PUNJAB STATE COOP. BANK LTD.,CHANDIGARH vs. ACIT, CL-2(1), CHANDIGARH

That the assessee is a Cooperative Society duly registered under the Punjab Coop. Societies Act, 1961, and is engaged in the business of Banking which was within the meaning o f Section 80P (2) (a) (i) o f the Income Tax Act prior to the amendment in the said section and isa regular assessee with the Income tax department through the Assistant Commissioner o f Income Tax Circle 2 (I), Chandigarh. The assessee society has been regularly assessed by the Assistant Commissioner o f Income Tax Circle 2 (I), Chandigarh up to the assessment year 2013-2014.

That the Assessee society filed its return for the year under consideration on 30th September 2014 declaring therein Rs. 38,78,05,675/- as net taxable income. No order to the effect of having processed the return has been received by the assessee. The assessee has also not received the refund claimed while filing the return of income. The case of the assessee was subsequently selected for scrutiny assessment under CASS list. A notice u/s 143 (2) was issued on 28thAugust 2015.

That the perusal of the assessment records of the assessee would reveal that the only source of income of the assessee is interest income besides income from house property. The main business of the assessee includes lending of money to earn interest thereon from the 294-Chd-2023 Punjab State Coop Bank Ltd, Chandigarh 3 various banks, institutions, investment in govt, securities and other various deposits including investment in bonds and debentures of various societies, others as well as interest earned on its advances to the various members, member cooperatives including cooperative societies.

That while completing the assessment for the year under consideration the Assessing Officer has made an addition of Rs. 1,18,62,530/- vide para 3.1 of the order of assessment. The assessee had claimed deduction being revenue expenditure at Rs.9,25,725/- being the amount of premium paid at the time of purchase of Government Securities from the Reserve Bank of India. This amount has been held by the Assessing Officer as capital expenditure instead of revenue expenditure as claimed by the assessee and as such the addition has been made. Although the assessee has claimedRs.9,24,725/-as per the income and expenditure account but the Assessing Officer has disallowed Rs.1,18,62,530/-under this head which is incorrect. The assessee also filed an application under the provision of section 154 for rectification of the order of assessment but the Assessing Officer has not as yet passed any order to that effect.

That the perusal of the order of assessment would reveal that an addition of Rs.1,73,73,000/- has been made while completing the 294-Chd-2023 Punjab State Coop Bank Ltd, Chandigarh 4 assessment vide para 4 of the order of assessment. The amount has been shown by the assessee being receipt against the onetime settlement entered into by the assessee during the year under consideration. It is submitted that the amount has not been taken to income account for the reason that the payee of the amount had not fully complied with the terms of the one time settlement entered into and has only complied with and paid part consideration of the said settlement. The same has been shown/taken into income account at the time of its final settlement with the payee. The perusal of the assessment records would also reveal that although the amount as per the records isRs.1,73,37,000/- and not Rs.1,73,73,000/- as has been added back by the Assessing Officer. The assessee has during the assessment proceedings filed the requisite details with regard to the scheme and the details of one time settlement entered into with the parties from whom the amount has been received and how that has been accounted in the books of accounts as per the guidelines in this behalf.

That the perusal o f the assessment order would also reveal that while completing the assessment the Assessing Officer has disallowed an amount o f Rs.66,733/- under section 14A read with rule 8D o f the income Tax Act. The assessee during the year under consideration received Rs. 1,43,200/- as dividend income from other cooperative

The Assessee being aggrieved by the order of ld. Assessing Officer dated 28.12.2016 then prefers an appeal before CIT(A) on Grounds specified in para 3 of the impugned order.

The ld. CIT(A) before passing the impugned order however, gave number of opportunities to the Assessee to represent the case the details of which are stated in para 4 of the impugned order. The Assessee however, did not file any specific submission and however sought only adjournments by providing varied reason.

The ld. CIT(A) in the impugned Order has dismissed the appeal of the Assessee and has upheld the order of ld. Assessing Officer dated 28.12.2016 by holding that mere filing of an appeal against a order does not mean just to raise objections against the Assessing Officer’s order it has to be pursued as well.

The Assessee being aggrieved by the impugned order has filed an appeal before this Tribunal and has raised several Grounds of appeal in Form No. 36 which is form of appeal to Appellate Tribunal.

In the result, appeal of the assessee is allowed for statistical purposes. Order pronounced on 12.08.2024. Sd/- Sd/-