Dhanuka Agritech Ltd., Delhi V. ACIT, Circle-2, New Delhi

ITA 1401/DEL/2021

• Counselvise Citation: [2024] 101 COUNSELVISE.COM (IT) 7774 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 6 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-04-2024
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: H
• Next Hearing Date: 08-04-2024
• Assessment Year: 2018-2019
• Appeal Filed On: 06-10-2021
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 201

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “H” DELHI BEFORE SHRI SAKTIJIT DEY, VICE PRESIDENT AND SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER ITA No.1401/Del/2021 Assessment Year 2018-19 Dhanuka Agritech Ltd. 82, 1 st Floor, Abhinash Mansion Joshi Road, Karol Bagh New Delhi. Vs. ACIT, Circle-2 New Delhi TAN/PAN: AAACD0105G (Appellant) (Respondent) Applicant by: Ms. Aabgina Chisti, Advocate Shri Gaurav Sachdeva, Chartered Accountant Respondent by: Shri Amit Katoch, CIT-DR Date of hearing: 09 04 2024 Date of pronouncement: 19 04 2024 O R D E R PER PRADIP KUMAR KEDIA - A.M.: T he c a p t io n e d a p pe a l f i l e d b y th e a s s e s s e e a ga i ns t t h e or de r o f t he C o m m i s s i o ne r o f I n c om e T a x ( A p pe a l s ) - X X I I I , N e w D e lh i ( ‘C I T ( A ) ’ in s h o r t ) d a t e d 1 1 . 0 8 . 20 2 1 a ri s i n g f ro m t h e a s s e s s m e n t o r de r d a t e d 19 . 0 3. 2 0 21 pa s s e d b y th e A s s e s s i n g O f f i c e r ( A O ) u n de r S e c t i o n 1 4 3 ( 3 ) o f t he I n c o m e T a x A c t , 19 61 ( t he A c t ) c o n c e rn i n g A Y 201 8 - 19 . 2. W h e n t h e m a t t e r w a s c a l l e d f o r h e a ri n g, t h e l d . c ou n s e l f or t he a s s e s s e e s u b m i tt e d t h a t a lt h o u gh s e ve ra l gr o un ds h as be e n r a i s e d , s he s e e ks to p r e s s G r o un d N o . 1 . 3 o nl y a n d o t h e r gr o un d s m a y be i gn o re d f o r t he p u r p os e s of a d j u d ic a t i o n. 3. I n t he l i gh t o f t he s u bm i s s io n s m a d e , o t he r g r o und s a re d i s m i s s e d a s n ot p re s s e d a n d G ro u nd N o . 1. 3 i s r e p r o du c e d h e reu n d e r : “ 1 . 3 T h a t o n t h e f a c t s a n d i n t h e c i r c u m s t a n c e s o f t h e c a s e , t h e C I T ( A ) o u g h t t o g ra n t th e c l a i m o f E x c i s e d u t y r e f u n d i s no n - t a x a b l e u n d e r t h e n o r m a l p r o v i s i o n s o f t h e A c t . ” ITA No.1401/Del/2021 2 4. W i t h r e f e r e nc e t o G r ou n d N o . 1. 3 of th e a p p e a l, th e l d . c o un s e l po i n te d ou t t ha t t he i s s u e c on c e rn s n on t a x a bi l i t y o n E x c i s e du t y s ub s i d y w h i c h w a s w r o n g l y o f f e re d a s ta x a b le i n c o m e of re venu e c h a r a c t e r i n re t u r n o f i n c o m e b y t he a s s e s s e e . T h e i s s u e w a s ho we ve r r a i s e d b e f o re t he C I T ( A ) o n c o r r e c t a pp r e c i a t i o n of f a c t s by a s s es s e e . T h e C IT ( A ) h a s s u m m a ri l y h o w e ve r di s p o s e d o f t h e a f o re s a i d gr o un d a ga i ns t t h e a s s e s s e e a s p e r p a ra g ra p h 4 . 4 . 3 o f t he f i r s t a p pe l l a t e or d e r. T h e l d. c o un s e l s u bm i t t e d t h a t t h e C IT ( A ) h a s re j e c t e d t h e c o nt e n t io n of t h e a s s e s s e e t ow a r d s n o n t a xa b i l i t y o f E x c i s e D ut y s u b s i d y s ol e ly o n t he gr o u n d t ha t no c l a i m w a s m a de b e f o r e t h e A O a t a n y s t a ge t ha t su c h E x c i s e D u t y s u bs i d y i s c a pi t a l i n na t u re a n d t h u s n ot t a x a bl e in t he a b s e n c e of a ny c l a i m be f or e A O , t h e C I T ( A ) h e l d t ha t t h e gr i e va n c e o f t h e a s s e s s e e i s no t m a i n ta i n a bl e be f or e h i m . T he l d . c o u ns e l re f e rre d to t h e s e ve ra l j ud gm e n t s t o s ub m i t t ha t t h e t a x c a n b e c ol l e c t e d on l y i n a c c o rd a n c e w i th l a w a n d m e r e i n c l u s i o n of s u c h Ex c i s e D ut y s u bs i d y a s t a x a b l e i n c om e un d e r m is c o n c e pt i o n of l a w , b y i t s e l f , w i l l n ot re nde r s uc h i n c o r re c t c l a s s i f i c a t i o n o f in c o me a s t a xa b l e e ve n t . 5. T h e l d . D R f o r t h e R e ve n ue di d n ot ra i s e a ny s e ri o us o bj e c t i on to t he a ve rm e n t s m a de o n be h a l f o f t h e a s s e s s e e a n d s ubm i t t e d t h a t t he i s s ue m a y b e d e c i de d i n a c c or d a nc e w i t h j u ri s pr ud e nc e a vail a b l e i n s u c h m a t te r s . 6. W e h a ve c a re f ul l y c o n s i de r e d t h e r i va l s u bm i s s i on s a nd p e r us e d t he m a t e r ia l a va i l a bl e o n r e c or d . 7. A s s t a t e d o n b e h a l f of t h e a s s e s s e e , t h e E x c i s e D u t y s u b s i d y re c e i ve d b y t he a s s e s s e e w a s w ro n gl y d e c l a re d a s r eve n u e i n c om e b y t he a s s e s s e e a nd i n c or re c t l y o f f e re d t o t a xa t i o n a s c h ar ge a bl e i n c om e w hi l e f i l i n g t h e r e t u r n o f i nc o m e . T he a s s e s s e e c o nt e n ds t h a t s uc h E x c i s e D u t y s u bs i d y i s e s s e nt i a l l y c a p i ta l i n n a t ur e a n d th u s no t li a b l e t o t a xa t i on a l th o u g h w ro n g l y o f f e re d a s t a xa b l e i n c om e w h i l e f il i n g t h e r e t u r n o f i nc o m e . T h e a s s e s s e e h a s r a i s e d s u c h c l a i m be f o re th e C I T ( A ). T he C I T ( A ) h a s d e a l t w i t h t h e i s s u e a s u n d e r: ITA No.1401/Del/2021 3 “4 . 4 . 3 I h a v e c o n s i d e re d f a c t s o f t h e c a s e a s w e l l as w r i t t e n s u b m i s s i o n o f t h e a p p e l l a n t . T h e a p p e l l a n t i t s e l f o f f e r e d e x c i s e d u t y r e c e i v e d o f R s . 7 , 4 4 , 1 9 , 7 2 0 / - i n i t s r e t u r n o f i n c o m e . E v e n d u r in g a s s e s s m e n t p r o c e e d i n g s , n o c l a i m w a s m a d e b e f o r e A s s e s s i n g O f fi c e r t h a t t h e a m o u n t i s n o t t a x a b l e . I n v i e w o f t h e s e f a c t s , t h i s g r o u n d o f a p p e a l d o e s n o t a r i s e f r o m t h e o r d e r o f t h e A s s e s s i n g O f f i c e r a n d i s n o t m a in ta i n a b l e . H e n c e , G r o u n d N o . 4 o f t h e a p p e a l i s d i s m i s s e d . ” 8. A s c a n b e s e e n , t h e C I T ( A ) ha s d e n i e d t o e nt e r t ai n s uc h c l a i m o f t he a s s e s s e e o n t h e g ro un d t h a t s u c h c l a i m w a s n e i the r m a d e b e f o re t he A O i n t h e a s s e s s m e n t pr o c e e d i n gs n o r t h e R O I w a s revi s e d. T h e a s s e s s e e s t a t e s t h a t t h e h i gh e r t a x a bl e i n c om e h a s b e e n o f f er e d b y in c l u d i n g E xc i s e D u t y s u b s i d y a s r e ve n u e i nc o m e o u t of s he e r m i s t a k e a nd i na d ve r t e nc e o n t h e pa r t o f th e a s s e s s e e . I t i s t he c o n t e n t i on o f t he a s s e s s e e t h a t s uc h m i s t a ke i n de c l a ri n g e x c e s s i ve ta x a b le i n c om e w i l l n o t op e r a t e a s a n y ki n d o f e s t op pe l a ga i n s t t h e a s s e s s ee r e ga r d l e s s o f w he t h e r a ny r e vi s e d re t u r n w a s f i l e d o r n o t a n d re ga rd l e s s o f t h e f a c t t ha t w he t h e r s u c h n e w c l a i m w a s m a d e b e f o r e t h e A O i n t h e c o ur s e o f a s s e s s m e nt pr o c e e d i n g s o r n o t . T h e a s s e s s e e c o nt e n ds t h a t o nc e t h e a s s e s s e e i s i n a po s i t i o n t o s h o w t h a t i t ha s be e n o ve r -a s s e s s e d un de r t h e p r o vi s i o n s o f t he A c t e ve n o n a c c ou n t o f a s s e s s e e ’s o w n m i s t a k e or o t he r w i s e , t he R e ve n ue i s u nd e r s t a t ut o r y o bl i ga t i on s t o a s s e s s c or re c t i n c om e . T he C I T ( A ) h a s s hu nn e d t h e c l a i m o f t h e a s s e s s e e w i t h o ut e xa m i n i n g f a c t ua l m a t ri x i n d i s c o r d w i t h t h e s u bl i m e p r i nc i p l e s e m a n at i n g f r om p l e th o ra o f j ud i c i a l p r e c e d e n ts . 8. 1 W e h a ve n o d i f f i c ul t y t o a c c e p t s uc h c on t e nt i o ns . It i s t r i t e t h a t t he a ut h or i t i e s un de r t h e A c t a re un d e r s a c r os a n c t ob l iga t i on t o a c t in a c c or da n c e w i t h l a w . T a x c a n b e c ol l e c t e d o n l y a s pr o vi d e d u n de r t he A c t . I f a n a s s e s s e e , u nd e r a m i s t a k e , m is c on c e pt i o n o r n ot b e i n g pr o pe r l y i ns tr u c te d , i s o ve r a s s e s s e d, t h e a u t h o r i t i e s u nd e r t h e A c t a r e r e qu i re d to e ns ur e t h a t o n l y l e gi ti m a t e t a x d ue s a r e c ol l e c t e d. T h i s i s t he vi e w w h i c h f l o w s f r o m i n n u m e r a b le j ud gm e n t s i n c l ud i n g C I T v s . Sh e l l y P r o d u c t s (2 0 03 ) 2 6 1 I T R 3 6 7 ( SC ) , S . R . K o s h t i v s . C I T (2 0 0 5) 2 76 I T R 1 6 5 ( G u j ) , E s t e r I n d us t r i e s v s . C IT ( 2 0 0 9 ) 1 85 T A X M A N 2 66 (D e lhi ) an d C I T v s . P r u t hv i B r o k e r s & S ha r e h ol d e r s ( P . ) L t d. [ 2 0 12] 3 49 I T R 3 3 6 (B o m ) . T he ITA No.1401/Del/2021 4 e s s e n c e o f t h e s e de c i s i o ns a r e t ha t m e r e a dm i s s i on o n t he pa r t of t he a s s e s s e e w i th re s pe c t t o a n a d d i ti o n /d i s a l l ow a nc e in i t s o ri g i n a l r e t u r n o r i n re vi s e d r e t u r n w o u l d n ot i p s o f a c t o b a r a n a s s e s s e e f ro m c l a i m i n g a n e xp e ns e o r d i s p ut i n g a n i n c om e , i f i t i s o t h e rw i s e p e rm i s s i bl e un d e r l a w . It i s t h u s w e l l s e t t le d t ha t i f a p a r ti c u l a r i nc o m e is n o t t a x a b l e un de r t he A c t , i t c a n no t be t a x e d o n t he b a s i s o f e s t op p e l o r a n y o t he r e qu i t a bl e do c t ri n e . T he R e ve n u e a u t h or i t ie s c a n n ot e n f o rc e u nte n a bl e a c t i o ns o f t he a s s e s s e e a ga i n s t i t w h ic h l e d t o d e c la r a t i on o f i nco m e o f h i g h e r a m o u nt i nc o r r e c t l y. I t i s t hu s op e n t o a s s e s s e e t o s ho w t ha t i t w a s o ve r a s s e s s e d un d e r e r ro ne o us i m p r e s s i o n o f l a w o r f a c t s e ve n i f i t i s a tt r i b u t a bl e t o t he m i s t a ke o f a s s e s s e e . 8. 2 S o v i e w e d, w e d o s e e po t e nc y i n t h e a r g u m e n t l ai d o n b e ha l f o f t he a s s e s s e e t h a t t he C I T ( A ) c o m m i t t e d e r ro r i n n ot m a ki n g e nq ui r y i n to l e gi t i m a c y o f re l i e f s o c l a i m e d a n d gr a n t h i m a p p r op r ia t e re l i e f i f f ou n d i n o rd e r . I n o u r c o ns id e r e d vi e w , t h e a c t i on of t h e C I T ( A ) i s i n de f i a nc e of th e j u d i c i a l pr e c e de n t s on t h e i s s ue a nd t hu s c an n ot be c o u n t e n a n c e d . In o u r vi e w , t h e a s s e s s e e c a n n ot b e p re ve nt e d f r o m r a i s i n g s u c h a dd i t i on a l c l a i m be f or e t h e C I T ( A ) m e re l y b e c a us e th e R O I c o u l d no t be re vi s e d or c l a im w a s n ot p ut b e f o r e A s s e s s i n g O f f i ce r . 8. 3 T h e f a c t ua l m a t r i x t o w a r d s c ha r a c te r of E x c i s e D ut y s ub s i d y ho w e ve r h a s no t b e e n ve ri f i e d b y A O o r b y t h e C IT ( A) . It w o ul d t h u s be i n f i t n e s s o f t h i n g s to r e m i t t he i s s ue t o t h e f il e of t he A O r a t he r t h a n t ha t o f C IT ( A ) f o r f re s h d e t e rm i n a ti o n o f c o r re c t nes s o f c la i m . T he A O s h a ll e xc l u de t h e E x c is e D u t y s ub s i d y f r om th e a m b it of c h a r ge a bl e i nc o m e i n a c c or da n c e w i t h l a w on b e in g s a t i s f i e d w it h th e c l a i m o f t he a s s e s s e e th a t s u c h s ub s i d y i s t o be r e ga r de d a s c a pi t a l i n n a t ur e i n t he c on t e xt o f t h e c a s e . I t s ha l l b e op e n t o t h e a s s e s se e t o a dd u c e a l l e vi d e nc e s a n d e x p la n a t i on s a s m a y be c on s i d e re d ne ce s s a r y to s u p p o rt e xc l u s i o n o f s uc h E x c i s e D ut y s u bs i d y f r om t h e a m b it o f t a x a t i on . 9. T h e i s s ue i s a c c o r d i n gl y s e t a s i d e t o t h e f i le of t he A O f o r p ro p e r de t e r m i na t i o n o f t a xa b i l it y o f E xc i s e D ut y s u b s i d y i n q ue s t i o n i n ITA No.1401/Del/2021 5 a c c or da n c e w i t h l a w a f t e r pr o vi d in g r e a s on a bl e o p p or t u n it y t o A s s e s s e e i n t h i s r e ga r d . 10 . C o ns e q u e n t l y, G r o u n d N o . 1 . 3 o f a p pe a l o f t h e a ss e s s e e i s a l low e d f o r s t a t i s t ic a l p u r p os e s . 11 . I n t h e r e s ul t , t h e a p p e a l of t he a s s e s s e e i s p art l y a l lo w e d . Order pronounced in the open Court on 19 th April, 2024. Sd/- Sd/- [SAKTIJIT DEY] [PRADIP KUMAR KEDIA] VICE PRESIDENT ACCOUNTANT MEMBER DATED: April, 2024 Prabhat