The Commissioner Of Income Tax, Chennai v. M/S.indian Bank Head Office, 66, Rajaji Salai, Chennai – 600 001

In the High Court of Judicature at Madras Dated: 01.12.2014 Coram The Honourable Mr.JUSTICE R.SUDHAKARandThe Honourable Mr.JUSTICE R.KARUPPIAH Tax Case (Appeal) No.928 of 2014 The Commissioner of Income tax,Chennai. .... AppellantVs. M/s.Indian BankHead Office,66, Rajaji Salai,Chennai – 600 001. .... Respondent APPEAL under Section 260A of the Income Tax Act against theorder dated 17.2.2014 made in I.T.A.No.879/Mds/2010 on the file ofthe Income Tax Appellate Tribunal 'C' Bench, Chennai against theorder of Commissioner of Income Tax (Appeals-III) Chennai-34dt.25.3.2010 in ITA.No.589/07-08/A-III, and arising out of theAssessment Order of Additional Commissioner of Income Tax, CompanyRange-I, Chennai, dt.31.12.2007 in PAN/GIR No.AAACH 607G. For Appellant : Mrs.Hema Muralikrishnan Standing Counsel for Income TaxJ U D G M E N T(Delivered by R.SUDHAKAR,J.) This Tax Case (Appeal) is filed by the Revenue as against theorder of the Income Tax Appellate Tribunal raising the followingsubstantial questions of law:"1. Whether on the facts and in the circumstances ofthe case, the Tribunal was right in entertainingAdditional grounds on a issue which was not adjudicatedbefore the CIT(A) especially when Section 253(1) clearlystipulates that appeal may be filed against the order ofthe lower authorities on those issues which is not thecase on hand? 2. Is not the finding of the Tribunal bad bypermitting the additional grounds on an issue which wasnot been dealt by the CIT(A) in his order and therefore itcould be at best only be a fresh ground which was notcontested at the time of filing of the appeal andtherefore not an additional grounds as held by theTribunal?https://hcservices.ecourts.gov.in/hcservices/ 3. Whether on the facts and circumstances of thecase, the Tribunal was right in holding that provision ofSection 115JB would not apply to the assessee bankespecially when as per explanation 3 had been inserted inthe Finance Act after explanation 2 to Section 115JB(2)wherein it had been clarified that Minimum Alternate Taxis applicable under Section 115JB to bank even if the bankprepare its profit and loss account as per BankingRegulation Act? 4. Whether on the facts and circumstances of thecase, the Tribunal was right in holding that the provisionof Section 115JB would not apply to the assessee bankfailing to note that as per Explanation 3 it has beenclarified 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 1stday of April, 2012 an option to prepare its profit andloss account for the relevant previous either inaccordance with provision of Part II and III to Schedule-VI of Companies Act, 1956 or in accordance with theprovisions of the Act governing such company and thereforeSection 115 JB is applicable?" 2. The assessment year in the case relates to the assessmentyear 2002-03. The assessee is a Scheduled Bank under the BankingRegulation Act, 1949. For the assessment year 2002-03, the assesseefiled return of income declaring total loss of Rs.256,09,26,436/-.The Assessing Officer completed the regular assessment determiningbook profit at Rs.171,77,15,332/- under Section 115JB and demanded asum of Rs.18,16,46,321/-. Subsequently, the assessment was reopenedunder Section 147 of the Income Tax Act by issuing notice underSection 148 to the assessee to charge to tax and interest accrued butnot due on securities as also excess relief granted while deductingunabsorbed 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 wasunder assessment of income in the case of the assessee. As againstthe order of the Commissioner of Income Tax (Appeals), the assesseepreferred further appeal before the Income Tax Appellate Tribunal. 3. In the course of hearing before the Tribunal, the assesseehad raised additional grounds. After hearing both sides, theTribunal after following the decision in respect of the assessee'sown case for the assessment years 2004-05 to 2006-07 allowed theraising of additional grounds, apart from deciding the issue onmerits. 4. The appellant/Revenue has challenged that portion of theorder of the Tribunal allowing the raising of additional groundscontending that additional grounds ought not to have been raisedbefore the Tribunal on the plea which was not adjudicated before theCIT (Appeals). https://hcservices.ecourts.gov.in/hcservices/ 5. Heard learned Standing Counsel appearing for the Revenue andperused the materials placed before this Court. 6. Rule 11 of the Income Tax Appellate Tribunal Rules providesfor raising of additional grounds, which reads as follows:"Grounds which may be taken in appeal.11 . The appellant shall not, except by leave of theTribunal, urge or be heard in support of any ground not setforth in the memorandum of appeal, but the Tribunal, indeciding the appeal, shall not be confined to the groundssetforth in the memorandum of appeal or taken by leave ofthe Tribunal under this rule:Provided that the Tribunal shall not rest its decision onany other ground unless the party who may be affectedthereby has had a sufficient opportunity of being heard onthat ground.” 7. The above-said provision makes it clear that the assesseehas the right to raise additional grounds and if the same isbeneficial to the assessee, the same should be considered by theTribunal. It is also seen from the order of the Tribunal that thevery same issue, raised as additional grounds, has already beenconsidered by the Tribunal in respect of the assessee's own case.Hence, as per the above-said provision, when the additional groundsis beneficial to the assessee, the Tribunal is right in allowing thesame. 8. The plea taken by the respondent/assessee is that theprovision of Section 115JB of the Income Tax Act will not beapplicable to the assessee bank and the said issue has beenconsidered by the Tribunal in the assessee's own case in respect ofthe assessment year 2000-2001 decided on 3[rd] April, 2011. 9. In view of the above, question of law Nos.1 and 2 areanswered against the Revenue and in favour of the assessee. Theother two substantial questions of law, namely question of law Nos.3and 4 are given up in view of the same raised in the connected appealin T.C.(A)No.929 of 2014. Accordingly, this Tax Case (Appeal) standsdismissed. No costs.Sd/-Assistant RegistrarDated:12.12.14 To 1. The Income Tax Appellate Tribunal 'C' Bench, Chennai. https://hcservices.ecourts.gov.in/hcservices/ 2. The Commissioner of Income Tax (Appeals)-III, Chennai. 3. The Additional Commissioner of Income Tax, Company Range-I,Chennai. 4.The Assistant Registrar,Income Tax Appellate Tribunal,Rajaji Bhavan, III Floor, Besant Nagar,Chennai-90. +1 cc to Mr.T.Ravikumar,Advocate,SR.58098. ts(co)krd 15/12 T.C.(A) No.928 of 2014