Commissioner Of Income Tax,Burdwan v. M/S. Burdwan Central Co-Operative Bank Limited

ITA/63/2008IA No.GA/1/2008 (Old No.GA/332/2008)AndITA/837/2008 IN THE HIGH COURT AT CALCUTTASpecial Jurisdiction (Income Tax)ORIGINAL SIDE COMMISSIONER OF INCOME TAX,BURDWAN -Versus- M/S. BURDWAN CENTRAL CO-OPERATIVE BANK LIMITED BEFORE :THE HON’BLE JUSTICE T.S. SIVAGNANAMAndTHE HON’BLE JUSTICE HIRANMAY BHATTACHARYYADate : 16[th] March, 2023 Appearance :Mr. Soumen Bhattacharjee, Adv....for the appellant in ITA/63/2008. Ms. Smita Das De, Adv....for the appellant in ITA/837/2008..Mr. J. P. Khaitan, Sr. Adv.Mr. Siddharth Das, Adv.Ms. Swapna Das, Adv....for the respondent. The Court : This appeal (ITA/63/2008) filed by therevenue under Section 260A of the Income Tax Act, 1961 (the‘Act’ for brevity) is directed against the order dated 27[th]June, 2007 passed by the Income Tax Appellate Tribunal, “A”Bench, Kolkata (the Tribunal) in ITA No.1279 & 1280/Kol/2007years 2003-04 and 2004-05. ITA/837/2008 also filed by the revenue under Section260A of the Act, is directed against the order dated 30[th]April, 2008 passed by the Income Tax Appellate Tribunal, “B”Bench, Kolkata in ITA No.394/Kol/2008 year 2005-06. The revenue has raised the following substantial question of law for consideration: (i)Whether on the facts and in the circumstancesof the case the Learned Tribunal erred indeleting the addition made by AssessingOfficer on account of disallowance undersection 80(P)(2)(a)(i) ? We have heard Mr. Soumen Bhattacharjee, and Ms. SmitaDas De, learned standing counsels appearing for theappellant/revenue and Mr. J. P. Khaitan, learner Senior Counselassisted by Mr. Siddharth Das and Ms. Swapna Das, learnedAdvocates for the respondent/assessee. The Tribunal while allowing the appeal filed by theassessee had followed the order passed by the Tribunal dated24[th] February, 2005 in the assessee’s own case for theassessment year 1995-96 to 1998-99. The Tribunal in the saidorder held as follows: “We also observe that the Hon’ble Supreme Court inthe case of Mehasana District Central Co-operative BankLtd. Vs. ITO (supra) had held that whether income derivedby the assessee co-operative bank from the investment ofits voluntary reserve other than statutory reserves ex except u/s 80(P)(2)(a)(i) depended upon whether thevoluntary reserves were utilized in the course of itsordinary banking business. Therefore, the A.O. was notjustified in disallowing the claim for deduction u/s.80(P)(2)(a)(i) relying on the said judgment of the SupremeCourt. Secondly, we also find from the order of the CIT(A)that the learned CIT, Burdwan vide order passed u/s. 264dated 18.3.2002 has held that voluntary reserves have beeninvested by the assessee co-operative bank in NABARD,IFCI, WBFC and Central Warehousing Corporation Ltd. aswell as in West Bengal Co-operative Ltd. and in the samewere made in pursuance of the provisions of section 24read with section 56 of the Banking Regulation Act, 1949and placement of such funds being imperative for thepurpose of carrying on banking business and are eligiblefor deduction u/s. 80(P)(2)(a)(i). We observe that theA.O. has passed the order u/s. 147/143(3) on 31.3.03 inall the assessment years under appeal. Therefore, we agreewith the observations of the learned CIT(A) that the A.O.was not justified to take a different view in the sameyears in the case of the assessee merely by invoking theprovisions of section 147 of the Income-tax Act as becausethe finding given by the CIT, Burdwan u/s. 264 dated18.3.2002 is binding on the A.O. We are of the opinionthat if the revenue had any grievance against the saidorder of the CIT, the same could have been rectified bythe CIT by passing appropriate order. The A.O. being anauthority subordinate to CIT in the hierarchy of theofficers of the Income-tax Department was not justified intaking a contrary view against the view taken by the CITin its order passed u/s. 264 dated 18.3.2004. Therefore,we do not find any infirmity in the order of the learned CIT(A) which calls for our interference and the grounds ofappeal of the revenue being devoid of any merit arerejected. CIT(A) which calls for our interference and the grounds ofappeal of the revenue being devoid of any merit arerejected. In the result, the appeals of the revenue aredismissed”. It has not been shown before us by the revenue that any appeal had been preferred against the order of the Tribunalfor the assessment year 1995-96 to 1998-99. Thus, in the light of the said fact, we find no errorin the order passed by the Tribunal in the following decisionfor the earlier assessment years. That apart, consistentapproach has to be maintained in such matters unless and untilthe revenue is able to establish that there are distinguishingfeatures to make a departure. In the light of the above, the appeals are dismissedand the substantial question of law is answered against therevenue. Consequently, the connected application (IA No.GA/1/2008) also stands dismissed. (T.S. SIVAGNANAM, J.) (HIRANMAY BHATTACHARYYA, J.) As./S.Das