KODAGU DISTRICT CO-OPERATIVE CENTRAL BANK LTD. Vs. ASSISTANT COMMISSIONER OF INCOME TAX, VIJAYANAGAR HASSAN

JUDGEMENT

(1.) This appeal under Section 260-A of the Income Tax Act, 1961 (hereinafter referred to as the Act , for short) has been filed by the assessee. The subject matter of the appeal pertains to the Assessment Year 2009-2010. The appeal was admitted by a Bench of this Court vide order dated 09.11.2016 on the following substantial questions of law:

(2.) Facts leading to filing of this appeal briefly stated are that the assessee is a District Central Co-operative Bank and is engaged in the banking business. The assessee filed return of income for the Assessment Year 2009-10 on 29.09.2009 declaring an income of Rs.3,80,29,000/-. The case of the assessee was selected for scrutiny and the Assessing Officer completed the assessment by an order dated 30.12.2011 and made addition of a sum of Rs.2,38,30,775/- which included a sum of Rs.24,95,846/- disallowed under Section 14A of the Act. The assessee thereupon filed an appeal before the Commissioner of Income Tax (Appeals), who by an order dated 27.02.2013 affirmed the order passed by the Assessing Officer. Thereafter, the assessee filed an appeal before the Income Tax Appellate Tribunal (hereinafter referred to as 'the Tribunal' for short). The Tribunal sustained disallowance of Rs.24,95,846/- made under Section 14A of the Act. However, the appeal preferred by the assessee was partly allowed. In the aforesaid factual background, the assessee has filed this appeal.

(3.) Learned counsel for the assessee submits that Section 14A of the Act mandates the Assessing Officer to first reject the claim of the assessee regarding the extent of such expenditure and rejection must be disclosed by assigning cogent reasons. It is only after rejection of cogent reasons, the question of determination of expenditure by the Assessing Officer would arise. It is further submitted that in the instant case, the aforesaid mandatory requirement has not been fulfilled by the Assessing Officer. However, the aforesaid aspect of the matter is neither been appreciated by the Commissioner of Income Tax (Appeals) nor the Tribunal. In support of aforesaid submission, reliance has been placed on the decision of the Supreme Court in ' MAXOPP INVESTMENT LTD. Vs. COMMISSIONER OF INCOMETAX , 2012 347 ITR 272' (DELHI), which has been upheld by the Supreme Court in the decision reported in ' MAXOPP INVESTMENT LTD. Vs. CIT , 2018 402 ITR 640'. On the other hand, learned counsel for the revenue has invited our attention to Paragraphs 10 and 11 of the order passed by the Tribunal and has submitted that all the authorities under the Act have rightly disallowed the claim for deduction under Section 14A of the Act and no interference in this appeal is called for.