TMI Blog2012 (3) TMI 413X X X X Extracts X X X X X X X X Extracts X X X X ..... s of sec. 263. Where there is complete lack of enquiry and the circumstances demands an extensive enquiry at the level of the Assessing Officer, then the CIT is justified in directing the Assessing Officer to decided the issue denovo.- Decided against revenue - ITA No. 4288/Mum/2010 - - - Dated:- 30-3-2012 - SHRI R S SYAL, SHRI VIJAY PAL RAO, JJ. For The Appellant :- Shri Girish Dave For The Respondent :- Sh Goli Sriniwas Rao ORDER PER VIJAY PAL RAO, JM This appeal by the assessee is directed against the order dated 25.3.2010 passed u/s 263 of the I T Act by the CIT for the AY 2005-06. 2 The assessment in this case was completed u/s 143(3) r.w.s 153A of the I T Act on 31.3.2008. Subsequently, on exam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... standard assets which can not be included for allowing deduction u/s. 36(1)(viia)of the Income Tax Act, 1961. 2.1 Accordingly, the CIT(A) proposed to set aside the assessment order by issuing show cause notice u/s 263 of the I T Act dated 11.2.2009 and thereafter again on 25.2.2010. The assessee filed reply to the show cause notice and has contested against the proposed action of the CIT to set aside the order u/s 263 of the act. The CIT did not convince with the submissions and explanation of the assessee and accordingly set aside the assessment order by invoking the provisions of sec. 263 of the I T Act and directed the Assessing Officer to re-do the assessment as per law. 3. Before us, the assessee has raised the following effect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 377; 115 crore under section 36(1 )(viia) in detail. He further erred in observing that the provision on standard assets is not for bad and doubtful debt and which cannot be included for allowing deduction under section 36(1)(viia) of the Income-tax Act, 1961. 7. Without prejudice to the above, the learned CIT erred in not appreciating that when two views are possible and one of the views has been adopted by the Assessing Officer, the power of revision under section 263 cannot be exercised. In the instant case, the appellant s view is supported by various judicial precedents and accordingly the view taken is definitely a plausible view. 4. The ld AR of the assessee has submitted that the assessee explained all the relevant facts and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eping in view the guidelines issued by the RBI in relation to such debts. 4.2 The ld AR referred Rule 6EA for identifying the categories of sticky advances on which the exemption u/s 43D is available. In support of his contention, the ld AR of the assessee has relied upon the decision of the Ahmedabad Bench of the Tribunal in the case of Karnavati Co-op Bank Ltd vd DCIT reported in 17 Taxman 239(Ahd) and submitted that when there is no defect in the method of recognising the interest income on sticky advances, then accepting the same by the Assessing Officer is not open to the CIT for invoking the provisions of sec. 263. The interest is assessable to tax only in the year when it is actually received or credited by the assessee in the P L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the assessee before passing the impugned order. Therefore, it cannot be said that the CIT has not applied his mind. The ld DR has advanced the argument that even as per sec. 43D, the interest is assessable to tax only when it is actually received or credited by the assessee; but the correctness of classification of NPA on the part of the assessee has to be decided by the Assessing Officer as per the provisions of law and particularly as per Rule 6EA. When the Assessing Officer has failed to make any enquiry or examination to find out the correctness of the decision of the assessee, the order of the Assessing Officer is erroneous and prejudicial to the interest of revenue. He has relied upon the order of the CIT. 5 We have considered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... per the conditions stipulated under Rule 6EA; however, the action of the assessee in this regard has to be judged by the Assessing Officer in order to verify the correctness of the same. It requires a detailed enquiry and verification of the facts about the state of assets classified by the assessee as NPA. In order to determine the action of the assessee whether the same is as per the requirements of Rules, the Assessing Officer has to take into consideration the various aspects including any receipt or recovery during the year in respect of the assets/advances and how the assessee given the treatment to such receipts in the books of account. Therefore, the assessee cannot take a plea that it is at the sole liberty of the assessee to decid ..... X X X X Extracts X X X X X X X X Extracts X X X X
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