Partly allowed

The Commissionier of Income Ta v. M/S Indian Bank

Madras HC1 Dec 2014TCA/928/2014

Case brief

AI extract

What is this about?

In this appeal, the Revenue challenged the Income Tax Appellate Tribunal's decision to allow additional grounds regarding the applicability of Minimum Alternate Tax (Section 115JB) to a Scheduled Bank. The High Court held that under Rule 11 of the Tribunal Rules, the Tribunal acts correctly in entertaining additional grounds beneficial to the assessee, especially when the issue was previously cons

What did the court decide?

Question of Law No.1 and 2 answered in favor of assessee; other questions given up; Tax Case Appeal dismissed.

The Commissionier of Income Ta Vs M/S Indian Bank — Income Tax | Madras HC (2014)

¶1

In the High Court of Judicature at Madras

¶2

Dated: 01.12.2014

¶3

Coram

¶4

The Honourable Mr.JUSTICE R.SUDHAKAR and The Honourable Mr.JUSTICE R.KARUPPIAH

¶5

Tax Case (Appeal) No.928 of 2014

¶6

The Commissioner of Income tax, Chennai. .... Appellant

¶7

Vs. M/s.Indian Bank Head Office, 66, Rajaji Salai, Chennai – 600 001. .... Respondent

¶8

APPEAL under Section 260A of the Income Tax Act against the order dated 17.2.2014 made in I.T.A.No.879/Mds/2010 on the file of the Income Tax Appellate Tribunal 'C' Bench, Chennai against the order of Commissioner of Income Tax (Appeals-III) Chennai-34 dt.25.3.2010 in ITA.No.589/07-08/A-III, and arising out of the Assessment Order of Additional Commissioner of Income Tax, Company Range-I, Chennai, dt.31.12.2007 in PAN/GIR No.AAACH 607G.

¶9

For Appellant : Mrs.Hema Muralikrishnan Standing Counsel for Income Tax J U D G M E N T (Delivered by R.SUDHAKAR,J.)

¶10

This Tax Case (Appeal) is filed by the Revenue as against the order of the Income Tax Appellate Tribunal raising the following substantial questions of law:

¶11

"1. Whether on the facts and in the circumstances of the case, the Tribunal was right in entertaining Additional grounds on a issue which was not adjudicated before the CIT(A) especially when Section 253(1) clearly stipulates that appeal may be filed against the order of the lower authorities on those issues which is not the case on hand?

¶12

Is not the finding of the Tribunal bad by permitting the additional grounds on an issue which was not been dealt by the CIT(A) in his order and therefore it could be at best only be a fresh ground which was not contested at the time of filing of the appeal and therefore not an additional grounds as held by the Tribunal?

¶13

https://hcservices.ecourts.gov.in/hcservices/

¶14

Whether on the facts and circumstances of the case, the Tribunal was right in holding that provision of Section 115JB would not apply to the assessee bank especially when as per explanation 3 had been inserted in the Finance Act after explanation 2 to Section 115JB(2) wherein it had been clarified that Minimum Alternate Tax is applicable under Section 115JB to bank even if the bank prepare its profit and loss account as per Banking Regulation Act?

¶15

Whether on the facts and circumstances of the case, the Tribunal was right in holding that the provision of Section 115JB would not apply to the assessee bank failing to note that as per Explanation 3 it has been clarified that a company to which proviso to sub section (2) of Section 211 of the Companies Act was applicable, has for an assessment year commencing on or before the 1st day of April, 2012 an option to prepare its profit and loss account for the relevant previous either in accordance with provision of Part II and III to ScheduleVI of Companies Act, 1956 or in accordance with the provisions of the Act governing such company and therefore Section 115 JB is applicable?"

¶16

The assessment year in the case relates to the assessment year 2002-03. The assessee is a Scheduled Bank under the Banking Regulation Act, 1949. For the assessment year 2002-03, the assessee filed return of income declaring total loss of Rs.256,09,26,436/-. The Assessing Officer completed the regular assessment determining book profit at Rs.171,77,15,332/- under Section 115JB and demanded a sum of Rs.18,16,46,321/-. Subsequently, the assessment was reopened under Section 147 of the Income Tax Act by issuing notice under Section 148 to the assessee to charge to tax and interest accrued but not due on securities as also excess relief granted while deducting unabsorbed depreciation. Aggrieved by the order of reassessment, the assessee filed an appeal before the Commissioner of Income Tax (Appeals), who held that the reassessment was valid, since there was under assessment of income in the case of the assessee. As against the order of the Commissioner of Income Tax (Appeals), the assessee preferred further appeal before the Income Tax Appellate Tribunal.

¶17

In the course of hearing before the Tribunal, the assessee had raised additional grounds. After hearing both sides, the Tribunal after following the decision in respect of the assessee's own case for the assessment years 2004-05 to 2006-07 allowed the raising of additional grounds, apart from deciding the issue on merits.

¶18

The appellant/Revenue has challenged that portion of the order of the Tribunal allowing the raising of additional grounds contending that additional grounds ought not to have been raised before the Tribunal on the plea which was not adjudicated before the CIT (Appeals). https://hcservices.ecourts.gov.in/hcservices/

¶19

Heard learned Standing Counsel appearing for the Revenue and perused the materials placed before this Court.

¶20

Rule 11 of the Income Tax Appellate Tribunal Rules provides

¶21

for raising of additional grounds, which reads as follows:

¶22

"Grounds which may be taken in appeal.

¶23

11 . The appellant shall not, except by leave of the

¶24

Tribunal, urge or be heard in support of any ground not set forth in the memorandum of appeal, but the Tribunal, in deciding the appeal, shall not be confined to the grounds setforth in the memorandum of appeal or taken by leave of the Tribunal under this rule:

¶25

Provided that the Tribunal shall not rest its decision on any other ground unless the party who may be affected thereby has had a sufficient opportunity of being heard on that ground.”

¶26

The above-said provision makes it clear that the assessee has the right to raise additional grounds and if the same is beneficial to the assessee, the same should be considered by the Tribunal. It is also seen from the order of the Tribunal that the very same issue, raised as additional grounds, has already been considered by the Tribunal in respect of the assessee's own case. Hence, as per the above-said provision, when the additional grounds is beneficial to the assessee, the Tribunal is right in allowing the same.

¶27

The plea taken by the respondent/assessee is that the provision of Section 115JB of the Income Tax Act will not be applicable to the assessee bank and the said issue has been considered by the Tribunal in the assessee's own case in respect of the assessment year 2000-2001 decided on 3^rd April, 2011.

¶28

In view of the above, question of law Nos.1 and 2 are answered against the Revenue and in favour of the assessee. The other two substantial questions of law, namely question of law Nos.3 and 4 are given up in view of the same raised in the connected appeal in T.C.(A)No.929 of 2014. Accordingly, this Tax Case (Appeal) stands dismissed. No costs.

¶29

Sd/Assistant Registrar

¶30

Dated:12.12.14

¶31

True Copy

¶32

Sub Assistant Registrar

¶33

¶34

The Income Tax Appellate Tribunal 'C' Bench, Chennai.

¶35

https://hcservices.ecourts.gov.in/hcservices/

¶36

The Commissioner of Income Tax (Appeals)-III, Chennai.

¶37

The Additional Commissioner of Income Tax, Company Range-I, Chennai.

¶38

4.The Assistant Registrar,

¶39

Income Tax Appellate Tribunal, Rajaji Bhavan, III Floor, Besant Nagar, Chennai-90.

¶40

+1 cc to Mr.T.Ravikumar,Advocate,SR.58098.

¶41

ts(co) krd 15/12 T.C.(A) No.928 of 2014

¶42

https://hcservices.ecourts.gov.in/hcservices/

The Commissionier of Income Ta v. M/S Indian Bank

Case brief

What is this about?

What did the court decide?

The Commissionier of Income Ta v. M/S Indian Bank

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

Coram

Case details

Similar cases

M/S Poompuhar Shipping Vs the Assistant Commissioner of

Commissioner of Income Tax Vs M/S Prakash Foods &Feed Mills

M.Veluswamy Vs Income Tax Officer

G. Malini Vs the Asst Commissioner of

Commissioner of Income Tax Vs M/S Ndr Wrehousing Pvt. Ltd.

M/S Lanxess India Pvt. Ltd. Vs Assistant Commissioner of