered by the Assessing Officer and the same was disallowed. Therefore, according to the Ld. D.R., the application filed by the assessee under Section 154 of the Act is not maintainable at all. At the best, it may be a good case to appeal before the CIT(Appeals) against the assessment order. However, there is no rectifiable error in a proceeding under Section 154 of the Act, therefore, the CIT(Appeals) has rightly dismissed the appeal of the assessee.
We have considered the rival submissions on either side and perused the relevant material available on record. Admittedly, in a proceeding under Section 143(3) of the Act, the Assessing Officer disallowed the claim of the assessee under Section 80P(2)(d) of the Act in respect of interest income received by the assessee on the fixed deposit with Tamil Nadu Industrial Co-operative Bank Ltd. The assessee subsequently filed application under Section 154 of the Act on the ground that there is an error in the order of the Assessing Officer. The Assessing Officer after examining the material available on record, found that the issue raised by the assessee was already examined by the Assessing Officer in the assessment order itself. Therefore, there is no rectifiable error. This observation of the Assessing Officer was further confirmed by the CIT(Appeals). The question arises for consideration is whether the deduction claimed by the assessee under Section 80P(2)(d) of the Act is a rectifiable error in a proceeding under Section 154 of the Act? We have carefully gone through the provisions of Section 154 of the Act which reads as follows:-
“RECTIFICATION OF MISTAKE 154. (1) With a view to rectifying any mistake apparent from the record an income-tax authority referred to in section 116 may,— (a) amend any order passed by it under the provisions of this Act ; (b) amend any intimation or deemed intimation under sub-section (1) of section 143. (c) amend any intimation under sub-section (1) of section 200A. (d) amend any intimation under sub-section (1) of section 206CB. (1A) Where any matter has been considered and decided in any proceeding by way of appeal or revision relating to an order referred to in sub-section (1), the authority passing such order may, notwithstanding anything contained in any law for the time being in force, amend the order under that sub-section in relation to any matter other than the matter which has been so considered and decided. (2) Subject to the other provisions of this section, the authority concerned— (a) may make an amendment under sub-section (1) of its own motion, and (b) shall make such amendment for rectifying any such mistake which has been brought to its notice by the assessee or by the deductor or by the collector, and where the authority concerned is the . . . Commissioner (Appeals), by the Assessing Officer also. (3) An amendment, which has the effect of enhancing an assessment or reducing a refund or otherwise increasing the liability of the assessee or the deductor or the collector, shall not be made under this section unless the authority concerned has given notice to the assessee or the deductor or the collector of its intention so to do and has allowed 4the assessee or the deductor a reasonable opportunity of being heard.
(4) Where an amendment is made under this section, an order shall be passed in writing by the income-tax authority concerned. (5) Where any such amendment has the effect of reducing the assessment or otherwise reducing the liability of the assessee or the deductor or the collector, the Assessing Officer shall make any refund which may be due to such assessee or the deductor or the collector. (6) Where any such amendment has the effect of enhancing the assessment or reducing a refund already made or otherwise increasing the liability of the assessee or the deductor or the collector, the Assessing Officer shall serve on the assessee or the deductor or the collector, as the case may be a notice of demand in the prescribed form specifying the sum payable, and such notice of demand shall be deemed to be issued under section 156 and the provisions of this Act shall apply accordingly. (7) Save as otherwise provided in section 155 or sub-section (4) of section 186, no amendment under this section shall be made after the expiry of four years from the end of the financial year in which the order sought to be amended was passed. (8) Without prejudice to the provisions of sub-section (7), where an application for amendment under this section is made by the assessee or by the deductor or by the collector on or after the 1st day of June, 2001 to an income-tax authority referred to in sub- section (1), the authority shall pass an order, within a period of six months from the end of the month in which the application is received by it,— (a) making the amendment ; or (b) refusing to allow the claim.”
Under Section 154 of the Act, the Assessing Officer can rectify an error which is apparent on the face of the record. In the case before us, the Assessing Officer dealt with the claim of the assessee in the regular assessment made under Section 143(3) of the Act. The proceeding under Section 154 of the Act is only to rectify an error which is apparent on the face of the record as rightly observed by the CIT(Appeals). When there was controversy which requires a complicated process of investigation, it is not permissible for rectification under Section 154 of the Act. In other words, what can be rectified under Section 154 of the Act is only an error which is apparent on the face of the record. In the case before us, the issue raised by the assessee was already dealt with by the Assessing Officer in the regular assessment under Section 143(3) of the Act. Therefore, it cannot be said there is a prima facie error in the order of the Assessing Officer. As rightly submitted by the Ld. Departmental Representative, at the best, there may be a good case for the assessee for an appeal before the CIT(Appeals) against the assessment order. However, this Tribunal is of the considered opinion that there is no merit in the application filed by the assessee under Section 154 of the Act. In other words, the issue raised by the assessee cannot be adjudicated in a proceeding under Section 154 of the Act. In view of this, this Tribunal do not find any reason to interfere with the order of the lower authority and accordingly the same is confirmed.
In the result, all the appeals filed by the assessee are dismissed.
Order pronounced on 25th April, 2017 at Chennai.