M/s. Dakshin Haryana Bijli Vitran Nigam Ltd., Hisar V. ACIT, Hisar

ITA 254/DEL/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 5058 (ITAT-DELHI)
• Duration Of Justice: 6 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-08-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 12-06-2017
• Assessment Year: 2005-2006
• Appeal Filed On: 16-01-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S KRISHNAN
• Keywords: Wrong claim; Bonafide mistake
• Section: 43B; 143(3); 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: B NEW DELHI BEFORE SHRI R.S. SYAL, HONBLE VICE PRESID ENT & SHRI K.N. CHARY, JUDICIAL MEMBER ITA NO.-254/DEL/2017 ( ASSESSMENT YEAR: 2005-06) DAKSHIN HARYANA BIJLI VITRAN NIGAM LTD. VIDYUT SADAN, DELHI ROAD HISAR AABCD0033C VS ACIT HISAR RANGE HISAR ASSESSEE BY SH. S. KRISHNAN, ADV. REVENUE BY MS. RACHNA SINGH, CIT DR ORDER PER SHRI K.N. CHARY, J.M. THIS IS AN APPEAL CHALLENGING THE ORDER DATED 30.1 2.2016 IN APPEAL NO. 260/HSR/2014-15 PASSED BY THE LD. COMMIS SIONER OF INCOME TAX (APPEALS), HISAR. 2. BRIEFLY STATED FACTS ARE THAT THE ASSESSEE IS A GOVERNMENT UNDERTAKING CARRYING OUT THE BUSINESS OF DISTRIBUTI ON OF ELECTRICITY IN SOUTHERN HARYANA. FOR THE AY 2005-06 THEY HAVE FILED THEIR RETURN OF INCOME ON 31.10.2005 DECLARING A LOSS OF RS. DATE OF HEARING 07.08.2017 DATE OF PRONOUNCEMENT 10.08.2017 2 ITA NO. 254/DEL/2017 163,32,42,396/- AND IT WAS PROCESSED U/S 143(1) OF THE INCOME TAX ACT, 1961 (HEREINAFTER FOR SHORT CALLED THE ACT ), ON 11.10.2006. ASSESSEE REVISED THE SAME ON 18.10.2006 DECLARING A LOSS OF RS. 222,90,10,540/- AND ON 28.12.2006 THIS REVISED RETU RN WAS ALSO PROCESSED U/S 143(1) OF THE ACT. AGAIN ON 22.03.20 07 ASSESSEE REVISED THEIR RETURN ONE MORE THAN TIME DECLARING A LOSS OF RS. 124,33,57,290/- AND ASSESSMENT U/S 143(3) OF THE AC T WAS COMPLETED AT A RETURNED LOSS OF 124,33,57,290/-. H OWEVER, SUBSEQUENTLY THE ASSESSMENT WAS REOPENED BY ISSUING A NOTICE DATED 09.03.2012 U/S 148 OF THE ACT AND VIDE ORDER DATED 04.02.2013 PASSED U/S 143(3)/147 OF THE ACT AO ADDE D A SUM OF RS. 1,95,95,85,359/- BY MAKING DISALLOWANCE ON ACCO UNT OF SURCHARGE LEVIED BUT NOT REALIZED AND A FURTHER SUM OF RS. 86,65,96,730/- BY MAKING DISALLOWANCE U/S 43B OF TH E ACT ON ACCOUNT OF THE PENSION PAYABLE TO TRUST (HVPNL) AND PENSION PAYABLE TO TRUST (DHBVNL). ASSESSEE ACCEPTED THE A DDITION OF RS. 86,65,96,730/- BUT APPEAL AGAINST THE ADDITION OF R S. 1,95,95,85,359/- LD. COMMISSIONER OF INCOME TAX (AP PEALS) DELETED THE SAME. WHILE MAKING THE ABOVE ADDITIONS AO INITIATED PROCEEDINGS U/S 271(1)(C) OF THE ACT AND CONCLUDED THE SAME BY 3 ITA NO. 254/DEL/2017 LEVYING A PENALTY OF RS. 31,71,09,410/- IN RESPECT OF THE ASSESSEES DEFAULT RELATING TO RS. 86,65,96,730/-. DURING THE PENALTY PROCEEDINGS AO TOOK NOTE OF THE FACT THAT THE LD. C IT (A), ROHTAK VIDE ORDER DATED 11.08.2014 DELETED THE ADDITION OF RS. 1,95,95,85,359/- ON ACCOUNT OF PROVISION OF SURCHAR GE LEVIED BUT NOT REALIZED. 3. ASSESSEES APPEAL CHALLENGING THE LEVY OF PENALT Y OF RS. 31,71,09,410/- WAS DISMISSED BY THE LD. CIT (A) BY WAY OF IMPUGNED ORDER AND, THEREFORE, THE ASSESSEE IS BEFO RE US IN THIS APPEAL CHALLENGING THE SAME. 4. IT IS THE ARGUMENT OF THE LD. AR THAT THERE IS N EITHER CONCEALMENT NOR FURNISHING OF INACCURATE PARTICULAR S OF INCOME OF THE ASSESSEE INASMUCH AS THE VERY DETECTION OF THE TAXABILITY OF RS. 86,65,96,730/- WAS FROM THE 6 TH ANNUAL REPORT PUBLISHED BY THE ASSESSEE AND AS A MATTER OF FACT THE ASSESSMENT ORD ER VIDE PARAGRAPH NO. 5 READS THAT ITS ONLY FROM SCHEDULE-1 6 RELATING TO CURRENT LIABILITIES AND PROVISIONS, AS COULD BE FOU ND FROM PAGE NO. 57 OF THE 6 TH ANNUAL REPORT, THE AO NOTICED THE DISALLOWABILITY OF THIS PARTICULAR AMOUNT. HE FURTHER SUBMITS THAT TH ERE IS A 4 ITA NO. 254/DEL/2017 DIFFERENCE BETWEEN FALSE CLAIM AND WRONG CLAIM INAS MUCH AS FALSE CLAIM INVOLVES THE ACTIVE MANIPULATION OF THE FACTS AND FIGURES WHEREAS IN WRONG CLAIM THERE IS BONA FIDE BELIEF OR ERROR. HERE IN THIS CASE, THE DISALLOWABILITY OF THIS PARTICULAR A MOUNT U/S 43B OF THE ACT MISSED THE ATTENTION OF THE AUDITORS OF THE COMPANY SO ALSO THE OTHER AUTHORITIES INCLUDING THE LD. AO WHI LE CONCLUDING THE ASSESSMENT U/S 143(3) OF THE ACT BY ORDER DATED 19.11.2007. HENCE, ACCORDING TO HIM, BY NO STRETCH OF IMAGINATI ON COULD IT BE SAID THAT THIS IS A CASE OF FALSE CLAIM. FACTS INV OLVED IN M/S JINDALS STEEL POWER LTD. VS. ACIT, HISAR ORDER DATE D 31.03.2016 IN ITA NO. 3052/DEL/2014 THE CASE HAS NO APPLICATION T O THE FACTS OF THE CASE IN AS MUCH AS THAT CASE IS DISTINGUISHABLE ON FACTS IN AS MUCH AS THERE THE PARTICULAR ASPECT DID NOT MISSED ATTENTION OF THE ASSESSEE BUT ON THE OTHER HAND A PART WAS WHERE AS OUT OF 2.95 CRORES OUTSTANDING AS ON 31.03.2008 ONLY 1.55 CRORE S WAS DISALLOWED. NEXTLY HE SUBMITTED THAT THE BONA FIDE S OF THE ASSESSEE COULD BE GATHERED FROM THE FACT THAT IN TH E YEAR OF PAYMENT OF THESE AMOUNTS ASSESSEE DID NOT CLAIM ANY DEDUCTION. LASTLY IT IS ARGUED BY THE LD. COUNSEL THAT HAVING REGARD TO THE HUGE LOSSES SUFFERED BY THE ASSESSEE COMPANY IT CAN NOT BE SAID 5 ITA NO. 254/DEL/2017 THAT THE CLAIM FOR DEDUCTION OF THIS PARTICULAR AMO UNT U/S 43B OF THE ACT IS A DEVICE TO MINIMIZE THE PAYMENT OF TAX. 5. PER CONTRA, IT IS THE ARGUMENT OF THE LD. DR THA T THE ASSESSEE HAD AMPLE OPPORTUNITY TO RECTIFY THE MISTAKE AT MAN Y A STAGE LIKE DURING THE ORIGINAL ASSESSMENT PROCEEDINGS BEFORE T HE AO, OR WHILE FILING THE RETURN OF INCOME IN RESPONSE TO THE NOTI CE ISSUED U/S 148 OF THE ACT, OR DURING THE COURSE OF REASSESSMEN T PROCEEDINGS BUT AT ALL THESE STAGES THE ASSESSEE DID NOT MAKE A NY ATTEMPT TO RECTIFY THE MISTAKE AND THE ULTIMATE ACCEPTANCE OF THIS ADDITION BY THE ASSESSEE ESTABLISH THAT WITH FULL KNOWLEDGE THE ASSESSEE PUT FORTH THIS CLAIM FOR DEDUCTION, AND IN VIEW OF THE FACT THAT THE ASSESSEE BEING GUIDED BY WELL QUALIFIED PROFESSIONA LS THE WRONG CLAIM OF DEDUCTION CANNOT BE SAID TO BE A BONA FIDE ONE BUT IT IS A DELIBERATE CLAIM WITH THE MOTIVE OF REDUCING THE IN CIDENCE OF TAXATION. SHE FURTHER ARGUED THAT INCOME INCLUDES NEGATIVE INCOME AND WHEN THE LOSSES ALLOWABLE TO BE CARRIED FORWARD FOR SETTING OFF AGAINST THE INCOME OF SUBSEQUENT YEARS, THE QUANTUM OF LOSS CERTAINLY IMPACTS THE PROFITS OF SUBSEQUENT YE ARS AND WITH 6 ITA NO. 254/DEL/2017 THAT VIEW OF THE MATTER IT CANNOT BE SAID THAT THE ASSESSEE DOES NOT STAND TO GAIN BY MAKING A FALSE CLAIM U/S 43B OF TH E ACT. 6. WE HAVE CAREFULLY GONE THROUGH THE RECORD. AS SESSEE IS AN INSTRUMENT OF STATE. FACT REMAINS THAT EVEN IN THE SCRUTINY PROCEEDINGS CONCLUDED BY ORDER DATED 19.11.2007, TH E DISALLOWABILITY OF THE CLAIM U/S 43B OF THE ACT MIS SED THE ATTENTION OF AO ALSO. FOR THAT MATTER IT HAS BEEN THE CONTEN TION OF THE ASSESSEE THAT EVEN BEFORE THE AO IN 271(1)(C) PROCE EDINGS THEY CONTENDED THAT WHEN THERE IS NEITHER CONCEALMENT OF INCOME NOR FURNISHING OF INACCURATE PARTICULARS, A WRONG CLAIM UNDER BONAFIDELY MISTAKE CANNOT BE A BASIS FOR ANY PENALT Y. THERE IS NO DENIAL OF THE FACT THAT VIDE SCHEDULE NO. 16 AT PAG E NO. 57 OF THE ANNUAL REPORT THE ASSESSEE INCORPORATED THESE DETAI LS AS TO THE AMOUNTS PAYABLE TO THE PENSION TRUST AND PF AUTHORI TIES. THESE FIGURES CLEARLY SHOW THAT THERE IS NEITHER CONCEALM ENT OF ANY FACT NOR FURNISHING OF ANY INACCURATE PARTICULARS. HAVI NG FURNISHED THE TRUE FACTS AND FIGURES, THE ASSESSEE MADE A CLA IM U/S 43B OF THE ACT WHICH IS INCORRECT. PRECISELY THAT IS THE REASON WHY, BY WAY OF ORDER U/S 147 OF THE ACT, AO MADE AN ADDITIO N AND THE 7 ITA NO. 254/DEL/2017 ASSESSEE ACCEPTED THE SAME WITHOUT LITIGATING FURTH ER. WE DO NOT SEE ANY RECORD TO CONTROVERT THE CONTENTION OF THE ASSESSEE THAT THIS PARTICULAR ASPECT MISSED THE ATTENTION OF THE STATUTORY AUDITORS ALSO. THE VERY FACT THAT THE ASSESSEE DID NOT CLAIM ANY DEDUCTION U/S 43B IN THE YEAR OF PAYMENT CLEARLY SH OWS THAT THE ASSESSEE WAS LABORING UNDER A BONAFIDE MISTAKE IN P REFERRING THIS CLAIM. FACTS OF M/S JINDALS CASE (SUPRA) ARE ALTOG ETHER DIFFERENT. IT IS A JUDICIALLY RECOGNIZED FACT THAT THERE IS NO PRESUMPTION THAT EVERY PERSON OR ENTITY KNOWS THE LAW AND NO SUCH MA IM IS KNOWN TO LAW IN THIS COUNTRY. FOR ALL THESE REASONS, WE ARE CONVINCED THAT IT IS NOT A CASE OF FALSE CLAIM BUT IT IS A CA SE OF WRONG CLAIM AND THERE IS NEITHER CONCEALMENT OF INCOME NOR FURN ISHING OF INACCURATE PARTICULARS. WE, THEREFORE, FIND THAT T HE ORDERS OF THE AUTHORITIES BELOW CANNOT BE SUSTAINED. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON 10.08.2017 SD/- SD/- (R.S. SYAL) (K. NARSIM HA CHARY) VICE PRESIDENT JUDICIAL MEMBER DATED: 10.08.2017 *KAVITA ARORA 8 ITA NO. 254/DEL/2017 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT TRUE COPY ASSISTANT REGISTRAR ITAT NEW DELHI DRAFT DICTATED ON 08.08.2017 DRAFT PLACED BEFORE AUTHOR 09.08.2017 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. 10.8.17 APPROVED DRAFT COMES TO THE SR.PS/PS 10.8.17 KEPT FOR PRONOUNCEMENT ON 10.8.17 FILE SENT TO THE BENCH CLERK 10.8.17 DATE ON WHICH FILE GOES TO THE AR DATE ON WHICH FILE GOES TO THE HEAD CLERK. DATE OF DISPATCH OF ORDER.