Catholic Syrian Bank Ltd vs Commissioner Of Income Tax, Thrissur on 17 February, 2012
19. The Cochin Bench of Tribunal in a subsequent decision relating to
assessment year 2010-11 in the case of Kodungallur Town Co-Op. Bank
Ltd. Vs. ACIT (supra) again decided the aforesaid issue of claim of
deduction under section 36(1)(vii) of the Act, especially in view of the
ratio laid down by the Hon'ble Supreme Court in Catholic Syrian Bank
Ltd. Vs. CIT (supra) relied upon by the Commissioner while invoking
revisionary jurisdiction under section 263 of the Act. The Tribunal held
that the Hon'ble Supreme Court had considered the issue whether the
deduction was allowable to scheduled banks under section 36(1)(vii) of
the Act in respect of bad debts written off and had held that the same
shall be limited to the extent the said debts credit balance in the
provision for bad and doubtful debts account made under clause (viia).
It was further observed by the Tribunal that the assessments in the said
case related to assessment year 2002-03 and prior years and the Apex
Court had considered the law with reference to the fact situation;
whereas the assessee before them was co-operative bank, which was
included in the category of beneficiaries under clause (viia) by the
8
Finance Act, 2007 w.e.f. 01.04.2007. The Tribunal further goes on to
hold that the deduction provided in the first part of clause (viia)(a) of
7.5% of total income, either to enjoyed by the assessee since inclusion of
co-operative banks within ambit of clause (viia)(a) by the Finance Act,
2007 is unconcerned with the advances made by rural branches of
banks. Further, referring to para 27 of the judgment of Apex Court, the
Tribunal held as under:-