The Assessee Placed Reliance On The Decision In The Case Of Cit v. Annamalaifinance Ltd. [(2005) 275 Itr 451 (Mad)]; Cit V. Elgi Finance Ltd [293 Itr 357(Mad)]; Cit V. Kicm Investments (Cal) [310 Itr 4]; Cit V. Shoorji Vallabhd

OD – 2 IN THE HIGH COURT AT CALCUTTASPECIAL JURISDICTION (INCOME-TAX)ORIGINAL SIDE ITAT/166/2022IA NO. GA/1/2022, GA/2/2022 PRINCIPAL COMMISSIONER OF INCOME TAX, SILIGURI, KOLKATAVS. THE JALPAIGURI CENTRAL CO-OPERATIVE BANK LIMITED BEFORE :THE HON’BLE JUSTICE T.S. SIVAGNANAMAndTHE HON’BLE JUSTICE SUPRATIM BHATTACHARYADate : SEPTEMBER 29, 2022. Appearance:Mr. Prithu Dudhoria, Adv.…for the appellantMr. Avra Mazumder, Adv.Mr. Binayak Gupta, Adv.…for respondent GA/1/2022 The Court :- We have heard Mr. Prithu Dudhoria, learned standing Counsel forthe appellant and Mr. Avra Mazumder, learned Advocate duly assisted by Mr. BinayakGupta, learned Advocate for the respondent. There is a delay of 1353 days in filing the appeal. We have perused the affidavitfiled in support of the application and we find that sufficient cause has been shown bythe revenue for not being able to prefer the appeal within the period of limitation. Hence, the application is allowed and the delay in filing the appeal is condoned. ITAT/166/2022 This appeal by the revenue under Section 260A of the Income Tax Act, 1961 (theAct) is directed against the order dated June 22, 2018 passed by the Income TaxAppellate Tribunal “D” Bench, Kolkata in I.T.A. No. 327/Kol/2017. The revenue has raised the following substantial question of law forconsideration:- “(i) Whether on the facts and in the circumstances of the case the Learned IncomeTax Appellate Tribunal has erred in law in holding that a provision for overdueinterest is allowable as expenditure under Income Tax Act?” We have heard Mr. Prithu Dudhoria, learned standing Counsel for the appellantand Mr. Avra Mazumder, learned Advocate duly assisted by Mr. Binayak Gupta, learnedAdvocate for the respondent. The respondent/assessee is a Co-operative bank filed its return of income for theassessment year under consideration. The assessing officer completed the assessmentunder Section 143(3) of the Act by order dated 14[th] January, 2016 and the provisionmade by the assessee for overdue interest was disallowed and added back to the totalincome of the assessee. Aggrieved by the same the assessee preferred the appeal before the Commissionerof Income Tax, Appeals, Jalpaiguri [CIT(A)] contending that the provision for overdueinterest is made against portion of overdue interest included in interest earned, which isalready considered for computation of tax, interest earned may also be noted byprovision for overdue interest, reducing gross income for computation of tax, but thatwould not comply with the standard of accounting as per the guidelines issued by theReserve Bank of India in exercise of the power under Section 45Q of the Reserve Bank ofIndia Act, 1949. The assessee further contended that the guidelines issued by theReserve Bank of India has an overriding power over the accounting norms prescribedunder Section 145 of the Act and the same is also in consonance with accountingstandard AS-9. Further the assessee stated that the same issue was also considered by the CIT(A) for financial year 2007-08, 2008-09, 2009-10, 2010-11 and the same wasallowed and the disallowance made by the assessing officer was set aside. The assessee placed reliance on the decision in the case of CIT v. ANNAMALAIFINANCE LTD. [(2005) 275 ITR 451 (Mad)]; CIT v. ELGI FINANCE LTD [293 ITR 357(Mad)]; CIT v. KICM INVESTMENTS (Cal) [310 ITR 4]; CIT v. SHOORJI VALLABHDAS &CO. [46 ITR 144 (SC)]. The assessee also relied upon the decision of the Coordinate Bench of theTribunal. The CIT(A) taking note of the decision and also the decision of the Coordinatebench of the Tribunal as well as the fact that in the assessee’s own case suchdisallowance made by the assessing officer for the earlier financial years was deleted bythe CIT(A), and allowed the assessee’s appeal. the CIT(A) for financial year 2007-08, 2008-09, 2009-10, 2010-11 and the same wasallowed and the disallowance made by the assessing officer was set aside. The assessee placed reliance on the decision in the case of CIT v. ANNAMALAIFINANCE LTD. [(2005) 275 ITR 451 (Mad)]; CIT v. ELGI FINANCE LTD [293 ITR 357(Mad)]; CIT v. KICM INVESTMENTS (Cal) [310 ITR 4]; CIT v. SHOORJI VALLABHDAS &CO. [46 ITR 144 (SC)]. The assessee also relied upon the decision of the Coordinate Bench of theTribunal. The CIT(A) taking note of the decision and also the decision of the Coordinatebench of the Tribunal as well as the fact that in the assessee’s own case suchdisallowance made by the assessing officer for the earlier financial years was deleted bythe CIT(A), and allowed the assessee’s appeal. Aggrieved by the same the revenue preferred appeal before the learned Tribunal.The learned Tribunal taking note of the various decisions and also the decision of theCoordinate Bench of the Tribunal dismissed the revenue’s appeal and challenging thesame the present appeal has been preferred and the legal issue which was decided bythe Learned Tribunal has been settled in various decisions and at this juncture it wouldbe beneficial to refer to the decision in the case of PRINCIPAL COMMISSIONER OFINCOME TAX- 1, RAJKOT, v. KUTCH DISTRICT CENTRAL CO-OP. BANK LIMITED, [2018]94 TAXMANN.COM 298(GUJARAT) wherein it was held that interest on non performingassets is not taxable on accrual basis based on the guidelines issued by the ReserveBank of India. The decision in KUTCH DISTRICT CENTRAL COOPERATIVE BANKLIMITED was affirmed by the Hon’ble Supreme Court in the decision reported in[2018]94 TAXMANN.COM 300 (SC). Thus we find that the learned Tribunal has rightly dismissed the appeal filed bythe revenue and such order does not call for any interference. In the result the appeal is dismissed and the substantial question of law isdecided against the revenue. (T.S. SIVAGNANAM, J.) (SUPRATIM BHATTACHARYA, J.) Pkd/GH.