Appeal to Supreme Court - Appeal dismissed as infructuous and question of law was left open. Appeal was filed against notice for reassessment to deny deduction on ground that assessee was not a banking company meanwhile tribunal in proceedings arising out of reassessment held in favour of assessee

SUPREME COURT OF INDIA

Civil Appeal Nos. 1502 and 1503 of 2008.

PUNJAB STATE CO-OPERATIVE ..............................................................Appellant.
AGRICULTURAL DEVELOPMENT BANK LTD.
V
COMMISSIONER OF INCOME-TAX AND ANOTHER.............................Respondent

A. K. SIKRI and C. NAGAPPAN, JJ.

Date :November 27, 2015

Appearances

Sudhir Walai, Ms. Niharika Ahluwalia and Dr. Abhishek Atrey, Advocates, for the appellant.
Ms. Nisha Bagchi, Ms. Shweta Garg, Ms. Sujeeta Srivastava and B. V. Balaram Das, Advocates, for the respondents.

Section 80P(2)(a)(i) of the Income Tax Act, 1961 — Appeal — Appeal to Supreme Court - Appeal dismissed as infructuous and question of law was left open. Appeal was filed against notice for reassessment to deny deduction on ground that assessee was not a banking company meanwhile tribunal in proceedings arising out of reassessment held in favour of assessee — Punjab State Co-operative Agricultural Development Bank Ltd vs. Commissioner of Income Tax and another.

JUDGMENT

1. The appellant is engaged in the business of banking. It had been filing income-tax returns claiming exemption from tax under section 80P(2)(a)(i) of the Income-tax Act, 1961, for the last 40 years prior to the assessment year in question, i.e., the assessment year 1999-2000. For this year also, though the return filed by the appellant was accepted, a notice under section 148 read with section 147 of the Income-tax Act was issued for reopening the assessment on the ground that the deduction under section 80P(2)(a)(i) of the Act was wrongly given inasmuch as the appellant is not a banking company registered under the Banking Regulation Act, 1949, and was not having any banking licence from the Reserve Bank of India. The reasons to believe that income as escaped assessment was furnished to the appellant to which the appellant filed the objections. However, these objections were rejected. Challenging that order, the appellant filed a writ petition in the High Court which has been dismissed by the High Court by the impugned judgment dated October 18, 2006 Punjab State Co-operative Agricultural Development Bank Ltd. v. CIT [2008] 305 ITR 156 (P&H). Against that order a special leave petition was filed in which leave was granted and that is how the present appeal has come before us.

2. Learned counsel appearing for the appellant-bank at the outset apprised the court about certain subsequent developments by submitting that after the aforesaid order was passed by the High Court, the Assessing Officer proceeded with the assessment holding that the appellant-assessee was not entitled to any deduction under the aforesaid provisions of the Act. Against that assessment order the appellant preferred an appeal before the Commissioner of Income-tax (Appeals) which was allowed by the Commissioner of Income-tax (Appeals). The order of the Commissioner of Income-tax (Appeals) was challenged by the Department before the Tribunal and that appeal has also been dismissed.

3. In view of the aforesaid events, it is clear that the present appeals have become infructuous. We, thus, dispose of these appeals as infructuous leaving the question of law open.

[2015] 379 ITR 533 (SC),[2016] 237 TAXMAN 373 (SC),[2016] 284 CTR 206 (SC)