M/s Sultanpur Zilla Sahkari Bank Ltd. vs. Pr. CIT, Faizabad

Parties Involved

Facts Summary

The assessee, a Cooperative Bank, filed a return declaring a loss of Rs. 1,22,969/- on 29.12.2015. The case was selected for limited scrutiny on various grounds including Minimum Alternate Tax (MAT) liability mismatch, interest expenses, low income and high loans/advances/investments, and increase in capital. The Assessing Officer accepted the return. However, the Principal Commissioner of Income Tax (PCIT) observed that the assessee had not deposited Provident Fund of Rs.7.46 Crore with the appropriate authority, which should have been treated as income under section 2(24)(x) of the Income Tax Act, 1961. The PCIT issued a show cause notice to the assessee on 27.06.2019, and after several hearings, the PCIT set aside the assessment order dated 20.12.2017 to the Assessing Officer for recomputation within three months. The assessee appealed against this order.…

Legal Issues

• 1. Whether the order passed by the Assessing Officer was erroneous and prejudicial to the interest of the Revenue?
• 2. Whether the Assessing Officer was required to consider the non-deposit of Provident Fund?

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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