2012 (9) TMI 1171 - AT - Income Tax

Summary

Issues Involved:
1. Consideration of written submissions and arguments by CIT(A).
2. Deduction u/s 80P(2)(a)(i) read with section 80P(4).
3. Validity of assessment order u/s 143(3) without processing return u/s 143(1).
4. Notice u/s 143(2) issued without application of mind.
5. Provision for NPA on mercantile basis.
6. Addition u/s 40(a)(ia) for non-deduction of tax.
7. Addition u/s 40(a)(ia) for amounts not payable at year-end.

Summary:

1. Consideration of Written Submissions and Arguments by CIT(A):
The assessee argued that the CIT(A) did not consider the written submissions and arguments, passing the order in an arbitrary and cryptic manner. The Tribunal found no merit in this contention, noting that the CIT(A) had duly considered the material and submissions before upholding the assessment order.

2. Deduction u/s 80P(2)(a)(i) Read with Section 80P(4):
The assessee, a primary Agricultural Credit Society, claimed deduction u/s 80P(2)(a)(i). The CIT(A) referred to the bye-laws of the assessee and the provisions of Section 80P(4), which exclude co-operative banks other than primary agricultural credit societies from such deductions. The Tribunal upheld the CIT(A)'s decision, finding it in accordance with the law and judicial precedents.

3. Validity of Assessment Order u/s 143(3) Without Processing Return u/s 143(1):
The assessee contended that the assessment order u/s 143(3) was invalid as the return was not processed u/s 143(1) within one year. The CIT(A) and the Tribunal, relying on various judicial decisions, held that non-processing u/s 143(1) does not bar the Assessing Officer from making an assessment u/s 143(3). The issue raised by the assessee was dismissed.

4. Notice u/s 143(2) Issued Without Application of Mind:
The assessee argued that the notice u/s 143(2) was issued on extraneous reasons without application of mind. The Tribunal found this issue to be devoid of merit, noting that the CIT(A) had already addressed it along with the previous issue. The findings of the CIT(A) were upheld.

5. Provision for NPA on Mercantile Basis:
The assessee challenged the disallowance of provision for NPA on a mercantile basis. The CIT(A) referred to Section 36(1)(viia) and relevant judicial decisions, concluding that the disallowance was justified. The Tribunal upheld this decision, finding it in line with the law and judicial pronouncements.

6. Addition u/s 40(a)(ia) for Non-Deduction of Tax:
The assessee contested the addition of Rs. 25,72,876 u/s 40(a)(ia) for non-deduction of tax. The CIT(A) relied on various judicial decisions and upheld the addition. The Tribunal found the CIT(A)'s decision well-reasoned and in accordance with judicial precedents, dismissing the issue raised by the assessee.

7. Addition u/s 40(a)(ia) for Amounts Not Payable at Year-End:
The assessee argued that no tax was to be deducted on certain payments, and thus, Section 40(a)(ia) was not applicable. The Tribunal, referring to its earlier findings on similar issues, upheld the CIT(A)'s decision, dismissing the issue as devoid of merit.

Conclusion:
The appeal of the assessee was dismissed, with the Tribunal upholding the findings and decisions of the CIT(A) on all issues raised.