ELLORA TIME PRIVATE LIMITED V. JOINT COMMISSIONER OF INCOME TAX

TAXAP/1024/2005

AI Insights

The case involves Ellora Time Private Limited, the appellant, contesting an order by the ITAT which favored the revenue concerning deductions under Section 80HHC and the recomputation of income under Section 115JA for the Assessment Year 1998-99. The primary legal questions pertained to whether the ITAT was justified in its interpretation of these sections within the scope of Section 143(1)(a) of the Income Tax Act, 1961. The High Court referenced a similar case involving the same group of companies, where it had previously ruled in favor of the assessee, leading to the decision in this case to also favor the assessee.

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 753889 (HC-GUJARAT)
• Appeal Type: Others
• Pronouncement Date: 02-12-2014
• Assessment Year: misc
• Other Referred Cases: Commissioner of Income-tax v. Maheshkumar A. Rathod, Manubhai M. Patel, T.S. Balaram, ITO v. Volkart Brothers
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: PRANAV DESAI
• Assessee Lawyers: R K PATEL
• Keywords: Book profit; Deductions; Income Tax; Interest Charge; Wind power generation
• Section: 234B; 80HHC; 234C; 143(1)(a); 115JA

Judgement Text

"O/TAXAP/1024/2005 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD TAX APPEAL NO. 1024 of 2005 FOR APPROVAL AND SIGNATURE: HONOURABLE MR.JUSTICE KS JHAVERI and HONOURABLE MR.JUSTICE K.J.THAKER ================================================================ 1 Whether Reporters of Local Papers may be allowed to see the judgment ? 2 To be referred to the Reporter or not ? 3 Whether their Lordships wish to see the fair copy of the judgment ? 4 Whether this case involves a substantial question of law as to the interpretation of the Constitution of India, 1950 or any order made thereunder ? 5 Whether it is to be circulated to the civil judge ? ================================================================ ELLORA TIME PRIVATE LIMITED....Appellant(s) Versus JOINT COMMISSIONER OF INCOME TAX....Opponent(s) ================================================================ Appearance: MR RK PATEL, ADVOCATE for the Appellant(s) No. 1 MR PRANAV G DESAI, ADVOCATE for the Opponent(s) No. 1 ================================================================ CORAM: HONOURABLE MR.JUSTICE KS JHAVERI and HONOURABLE MR.JUSTICE K.J.THAKER Page 1 of 5 O/TAXAP/1024/2005 JUDGMENT Date : 02/12/2014 ORAL JUDGMENT (PER : HONOURABLE MR.JUSTICE KS JHAVERI) 1. Being aggrieved and dissatisfied with the impugned order passed by the Income Tax Appellate Tribunal, Rajkot Bench (hereinafter referred to as ITAT) dated 31.03.2005 in ITA No. 206/Rjt/2000 for the Assessment Year 1998-99, the assessee has preferred the present Tax Appeal. 2. This appeal was admitted on 21.02.2006 for consideration of the following substantial questions of law: “[1] Whether, on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was justified in undertaking an exercise of interpretation of provisions of Section 80HHC of the Income Tax Act, 1961 as being within the true scope of section 143(1)(a) of the Act? [2] Whether, on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was justified in undertaking an exercise of interpretation of provisions of Section 115JA of the Income Tax Act, 1961 as being within the true scope of section 143(1)(a) of the Act?” 2.1 The assessee Company declared its total income for the assessment year in question by filing its return of income. The Assessing Officer reduced deduction u/s 80HHC, disallowed deduction u/s 115JA from income from wind power generation, reworked book profit u/s 115JA and charged interest u/s 234B and 234C of the Act. On appeal before the CIT(A), the CIT(A) partly allowed the appeal. Page 2 of 5 O/TAXAP/1024/2005 JUDGMENT 2.2 Being aggrieved by the order of the first appellate authority, the revenue preferred appeal before the ITAT on issues pertaining to deduction u/s 80HHC and recomputation of income u/s 115JA made by the Assessing Officer and the ITAT vide impugned order decided the issue in favour of the revenue. Being aggrieved by the said order, the present appeal is filed. 3. Question no. 1 raised for consideration in the present Tax Appeal is now not res integra in view of the decision of this Court dated 20.11.2014 rendered in Tax Appeal No. 1665 of 2005. This Court in the case of very same group of companies in the said decision has held as under: “5. We are even fortified in our view by the decision of this Court in the case of Commissioner of Income-tax v. Maheshkumar A. Rathod, reported in 296 ITR 146. Para-3 of the said decision is reproduced for ready reference which would show that the facts are identical and case is also identical. “3. This Court has considered the issue in the case of Manubhai M. Patel (supra) as under: “5. Section 143(1)(a) of the Act says that where a return has been made under section 139, or in response to a notice under sub- section(1) of section 142, then, particular powers can be exercised by the Assessing Officer. Section 154 of the Act relates to rectification of mistakes. With a view to rectify any mistake apparent from the records, the income-tax authorities referred to in section 116 may amend any order passed by it under the provisions of the Act. In the present matter, proceedings were Page 3 of 5 O/TAXAP/1024/2005 JUDGMENT drawn under section 143(1)(a) on the premises that such deductions were not permissible. It is not in dispute before us that on the date when the assessee was claiming the deductions, the judgments of the Tribunal and of the different High Courts were in favour of the assessee wherein the Tribunals or the High Courts had observed that to the extent of 40 percent deductions would be permissible subject to verification. We are not concerned with the judgments of the Tribunals or of the High Court,but the question would be that whether the Assessing Officer was justified in proceeding under section 143(1)(a), especially, when the matter was debatable and the Assessing Officer could proceed either under section 143(2) or section 143(3) of the Act. 6. The Apex Court, in the matter of T.S. Balaram, ITO v. Volkart Brothers [1971] 82 ITR 50, has observed that a mistake apparent on record must be an obvious and patent mistake and not some thing which can be established by a long drawn process of reasoning on points on which there may be conceivably two opinion. A decision on a debatable point of law is not a mistake apparent from the record. 7. From the said judgment of the Apex Court, it would be clear that in a case where the mistake is apparent from the record, powers under section 154 of the Act could always be exercised. In the present matter, the Assessing Officer, in view of the debatable issue relating to deduction or disallowance of the deductions, could not proceed under section 143(1)(a) of the Act. 6. In that view of the matter, we are in complete agreement with the view taken by the Tribunal, and therefore, we do not give any elaborate reasons while dismissing the present appeal of Revenue. Hence, this appeal is dismissed.” 3.1 Similarly, question no. 2 raised in this appeal is Page 4 of 5 O/TAXAP/1024/2005 JUDGMENT argumentative in nature and is not required to be decided at the stage of section 143(1)(a) of the Act. 4. Having heard learned advocates for the revenue and the questions posed for consideration for us reproduced hereinabove and considering the decision cited, the questions which are raised in the present appeal are required to be answered in favour of the assessee. We are not giving any elaborate reasons for the same as this Court in similar case has answered the very same question in favour of assessee. 5. In view of the above, the questions raised in the present appeal are answered in favour of the assessee and consequently, the impugned judgment and order passed by the ITAT is modified accordingly. Hence, the present Tax Appeal is allowed to the aforesaid extent. (K.S.JHAVERI, J.) (K.J.THAKER, J) divya Page 5 of 5 "