M/s. Greater Noida Industrial Development Authority, Greater Noida V. Pr. CIT, Noida

ITA 2482/DEL/2017

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 6603 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 2 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-07-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 20-06-2017
• Assessment Year: 2012-2013
• Appeal Filed On: 25-04-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MEETA SINGH
• Assessee Lawyers: BALBIR SINGH; RAJ RANI LAKRA
• Keywords: Business income; Earning of tax free income
• Section: 263; 10

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCHES: C : NEW DELHI BEFORE SHRI R.S. SYAL, VICE PRESIDENT AND SHRI N.K. CHOUDHARY, JUDICIAL MEMBER ITA NO.2482/DEL/2017 ASSESSMENT YEAR: 2012-13 GREATER NOIDA INDUSTRIAL DEVELOPMENT AUTHORITY, PLOT NO.1, GLOBAL KNOWLEDGE PARK IV, GREATER NOIDA. PAN: AAALG0129L VS. PR. CIT, NOIDA (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI BALBIR SINGH, SR. ADV. & MS. RAJ RANI LAKRA, CA DEPARTMENT BY : SMT. MEETA SINGH, CIT(DR) DATE OF HEARING : 23.07.2018 DATE OF PRONOUNCEMENT : 24 .07.2018 ORDER THIS APPEAL BY THE ASSESSEE ARISES OUT OF THE ORD ER DATED 30.03.2017 PASSED BY THE PR. CIT UNDER SECTION 263 OF THE INCOME- TAX ACT, 1961 (HEREINAFTER ALSO CALLED `THE ACT) I N RELATION TO THE ASSESSMENT YEAR 2012-13. 2 ITA NO. 2482/DEL.2017 2.1. BRIEFLY STATED THE FACTUAL MATRIX OF THE CASE IS T HAT THE ASSESSEE DID NOT FURNISH RETURN OF INCOME WITHIN THE TIME AL LOWED UNDER SECTION 139(1) OF THE ACT. NOTICE WAS ISSUED UNDER SECTION 142(1), REQUIRING THE ASSESSEE TO FILE RETURN. THEREAFTER, THE ASSESSEE FURNISHED RETURN ON 10.11.2014 DECLARING BUSINESS INCOME OF R S.20,64,84,209/-, WHICH WAS CLAIMED AS EXEMPT INCOME UNDER SECTION 10 (20) OF THE ACT. THE ASSESSING OFFICER HELD THAT THE ASSESSEE W AS NOT ENTITLED TO EXEMPTION UNDER SECTION 10 OF THE ACT. DURING THE C OURSE OF ASSESSMENT PROCEEDINGS, IT WAS NOTICED THAT THE ASS ESSEE CLAIMED DEDUCTION ON ACCOUNT OF RESERVE FOR FUTURE DEVELOPM ENT; RESERVE FOR SPECIAL PROJECTS; RESERVE FOR GREENS; AND RESERVE F OR URBAN RENEWAL AND UPGRADATION FUNDS, TOTALLING IN ALL TO A SUM OF RS. 796.07 CRORE. THE ASSESSING OFFICER FOUND THAT THE ACTUAL EXPENDITURE INCURRED AGAINST SUCH RESERVES WAS RS.1198.83 CRORE. HE HELD THE ASS ESSEE TO BE ENTITLED TO ACTUAL EXPENDITURE AND NOT THE AMOUNT O F RESERVES. THUS, AS AGAINST THE GROSS INCOME OF RS.20.64 CRORE DECLARED IN THE RETURN BEFORE EXEMPTION, THE ASSESSING OFFICER ALLOWED FU RTHER DEDUCTION OF RS.402.73 CRORE, BEING THE EXCESS OF ACTUAL EXPENDI TURE OVER THE AMOUNT OF RESERVES CREATED. HOWEVER, TOTAL INCOME W AS DETERMINED AT 3 ITA NO. 2482/DEL.2017 NIL BY OBSERVING THAT THE LOSS COULD NOT BE CARRIED FORWARD FOR SET OFF AGAINST THE INCOME OF THE LATER YEARS ON THE PREMIS E THAT THE LOSS RETURN FILED BY THE ASSESSEE WAS NOT WITHIN THE TIM E PRESCRIBED UNDER SECTION 139(1) OF THE ACT. 2.2. THE LEARNED CIT HELD THE ASSESSMENT ORDER TO BE ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE ON CERTAIN C OUNTS, INCLUDING THAT THE LOSS WORKED OUT BY THE ASSESSING OFFICER AT RS. 402.073 CRORE SHOULD HAVE BEEN REDUCED BY THE SURPLUS INCOME BEFO RE EXEMPTION AT RS.20.64 CRORE AND THE NET LOSS OF RS.382.08 CRORE OUGHT TO HAVE BEEN CALCULATED. APART FROM THAT, THE LEARNED CIT HELD T HE ASSESSMENT ORDER TO BE NOT IN CONSONANCE WITH CERTAIN PROVISIONS. T HIS IS HOW, HE SET ASIDE THE ASSESSMENT ORDER AND REMITTED THE MATTER TO THE FILE OF THE ASSESSING OFFICER WITH A DIRECTION TO MAKE FRESH VE RIFICATION ON THE POINTS GIVEN IN THE IMPUGNED ORDER. THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL AGAINST THE REVISIONARY ORDER. 3. WE HAVE HEARD THE RIVAL SUBMISSION AND PERUSED THE RELEVANT RECORD. SECTION 263 OF THE ACT EMPOWERS THE CIT TO REVISE AN ASSESSMENT ORDER WHICH IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF 4 ITA NO. 2482/DEL.2017 REVENUE. TWIN CONDITIONS SET OUT IN THE SECTION, VI Z, THE ASSESSMENT ORDER, BEING, ERRONEOUS AND PREJUDICIAL TO THE INTE REST OF THE REVENUE, MUST CO-EXIST SO AS TO CLOTHE CIT WITH THE REVISION ARY POWER. IT IS THE TRITE LAW THAT IF ONLY ONE OF THE CONDITIONS IS FUL FILLED IN A PARTICULAR CASE, IT GOES OUT OF THE PURVIEW OF THE REVISION. 4. IT IS AN ADMITTED POSITION THAT THE CLAIM OF THE ASSESSEE FOR ITS ENTITLEMENT TO EXEMPTION U/S 10(20) OF THE ACT HAS BEEN EVENTUALLY JETTISONED. IT IS SEEN THAT THE ASSESSEE FILED BELA TED RETURN OF INCOME OUTSIDE THE TIME PRESCRIBED U/S 139(1) OF THE ACT. AS SUCH, NO LOSS DETERMINED IN ASSESSMENT CAN BE CARRIED FORWARD FOR SET OFF AGAINST POSITIVE INCOME FOR LATER YEARS. THAT IS RAISON DETRE FOR THE ASSESSING OFFICER COMPUTING NIL INCOME AND NOT ALLO WING ANY CARRY FORWARD OF LOSS. THE LD. AR CANDIDLY ADMITTED THAT THE FACTUM OF ASSESSEE, NOT BEING ENTITLED TO CARRY FORWARD THE L OSS, HAS ATTAINED FINALITY AS THE SAME HAS BEEN ACCEPTED AND NOT CHAL LENGED IN ANY FURTHER PROCEEDINGS. 5. WE HAVE NOTED ABOVE THAT IN THE ORIGINAL ASSE SSMENT, THE AO DETERMINED TOTAL INCOME AT NIL AND DID NOT ALLOW CA RRY FORWARD OF LOSS 5 ITA NO. 2482/DEL.2017 COMPUTED AT RS.382.09 CRORE. IT IS A MATTER OF RECO RD THAT PURSUANT TO THE REVISIONARY ORDER, THE ASSESSING OFFICER AGAIN TOOK UP THE ASSESSMENT UNDER SECTION 143(3)/147 READ WITH SECTI ON 263 OF THE ACT AND PASSED A FRESH ASSESSMENT ORDER ON 27.12.2017 D ETERMINING THE TOTAL INCOME AT RS. NIL AND DID NOT ALLOW CARRY FOR WARD OF LOSS OF RS.455.99 CRORE. THIS SHOWS THAT THE INCOME ORIGINA LLY DETERMINED BY THE ASSESSING OFFICER AT NIL REMAINED THE SAME EVEN AFTER GIVING EFFECT TO THE ORDER PASSED IN REVISION. THUS, WE A RE CONFRONTED WITH A SITUATION IN WHICH THE ORIGINAL ASSESSMENT AS WELL AS THE ASSESSMENT GIVING EFFECT TO THE IMPUGNED ORDER, REMAIN AT NIL INCOME, AND IN BOTH THE SITUATIONS, THERE IS NO CARRY FORWARD OF LOSS. IN OTHER WORDS, THE SHORTCOMINGS NOTICED BY THE LD. CIT IN ASSESSMENT O RDER, WHICH IN HIS OPINION MADE THE ORDER ERRONEOUS, ARE TAX NEUTRAL. IN THE CIRCUMSTANCES AS ARE INSTANTLY OBTAINING, VARIATION IN THE AMOUNT OF LOSS, WITHOUT ALLOWING ANY CARRY FORWARD TO SUBSEQU ENT YEAR(S) FOR SET OFF, IS IN NO WAY PREJUDICIAL TO THE INTEREST OF TH E REVENUE. SINCE THE ORIGINAL ASSESSMENT ORDER IN THE INSTANT CASE SATIS FIES, AT THE MOST, THE FIRST CONDITION UNDER SECTION 263 OF THE ACT, BEING ERRONEOUS FROM THE STAND POINT OF THE LD. CIT, IT FAILS TO SATISFY TH E SECOND CONDITION OF 6 ITA NO. 2482/DEL.2017 BEING, PREJUDICIAL TO THE INTEREST OF THE REVENUE. IN SUCH CIRCUMSTANCES, THE EXERCISE OF REVISIONARY POWER GE TS VITIATED BECAUSE OF CUMULATIVE NON-FULFILMENT OF THE STATUTORY CONDI TIONS STIPULATED IN THE PROVISION. ERGO, WE SET ASIDE THE IMPUGNED ORD ER. 6 . IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOW ED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 24.07.201 8. SD/- SD/- N.K. CHOUDHARY [R.S. SYAL] JUDICIAL MEMBER VICE PRESIDENT DATED, 24 TH JULY, 2018. RK/- COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT AR, ITAT, NEW DELHI.