The Bombay High Court has disapproved the AO’s non-compliance to high court’s decisions and held that assessee are entitled for deduction to the broken period interest (BPI) on purchase of hold to maturity (HTM) securities.
The bench of Justice G. S. Kulkarni and Justice Advait M. Sethna has relied on the decision in Hexaware Technologies Ltd. is binding on the Revenue and accordingly, there cannot be any actions which could be taken by the Assessing Officers contrary to the law as laid down in the decision of this Court.
The bench stated that an approach of defiance, which appears to be quite brazen, has brought about a situation of disobedience and/or non-adherence to the law as laid down by the Constitutional Court, by the Revenue officials, who are otherwise bound by the decision of the Jurisdictional High Court.
The assessment year in question is assessment year 2018-19. The petitioner filed its return of income declaring a total loss. On 31 March 2018, revised return of income was filed declaring total loss of Rs.63,96,27,72,352. The petitioner contends that the notes appended to the computation of income provided details of broken period interest paid on purchase of securities.
In regard to the return filed by the petitioner, on 22 September 2019, for the assessment year in question, a notice under section 143(2) of the Income Tax Act was issued to the petitioner. A notice under Section 142(1) was issued to the petitioner, which was followed by similar notices dated 14 January 2020 and 19 March 2021.
NFAC passed an assessment order under Section 143(3) read with Section 144B making an addition of Rs.9307.87 crores and deleted addition on broken period interest made in the draft assessment order. Also on the even date, a computation sheet as also a notice of demand was issued by the Assessing Officer. All these documents form part of the record of this petition at Exhibits ‘J’ & ‘K’ to the petition.
The petitioner assailed the impugned notice under section 148A(b) as also the impugned order passed thereon under Section 148A(d) dated 30 August, 2024 and a consequent notice dated 30 August, 2024 issued under Section 148 of the Act.
The court directed all Assessing Officers who are bound by the decision of the Jurisdictional High Court, unless the law would otherwise permit them, shall not resort to any proceedings which are contrary to the decisions of this Court and, as observed by the Supreme Court, following the principles of judicial discipline, so as to add to the chaos already caused and as observed by the Supreme Court at the cost of undue harassment being caused to the assessees.
Case Details
Case Title: Bank of India Versus ACIT
Case No.: Writ Petition No. 4946 Of 2024
Date: 02/12/2024
Counsel For Petitioner: Senior Advocate P.J. Pardiwalla
Counsel For Respondent: Samiksha Kanani
