Sri Syed Mustafa Kamal Pasha , Bangalore V. The Deputy Commissioner of Income Tax Circle-6(2)(1), Bangalore

ITA 129/BANG/2018

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 4741 (ITAT-BANGALORE)
• Duration Of Justice: 4 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-06-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 11-01-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Depreciation; Opportunity of being heard; Condonation of delay
• Section: 12; 154; 15

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCH B, BANGALORE BEFORE SHRI A. K. GARODIA, ACCOUNTANT MEMBER AND SHRI LALIET KUMAR, JUDICIAL MEMBER ITA NO. 129 (BANG)/2018 (ASSESSMENT YEAR : 2012 13) SRI SYED MUSTAFA KAMAL PASHA, NO. 03, 4 TH MAIN, JAYAMAHAL EXTENSION, BANGALORE -560 046. PAN: ADCPK8497N APPELLANT VS THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 6 (2) (1), BANGALORE. RESPONDENT ASSESSEE BY : SHRI SANKETH S N AYAK, C. A. REVENUE BY : MS. NEERA MALHOTRA, CIT (DR) DATE OF HEARING : 28 05 2018 DATE OF PRONOUNCEMENT : 01 06 20 18 O R D E R PER SHRI A.K.GARODIA, AM THIS IS AN ASSESSEES APPEAL DIRECTED AGAINST THE O RDER OF CIT (A) 1, BENGALURU DATED 26.09.2017 FOR A. Y. 2012 13. 2. OUT OF 5 GROUNDS RAISED BY THE ASSESSEE, TWO GRO UNDS I.E. GROUND NOS. 3 & 4 ARE ON MERIT ABOUT CONFIRMING OF DISALLOWANCE OF DE PRECIATION OF RS. 20.40 CRORES BUT BEFORE THAT, GROUND NO. 2 IS ON TECHNICA L ASPECT. WE THEREFORE FIRST DECIDE GROUND NO. 2. THIS GROUND IS AS UNDER:- 2. THE LEARNED CIT (A) HAS ERRED IN FACT AND IN LAW BY CONSIDERING THAT THE APPEAL WAS AGAINST THE ORDER U/S 154 OF TH E ACT ONLY. WHEREAS THE APPEAL WAS MADE FOR BOTH THE ORDERS U/S 143 (3) DATED 31 ST MARCH, ITA NO. 129/BANG/2018 2 2015 AND U/S 154 DATED 12 TH JUNE 2015. HENCE THE REJECTION OF APPEAL IS NOT VALID AS PER LAW. 3. BRIEF FACTS ARE THAT AS PER THE ASSESSMENT ORDER DATED 31.03.2015 PASSED BY THE AO U/S 143 (3), THE AO SAYS THAT THE RETURN OF INCOME WAS FILED BY THE ASSESSEE ON 30.09.2012 DECLARING NIL INCOME. THE AO MADE ADDITION OF RS. 20.40 CRORES BY DISALLOWING THE DEPRECIATION ON WIN DMILLS CLAIMED BY THE ASSESSEE. THIS DISALLOWANCE WAS MADE BY THE AO ON T HIS BASIS THAT THE ASSESSEE HAS PURCHASED WINDMILLS WORTH RS. 51 CRORE S AS PER BILL DATED 29.03.2012 & 30.03.2012 AND AS PER LETTER DATED 31. 03.2015 RECEIVED BY THE AO OVER FAX FROM THE EXECUTIVE ENGINEER, TL & SS DI VISION, KPTCL, CHIKKODI, THE PRESENT ASSESSEE HAS NOT STARTED PRODUCTION OF ELECTRICITY AND NOT SUPPLIED TO KPTCL DURING THE MONTH OF MARCH, 2012. THEREAFTE R, THE ASSESSEE FILED A RECTIFICATION PETITION U/S 154 BEFORE THE AO ON 23. 04.2015 CONTENDING THAT THE AO SHOULD HAVE CONSIDERED THE LOSS AS PER RETURN OF INCOME FOR THE PRESENT YEAR FILED BY THE ASSESSEE AT RS. 17,57,31,648/- AS AGAINST NIL INCOME CONSIDERED BY THE AO IN THE ORDER U/S 143 (3). AS P ER THE ORDER U/S 154 PASSED BY THE AO ON 12.06.2015, THE AO DETERMINED THE TAXA BLE INCOME OF THE ASSESSEE AT RS. 281,68,352/- AS AGAINST RS. 20.40 CRORES AS PER THE ASSESSMENT ORDER U/S 143 (3). NO SEPARATE APPEAL WA S FILED BY THE ASSESSEE BEFORE CIT (A) AGAINST THE ASSESSMENT ORDER DATED 3 1.03.2015 PASSED U/S 143 (3) BUT AFTER PASSING OF ORDER U/S 154 ON 12.06.201 5, THE APPEAL WAS FILED BEFORE CIT (A) ON 15.07.2015 AND AS PER THE FORM 35 FILED BEFORE CIT (A), THIS APPEAL IS AGAINST BOTH ORDERS PASSED BY THE AO 1 ST U/S 143 (3) ON 31.03.2015 AND LATER U/S 154 ON 12.06.2015. ONLY ONE EFFECTIVE GROUND IS RAISED BEFORE CIT (A) THAT THE AO IS NOT JUSTIFIED IN DISALLOWING THE ASSESSEES CLAIM OF DEPRECIATION OF RS. 20.40 CRORES. LEARNED CIT (A) A S PER THE IMPUGNED ORDER HELD THAT THE APPEAL FILED BY THE ASSESSEE IS AGAIN ST THE ORDER PASSED BY THE AO U/S 154. HE ALSO HELD THAT THE ISSUE RAISED IN T HE APPEAL REGARDING DISALLOWANCE OF DEPRECIATION IS NOT SUBJECT MATTER OF THE ORDER U/S 154 AND ON THIS BASIS, HE REFUSED TO CONSIDER AND DECIDE THE A PPEAL ON MERIT OF THE DISALLOWANCE OF DEPRECIATION. NOW THE ASSESSEE IS I N FURTHER APPEAL BEFORE US. ITA NO. 129/BANG/2018 3 4. LEARNED AR OF THE ASSESSEE SUBMITTED THAT THE AP PEAL IS FILED BY THE ASSESSEE AGAINST BOTH ORDERS PASSED BY THE AO U/S 143 (3) ON 31.03.2015 AND U/S 154 ON 12.06.2015 BUT EVEN IF IT IS HELD THAT THE APPEA L FILED BY THE ASSESSEE IS AGAINST ONLY ONE ORDER OF THE AO THAN IT SHOULD HAV E BEEN HELD BY CIT (A) THAT THIS APPEAL IS AGAINST THE ORDER PASSED BY THE AO U /S 143 (3) ON 31.03.2015 AND HE SHOULD HAVE DECIDED THE ISSUE ABOUT DISALLOW ANCE OF DEPRECIATION ON MERIT. HE ALSO SUBMITTED THAT IT MAY BE THE OPINION OF THE CIT (A) THAT THERE IS SOME DELAY IN FILING OF APPEAL BEFORE CIT (A) AGAIN ST THE ORDER PASSED BY THE AO U/S 143 (3) ON 31.03.2015 BUT IF THE MATTER IS R ESTORED BACK TO CIT (A), THE ASSESSEE WILL FILE AN APPLICATION FOR CONDONATION O F DELAY BEFORE CIT (A). LEARNED DR OF THE REVENUE SUPPORTED THE ORDER OF TH E CIT (A). 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FIN D FORCE IN THE SUBMISSIONS OF THE LEARNED AR OF THE ASSESSEE BECAUSE WE FIND THAT AS PER SECTION 246A(1) (C), APPEAL CAN BE FILED BEFORE CIT (A) AGAINST AN ORDER PASSED BY THE AO U/S 154 IF SUCH ORDER HAS AN EFFECT OF ENHANCING THE AS SESSMENT. IN THE PRESENT CASE, THE ASSESSED INCOME AS PER ORDER U/S 154 IS L ESSER AT RS. 281,68,352/- AS AGAINST ASSESSED INCOME OF RS. 20.40 CRORES AS P ER ORDER U/S 143 (3). HENCE, THERE IS NO ENHANCEMENT AS PER ORDER U/S 154 AND THEREFORE, IT CANNOT BE SAID THAT THE APPEAL FILED BEFORE CIT (A) IS AGA INST THE ORDER U/S 154. ALTHOUGH THE ASSESSEE HAS REFERRED TO BOTH ORDERS I N FORM 35 I.E. ASSESSMENT ORDER U/S 143 (3) DATED 31.03.2015 AND ORDER U/S 15 4 DATED 12.06.2015 BUT IN VIEW OF ABOVE DISCUSSION, WE HOLD THAT THIS APPEAL FILED BY THE ASSESSEE BEFORE CIT (A) IS AGAINST THE ASSESSMENT ORDER DATED 31.03 .2015 PASSED U/S 143 (3). SINCE, THE ISSUE REGARDING DISALLOWANCE OF DEPRECIA TION IS ARISING OUT OF THIS ASSESSMENT ORDER, LEARNED CIT (A) SHOULD HAVE DECID ED THIS ISSUE ON MERIT. SINCE, HE HAS NOT DONE SO, WE RESTORE THE MATER BAC K TO CIT (A) FOR DECISION ON MERIT. WE ALSO OBSERVE THAT THERE MAY BE SOME DELAY IN FILING OF APPEAL BEFORE CIT (A) ONCE IT IS CONSIDERED AS AN APPEAL AGAINST THE ASSESSMENT ORDER DATED 31.03.2015 PASSED U/S 143 (3). IF THERE IS SUCH DEL AY, THE ASSESSEE SHOULD FILE PROPER APPLICATION BEFORE CIT (A) REQUESTING FOR CO NDONATION OF DELAY WITHIN 30 DAYS FROM THE RECEIPT OF THIS ORDER AND IF THE ASSE SSEE DOES SO, LEARNED CIT (A) SHOULD FIRST DECIDE REGARDING CONDONATION OF DELAY AND IF THE DELAY IS CONDONED AND APPEAL IS ADMITTED, THE APPEAL SHOULD BE DECIDE D ON MERIT AFTER PROVIDING ITA NO. 129/BANG/2018 4 ADEQUATE OPPORTUNITY OF BEING HEARD TO BOTH SIDES. SINCE, WE ARE NOT AWARE ABOUT THE ASSESSEES EXPLANATIONS ABOUT DELAY IN FI LING OF APPEAL BEFORE CIT (A), WE DO NOT MAKE ANY COMMENT ABOUT CONDONATION O F DELAY. REGARDING MERIT OF THE ISSUE I.E. DISALLOWANCE OF DEPRECIATION ALSO , WE MAKE NO COMMENT AT THE PRESENT STAGE AND HENCE, WE DO NOT REPRODUCE, CONSI DER AND DECIDE GROUND NO. 3 & 4 RAISED BEFORE US BECAUSE IT IS NOT REQUIR ED AT THE PRESENT STAGE SINCE THE MATTER IS RESTORED BACK TO CIT (A) FOR HIS DECI SION ON MERIT. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE M ENTIONED ON THE CAPTION PAGE. SD/- (LALIET KUMAR) SD/- (A.K. GARODIA) JUDICAL MEMBER ACCOUNTANT MEMBER PLACE: BANGALORE D A T E D : 01.06.2018 /MS/ COPY TO: 1. APPELLANT 4. CIT(A) 2. RESPONDENT 5. DR, ITAT, BANGALORE 3. CIT 6. GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY, INCOME TAX APPELLATE TRIBUNAL, BANGALORE.