M/s Orissa Power Generation Corporation Ltd, Bhubaneswar V. CIT, Bhubaneswar

ITA 248/CTK/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 52407 (ITAT-CUTTACK)
• Duration Of Justice: 1 year(s) 3 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-09-2011
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Next Hearing Date: 20-09-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 18-06-2010
• Court: TRIBUNAL
• Department Lawyers: A BHATTACHARJEE
• Assessee Lawyers: D K MOHANTYC R JENA ARS
• Keywords: Opportunity of being heard; Principle of natural justice; Assessment record
• Section: 115JB

Judgement Text

IN THE INC O ME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK BEFORE : SHRI K.K.GUPTA, AM , AND SHRI K.S.S.PRASAD RAO, JM ITA NO. 248/CTK/2010 (ASSESSMENT YEAR 2005 - 06) M/S.ORISSA POWER GENERATION CORPORATION LTD., 7 TH FLOOR, FORTUNE TOWER, CHANDRASEKHA RPUR, BHUBANESWAR 751 023 PAN: AAAC 4759 R VERSUS COMMISSIONER OF INCOME - TAX, BHUBANESWAR (APPELLANT) (RESPONDENT) FOR THE APPELLANT: SHRI D.K.MOHANTY/C.R.JENA, ARS FOR THE RESPONDENT SHRI A.BHATTACHARJEE, DR DATE OF HEARING : 20.09.20 11 DATE OF PRONOUNCEMENT : 23.09.2011 ORDER SHRI K.K.GUPTA, AM : THIS APPEAL BY THE ASSESSEE AGITATES THE ACTION OF THE LEARNED COMMISSIONER OF INCOME - TAX ASSUMING JURISDICTION/S.263 OF THE INCOME - TAX ACT,1961 AS ILLEGAL, UNJUST AND VOID AB INITIO . 2. AT THE OUTSET THE LEARNED DR SUBMITTED THAT THIS APPEAL BY THE ASSESSEE STANDS TO BE DISMISSED IN VIEW OF THE FACT THAT THE ASSESSING OFFICER HAS ALREADY PASSED THE ORDER ON THE DIRECTION OF THE LEARNED CIT U/S.263 WHICH ISSUES HAVE BEEN AGITATED BY THE ASSESSEE BEFORE THE FIRST APPELLATE AUTHORITY. 3. THE LEARNED COUNSEL FOR THE ASSESSEE VEHEMENTLY ARGUED THAT THE BONE OF CONTENTION AS WAS BEFORE THE LEARNED CIT AS PER THE SHOW CAUSE NOTICE FOR ASSUMING JURISDICTION U/S.263 IS THE VERY ISSUE WHICH HAS N OT BEEN CONSIDERED OR RATHER NOT THE ISSUE BEFORE THE CIT(A), THEREFORE, CLINCHES THE ISSUE IN FAVOUR OF THE ASSESSEE THAT THE ORDER OF THE LEARNED CIT IS FIT TO BE QUASHED. 4. HE FURTHER ELABORATED T HE FACTS AS HAVE BEEN BROUGHT ON RECORD ARE THAT T HE ASS ESSEE ,ORISSA POWER GENERATION CORPORATION LTD (FOR SHORT ITA NO.248/CTK/2010 2 OPGC ) IS A GOVT OF ORISSA ENTERPRISES AND IS SOLELY AND WHOLLY ENGAGED IN THE BUSINESS OF GENERATION & DISTRIBUTION OF POWER AND HAS SET UP ITS POWER PLANTS (THERMAL POWER STATION AND MINI - HYDEL P ROJECTS) IN ORISSA. THE ASSESSEE HAS ESTABLISHED THERMAL POWER STATIONS OF 2*210MW EACH AT BA NAHARPALLI, IN THE DISTRICT OF J HARSUGUDA, ORISSA. THE POWER GENERATED FROM THE POWER STATIONS ENTIRELY SOLD TO GRIDCO (A GOVT. OF ORISSA ENTERPRISE) THROUGH POWER PURCHASE AGREEMENT EXECUTED. COAL IS THE ONLY RAW MATERIAL USED FOR GENERATION OF POWER HAS BEEN PROCURED FROM MAHANADI COAL FIELDS AT THE REGULATED PRICE FIXED BY GOVT. OF INDIA. WHILE GENERATING POWER AND CONTINUING ITS VARIOUS OPERATIONS, M/S OPGC AS R EQUIRED IN THE REGULAR COURSE OF BUSINESS ACTIVITIES MAINTAINS ALL BOOKS OF ACCOUNTS INCLUDING CASH BOOK, BANK BOOK, LEDGERS, JOURNAL REGISTER, VARIOUS SUBSIDIARY LEDGERS/REGISTERS, DAY TO DAY STOCK ACCOUNT SUPPORTED WITH BILLS VOUCHERS ETC. CONFIRMING TO THE PROVISIONS OF THE COMPANIES ACT, AS WELL AS ACCOUNTING STANDARDS/ GUIDELINES ISSUED BY THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA. AS PROVIDED UNDER THE COMPANIES ACT, THE ACCOUNTS OF THE COMPANY ARE AUDITED BY THE STATUTORY AUDITORS AS WELL AS CO NTROLLER & AUDITORS GENERAL OF INDIA. THE COMPANYS TURNOVER EXCEEDING RS.40.00 LAKHS ARE ALSO FURTHER AUDITED U/S 44 AB OF THE INCOME TAX ACT 1961. THE ASSESSEE COMPANY BEING A GOVT COMPANY, THE ACCOUNTS ARE OPENED TO THE PUBLIC. OTHERWISE THE ACCOUNT OF THE COMPANY ARE FULLY TRANSPARENT VERIFIABLE. FOR THE ASST. YEAR 2005 - 06 ALTHOUGH, OPGCS BOOK PROFIT AS PER P/L ACCOUNT IS 153,37,36,564 , TAKING INTO ACCOUNT THE ELIGIBLE DEDUCTION U/S 801A OF THE ACT IN RESPECT OF PROFIT / GAINS DERIVED BY THE ASSESSEE FROM BUSINESS OF GENERATION OF POWER I.E POWER PROFIT FOR THE SAID YEAR, THE TAXABLE INCOME UNDER THE NORMAL PROVISIONS OF THE ACT WAS NIL AND CONSEQUENTLY THE TAX PAYABLE UNDER NORMAL COMPUTATION WAS NIL. ITA NO.248/CTK/2010 3 ACCORDINGLY OPGC DISCLOSED ITS LIABILITY U/ S 115JB OF THE ACT. THE RETURN WAS FILED WITHIN THE DUE DATE U/S 139(1) OF THE ACT, APPROPRIATE MAT TAX WAS ALSO PAID. THE ASSESSMENT WAS SELECTED FOR SCRUTINY & SCRUTINY ASSESSMENT WAS COMPLETED DETERMINING THE TOTAL INCOME AT 15,19,01,3 20 ON DATED 28.12.2007 RECEIVED ON 7TH JANUARY 2008. AGGRIEVED WITH THE ASSESSMENT AS FRAMED, THE ASSESSEE WAS IN 1ST APPEAL BEFORE THE CIT(A) , BHUBANESWAR. WHILE THE MATTER STOOD THUS, THE ASSESSEE WAS SERVED WITH A NOTICE U/S. 263 OF THE I.T. A CT, 1961, BY THE CIT, BHUBANESWAR TO APPLY THE PROVISIONS AS CONTEMPLATED U/S. 263 ON DATED 25.02.2010 RECEIVED ON 2ND MARCH 2010. THAT WITHIN A PERIOD OF 29 DAYS THE ENTIRE PROCEEDING WAS COMPLETED IN HASTE. UNDOUBTEDLY THE ASSESSEE WAS DEPRIVED FROM TH E BENEFIT OF NATURAL JUSTICE AS WELL AS REASONABLE OPPORTUNITY OF BEING HEARD. HOWEVER, THE ASSESSEE APPEARING BEFORE THE LD. CIT FILED THE WRITTEN NOTE OF SUBMISSION ACCOMPANIED WITH (1) ABSTRACT OF THE COST OF AUDIT REPORT AS WELL ABSTRACT OF NOTES ON AC COUNTS FORMING PART OF AUDITED ACCOUNTS QUANTIFYING PURCHASE OF COAL, CONTROLLED MEASURES UNDERTAKEN CONSUMPTION OF COAL DURING THE YEAR (2) DETAILS OF STORES & SPARES CONSUMED WITH 0/B & C/B (3), INTERNAL AUDITO R S CERTIFICATE ETC. AND STRONGLY OBJECTED TO THE INVOKING OF THE PROVISION OF SEC. 263 RESPECTFULLY SUBMITTING THAT SINCE THE LD. ASSESSING OFFICER WITH A CONSCIOUS MIND VERIFYING THE RECORDS, ACCOUNTS ETC. , COMPLETED THE ASSESSMENT. THERE IS NO SCOPE FOR INVOKING THE PROVISION OF SECTION 263. HOWEV ER, IGNORING THE SUBMISSIONS AS ABOVE, THE LD. CIT, BHUBANESWAR HAS PASSED AN ORDER U/S. 263 CANCELLING THE EARLIER ASSESSMENT ORDER S ETTING ASIDE THE SAME TO THE ASSESSING OFFICER FOR FRESH ASSESSMENT SUBSTITUTING THE THOUGHT PROCESS OF THE ASSESSING OFFI CER, WHILE COMPLETING THE ASSESSMENT. IT IS PERTINENT TO STATE HERE THAT CERTAIN MATERIALS/ DETAILS AS ASKED FOR IN COURSE OF THE PROCEEDING U/S. 263 WAS NEITHER RELATED TO THE ASSESSMENT YEAR IN ITA NO.248/CTK/2010 4 QUESTION OR WAS RELEVANT FOR THE PURPOSE OF INVOKING THE PRO VISION OF SEC. 263 . IT WAS THEREFORE APPARENT THAT IN ABSENCE OF ANY ERRONEOUS ORDER, THE LEARNED CIT WAS MAKI N G ROVING AND FISHING ENQUIRY TO UNEARTH THE SAME IN THE PROCEEDING INITIATED U/S. 26 3. 5. THE LEARNED COUNSEL OF THE ASSESSEE SUB MITTED THAT THE LEARNED CIT EXAMINED THE ASSESSMENT RECORDS AND ALLEGED DISCREPANCIES ON THREE BASIC ISSUES, WHICH ARE AS UNDER: (A) WHEREAS COAL CONSUMPTION HAS SUBSTANTIALLY INCREASED IN ASSESSMENT YEAR 2005 - 06 VIS - - VIS THE EARLIER YEAR, THE POWER PRODUCTION WAS NOT C OMMENSURATE AND POWER SALE INCREASED ONLY MARGINALLY. (B) INSURANCE CHARGES HA VE INCREASED SUBSTANTIALLY AS COMPARED WITH LAST YEAR. WHEREAS THE ASSETS HAVE NOT INCREASED MUCH. (C) THERE HAS BEEN SUBSTANTIAL INCREASE IN CONSUMPTION OF STORES AND SPARES A S COMPARED WITH LAST YEAR WHICH SHOULD HAVE CRITICALLY EXAMINED BY THE A.O. ACCORDINGLY, HE WAS OF THE VIEW THAT HE COULD INVOKE HIS POWER U/S. 263 OBSERVING THAT THE ORDER OF THE A.O. WAS ERRONEOUS IN SO FAR AS IT WAS PREJUDICIAL TO THE INTEREST OF REVENU E. IGNORING ALL EXPLANATIONS FURNISHED BEFORE HIM, HE PROCEEDED TO CANCEL THE ASSESSMENT DIRECTING THE A.O. TO MAKE IT AFRESH. HE FURTHER SUBMITTED THAT NEITHER WAS THERE ANY FACTUAL OR LEGAL ERROR IN THE ACTION OF THE A.O. NOR WAS HIS ENQUIRIES INADEQUATE ON THE ISSUES. HE HAD MADE PERTINENT ENQUIRIES AND HAD RAISED PERTINENT ISSUES, WHICH WERE DULY EXPLAINED DURING THE ASSESSMENT PROCEEDINGS ARID ON HIS SATISFACTION, HE HAD DROPPED HIS CONCLUSION. THE EXPLANATIONS WHICH WERE SUBMITTED TO THE A.O. WERE BEI NG RESUBMITTED ON ALL THE THREE ISSUES AS ITA NO.248/CTK/2010 5 DISCUSSED ABOVE AND THE A SSESSEE HUMBLY PRAY ED THAT THE SAME MAY BE CONSIDERED TO SEE THAT THE CIT MERELY SUBSTITUTED HIS OWN OPINION IN PLACE OF T HAT OF THE A.O. WHICH IS NOT PERMITTED IN PROCEEDINGS U/S. 263. A) THE POWER GENERATED BY QPGC IS SOLD TO GRIDCQ AS PER THE BULK POWER PURCHASE AGREEMENT (PPA). IT MAY BE NOTED THAT OPGC CANNOT SALE THE POWER TO ANY OTHER PARTY OTHER THAN TO GRIDCO. THE TARIFF IS REGULATED AS PER POWER PURCHASE AGREEMENT. IT IS HUMBLY SUB MITTED THAT THE COAL CONSUMPTION IS BASED ON THE PLANT LOAD FACTOR (PLF) AND ALSO THE QUALITY OF COAL (CARBON CONTENT). SIMPLY SPEAKING, LOW GRADE COAL IN TERMS OF TONNAGE CONSUMPTION WILL BE MORE FOR THE SAME PRODUCTION OF UNITS WHEREAS HIGH GRADE COAL WI LL BE LESS. CONSUMPTION OF COAL HAS INCREASED DUE TO INCREASE IN THE PLF AND CONSUMPTION PER UNIT IS ACTUALLY REDUCED FROM 0.87 KG/KWH FOR PREVIOUS YEARS TO 0.84 KG/KWH DURING THIS YEAR. AS A MATTER OF FACT, IN TERMS OF UNITS OF PRODUCTION THERE HAS BEEN N O REDUCTION. HOWEVER, THE SALE REALIZATION HAS FALLEN, BECAUSE THE SALE PRICE IS REGULATED THROUGH THE PPA, WHICH IS ON COST PLUS BASIS. THERE HAVE BEEN CIRCUMSTANCES PERTAINING TO THE INTEREST COMPONENT DUE TO WHICH THE AVERAGE PRICE PER UNIT FOR THE CURR ENT YEAR HAS REDUCED TO 1.303 AS COMPARED WITH 1 .364 LAST YEAR. THEREFORE, EVEN THOUGH QUANTITY OF POWER SOLD HAS INCREASED, THERE IS ONLY A MARGINAL INCREASE IN SALE VALUE. B) THE INSURANCE PAYMENT YEAR AFTER YEAR IS NOT A DIRECT FUNCTION OF THE VALUE OF PLANT AND MACHINER Y OR ADDITION/ REDUCTION IN PLANT & MACHINERY. OPGC INVITED QUOTES FROM DIFFERENT INSURANCE COMPANIES FOR TAKING DIFFERENT INSURANCE POLICIES SUCH AS FIRE, SPECIAL CONTINGENCIES, PUBLIC LIABILITIES, ELECTRONICS EQUIPMENT AND TERRORISM ITA NO.248/CTK/2010 6 ETC. THE PREMIUM QUOT ED BY THE INSURANCE COMPANIES ARE REGULATED AS PER THE TERMS AND TARIFF FIXED BY THE INSURANCE REGULATORY DEVELOPMENT AGENCY (IRDA). THE HIKE OF PREMIUM DURING THE FINANCIAL YEAR 2004 - 05 IS DUE TO COVERAGE AND TAKING OF TERRORISM POLICY FOR WHICH PREMIUM O F RS. 40.14 LAKHS HAS BEEN PAID. BESIDES ABOVE INSURANCE POLICIES HAVE BEEN TAKEN UNDER REINSTATEMENT VALUE BASIS (NOT ON THE HISTORICAL COST) OF PLANT FOR WHICH THE COVER VALUE BOTH THE YEARS ARE DIFFERENT. C) CONSUMPTION OF STORES AND SPARES IS DEPENDS U PON THE REGULA R AS WELL AS ANNUAL MAINTENANCE/ OVERHAULING OF THE PLANT. DURING THE YEAR SHORTAGE & OBSOLETE SPARES AMOUNTING OF 2,74,933 ( PREVIOUS YEAR 1,52,995 ) HAS BEEN WRITTEN OFF IN THE ACCOUNTS ON THE BASIS OF PHYSICAL VERIFICATION. THE COMPANY CONSISTENTLY FOLLOWED THE SAME METHOD OF PHYSICAL VERIFICATION AND THE SHORTAGES! OBSOLETE ITEMS HAVE BEEN CHARGED TO THE EXPENSES ACCOUNTS. IT IS STATED THAT ON PHYSICAL VERIFICATION, PROFIT ARISES ON EXCESS STORES MATERIALS OF 53,18,858 (CONSISTS OF CABLE AND STEEL AMOUNTING TO 22,94,479 AND 30,24,379 RESPECTIVELY) HAVE BEEN BOOKED UNDER HEAD PROFI T ON SURPLUS STORE IN SCHEDU LE - 10 TO PROFIT AND LOSS ACCOUNT OFFERED FOR TAXATION IN NORMAL COMPUTATION. THE ABOVE EXCESS STOCKS ARE ARRIVED MOSTLY DUE TO ADOPTION OF COEFFICIENT MEASUREMENT METHOD FOR ISSUE OF STEELS & CABLES. THE AFORESAID EXPLANATIONS WERE ALSO FURNISHED BEFORE TH E CIT IN COURSE OF THE REVISION PROCEEDING U/S. 263. WHEREAS WHILE PASSING THE ORDER U/S. 263, CIT HAS NOT JUSTIFIED HIS ACTION, EXCEPT THAT OF SUBSTITUTING THE THOUGHT PROCESS OF THE A.O. ON THE FACTS AS ABOVE, THE INVOKING OF JURISDICTION U/S. 263 A RE LI ABLE TO BE SET ASIDE. IT MAY BE FURTHER APPRECIATED THAT, EVEN IF ITA NO.248/CTK/2010 7 ASSUMING BUT NOT ADMITTING THAT THOUGH THERE MAY BE A CASE THAT THE ORDER PASSED BY THE A.O. IS ERRONEOUS, BUT HOWEVER, THE NOTICE DOES NOT CONTEMPLATE THAT HOW IT IS PREJUDICIAL TO THE INTE REST OF REVENUE? HENCE, IN ABSENCE OF ONE OF THE CONDITION, THE INVOKING OF JURISDICTION U/S. 263(1) ARE NOT SUSTAINABLE ON FACT & LAW. IN SUPPORT, HE PLACED RELIANCE ON THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF M ALBAR COMPANY LIMITED VRS. CIT [ (2000), 243 ITR, PAGE - 83 (S.C) ] . THE LEARNED AR OF THE ASSESSEE SUBMITTED THAT WHILE PASSING THE ORDER U/ 263 DATED 31 .03.2010, THE CIT HAS CANCELLED THE ORDER IN ITS ENTIRETY WHICH IS ALSO NOT PERMISSIBLE FOR INVOKING THE PROVISION OF SEC. 263 IN VIEW OF THE FACT THAT IT IS INCUMBENT ON THE PART OF THE CIT TO POINT OUT THE ERROR IN A PARTICULAR ASPECT OR A PARTICULAR DECISION TAKEN IN THE ASSESSMENT ORDER, BUT HOWEVER, NOT SETTING ASIDE OR CANCELLATION OF THE ASSESSMENT ORDER IN ITS ENTIRETY WHICH ARE NOT CONTEMPLATED BY THE SECTION. IT IS PERTINENT TO SUBMIT HERE THAT AS A RESULT OF CANCELLATION OF THE ORIGINAL ASSESSMENT U/S. 263, THE ASSESSING OFFICER HAS SINCE COMPLETED THE ASSESSMENT EXAMINING ALL THE ABOVE ISSUES IN THE LIGHT OF THE CITS DIRECTION. HOWEVER, IN HIS ORDER DATED 24.12.2010, U/S. 143 (3) / 263, NONE OF THE THREE ABOVE ISSUES, THE A.O. COULD FIND ANY SCOPE TO TAKE A STAND DIFFERENT FROM THE STAND TAKEN BY HIM IN THE ORIGINAL ASSESSMENT. THIS FURTHER GOES TO ESTABLISH THE VIEW POINT OF THE APPELLANT. THE LEARNED AR OF THE ASSESSEE FURTHER SUBMITTED THAT THE COMPANY HAS PAID MAT ON BOOK PROFIT FOR THE YEAR. IN BOTH THE SITUATION THAT IS THE ORIGINAL ASSESSMENT AS WELL AS THE CONCLUDED ASSESSMENT AS PER DIRECTION OF CIT, U/S. 263 DOES NOT GIV E RISE TO ANY BENEFIT TO THE DEPARTMENT IN TERMS OF REVENUE. 6. HE ENCLOSED THE COPY OF THE ORDER PASSED BY THE ASSESSING OFFICER ON THE DIRECTION OF THE LEARNED CIT(A) U/S.263 ON PAPER BOOK PAGE 94 WHICH HE PERUSED BY INDICATING THAT BEING SATISFIED HIMSE LF ON THE ISSUES RAISED BY THE ITA NO.248/CTK/2010 8 LEARNED CIT U/S.263 THERE WAS NO BASIS FOR HIM TO VERIFY IT AGAIN WHEN HE SOUGHT TO REPEAT THE ASSESSMENT AS WAS THE ORIGINAL ASSESSMENT CLEARLY INDICATING THAT THE SHOW CAUSE NOTICE ISSUED BY THE LEARNED CIT WAS TO BE CONSI DERED IN THE LIGHT OF THE REVISIONARY POWER VESTED WITH HIM WHICH IN TURN MEANT THAT THE ISSUES HAD BEEN VERIFIED BY HIM ON THE BASIS OF VARIOUS OTHER INTERLINKED APPREHENSIONS. HE ALSO SUBMITTED THAT THE ADDITIONAL DISALLOWANCE HAVE BEEN MADE INSPITE OF T HE ASSESSEE CLAIMING THAT THEY WERE NOT FORMING PART OF LEARNED CITS DIRECTION IN HIS ORDER U/S.263. THE ASSESSING OFFICER WITHOUT INDICATING AS TO HOW THEY ARE LINKED TO THE ISSUES AS CONSIDERED BY THE LEARNED CIT AND CAN BE INCORPORATED. HE SUBMITTED TH AT THE LEARNED CIT HAS APPRISED OF THE ISSUE THEREFORE THE ORIGINAL ORDER PURPORTEDLY CANCELLED BY THE LEARNED CIT ASSUMING JURISDICTION U/S.263 WITH A DIRECTION TO MAKE FRESH ORDER BECOMES INFRUCTUOUS. HE PRAYED THAT THE ORDER OF THE LEARNED CIT U/S.263 M AY KINDLY BE CANCELLED. 7. THE LEARNED DR SUBMITTED THAT THE ASSESSING OFFICER ON THE DIRECTION OF THE LEARNED CIT U/S.263 HAS VERIFIED AND CONSIDERED THE ISSUES BUT CHOSE TO FRAME ASSESSMENT AS WAS THE ORIGINAL ASSESSMENT FOR AN ADDITIONAL ISSUE HAVING BE EN RAISED WHICH HAS BEEN APPEALED AGAINST BY THE ASSESSEE. HE SUBMITTED THAT THE ISSUES RAISED BY THE LEARNED CIT U/S.263 THEREFORE BECOMES PART AND PARCEL TO BE CONSIDERED IN THE LIGHT OF THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTING THAT THE SPECIFIC I SSUES DEALT WITH BY THE LEARNED CIT HAVE NOT BEEN CONSIDERED BY THE ASSESSING OFFICER IN THE PROCEEDINGS PURSUANT TO ORDER U/S.263. ON A SPECIFIC QUERY BY THE BENCH WHETHER THE LEARNED CIT CAN TAKEN ACTION BY INVOKING THE PROVISIONS OF THE I.T.ACT WHEN THE ASSESSING OFFICER HAS CARRIED OUT THE DIRECTION OF THE CIT U/S.263 WITHOUT INDICATING THE NON - APPLICATION OF MIND TO THE FACTS AS PER THE SHOW CAUSE NOTICE, THE LEARNED DR REPLIED IN NEGATIVE. ITA NO.248/CTK/2010 9 8. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIA L AVAILABLE ON RECORD. ON OUR CAREFUL CONSIDERATION OF THE FACTS, WE ARE INCLINED TO FIND FAVOUR IN THE SUBMISSIONS OF THE LEARNED COUNSEL FOR THE ASSESSEE. THE ISSUES AS PER THE SHOW CAUSE NOTICE IN THE MIND OF THE LEARNED CIT INSOFAR AS THE ASSESSING OFF ICER HAD CONSIDERED THE ISSUES IN ITS ENTIRETY IN THE MANNER SO AS TO MAKE SPECIFIC DISALLOWANCE. WE HAVE PERUSED BOTH THE ORDERS OF THE ASSESSING OFFICER AS SUBMITTED BY THE LEARNED COUNSEL FOR THE ASSESSEE AND WE ARE INCLINED TO FIND THAT THE LEARNED CIT HAD NOT POINTED ANY MISTAKE OR ERROR IN THE ORDER OF THE ASSESSING OFFICER WHICH COULD LEAD TO THE FINDING THAT THE ASSESSMENT WAS PREJUDICIAL TO THE INTEREST OF REVENUE. THE CASE LAWS CITED BY THE LEARNED COUNSEL THEREFORE SQUARELY APPLY ON THE BASIS OF FACTS PUT FORTH AND AGREED TO BY THE REVENUE THAT ON THE APPLICATION OF THE DIRECTION OF THE LEARNED CIT THE ASSESSING OFFICER COULD NOT FIND ANYTHING ERRONEOUS OR PREJUDICIAL TO THE INTEREST OF REVENUE THEREFORE FOUND IT FIT BUT PROCEED AS PER THE ORIG INAL ORDER IN VIEW OF THE LEARNED CIT HAVING CANCELLED THE ORIGINAL ORDER. WE ARE INCLINED TO UPHOLD THE PRAYER OF THE ASSESSEE TO QUASH THE IMPUGNED ORDER OF THE LEARNED CIT. ACCORDINGLY, WE QUASH THE IMPUGNED ORDER OF THE LEARNED CIT PASSED U/S.263. 9. I N THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. SD/ - SD/ - (K.S.S.PRASAD RAO) JUDICIAL MEMBER (K.K.GUPTA) ACCOUNTANT MEMBER DATE: 23 RD SEPTEMBER, 2011 H.K.PADHEE, SENIOR PRIVATE SECRETARY. ITA NO.248/CTK/2010 10 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT: M/S.ORISSA POWER GENERATION CORPORATION LTD., 7 TH FLOOR, FORTUNE TOWER, CHANDRASEKHARPUR, BHUBANESWAR 751 023 2. THE RESPONDENT: COMMISSIONER OF INCOME - TAX, BHUBANESWAR 3. THE CIT, 4. THE CIT (A), 5. THE DR, CUTTACK 6. GUARD FILE (IN DUPLICATE) TRUE COPY, BY ORDER, SENIOR PRIVATE SECRETARY.