Acit, Ludhiana vs Assessee

The AC IT, Circle IV, Vs. The Ludhiana Central Co-op Bank Ltd., Ludhiana Ludhiana

PAN No.AAAJT1911B

(Appellant) (Respondent)

Appellant By : Shri Manjit Singh Respondent By : S/Shri Manish Gupta & Praveen Jindal

Date of hearing : 05.06.2015 Date of Pronouncement : 05.06.2015

ORDER

PER T.R.SOOD, A.M.

Through this Misc. Application the Revenue has sought rectification of an

error which has crept into the order of Tribunal in ITA No. 526/Chd/2013 dated

25.02.2014.

2. The Ld. DR referred to the Misc. Application and pointed out that Revenue's

appeal was decided by the Tribunal with regard to the issue of relief allowed by

CIT(A) on account of interest accrued on non performing assets. This issue was

raised by the Revenue though ground No.1 of the appeal.

3. The Ld. DR referred to the Misc. Applications and pointed out that the

Tribunal has decided this issue against the Revenue by following the order in the

case of AC IT Vs. Punjab State Cooperative Bank Ltd in ITA No. 1112/Chd/2010. The Ld. DR submitted that in case of AC IT Vs. Punjab State Cooperative Bank Ltd

the relief was given mainl y on the basis that provisions of section 43D of the Act 2

which clearl y provides that in case of Public Financial Institution or Scheduled

bank etc, the income by way of interest in relation to the loan of doubtful nature is

taxable onl y when they are credited in the books of account . He pointed out that

these facts becomes clear from the order of Tribunal at page 5 wherein in para 13

of the order in the case of AC IT v Punjab State Cooperative Bank Ltd. (supra) has

been reproduced. He further pointed out that even the Assessing Officer has

discussed this issue regarding provisions of section 43D in the assessment order

itself. He contended that since assessee is not a Scheduled Bank, therefore,

decision in the case of AC IT v s Punjab State Cooperative Bank Ld. should not

have been applied. Therefore, clearl y an error has crept in the order of Tribunal

and the same may be recalled.

4. On the other hand Ld. Counsel of the assessee submitted that there is no

doubt that Tribunal has referred to the decision of ACIT v Punjab State

Cooperative Bank Ltd (supra). Further, the Tribunal has also referred to the

decision of Ahmadabad Bench of the Tribunal in the case of Karnavati Co-Op

Bank Ltd Vs. DC IT and even that bank is not a Scheduled Bank and, therefore, that

decision has been rightl y followed. Accordingl y there is no error apparent from

the record.

5. We have considered the rival submissions carefull y. We find that in

assessment order itself the Assessing Officer has discussed the issue in detail and

he has also referred to the decision of Hon'ble Supreme Court in case of Southern

Technologies Ltd v JCIT 320 ITR 577. The Assessing Officer further discussed

the other decisions along with provisions of section 43D. The perusal of section

43D clearl y shows that it applies onl y to the Scheduled Banks and this fact was

admitted by Ld. Counsel also that the same applies onl y in case of Financial

institution or Scheduled Bank. Admittedl y, the assessee is not a Scheduled Bank

and, therefore, the provisions of section 43D were not applicable. In the case of 3

ACIT v Punjab State Cooperative Bank Ltd. (supra), the relief was granted mainl y

on the basis of section 43D and, therefore, that decision could not have been

relied on for dismissing the Revenue's appeal in the present case. In our opinion,

the Tribunal has inadvertentl y not noticed that decision of ACIT v Punjab State

Cooperative Bank Lt d (supra) was rendered because of provisions of section 43D.

Therefore, clearl y an error has crept into the order of the Tribunal. Accordingl y,

we recall the order in ITA No. 526/Chd/2013 for the purpose of re-adjudication of

onl y one issue i.e regarding relief granted by C IT(A) against interest in respect of

non- performing loans which has been raised through ground No.1 by the Revenue.

In other words, the order is recalled for limited purpose of re-adjudication of

ground No.1 again.

6. Registry is directed to fix the date of hearing of the appeal in routine

manner by issuing a fresh notice to both the parties.

7. In the result, Misc. Application is allowed.

Order pronounced in the open Court on 05/06/2015.

Sd/- Sd/- (BHAVNESH SAINI) (T.R. SOOD) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated : 5 t h June, 2015 Rkk Copy to: 1. The Appellant 2. The Respondent 3. The CIT 4. The CIT(A) 5. The DR