Noida Power Company Ltd., Uttar Pradesh V. Addl. CIT, Noida

ITA 1614/DEL/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 65631 (ITAT-DELHI)
• Duration Of Justice: 6 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-10-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: E
• Next Hearing Date: 17-07-2012
• Assessment Year: 2008-2009
• Appeal Filed On: 04-04-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RA J TANDON
• Assessee Lawyers: SUBHASIS
• Section: 234B

Judgement Text

ITA NO.1614/DEL/2012 ASSTT. YEAR: 2008-09 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH E NEW DELHI BEFORE SHRI J.S. REDDY, ACCOUNTANT MEMBER AND SHRI CHANDRA MOHAN GARG, JUDICIAL MEMBER ITA NO. 1614/DEL/2012 ASSESSMENT Y EAR: 2008-09 NOIDA POWER COMPANY LIMITED, VS ADDL. COMMISSIO NER OF INCOME TAX, COMMERCIAL COMPLEX, NOIDA RANGE, NOIDA. BLOCK H, ALPHA II SECTOR, GREATER NOIDA CITY -201308 (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI SUBHASIS RESPONDENT BY: SHRI RAJ TANDON, C.I.T.(DR) O R D E R PER CHANDRAMOHAN GARG, JUDICIAL MEMBER THIS APPEAL HAS BEEN PREFERRED BY THE ASSESSEE AGAI NST THE ORDER OF THE COMMISSIONER OF INCOME TAX(A), GHAZIABAD DATED 16.0 1.2012 FOR AY 2008-09. 2. THE ASSESSEE HAS RAISED FIVE GROUNDS IN THIS APP EAL. GROUND NO. 1 CONTAINS A NUMBER OF SUB-GROUNDS BUT THE SUM AND SU BSTANCE OF THESE GROUNDS IS CONTAINED IN GROUND NO. 1(A) THAT THE LD . COMMISSIONER OF INCOME TAX(A) ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER WHO HAD DISALLOWED RS.22,93,95,980/- BEING EXPENDITURE INCURRED ON ACCOUNT OF ITA NO.1614/DEL/2012 ASSTT. YEAR: 2008-09 2 POWER PURCHASE PRICE PAYABLE TO UTTAR PRADESH POW ER CORPORATION LIMITED (UPPCL). GROUNDS NO. 3 AND 4 ARE RELATED T O CHARGING OF INTEREST U/S 234B AND 234C OF THE INCOME TAX ACT (HEREINAFTE R REFERRED TO AS THE ACT). GROUND NO. 2 IS RELATED TO THE CREDIT OF ADV ANCE TAX AND SELF ASSESSMENT TAX PAID BY THE ASSESSEE COMPANY AND GRO UND NO. 5 IS A PRO FORMA GROUND WHICH NEEDS NO ADJUDICATION. 3. WE HAVE HEARD BOTH THE PARTIES AND PERUSED ENTIR E RECORD BEFORE US AND CAREFULLY CONSIDERED THE SAME. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE SAME QUESTION REGARDING THE EXPENDITURE IN CURRED ON POWER PURCHASE AROSE FOR THE FIRST TIME IN THE AY 1994-95 AND THE TRIBUNAL DECIDED THE MATTER IN FAVOUR OF THE ASSESSEE BY HOLDING THA T THE LIABILITY HAS BEEN CRYSTALLIZED IN THE YEAR ITSELF. HE FURTHER SUBMIT TED THAT AS AND WHEN THE QUESTION OF RATE PAYABLE REACHES FINALITY, THE DEPA RTMENT WOULD BE AT LIBERTY TO BRING THE AMOUNT TO TAX BY INVOKING THE PROVISIO NS OF SECTION 41(1) OF THE ACT PERTAINING TO THE AMOUNT WHICH CEASES TO BECOME A LIABILITY. REPLYING TO THE ABOVE CONTENTION, THE DEPARTMENTAL REPRESENT ATIVE SUBMITTED A COPY OF THE JUDGMENT OF ITAT DELHI E BENCH IN ITA NO. 999/DEL/2011 FOR A.Y. 2007-08 DATED 19.1.2012 IN ASSESSEES OWN CASE . WE FIND IT APPROPRIATE TO REPRODUCE THE FINDINGS GIVEN THEREIN AS FOLLOWS:- 2.1 THE QUESTION AGAIN CAME UP FOR DISCUSSION BEF ORE THE TRIBUNAL IN THE PROCEEDINGS OF ASSESSMENT YEARS ITA NO.1614/DEL/2012 ASSTT. YEAR: 2008-09 3 1995-96 TO 1999-00, FOR WHICH A CONSOLIDATED ORDER WAS PASSED ON 30.06.2008. IN THIS ORDER, IT IS MENTIONE D THAT THE QUESTION OF DIFFERENTIAL RATE, THAT IS THE DIFF ERENCE BETWEEN THE RATE STIPULATED IN THE AGREEMENT AND CH ARGED BY UPSEB IN THE BILLS AND THE RATE RECOMMENDED BY INDEPENDENT AUTHORITY WAS IN DISPUTE AND THE SAID D ISPUTE WAS NOT RESOLVED DURING THE RELEVANT YEAR. THEREFOR E, THE CONTRACTUAL LIABILITY ON ACCOUNT OF SUCH DIFFERENTI AL RATE IS NOT A LIABILITY IN PRAESENTI. THERE IS A POSSIBI LITY OF REDUCTION OR EXTINCTION OF THE LIABILITY, THEREFORE , IT CANNOT BE REGARDED AS AN ASCERTAINED LIABILITY. IN THIS VIEW, THE APPEALS WERE DECIDED IN FAVOUR OF THE REV ENUE. 2.2 IT IS ARGUED THAT THE ONLY DIFFERENCE IN FACTS IS THAT IN ASSESSMENT YEAR 1994-95 THE AMOUNT CHARGED BY UPSEB IN THE BILLS WAS DEBITED TO PROFIT AND LOSS ACCOUNT WHILE IN LATER YEARS ONLY A PART WAS DEBITED TO THE PROFIT A ND LOSS ACCOUNT AND THE REMAINING WAS CLAIMED SEPARATELY IN THE STATEMENT OF INCOME. THIS DIFFERENCE IN TREATMENT D OES NOT LEAD TO ANY DIFFERENCE IN INFERENCE ABOUT ACCRU AL OF THE LIABILITY AS HELD IN THE CASE OF KEDAR NATH JUT E MANUFACTURING CO. LTD. VS. CIT, 82 ITR 363 (SC) AND TUTICORIN ALKALI CHEMICALS & FERTILIZERS LTD. VS. C IT, 227 ITR 172 (SC). IT IS FURTHER ARGUED THAT IN VIEW OF THE DECISION OF SPECIAL BENCH IN THE CASE OF CIT VS. RE LIANCE INDUSTRIES LTD., 88 ITD 273 (BOM.), THE SUBSEQUENT BENCH OF THE TRIBUNAL COULD NOT HAVE DIFFERED FROM THE DE CISION OF THE EARLIER BENCH AND A PROPER COURSE OF ACTION WOULD HAVE BEEN TO PLACE THE MATTER BEFORE THE PRESIDENT OF THE TRIBUNAL WITH A REQUEST TO CONSTITUTE SPECIAL BENCH CONSISTING OF THREE OR MORE MEMBERS. ACCORDINGLY, I T IS AGITATED THAT THE DECISION FOR ASSESSMENT YEAR 1994 -95 MAY BE FOLLOWED AND THE MATER MAY BE DECIDED IN FAV OUR OF THE ASSESSEE. 3. IN REPLY, THE LD. CIT, DR REFERRED TO THE SUBSEQ UENT DECISION OF THE TRIBUNAL AND SUBMITTED THAT IT HAS ALSO TAKEN INTO ACCOUNT THE RECOMMENDATION OF AN INDEPENDENT AUTHORITY, WHICH IS STILL IN FORCE. THI S MATTER IS PENDING NOW BEFORE THE HONBLE SUPREME COURT. ITA NO.1614/DEL/2012 ASSTT. YEAR: 2008-09 4 ACCORDINGLY, IT IS AGITATED THAT THE LATER DECISION OF THE TRIBUNAL MAY BE FOLLOWED. 4. WE HAVE CONSIDERED THE FACTS OF THE CASE AND SUBMISSIONS MADE BEFORE US. WE ARE OF THE VIEW THAT THE SUBSEQUENT DECISION OF THE TRIBUNAL TAKES INTO ACCO UNT ALL THE FACTS AVAILABLE TILL THAT POINT OF TIME. IN THE FIRST DECISION, THE TRIBUNAL TOOK NOTE OF THE STIPULATION IN THE AGREEMENT THAT POWER PURCHASE RATE WAS TO BE STUDIE D AND REVISED BY AN INDEPENDENT AUTHORITY, THEREFORE, NAIR COMMITTEE WAS APPOINTED ON 31.08.1994. THIS COMMITTEE DETERMINED THE RATE AT RS. 1.35 PER UNIT. HOWEVER, THE REPORT WAS SUBMITTED BY THE COMMITTEE MUCH AFTER THE CLOSE OF THE PREVIOUS YEAR. IT IS CL EAR FROM THIS ORDER THAT THE TRIBUNAL DID NOT TAKE INTO ACCO UNT THE FINDING OF THE NAIR COMMITTEE. THIS WAS DONE IN THE SUBSEQUENT ORDER. THEREFORE, WE ARE OF THE VIEW THA T THE SUBSEQUENT DECISION SHOULD BE FOLLOWED IN THIS CASE . ACCORDINGLY, FOLLOWING THIS DECISION, THE MATTER IS DECIDED IN FAVOUR OF THE REVENUE. THUS, GROUND NO. 1 IS DISMISSED. 5. IN SO FAR AS CHARGING OF INTEREST UNDER SECTIONS 234B AND 234C IS CONCERNED, THE LD. CIT, DR RELIED ON TH E DECISION IN THE CASE OF JCIT VS. ROLTA INDIA LTD, ( 2011) 330 ITR 470 (SC). IT HAS BEEN DECIDED THAT FOR THE PURPOSE OF LEVY OF INTEREST U/S 234B ASSESSED TAX MEANS THE TAX ASSESSED ON REGULAR ASSESSMENT. IT HA S BEEN FURTHER HELD THAT WHAT APPLICABLE IN RESPECT O F SECTION 234B IS ALSO APPLICABLE IN RESPECT OF SECTI ON 234C EVEN WHEN ASSESSMENT IS MADE U/S 115JA. THIS CLEARLY LEADS TO AN INFERENCE THAT INTEREST UNDER S ECTIONS 234B AND 234C ARE CHARGEABLE. ACCORDINGLY, THESE GROUNDS ARE ALSO DISMISSED. 4. LD. DR FURTHER SUBMITTED THAT ALTHOUGH THERE IS THE ORDER OF ITAT IN ITA 70/DEL/2003 FOR AY 1994-95 AVAILABLE ON PAGES 1 .1 TO 1.5 OF THE PAPER ITA NO.1614/DEL/2012 ASSTT. YEAR: 2008-09 5 BOOK IN FAVOUR OF THE ASSESSEE BUT SUBSEQUENT DECIS IONS OF THE TRIBUNAL SHOULD BE CONSIDERED WHICH WERE IN FAVOUR OF THE RE VENUE FROM AY 1995-96 TO 1999-2000 AND CONTINUOUSLY FOLLOWED UPTO AY 2007 -08. THE DR FURTHER SUBMITTED THAT IN THE FIRST DECISION FOR AY 1994-95 , THE TRIBUNAL TOOK A NOTE OF THE STIPULATION IN THE AGREEMENT THAT THE POWER PURCHASE RATE WAS STUDIED AND REVISED BY INDEPENDENT AUTHORITIES. CONSEQUENTL Y, NAIR COMMITTEE WAS APPOINTED ON 31.08.1994. THE NAIR COMMITTEE DETERM INED THE RATE AT RS.1.35 PER UNIT BUT THE REPORT WAS SUBMITTED BY TH E COMMITTEE MUCH AFTER THE CLOSE OF THE PREVIOUS YEAR I.E. 1993-94. HE FU RTHER SUBMITTED THAT FROM A BARE READING OF THE ORDER OF THE TRIBUNAL FOR AY 19 94-95, IT IS VERY MUCH CLEAR THAT THE TRIBUNAL DID NOT CONSIDER THE FINDIN GS OF THE NAIR COMMITTEE AND THIS WAS DONE IN THE ORDERS OF THE TRIBUNAL FOR SUBSEQUENT ASSESSMENT YEARS. THE DR VEHEMENTLY SUBMITTED THAT IN THESE P ECULIAR FACTS AND CIRCUMSTANCES OF THE CASE, THE ORDER OF THE TRIBUNA L FOR AY 1994-95 HAS BEEN MODIFIED BY THE TRIBUNAL ITSELF IN THE SUBSEQU ENT YEARS TILL IMMEDIATELY PRECEDING AY 2007-08 TO THE ASSESSMENT YEAR UNDER C ONSIDERATION I.E. 2008- 09 IN THE PRESENT CASE. 5. THE DR FINALLY SUBMITTED THAT THE DECISION OF TH E TRIBUNAL IN SUBSEQUENT YEARS SHOULD BE FOLLOWED AS A RULE OF CO NSISTENCY BECAUSE THE RECOMMENDATIONS OF THE NAIR COMMITTEE ARE STILL IN FORCE. THE DR ALSO ITA NO.1614/DEL/2012 ASSTT. YEAR: 2008-09 6 SUBMITTED THAT NOW THIS MATTER IS PENDING BEFORE HO NBLE SUPREME COURT. HENCE, THE LATER DECISIONS OF THE TRIBUNAL MAY BE F OLLOWED. 6. IN VIEW OF ABOVE SUBMISSIONS AND ITAT DELHI E BENCH JUDGMENT FOR AY 2007-08 IN ASESSEES OWN CASE, WE ARE OF THE VIEW THAT SUBSEQUENT DECISION OF THE TRIBUNAL CONSIDERED ALL THE FACTS A ND CIRCUMSTANCES RELATED TO THE ISSUE IN QUESTION WHICH WERE AVAILABLE TILL THA T POINT OF TIME. THE FIRST DECISION OF THE TRIBUNAL FOR AY 1994-95 WAS DELIVER ED WITHOUT CONSIDERING THE RECOMMENDATIONS OF THE NAIR COMMITTEE BUT THE S AME WAS CONSIDERED IN THE SUBSEQUENT ASSESSMENT YEAR ORDERS TILL AY 2007- 08. THE ASSESSEES REPRESENTATIVE WAS SPECIFICALLY ASKED TO SUBMIT ANY ORDER OR JUDGEMENT CONTRARY TO THE FINDINGS OF THE TRIBUNAL IN THE SUB SEQUENT ASSESSMENT YEARS IN ASSESSEES OWN CASE BUT HE EXPRESSED HIS INABILI TY. THEREFORE, WE HAVE NO SUBSTANTIAL REASON TO TAKE A DIFFERENT VIEW WHICH H AS ALREADY BEEN TAKEN BY THE ITAT DELHI E BENCH IN ITA NO. 999/DEL/2011(SU PRA). ACCORDINGLY, FOLLOWING THIS DECISION, GROUND NO. 1 IS DECIDED IN FAVOUR OF THE REVENUE. CONSEQUENTLY GROUND NO. 1 IS DISMISSED. GROUND NO.2 7. BOTH THE PARTIES CONCEDED THAT THE ALLOWANCE OF FULL CREDIT OF ADVANCE TAX AND SELF ASSESSMENT TAX PAID BY THE ASSESSEE CO MPANY FOR THE RELEVANT ASSESSMENT YEAR DURING THE PREVIOUS YEAR IS A MATTE R OF TAX ACCOUNT WHICH ITA NO.1614/DEL/2012 ASSTT. YEAR: 2008-09 7 CAN BE DECIDED BY THE ASSESSING OFFICER ON VERIFICA TION OF THE TAX PAID AND CREDIT PERMISSIBLE UNDER THE ACT MAY BE ALLOWED AT HIS END. THEREFORE, WE FIND IT APPROPRIATE TO RESTORE THIS ISSUE TO THE FI LE OF THE ASSESSING OFFICER WITH THE DIRECTION THAT THE CREDIT OF ADVANCE TAX A ND SELF ASSESSMENT TAX PAID BY THE ASSESSEE COMPANY BE ALLOWED AFTER DUE VERIFI CATION OF TAX DEPOSIT VOUCHERS AND TAX LEVIED ON THE ASESSEE. ACCORDINGL Y, GROUND NO. 2 IS DISPOSED OF IN THE MANNER AS INDICATED ABOVE. GROUND NO. 3 & 4 8. GROUND NO. 3 IS RELATED TO THE INTEREST CHARGEAB LE U/S 234C OF THE ACT AND GROUND NO. 4 IS RELATED TO THE INTEREST CHARGEA BLE U/S 234B OF THE ACT. THE ASSESSEES REPRESENTATIVE SUBMITTED THAT THESE ISSUES ARE CONSEQUENTIAL IN NATURE AND THE COMMISSIONER OF INCOME TAX(A) FAILED TO APPRECIATE THE FACT THAT THE INTEREST U/S 234C OF THE ACT IS CHARGEABLE ONLY ON THE RETURNED INCOME AND NOT ON THE ASSESSED INCOME. THE AR FURT HER SUBMITTED THAT THE COMMISSIONER OF INCOME TAX(A) ALSO ERRED IN CONFIRM ING THE ASSESSMENT ORDER IN CHARGING INTEREST U/S 234B OF THE ACT. 9. LD. DR RELIED ON THE JUDGMENT OF HONBLE SUPREME COURT IN THE CASE OF JCIT VS ROLTA INDIA LTD. (2011) 330 ITR 470 (SC) WHEREIN IT WAS HELD THAT FOR THE PURPOSE OF LEVY OF INTEREST U/S 2 34B OF THE ACT, THE TERM ASSESSED TAX MEANS THE ASSESSED OR REGULAR ASSES SMENT. IT WAS ALSO HELD ITA NO.1614/DEL/2012 ASSTT. YEAR: 2008-09 8 THAT WHAT IS APPLICABLE IN RESPECT OF SECTION 234B OF THE ACT IS ALSO APPLICABLE IN RESPECT OF SECTION 234C OF THE ACT EV EN WHEN ASSESSMENT IS MADE U/S 115JA. THE RATIO OF JUDGEMENT OF HONBLE APEX COURT CLEARLY LEADS TO AN INFERENCE THAT THE INTEREST U/S 234B AN D 234C ARE CHARGEABLE. IN VIEW OF ABOVE, RESPECTFULLY FOLLOWING THE JUDGMENT OF HONBLE SUPREME COURT IN THE CASE OF ROLTA INDIA LTD. (SUPRA), GROU ND NO. 3 AND 4 ARE ALSO DISMISSED. GROUND NO.5 10. AS HAS ALREADY BEEN DISCUSSED, GROUND NO. 5 NEE DS NO ADJUDICATION, THEREFORE, WE DISMISS THE SAME. 11. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 12.10.2012. SD/- SD/- ( J.S. REDDY ) (CHANDRAMOHAN GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER DT. 12TH OCTOBER 2012 GS COPY FORWARDED TO:- 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR BY ORDER DEPUTY REGISTRAR