TMI Blog2022 (4) TMI 585X X X X Extracts X X X X X X X X Extracts X X X X ..... erwise, when the Revenue has not disputed the interest free funds with the assessee to invest in the shares and securities yielding tax free income, then no disallowance is called for under section 14A read with rule 8D(2)(ii). Accordingly, the appeal filed by the assessee is allowed and appeal filed by the Revenue for the assessment year 2009-10 is dismissed. Validity of reopening of the assessment after four years from the end of the assessment year - Claim of interest expenditure under section 40(a)(ia) for want of TDS - HELD THAT:- As decided in own case[ 2021 (3) TMI 1357 - ITAT MUMBAI] specific tangible information came into the possession of Ld. AO which revealed possible escapement of income in the hands of the assessee. Nothing more, in our opinion, was required at this stage. Undisputedly, once the case was reopened, the other issues of underassessment or escapement of income could also be examined by Ld. AO. AR has also pleaded that objections filed by the assessee were not disposed-off. However, the said plea has also no substance since the assessee, in response to notice u/.s 148, vide letter dated 04/09/2017, merely submitted that it had fully truly disclosed a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not passed any order to give effect to the order of the CIT(A) despite the fact that the assessee had already filed a petition under section 154 of the Income-tax Act to rectify the mistakes. Once the Assessing Officer has not challenged the order of the CIT(A) dated 25/10/2012, then the Assessing Officer is bound to follow the said order in letter and spirit. The non passing of the giving effect order amounts disobedience and judicial indiscipline on the part of the Assessing Officer which is a serious matter to be considered by the appropriate authority - Assessing Officer has acted in a highly arbitrary manner while passing the impugned order under section 220(2) for charging the interest without first determining the tax liability of the assessee in accordance with the issues settled in appeal. Accordingly, in the interest of justice, we set aside the orders of the authorities below and remand the issue to the record of the Assessing Officer to readjudicate the same after giving effect to the order of the CIT(A) dated 25/10/2012. Assessee s appeal is allowed, for statistical purpose. - I.T.A No.1580, 1581, 1582, 1583/Mum/2020 And I.T.A No. 452, 453, 454/Mum/2021 - - - Dated: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... litigation, the issue of disallowance made under section 14A was carried to this Tribunal and this Tribunal, vide order dated 17/12/2015 directed the Assessing Officer to decide the issue of disallowance under section 14A of the Act r.w.r. 8D alongwith other issues of deduction under section 36(1) afresh. The Assessing Officer has given effect to the order of this Tribunal by passing the order dated 22/12/2017 and allowed the claim of the assessee without making any disallowance sofar as section 14A read with rule 8D is concerned. Thereafter, the Assessing Officer has passed an order under section 154 on 07/06/2018 and again made the disallowance under section 14A by relying on the judgement of Hon ble Supreme Court in case of M/s Maxopp Investment Ltd vs CIT in 91 taxmann.com 154. The assessee challenged the order of the Assessing Officer passed under section 154 before the CIT(A), who has granted part relief to the assessee by deleing the addition / disallowance sofar as disallowance of interest expenditure is concerned by accepting the fact that the assessee was having its own interest free funds for making the investment. However, the CIT(A) has confirmed the disallowance made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder passed by the AO is not sustainable as the issue was debatable and it was not liable for rectification of mistake u/s .154. Hence, we hold that order passed to withdraw the relief granted u/s 14A earlier is bereft of jurisdiction. Hence, we set aside the order of Ld.CIT(A) and decide the issue in favour of the assessee. Thus, it is clear that the Tribunal has held that the issue of disallowance under section 14A in respect of indirect common interest expenditure as well as indirect common administrative expenditure is a debatable issue and does not fall in the ambit of an error apparent on record which could be rectified under section 154 of the Act. The Tribunal, in the earlier order has discussed various aspects and facts which are required to be considered to take a decision on the issue of disallowance under section 14A r.w.r. 8D of the Income-tax Act. Since the jurisdiction of the Assessing Officer to pass an order under section 154 to withdraw the relief granted under section 14A is held to be barred, therefore, both the issues involved in the cross appeals stand disposed of. Even otherwise, when the Revenue has not disputed the interest free funds with the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t year 2009-10, the appeal of the assessee stands allowed and the appeal of the revenue stands dismissed. 7. For the Assessment year 2011-12, the assessee has raised the following grounds:- Reopening of Assessment 1.1 The Ld. CIT(A) failed to appreciate that, AO reopened the assessment after a period of 4 years from the end of the assessment year even when there was no failure on the part of appellant to fully and truly disclose all information required for completion of assessment. Disallowance u/s 40 a(ia) 2.1 The Ld. CIT(A) erred in confirming the disallowance u/s 40a(ia) without appreciating that TD5 is automatically deducted by system and unless there were specific reasons such as exemption certificate etc., question of non-deduction will not arise and the evidence to satisfaction of AO could not be given within a short period due to considerable lapse of time of more than 8 years. Interest u/s 244A 3.1 The Ld. CIT(A) erred in not following the binding decision of Hon'ble ITAT in appellant's own case where it was held that refunds granted should first be adjusted against interest due and thereafter against tax due by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act and book profit under section 115JB at ₹ 2811,22,04,789/-. Thereafter giving effect order was also passed on 10/04/2018 pursuant to the order of CITA) dated 26/12/2017. The Assessing Officer in the meantime issued a notice under section 148 on 29/03/2018 and recorded the reason to assess the income by disallowing the claim of interest expenditure under section 40(a)(ia) for want of TDS. The Assessing Officer has stated in the reasons recorded that an information was receive d from the TDS Wing, Nagpur regarding this fact of non deduction of tax at source detected during the survey conducted in one of the branches of the assessee bank. The Assessing Officer finally passed the re-assessment order on 10/12/2018 whereby he made a disallowance of ₹ 12,97,323/- under section 40(a)(ia). The assessee challenged the assessment order before the CIT(A) and also raised the issue of validity of reopening but could not succeed on this issue. 11. At the outset, we note that an identical issue has been considered by the co-ordinate bench of this Tribunal for the assessment year 2010-11 in para 6 as under:- 6. Aggrieved as aforesaid, the assessee assailed the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lso pleaded that objections filed by the assessee were not disposed-off. However, the said plea has also no substance since the assessee, in response to notice u/.s 148, vide letter dated 04/09/2017, merely submitted that it had fully truly disclosed all the particulars required for the assessment at the time of filing of return of income and at the time of various hearings for assessment u/s 143(3) whereas it is notable that case has been reopened on the basis of subsequent receipt of tangible information. Therefore, we concur with the view of Ld. CIT(A), in this regard and dismiss ground no.1 raised by the assessee. To maintain the rule of consistency, we follow the earlier order of this Tribunal on this issue and consequently ground 1.1 of the appeal is dismissed. 12. Ground 2.1 is regarding disallowance made by the Assessing Officer under section 40(a)(ia) which was confirmed by the CIT(A). 13. We have heard the Ld.AR as well as the Ld.DR and considered materials on record. At the outset, we note that this issue has been considered by the co-ordinate bench of this Tribunal for the assessment year 2011-12 vide order dated 03/03/2021 (supra) in para 8 as under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Y. 2010-11 (ITA No.2142 1627/Mum/2014). Recently the jurisdictional High Court in the case of the assessee titled CIT-LTU vs. Union Bank of India[2019] 263 Taxman 685 (Bombay)had also held that the provisions of section 115JB, as it stood prior to its amendment by virtue of Finance Act, 2012, would not be applicable to a banking company governed by provisions of Banking Regulation Act, 1949. In view of the above, this ground of appeal of the assessee is allowed and it is held that the provisions of section 115JB are not applicable to the assessee for this year and accordingly Ground No.4 is allowed. 16. Thus, the CIT(A) has followed the decision of the Tribunal in assessee s own case as well as the judgement of Hon ble jurisdictional High Court in assessee s own case reported in 263 Taxman 685 (Bom). We further note that this Tribunal for the assessment year 2009-10 vide order dated 03/03/2021 (supra) has considered this issue in para 9 as under:- The sole subject matter of revenue s appeal is applicability of Sec.115JB to the assessee Bank for the year under consideration. Regarding adjustment of Book Profits u/s 115JB, relying upon Tribunal decision in assessee s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to note that if order of CIT(A) dated 25.10.2012 is given effect, there will only be a refund due and hence the question of charging any interest u/s 220(2) does not arise. 3. The Id. CIT(A) erred in not deciding on the issue of short granting of interest u/s 244A which arose on account of AO not following the specific directions of Id. CTI(A) of adjusting the refunds granted first against the interest refund due and thereafter against the tax refund due. 19. The Ld.AR of the assessee has submitted that the CIT(A) has dismissed the appeal of the assessee on the technical ground that the order passed under section 220(2) is not an appealable order. He has pointed out that the impugned order of the CIT(A) is contrary to various decisions on this issue wherein it has been held that appeal lies against the charging of interest under section 220(2), if the order of the Assessing Officer levying interest is arbitrary. In support of his contention he has relied upon the decision of the co-ordinate bench of this Tribunal in case of ACIT vs Hindalco Industries Ltd 4 SOT 757 (Mum). The Ld.AR has, then submitted that an identical issue has been considered by the Gauhati Bench ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Assessing Officer made an adjustment in the book profit on account of bad and doubtful debts to the tune of ₹ 201 crores. The assessee challenged the action of the Assessing Officer before the CIT(A), but could not succeed. In the second appeal, this Tribunal in ITA No.5105/Mum/2004 vide order dated 09/05/2008 allowed the claim of the assessee by following the Special Bench decision in case of JCIT vs Usha Martin Industries Ltd 104 ITD 249 (Cal)(SB). The department filed an M.A. against the said order of the Tribunal in view of the amendment in the provisions of section 115JB by the Finance Act, 2009 wherein the Tribunal vide order dated 19/11/2010 allowed the M.A. and directed the Assessing Officer to examine the case as per accounts prepared in accordance with Schedule 6 of Companies Act. The Assessing Officer consequently added back the said amount of provision for bad and doubtful debts to the book profit. The said giving effect order was challenged by the assessee before the CIT(A) and the CIT(A), in para 8.1 of the order dated 25/10/2012, has observed as under:- 8.1 Therefore, as per the above computation ₹ 201,00,00,000/- was deleted. Subsequent to t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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