THE TUTICORIN MELUR CO - OPERATIVE BANK LTD.,TUTICORIN vs. DCIT, TUTICORIN

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ITA 2633/CHNY/2014Status: DisposedITAT Chennai16 February 2017AY 2007-083 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the statutory deduction under Section 36(1)(viia) should be considered, even if not raised before lower authorities. The matter was remitted back to the Assessing Officer for verification and fresh adjudication.

What were the facts?

The assessee bank claimed a deduction for bad debt under Section 36(1)(viia) of the Income-tax Act. This ground was not raised before the lower authorities due to an inadvertent error.

What were the issues?

Whether a statutory deduction, not raised before lower authorities, can be considered by the Tribunal. The need for verification of the bad debt provision by the Assessing Officer.

Which sections of the Income-tax Act were involved?

Section 36(1)(viia)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘A’ BENCH, CHENNAI [CAMP: MADURAI

Before: SHRI N.R.S. GANESAN & SHRI ABRAHAM P. GEORGE

For Respondent: Shri S. Renga Rajan, JCIT
Hearing: 16.02.2017Pronounced: 16.02.2017

आदेश /O R D E R

PER N.R.S. GANESAN, JUDICIAL MEMBER:

1.

This appeal of the assessee is directed against the order of the Commissioner of Income Tax (Appeals) – II, Madurai, dated 20.08.2014 and pertains to assessment year 2007-08.

2.

Sh. R. Vijayaraghavan, the Ld.counsel for the assessee, submitted that the provision for bad debt is allowable as statutory deduction under Section 36(1)(viia) of the Income-tax Act, 1961 (in short 'the Act'). However, by inadvertent error, it was not raised before the lower authorities, therefore, this ground is raised before this Tribunal by way of additional ground. Therefore, the Ld.counsel submitted that the matter may be remitted back to the file of the Assessing Officer for verification and pass order on merit.

3.

Shri S. Renga Rajan, the Ld. Departmental Representative, submitted that this ground was never raised before the lower authorities, therefore, the lower authorities had no occasion to consider this ground.

4.

We have considered the rival submissions on either side and perused the relevant material available on record. Admittedly, Section 36(1)(viia) of the Act provides for statutory deduction.

Merely because the assessee has not raised the same before the lower authorities that cannot be a reason not to consider the statutory deduction. This Tribunal is of the considered opinion that the matter needs to be verified by the Assessing Officer.

Accordingly, the order of the lower authorities are set aside and the issue of deduction claimed by the assessee under Section 36(1)(viia) of the Act is remitted back to the file of the Assessing Officer. The Assessing Officer shall reconsider the issue in the light of the statutory provisions contained in Section 36(1)(viia) of the Act and pass order on merit on the basis of the material available on record, after giving a reasonable opportunity to the assessee.

5.

In the result, the appeal of the assessee is allowed for statistical purposes.

Order pronounced in the open court on 16th February, 2017 at Madurai.

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