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TMI Blog2017 (5) TMI 968X X X X Extracts X X X X X X X X Extracts X X X X ..... ve bank. As per the settled principles of taxation jurisprudence, as discussed in the earlier paragraphs, assessees and the AO. s are not allowed to approbate and reprobate. Rule of consistency is applicable to both the parties. The assessee has not filed any application before the then FAA requesting him to cancel the penalty order and claiming that submissions made by it were factually wrong. In the case under consideration, the assessee itself has claimed that it was a cooperative bank and the reopening is also based on the claim made by it before the FAA during the penalty proceedings. A person coming to judicial forums is supposed to come with clean hands. We are aware that morality and ethics are not part of the tax jurisprudence and we are also not deciding a moral issue. But, it does not mean that assessee can take a stand as per its convenience resulting in depriving the Sovereign of its due taxes. In our opinion, considering the peculiar facts and circumstances of the case under consideration, the order of the FAA does not suffer from any legal or factual infirmity. Therefore, confirming the same, we decide second ground of appeal against it. Audit fees and provisio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... P of the Act. Initially the return was processed u/s. 143 (1) and later on a notice u/s. 148 was issued. The AO observed that the assessee would accept deposits from its member and would provide credit facilities to the members, that it had claimed audit fee of ₹ 2. 14 lakhs, that the payments were subjected to tax deducted at source. He directed the assessee to furnish proof of tax deducted. As the assessee could not furnish any evidence in that regard, the AO disallowed the sum of ₹ 2. 14 lakhs. He further found that it had claimed ₹ 2. 09 lakhs on account of sevak updaan nidhi . As per the AO the amount was provision for gratuity and hence same was not a allowable deduction. With regard to the claim made by the assessee u/s. 80P, the AO observed that during the AY. 2007-08 it had accepted cash deposits in excess of ₹ 20, 000/-to the tune of ₹ 61. 83 lakhs, that for the contravention of the provisions of section 269SS penalty u/s. 271D of the Act levied on 27/09/2010, that the First Appellate Authority (FAA)had deleted the penalty on the ground that the provisions of Maharashtra State Cooperative Societies Act, 1960 clearly showed that the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ank and that accordingly it got relief from the then FAA, that the assessment was rightly reopened as the co-operative bank was not entitled to claim deduction u/s. 80P in view of the section 80P(4)of the Act, that the assessee had not raised any objection for reopening the assessment u/s. 147 at the time of assessment proceedings before the AO. 3. 2. Before us, the Authorised Representative(AR)stated that the assessee was a cooperative society, that just because of deletion of penalty the assessee could not be treated as cooperative bank, that the CA had mis-represented the facts before the FAA who had adjudicated the penalty appeal. He relied upon the cases of Quepem Urban Cooperative Credit Society Ltd. (377 ITR 272), Goa PWD Staff Cooperative Credit Society Ltd. (242 Taxman 422) Belgaum Merchants Cooperative Credit Society Ltd. (64 taxmann. com 274). The Departmental Represnetative(DR) argued that the assessee itself had submitted before the FAA that it was a cooperative bank. he referred to pages 86 and 87 of the paper book filed by the assessee for the AY. 2012-13. He further stated that principle of mutuality was not applicable in the case under consideration, that the fu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on on this issue. It was only in 1961 that the High Court, on a reference made to it, held that the contention of the firm, in which the petitioner was a partner, that it was to be treated as a registered firm had to be accepted and directed the incidental and consequential proceedings to be undertaken by the Tribunal and the officers concerned. It is on the basis of this the Tribunal passed an order on 16. 06. 1961, pursuant to which the department took up the matter once over so as to remedy the defect which had gone into the record. After recording the above facts the Hon ble Madras High Court held as under: The other contention has also to fail. In fact, it was the order of the High Court, followed up by the directive of the Tribunal, that was responsible for the reassessment and this reassessment was made at a time when section 35(5) was in the statute book, having been inserted in 1952. The petitioner cannot approbate and reprobate. If he desires to go back to a period prior to April 1, 1952, he could only claim that the status of the firm, in which he was a partner, should be recognised as an unregistered firm. The learned counsel, however, stated that the order of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that the assessee having taken the benefit could not now contend against the said decision. In the case of N. Mangathayaramma and others(255 ITR 127), the Hon ble AP High Court has also dealt with the issue of taking opposite stands by an assessee in the assessment proceedings. In this matter, wealth-tax arrears to the tune of ₹ 5. 5 lakhs owed by A. Certain house properties with appurtenant lands belonged to the joint family and were assessed in the hands of A, Hindu undivided family. In connection with the recovery of the said arrears of the wealth-tax, the TRO, issued a proclamation in the Telugu daily newspaper and brought to sale the schedule property and ultimately auction was conducted and the sale was knocked down in favour of the highest bidder, for a consideration of ₹ 6, 58, 000. A writ petition was filed by M and her five children who claimed that the properties mentioned in the auction notification and published in Eenadu daily were the properties of petitioners Nos. 2 to 6. Another writ petition was filed by R who claimed that the properties belonged to him. Dismissing the writ petitions the Hon ble Court held that M and her children had agreed to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plants, held that the income so earned was liable to tax under section 45 of the Act. rather we are of the view that the assessee is not entitled to put forth any other contrary contention, in view of his conceding argument before the Tribunal. Before us, the correctness of the order of the Tribunal is only put in issue and we do not find any ground for interference in that order. Lastly, we would like to refer to the case of Gupta perfumers P. Ltd. , the Hon ble Delhi High Court(348 ITR 86)has also dealt with the issue of approbation and reprobation. In that matter the settlement commission had substantially accepted the undisclosed income surrendered by the assessee and had granted the applicant immunity from prosecution and penalty. Later on the applicant pleaded that application should be rejected. Deciding the matter, the Hon ble Court held that the argument of the petitioner that the settlement application should have been rejected as the petitioner had not made full and true disclosure, has to be rejected on the principle of approbate and reprobate. 3. 4. As per the Provisions of section 80P(4) of the Act stipulate that cooperative banks are not entitled to dedu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ad misrepresented the case before the then FAA. Nothing was brought on record to prove that any action was taken against the CA for alleged misrepresentation. No affidavit of the CA concerned has been filed to prove that he had made the claim before the then FAA on his own and not as per the instructions of the assessee. The case of the assessee can be easily summarised in a Hindi proverb- Chitt bhee meri Pat bhee meri. To save itself from the penal provisions, it claimed that it was a cooperative bank and for claiming deduction u/s. 80P now it claims that it is not a cooperative bank. As per the settled principles of taxation jurisprudence, as discussed in the earlier paragraphs, assessees and the AO. s are not allowed to approbate and reprobate. Rule of consistency is applicable to both the parties. The assessee has not filed any application before the then FAA requesting him to cancel the penalty order and claiming that submissions made by it were factually wrong. We have gone through the cases relied upon by the assessee. In none of the cases the assessee itself had admitted that it was a cooperative bank. From the day one they were claiming that they were cooperative soci ..... X X X X Extracts X X X X X X X X Extracts X X X X
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