M/S NEYYANTINKARA CO-OP URBAN BANK LTD,TRIVANDRUM vs. THE ACIT , CIRCLE 2(1), TRIVANDRUM

The CIT(Appeals) failed to appreciate, in the right perspective, the fact that the assessing has not allowed the deduction of an amount of Rs 19,18,448/-credited to the Profit & Loss account under the Head Investment Depreciation reserve removed from the total income.

During the preceding years, the assessing officer had added back the aforesaid amount to the total income and reworked the total income and computed the tax liability and therefore the appellant is eligible to claim the said amount as deduction from the total income, for which the evidence was available in the assessment records. The CIT (Appeals) failed to appreciate the issue in the right perspective and ought to have noted that the assessing officer failed to consider or address this aspect. The CIT (Appeals) failed to take note of the fact that the assessing officer without considering the issue raised by the assessee and the documents made available to him vide 8-1- 2018, rejected the rectification application.” 3. Learned Counsel next takes us to the assessee’s sec.154 rectification application, reading as under:-

The assessee’s case accordingly is that the limited relief which is claimed in its instant rectification is that to prevent double addition of the very amount under the head “Investment depreciation reserve removed” which already stood added / assessed in the preceding assessment years. Learned DR draw strong support from both the lower authorities findings that such an issue could hardly been held as rectifiable mistake in the light of T.S.Balaram, ITO vs. Volkar Bros. [1971] 82 ITR 50 (SC). She further elaborates the point that the Assessing Officer has already held the assessee not to have filed all the relevant details. She however fails to dispute that the assessee’s averments in its rectification application had duly claimed to have attached all the corresponding assessment orders pertaining to the preceding assessment years which have neither been considered nor rejected.

Face with this situation, we deem it appropriate to restore the issue to the Assessing Officer for fresh appropriate adjudication as per law. We further make it clear that it shall be the tax payers risk and responsibility to plead and prove all the relevant facts before the Assessing Officer within three effective opportunity in consequential proceedings. Ordered accordingly.