Andhra Pradesh Power Generation Corporation Limited, Vijayawada V. The ACIT, Circle-3(1), , Vijayawada

ITA 167/VIZ/2020

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 2629 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 10 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-06-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 07-04-2021
• Assessment Year: misc
• Appeal Filed On: 12-08-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D K SONOWAL
• Assessee Lawyers: M CHANDRAMOULESWARA RAO
• Keywords: Revision of order; Depreciation; Period of limitation; Wrong claim; Reassessment proceedings; Set aside
• Section: 143(3); 80IA; 191; 13; 147; 263

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM (THROUGH WEB - BASED VIDEO CONFERENCING PLATFORM) , . . , BEFORE SHRI N.K.CHOUDHRY, HONBLE JUDICIAL MEMBER & SHRI D.S. SUNDER SINGH, HONBLE ACCOUNTANT MEMBER ./ I.T. A.NO. 1 6 7 /VIZ/20 20 ( / A SSESSMENT Y EAR : 20 12 - 13 ) ANDHRA PRADESH POWER GENERATION CORPORATION LTD. VIJAYAWADA [PAN : AA CCA2734 J ] VS. ASST.COMMISSIONER OF INCOME TAX CIRCLE - 3(1) VIJAYAWADA ( / APPELLANT) ( / RESPONDENT) / ASSESSEE BY : SHRI M.CHANDRAMOULESWARA RAO, AR /REVENUE BY : SHRI D.K.SONOWAL, CIT(DR) / DATE OF HEARING : 1 7 . 0 6 .202 1 / DATE OF PRONOUNCEMENT : 25 .06 . 202 1 / O R D E R P ER BENCH : THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER OF THE PR. COMMISSIONER OF INCOME TAX ( PR.CIT ), VIJAYAWADA PASSED U/S 263 OF INCOME TAX ACT (IN SHORT A CT) DATED 2 5 .0 6 .2020 FOR THE ASSESSMENT YEAR (A.Y.) 2012 - 13. 2. ALL THE GROUNDS OF APPEAL ARE A GAINST THE ORDER OF THE LD.PR.CIT, VIJAYAWADA PASSED U/S 263 OF THE INCOME TAX ACT, 1961 (IN SHORT ACT). IN 2 ITA NO.1 6 7 /VIZ/20 20 , A.Y.20 12 - 13 A NDHRA PRADESH POWER GENERATION CO - OP LTD., VIJAYAWADA THE INSTANT CASE, THE ASSESSMENT WAS ORIGINALLY COMPLETED U/S 143(3) BY AN ORDER DATED 31.03.2015. SUBSEQUENTLY, THE ASSESSING OFFICER (AO) HAS REOPENED THE ASSESSMENT U/S 147 FOR ESCAPEMENT OF INCOME WITH REGARD TO DEDUCTION U/S 80IA AND COMPLETED THE ASSESSMENT U/S 143(3) R.W.S. 147 OF THE ACT ON 01.12.2017. IN THE ORDER PASSED U/S 143(3) R.W .S.147 DT.01.12.2017 , THE AO ALLOWED DEDUCTION U/S 80IA . 3. T HE LD.PR.CIT HAS TAKEN UP THE ASSESSMENT ORDER PASSED U/S 143(3) R.W.S. 147 DT.01.12.2017 FOR REVISION U/S 263 FOR EXCESS CLAIM OF DEPRECIATION . T HE LD.PR.CIT ISSUED SHOW CAUSE NOTICE , STATING THAT THE ASSESSEE HAS CLAIMED DEPRECIATION @100% ON CHIMNEY AGAINST THE ALLOWABLE DE PRECIATION OF @15% AND THUS, THE ASSESSMENT RESULTED IN EXCESS ALLOWANCE OF DEPRECIATION OF RS.53,25,74,114/ - , HENCE, DIRECTED THE ASSESSEE AS TO WHY THE ASSESSMENT SHOULD NOT BE REVISED U/S 263 OF THE ACT. IN RESPONSE TO THE SHO W CAUSE NOTICE ISSUED U/S 263, THE ASSESSEE FILED EXPLANATION STATING THAT THE O RIGINAL ASSESSMENT WAS COMPLETE D U/S 143(3) BY AN ORDER DATED 31.03.2015 AND SUBSEQUENTLY, THE ASSESSMENT WAS TAKEN UP FOR REASSESSMENT U/S 147 FOR VERIFICATION OF DEDUCTION U /S 80IA AND THE PR.CIT SOUGHT TO REVISE THE ASSESSMENT FOR INCORRECT ALLOWANCE OF DEPRECIATION , WHICH WAS NOT THE SUBJECT MATTER OF THE REASSESSMENT ORDER AND THUS NOT AN ISSUE BORNE OUT OF THE ASSESSMENT ORDER DATED 01.12.2017 , 3 ITA NO.1 6 7 /VIZ/20 20 , A.Y.20 12 - 13 A NDHRA PRADESH POWER GENERATION CO - OP LTD., VIJAYAWADA HENCE, ARGUED THAT THERE IS NO CASE FOR REVISION. THE LD.A.R FURTHER SUBMITTED THAT THE ISSUE OF DEPRECIATION WAS RELATED TO THE ORIGINAL ASSESSMENT MADE U/S 143(3) DATED 31.03.2015 AND THE TIME LIMIT OF TWO YEARS FOR TAKING UP THE CASE FOR REVISION U/S 263 GOT EXPIRED. THE LD AR SUBMITTED THAT THE TIME LIMIT FOR REVISION NEEDS TO BE COUNTED FROM THE ORIGINAL ASSESSMENT ORDER, BUT NOT FROM THE REASSESSMENT ORDER, SINCE THE ISSUE RAISED BY THE LD.PR.CIT WAS NOT EMANATED FROM THE REASSESSMENT ORDER. THE LD .AR ALSO STATED THAT THE AO IN THE ORIGINAL ASSESSMENT VERIFIED THE ISSUE AND ALLOWED THE DEDUCTION, THEREFORE, ARGUED THAT THERE IS NO CASE FOR REVISION U/S 263, HENCE, REQUESTED TO DROP THE REVISION PROCEEDINGS. NOT BEING CONVINCED WITH THE EXPLANATION O F THE ASSESSEE, THE LD.PR.CIT HELD THAT THE AO HAS ALLOWED THE EXCESS DEPRECIATION WITHOUT VERIFYING THE DETAILS IN THE ASSESSMENT ORDER PASSED U/S 147 R.W.S. 143(3), THEREFORE, THE ORDER PASSED BY THE AO U/S 143(3) R.W.S. 147 WAS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE, ACCORDINGLY , SET ASIDE THE ASSESSMENT ORDER AND DIRECTED THE AO TO REDO THE ASSESSMENT DENOVO IN ACCORDANCE WITH LAW. 4. AGAINST WHICH THE ASSESSEE FILED APPEAL BEFORE THE TRIBUNAL. ASSAILING THE CONTENTION OF THE ASSES SEE THAT THE REVISION ORDER PASSED BY THE LD.PR.CIT IS BAD IN LAW, THE LD.AR ARGUED THAT THE ASSESSMENT WAS 4 ITA NO.1 6 7 /VIZ/20 20 , A.Y.20 12 - 13 A NDHRA PRADESH POWER GENERATION CO - OP LTD., VIJAYAWADA COMPLETED ORIGINALLY BY AN ORDER DATED 31.03.2015 AFTER EXAMINING THE ISSUES AND REASSESSMENT WAS TAKEN UP ONLY FOR THE PURPOSE OF DISALLOWANCE U/S 80IA . THUS THE TIME LIMIT FOR TAKING UP THE CASE FOR REVISION GOT EXPIRED BY 31.03.2017. SINCE THE ISSUE OF DEPRECIATION WAS NOT BORNE OUT OF THE REASSESSMENT ORDER, THE LD.AR ARGUED THAT THE TIME LIMIT CANNOT BE EXTENDED AND THE TIME LIMIT OF TWO YEARS G OT EXPIRED BY 31.03.2017, HENCE, SUBMITTED THAT THE ORDER PASSED BY THE LD.PR.CIT IS TIME BARRED, HENCE, REQUESTED TO QUASH THE ORDER PASSED U/S 263. THE ASSESSEE ALSO RELIED ON THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF CIT VS. ALAGENDRAN FINAN CE LTD. 293 ITR 1 (SC) AND THE DECISION OF AHOKA BUILDCON LTD. V. CIT (2010) 191 TAXMAN 29 (BOM.). 5. ON THE OTHER HAND, THE LD.DR SUPPORTED THE ORDER OF THE LD.PR.CIT AND ARGUED THAT SINCE , THE AO HAS NOT EXAMINED THE ISSUE WITH REGARD TO ALLOWABILITY OF DEPRECIATION ON CHIMNEYS IN THE REASSESSMENT MADE U/S 147 R.W.S. 143(3) OF THE ACT AND THE LD.PR.CIT IS WITHIN THE LIMIT FOR TAKING UP THE CASE FOR REVISION AS PROVIDED U/S 263 OF THE ACT. THUS, ARGUED THAT THERE IS NO ERROR IN THE ORDER OF THE LD.PR.CIT, HENCE , REQUESTED TO UPHOLD THE ORDER OF THE LD.PR.CIT AND DISMISS THE APPEAL OF THE ASSESSEE. 5 ITA NO.1 6 7 /VIZ/20 20 , A.Y.20 12 - 13 A NDHRA PRADESH POWER GENERATION CO - OP LTD., VIJAYAWADA 6. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL PLACED ON RECORD. IN THE INSTANT CASE, THE LD.PR.CIT HAS TAKEN UP THE CASE FOR REVISION OF THE ASSESSMENT MADE U/S 143(3) R.W.S. 147 OF THE ACT DATED 01/12/2017 . THE ISSUE WITH REGARD TO INCORRECT ALLOWANCE OF DEPRECIATION ON CHIMNEY WAS NOT THE SUBJECT MATTER OF THE ASSESSMENT ORDER PASS ED U/S 143(3) R.W.S. 147 OF THE ACT. THE ASSESSMENT WAS REOPENED U/S 147 FOR THE PURPOSE OF WRONG CLAIMING OF DEDUCTION U/S 80IA . THE AO EXAMINED THE CLAIM OF THE ASSESSEE M AD E U/S 80IA AND COMPLETED THE ASSESSMENT. THE ORIGINAL ASSESSMENT WAS PASSED U/ S 143(3) ON 31.03.2015 AND THE ISSUE OF DEPRECIATION WAS RELATED TO THE ORIGINAL ASSESSMENT MADE U/S 143(3) DT 31.03.2015. T HE REFORE THE TIME LIMIT FOR TAKING UP THE CASE FOR REVISION U/S 263 COMMENCES FROM THE ORIGINAL ASSESSMENT, BUT NOT FROM THE DATE OF REASSESSMENT MADE U/S 143(3) R.W.S. 147. THIS VIEW IS SUPPORTED BY THE DECISION OF HONBLE SUPREME COURT IN CIT VS. ALAGENDRAN FINANCE LTD. 293 ITR 1 (SC), AHOKA BUILDCON LTD. V. CIT (2010) 191 TAXMAN 29 (BOM.) HONBLE APEX COURT IN THE CASE OF ALAGENDRAN FINANCE LTD (SUPRA) HELD AS UNDER: 15. WE, THEREFORE, ARE CLEARLY OF THE OPINION THAT KEEPING IN VIEW THE FACTS AND CIRCUMSTANCES OF THIS CASE AND, IN PARTICULAR, HAVING REGARD TO THE FACT THAT THE COMMISSIONER OF INCOME - TAX EXERCISING ITS REVI SIONAL JURISDICTION REOPENED THE ORDER OF ASSESSMENT ONLY IN RELATION TO LEASE EQUALIZATION FUND WHICH BEING NOT THE SUBJECT OF THE REASSESSMENT PROCEEDINGS, THE PERIOD OF LIMITATION PROVIDED FOR UNDER SUB - SECTION (2) OF SECTION 263 OF THE ACT WOULD BEGIN TO RUN FROM THE DATE OF THE ORDER OF ASSESSMENT AND NOT FROM THE ORDER 6 ITA NO.1 6 7 /VIZ/20 20 , A.Y.20 12 - 13 A NDHRA PRADESH POWER GENERATION CO - OP LTD., VIJAYAWADA OF REASSESSMENT. THE REVISIONAL JURISDICTION HAVING, THUS, BEEN INVOKED BY THE COMMISSIONER OF INCOME - TAX BEYOND THE PERIOD OF LIMITATION, IT WAS WHOLLY WITHOUT JURISDICTION RENDERING T HE ENTIRE PROCEEDING A NULLITY. 16. THE TRIBUNAL AND THE HIGH COURT, THEREFORE, IN OUR OPINION, WERE CORRECT IN PASSING THE IMPUGNED JUDGMENT. THE APPEAL, THEREFORE, BEING DEVOID OF ANY MERIT IS DISMISSED WITH COSTS. COUNSEL'S FEE ASSESSED AT RS. 25,000. THE COORDINATE BENCH OF ITAT HYDERABAD A BENCH IN THE CASE OF M/S NORTHERN POWER DISTRIBUTION COMPANY OF TELANGANA LTD. VS. ASST.COMMISISONER OF INCOME TAX, CIRCLE - 1, WARANGAL IN ITA NO.1479/HYD/2014 HAS ALSO TAKEN THE SIMILAR VIEW . FOR THE SAKE CLARITY AND CONVENIENCE WE EXTRACT THE RELEVANT PART OF THE DECISION OF ITAT HYDERABAD A BENCH IN THE CASE OF M/S NORTHERN POWER DISTRIBUTION COMPANY OF TELANGANA LTD AS UNDER: 10. AS REGARDS THE OTHER GROUNDS ON WHICH THE CIT SOUGHT TO REVISE THE ORDER OF THE AO ARE CONCERNED, WE ARE OF THE OPINION THAT ALL THESE ISSUES ARE NOT ARISING OUT OF THE ORDER U/S 143(3) R.W.S. 147 OF THE I.T. ACT. THEREFORE, THE REVISION U/S 263 AS ITA NO.1479 OF 2014 REGARDS THESE ISSUES IS AGAINST THE ORDER U/S 143(3) DATED 31.12.2 008. SECTION 263 OF THE I.T. ACT PROVIDES THAT NO ORDER U/S 263 SHALL BE MADE UNDER SUB - SECTION(1) THEREOF, AFTER THE EXPIRY OF TWO YEARS FROM THE END OF THE FINANCIAL YEAR IN WHICH THE ORDERS SOUGHT TO BE REVISED WAS PASSED. IN THE CASE BEFORE US, THE ASS ESSMENT ORDER PASSED U/S 143(3) OF THE ACT WAS ON 31.12.2008, WHEREAS THE NOTICE U/S 263 WAS ISSUED ON 5.12.2013 I.E. BEYOND TWO YEARS FROM THE END OF THE RELEVANT FINANCIAL YEAR IN WHICH THE ASSESSMENT ORDER IS PASSED. AS HELD BY THE HON'BLE SUPREME COURT IN THE CASE OF CIT VS. ALAGENDRAN FINANCE LTD., 293 ITR 1 (SC) PERIOD OF LIMITATION BEGINS FROM THE ORIGINAL ASSESSMENT AND NOT FROM RE - ASSESSMENT IN WHICH THESE ITEMS WERE NOT DEALT WITH. THEREFORE, AS CONTENDED BY THE LEARNED COUNSEL FOR THE ASSESSEE, T HE OTHER GROUNDS ON WHICH THE CIT SOUGHT REVISION ARE OUTSIDE THE PURVIEW OF THE CIT U/S 263 AS BARRED BY LIMITATION. THEREFORE, THE REVISION ORDER ON THESE GROUNDS ALSO IS NOT SUSTAINABLE. SINCE THE FACTS ARE IDENTICAL RESPECTFULLY FOLLOWING THE VIEW TA KEN BY THE HONBLE SUPREME COURT, WE HOLD THAT THE TIME LIMIT FOR PASSING THE 7 ITA NO.1 6 7 /VIZ/20 20 , A.Y.20 12 - 13 A NDHRA PRADESH POWER GENERATION CO - OP LTD., VIJAYAWADA ORDER U/S 263 GOT EXPIRED, AND THE ORDER PASSED U/S 263 IS UNSUSTAINABLE AND THE SAME IS QUASHED. 7 . IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 25 TH JUNE , 2021. SD/ - SD/ - ( ) ( . . ) (N.K.CHOUDHRY) (D.S.SUNDER SINGH) / JUDICIAL MEMBER / ACCOUNTANT MEMBER DATED : 25 .0 6 .2021 L.RAMA, SPS / COPY OF THE ORDER FORWARDED TO : - 1 . / THE ASSESSEE - ANDHRA PRADESH POWER GENERATION CORPORATION LTD. , C/O M.CHANDRA MOULESWARA RAO, CHARTERED ACCOUNTANT, C - 3,SKYLARK APARTMENTS, NEAR SKYLINE THEATRE, BASHEERBAGH, HYDERABAD. 2 . / THE REVENUE ASST.COMMISSIONER OF INCOME TAX, CIRCLE - 3(1), VIJAYAWADA 3. THE PR.COMMISSIONER OF INCOME TAX , VI JAYAWADA 4 . , , / DR, ITAT, VISAKHAPATNAM 5 . / GUARD FILE / BY ORDER // TRUE COPY // SR. PRIVATE SECRETARY ITAT, VISAKHAPATNAM