आयकर अपीलीय अधिकरण “ए” न्यायपीठ पुणे में ।

IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, PUNE BEFORE SHRI R.K. PANDA, VICE PRESIDENT AND MS. ASTHA CHANDRA, JUDICIAL MEMBER आयकर अपील सं . / ITA Nos.800, 801, & 802/PUN/2024 धििाारण वर्ा / Assessment Years : 2013-14, 2014-15 & 2015-16 Income Tax Officer, The Beed District Central Co-Op. Bank Ltd., Ward – 1, Jalna Rajuri Ves, Beed – 431122, Vs. Maharashtra PAN : AAAAT5256C अपीलार्थी / Appellant प्रत्यर्थी / Respondent Assessee by : Shri Shubham N. Rathi Department by : Shri Amol Khairnar Date of hearing : 02-12-2024 Date of 21-02-2025 Pronouncement : आदेश / ORDER PER ASTHA CHANDRA, JM :

These three appeals filed by the Revenue are directed against the three separate orders all dated 28.02.2024 of the Ld. Commissioner of Income Tax (Appeals)/NFAC, Delhi [“CIT(A)”] pertaining to Assessment Years (“AYs”) 2013-14, 2014-15 and 2015-16 respectively. Since the issue(s) involved are identical, these were heard together and are being disposed of by this common order.

ITA No. 800/PUN/2024, AY 2013-14.

2. Briefly stated, the facts of the case are that the assessee is a Co-operative Bank registered under the Maharashtra Co-operative Societies Act, 1960 and engaged in the business of providing banking and credit facilities to its account holders. It is governed under the Banking Regulation Act, 1949. For AY 2013- 14, the assessee e-filed its return of income on 01.10.2023 declaring total income at Rs.3,50,79,049/- and after set off of brought forward losses, the balance taxable income is arrived at Rs. Nil. The return was processed u/s 143(1) of the Income Tax Act, 1961 (the “Act”). Subsequently, the case was selected for scrutiny under CASS and the assessment u/s 143(3) of the Act was completed by the Ld. Assessing Officer (“AO”) on 29.01.2016 assessing total income of the assessee at Rs.7,00,83,018/-. The Pr. CIT-2, Aurangabad observed that the following issues remained to be verified during the course of assessment made u/s 143(3) of the Act :

"On verification of balance sheet and profit and loss account it is noticed that the assessee has made the provision on account of overdue interest of Rs.34,94,01,000/-. However, there is no provision of income tax Act under which any provision is allowed as expenses. Therefore, provision for overdue interest is not allowable as expenditure and hence same should have been disallowed."

2.1 The Ld. Pr. CIT therefore invoked the provisions of section 263 of the Act holding that the impugned assessment is erroneous and prejudicial to the interest of the revenue. Statutory notice u/s 143(2) of the Act was duly issued and served upon the assessee. During the subsequent assessment proceedings, the assessee filed submissions before the Ld. AO which were not found tenable by him. He proceeded to make an addition on account of overdue interest on NPA accounts amounting to Rs.34,94,01,100/- on the ground that this provision is not applicable to the Co-operative Banks and rejected the reliance placed by the assessee on the decision of the Aurangabad Bench of the Hon‟ble Bombay High Court in the case of CIT Vs. Deogiri Nagari Sahakari Bank Ltd. reported in 79 taxmann.com 396 (Bom.). The Ld. AO, therefore, completed the assessment u/s 143(3) r.w.s. 263 of the Act on 30.12.2018 by disallowing the claim of deduction u/s 43D of the Act to the tune of Rs.34,94,01,100/-.

3. Aggrieved, the assessee filed an appeal before the Ld. CIT(A), vide his order dated 30.12.2018 deleted the addition made by the Ld. AO by recording his findings and observations as under :

“5. Observation and Decision:

In ground No. 1, the Appellant has contested the order u/s 143(3) r.w.s. 263 of the IT Act, 1961 dated 30/12/2018 for the A.Y. 2013-14 of the AO of making an addition of RS. 34,94,01,100/- by disallowing the claim of deduction u/s 43B of the Act. I have carefully considered the submissions made by the Appellant. It is observed that the AO disallowed the provision on account of overdue intere