CIT vs UTI Bank Ltd.

Akil Abdul Hamid Kureshi, J.�Revenue has filed this appeal against the order of the Income-tax Appellate Tribunal (hereinafter referred to as "the Tribunal") dated 30-8-2013, raising the following questions for our consideration:

''(A) Whether the appellate Tribunal has substantially erred in directing the assessing officer to admit assessees contention for deleting the suo moto disallowance of Rs. 6.32 crores u/s. 14A made by the assessee in the return of income?

(B) Whether the appellate Tribunal has erred in not appreciating the fact that the assessee can only make a new claim which was not made in the original return by way of filing a revised return under section 139(5)?"

We have heard the learned counsel for the parties and in the facts of the case, propose to dispose of this tax appeal at this stage.

Briefly stated the facts are that the assessing officer by his order of assessment for the assessment year 2002-03 made addition of Rs. 30.45 crore (rounded off) by way of additional disallowance under section 14A of the Income Tax Act, 1961 ("the Act", for short). The assessee carried the matter in appeal. Commissioner (Appeals) restricted the additions, but still confirmed the view of the assessing officer that section 14A of the Act would apply.

The assessee carried the matter in further appeal before the Tribunal. The Tribunal relied upon its own decision for the subsequent assessment year 2003-2004, in case of this very assessee, where somewhat similar question had come up. The Tribunal concluded as under:

''20. Before us, the learned authorised representative has raised a new argument wherein it was submitted that even the suo motu disallowance made by the assessee while computing the income should be deleted and for which he placed reliance the decision of Hon. Calcutta High Court and the decision of Supreme Court. We find that this ground was not taken by the assessee before assessing officer and Commissioner (Appeals). Assessing officer had proceeded on the basis of the suo moto disallowance made by the assessee. Thus the assessing officer or Commissioner (Appeals) did not had any opportunity to examine the aforesaid contention and therefore there is no finding on it either by the assessing officer and Commissioner (Appeals). In view of these facts, we are of the view that the matter with respect to Nil disallowance under 14A be remitted back to the file of assessing officer for examining it afresh. Thus the matter is remitted to the file of assessing officer and he is directed to admit the issue and decide the issue afresh on merits as per law after considering the submissions made by the assessee and after giving a reasonable opportunity of hearing to the assessee. Assessee is also directed and furnish promptly the details called for by the assessing officer to decide the issue. Thus this ground of the assessee is allowed for statistical purposes."

In this context, the Revenue has questioned the Tribunals decision to permit the assessee to argue before the Tribunal that even suo motu disallowance of Rs. 6.32 crore (rounded off) made by the assessee in the return filed was not justified. The stand of the Revenue is that when the assessee had filed a return in which the disallowance noted above was offered suo motu, the assessee could not have resiled from such position without filing a revised return. The Tribunal did not accept this contention and remitted the entire issue back for consideration before the assessing officer.

In our opinion, when all materials necessary to examine the nature of disallowance to be made, if at all, under section 14A of the Act are already on record and when once assessing officer as well as Commissioner (Appeals) have already considered the issue and given detailed findings, it would be appropriate for the Tribunal to give its final conclusive opinion on the entire issue.

Learned counsel for the Revenue placed heavy reliance on the decision of the Supreme Court in the case of Goetze (India) Ltd. Vs. Commissioner of Income Tax, , whereas counsel for the assessee placed reliance on the judgment of this Court dated 2-4-2014 in Tax Appeal No. 2562/2009 and connected appeals in the case of CIT v. Mitesh Impex.

When we are placing the entire issue for consideration before the Tribunal, we would not like to make any conclusive observations on the rival contentions. We leave it for the Tribunal to hear both the parties and give its conclusive findings as found appropriate in law.

Under the circumstances, the appeal is partly-allowed. The Tribunals judgment on the issue on hand is set aside. The entire issue is placed back before the Tribunal for decision on merits.

Tax Appeal is disposed of, accordingly.