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TMI Blog2012 (3) TMI 413X X X X Extracts X X X X X X X X Extracts X X X X ..... rest of revenue on the following reasons: "1)While computing the total income the Assessing Officer rejected claim of bank to reduce an amount of Rs. 2,985.34 crores which was credited in Profit & Loss Account on account of appreciation of securities held as AFS (Available for Sale) and HFT (Held for Trading) categories from total income. However, while arriving at the total income the Assessing Officer allowed the deduction of Rs. 1,244.90 crores which was taxed during A.Y. 2001-02 to 2004-05 over looking the fact that the assessee bank has not accepted the addition made in the above assessment years. 2) In Para. 2 of Notes to the statement of Income, the bank has mentioned that "the bank as per Reserve Bank of India Guidelines for non-r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... following among other grounds: 1. The order of the learned CIT is contrary to the provisions of law and facts of the case and without appreciation of the facts and circumstances of the case in their right perspective. 2. The learned CIT erred in invoking the provisions of section 263 and holding that the order passed by the Assessing Officer was erroneous and prejudicial to the interest of the Revenue. 3. The learned CIT erred in holding that the Assessing Officer has not conducted proper enquiry into the claim of the assessee and there is an apparent error of reasoning of law in the assessment order. 4. The learned CIT erred in holding that while arriving at the total income the Assessing Officer allowed the deduction of Rs. 1,244.90 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rty to identify the Non Performing Assets (NPAs) for the purpose of crediting the due interest in the Profit & Loss Account and the Assessing Officer has nothing to do with the same. Thus, the ld AR has submitted that when the decision of the assessee in respect of crediting the due interest on NPA is as per the guidelines of the Reserve Bank of India as well as Rule 6EA, then accepting the same by the Assessing Officer does not constitute any error in the assessment order. 4.1 He has referred the reply dated 2.3.2009 to the show cause notice u/s 263 and submitted that the assessee consistently following the practice of recognising income on bad or doubtful debts in accordance with sec. 43D read with the RBI guidelines and the same cannot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted that despite all the facts and provisions explained, the CIT has not given any definite finding while passing the impugned order; thus, there is gross non application of mind on the part of the CIT. 4.3 He has further pointed out that the CIT has relied upon the decision of the Hon'ble Supreme Court in the case of Tara Devi Aggarwal (Smt.) v. Commissioner of Income-tax reported in 88 ITR 323. But in the said case, the Hon'ble Supreme Court has observed that the CIT made enquiry to find out the actual facts and malafide intention of the assessee. Whereas in the case of the assessee, neither any enquiry was made by the CIT nor any finding has been given. He has relied upon the order dated 1.3.2012 of the Hon'ble Delhi High Court in the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n from the reply dt 31.1.2008 and 27.3.2008, it cannot be remotely inferred that the Assessing Officer raised any enquiry on this issue or the assessee has furnished any explanation thereto. The decisions relied upon by the assessee are in respect of the issue on which the Assessing Officer has made an enquiry. Therefore, it is a clear case of lack of enquiry by the Assessing Officer while passing the assessment order u/s 143(3) in respect of the issue under consideration. 6 It is settled proposition of law, if the Assessing Officer has not applied his mind as no enquiry was conducted, then the order of the Assessing Officer is erroneous so far as prejudicial to the interest of revenue. The CIT has raised three specific issues for invoking ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plicability of sec. 43D on the merits of the issue and therefore, in our humble view would not help the case of the assessee in hand. 8 The Hon'ble Delhi High Court in the case of DG Housing Projects Ltd (supra) has observed that; "a distinction must be drawn in the cases where the Assessing Officer does not conduct an enquiry; as lack of enquiry by itself renders the order being erroneous and prejudicial to the interest of the Revenue and cases where the Assessing Officer conducts enquiry but finding recorded is erroneous and which is also prejudicial to the interest of the Revenue. In latter cases, the CIT has to examine the order of the Assessing Officer on merits or the decision taken by the Assessing Officer on merits and then hold a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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