SC refuses relief to I-T dept against ICICI Bank

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The Supreme Court on Monday refused to entertain the income tax department's plea against ICICI Bank and asked it to approach the Bombay High Court for condonation of delay in filing the appeal.A bench headed by justice S H Kapadia remanded the matter back to the high court which in July last year had dismissed the department's plea on the ground that it had no power to condone the delay as the petition was barred by limitation.However, the matter was remanded back in view of the latest amendment that allows the high court to condone delay. The department submitted that the reason for delay of 87 days was due to administrative procedures and getting approvals from various departments.According to the petition, ICICI Bank during the assessment year 1996-97 offered interest income from loans and advances, etc, to industrial units and filed income tax returns declaring a total income of around Rs 5.60 crore. Later on, it revised computation declaring a loss of around Rs 194 crore in October 1999 and declared nil income in November 1999 after reopening of the assessment by the tax authorities.While the assessing officer had allowed deduction on income of Rs 194 crore towards doubtful debts and foreign exchange fluctuations, it subsequently disallowed the deduction under Section 80M of the Income Tax Act, thereby determining the total income of Rs 264.08 crore in March 1999. Later on, another order was passed in March 2003 revising downward the amount of deduction.The department had sought to revise the March 2003 order after it found that the order was erroneous and prejudicial to the interest of the revenue as deduction was allowed in excess and notional liability on account of forex fluctuations was not brought to tax. While the assessee had opposed such a revision saying the time had already expired, the commissioner of income tax held that the impugned order was erroneous.However, both the Income Tax Appellate Tribunal and the high court had dismissed the department's plea on the ground that the time limit for revision had to be counted from the date of the original assessment order passed in March 1999 and not the second reassessment and the March 2003 order was barred by time.

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