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TMI Blog2022 (4) TMI 1057X X X X Extracts X X X X X X X X Extracts X X X X ..... Rahman, Hon'ble Accountant Member And Shri Amarjit Singh, Hon'ble Judicial Member For the Assessee : Shri Keshav Bhujale For the Department : Ms. Sailaja Rai ORDER PER S. RIFAUR RAHMAN (AM) 1. This appeal is filed by the assessee against the order of the Learned Principal Commissioner of Income Tax (Appeals) 1, Mumbai [hereinafter in short Ld. Pr.CIT ] dated 24.03.2021 for the A.Y.2011-12. 2. Brief facts of the case are, assessee is a scheduled cooperative bank engaged in the business of banking. In the year under consideration assessee filed return of income on 15.09.2011 declaring total income of ₹.41,79,64,710/-. The original assessment was completed u/s. 143(3) of Income-tax Act, 1961 (in short Act ) on 31.01.2014 determining the total income at ₹.41,79,64,710/- under normal provisions of the Act. Subsequently re-assessment was made u/s. 143(3) r.w.s. 147 of the Act on 26.12.2018 determining total income as per the original assessment order. Ld. Pr.CIT, Mumbai -1 perused the assessment records and observed that assessee had claimed deduction on account of provision of bad debts u/s. 36(1)(viia) of the Act to the tune of ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... debts. The case was again reopen under 143(3) r.w. 147 where in the said issue was raised on account of audit objection against which the contention of the assessee was accepted and the resultant order under Sec.147 was passed by the A.O. e) Since the assessee has claimed deductions u/s.36(1)(via) for the Asst. Years 2007-08, 2008-09, 2009-10 and 2010-11 and the bad debts written off pertaining to advances classified as NPA's after 31.03.2006 have been first adjusted against these balances and the balance bad debts if any have been claimed since the A.Y.2012-13 onwards, it has not been prejudicial to the interests of the revenue. f) The assessee has relied upon the decision in the case of City Co-op. Bank Ltd. v/s. ITO-1(3)(3) passed by ITAT, Mumbai supporting the contention of the assessee. 3. After considering the submissions of the assessee Ld. Pr.CIT rejected the submissions made with the following observations: - 8. I have perused the facts of the case and I do not find any force in the contentions made on behalf of the assessee which is satisfactorily relevant to the issue under consideration. The reasons for the same are as under: 1. In this reg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 021. 1.2 The learned Principal Commissioner of Income-tax failed to appreciate that the said notice u/s. 263 dated 02/03/2021 is illegal and invalid being without authority in law and without jurisdiction. 1.3 The learned Principal Commissioner of Income-tax failed to appreciate that the assessment order 26/12/2018 is neither erroneous nor prejudicial to the interest of the revenue. 1.4 The learned Principal Commissioner of Income-tax failed to appreciate that the claim for deduction of ₹ 14,83,13,270/- u/s.36(1)(vii) was allowed in the assessment order dated 31/01/2014 and not in the assessment order dated 26/12/2018 and accordingly the notice u/s. 263 is barred by limitation. 1.5 The Learned Principal Commissioner of Income-tax failed to appreciate that the claim for deduction of ₹ 14,83,13,270/- u/s.36(1)(vii) is allowable and the claim is also supported by the decision of the jurisdictional Mumbai Bench of the Income Tax Appellate Tribunal dated 12/09/2017 in the case of City Cooperative Bank Ltd., in ITA no. 2884/Mum/2015. 1.6 The learned Principal Commissioner of Income-tax failed to appreciate that the said decision of the jurisdictional ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le High Court. Further, he submitted that the same was subsequently withdrawn due to the low tax effect as per the latest CBDT instruction. Further on merit he supported the findings of the Ld.Pr.CIT. 8. Considered the rival submissions and material placed on record, we observed that this issue is already covered in detail by the Coordinate Bench in the case of City Cooperative Bank Ltd. v. ITO (supra) and held as under: - 3. We have gone through the submissions made by both the parties. We noted from the chart available on page 15 of the paper book showing the statement of party-wise bad debts written off and the provision existed as on 31.03.2006 that the assessee has written off the bad debts in respect of 31 parties amounting to ₹ 94,45,827/- during the impugned assessment year while the provisions as on 31.03.2006 was to the extent of ₹.83,39,432.57. The assessee has made provision for assessment years 2007-08, 2008-09 and 2009-10 at ₹.7,96,787/-,₹. 5,029/- and ₹.2,75,628/- respectively. It is a fact that up to A.Y. 2006-07 the income from banking business was fully allowed in the case of the assessee under section 80P of the Income Tax Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X
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