ITO, Ward-16(2), Hyderabad V. M/s NSL Power and Infratech Limited, Hyderabad

ITA 351/HYD/2013

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 2887 (ITAT-HYDERABAD)
• Duration Of Justice: 3 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-06-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2006-2007
• Appeal Filed On: 20-03-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M H NAIK
• Assessee Lawyers: S RAMA RAO
• Keywords: Non-deduction of tax
• Section: 263; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A, HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBE R AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA NO.351/HYD/2013 : ASSESSMENT YE AR 2006-07 THE INCOME TAX OFFICER WARD 16(2), HYDERABAD V/S M/S. NSL POWER AND INFRATECH LIMITED, HYDERABAD ( PAN AACCN 0773 A) (APPELLANT) (RESPONDENT) CROSS OBJECTION NO.29/HYD/2013 (ITA NO.351/HYD/2013) : ASSESSMENT YEAR 2006-07 M/S. NSL POWER AND INFRATECH LIMITED, HYDERABAD ( PAN AACCN 0773 A) V/S THE INCOME TAX OFFICER WARD 16(2), HYDERABAD (CROSS OBJECTOR ) (RESPONDENT) ASSESSEE BY : SHRI S.RAMA RAO DEPARTMENT BY : SHRI M.H.NAIK DR DATE OF HEARING 27.06.2013 DATE OF PRONOUNCEMENT 27.06.2013 O R D E R PER SAKTIJIT DEY, JUDICIAL MEMBER: THIS APPEAL BY THE REVENUE AND CROSS-OBJECTION BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDER OF THE COMM ISSIONER OF INCOME- TAX(APPEALS) V, HYDERABAD DATED 1.12.2012 AND THE ASSESSMENT YEAR INVOLVED IS 2006-07. SINCE COMMON ISSUES ARE INVO LVED, THESE MATTERS ARE BEING DISPOSED OF WITH THIS COMMON ORDER FOR TH E SAKE OF CONVENIENCE. ITA NO.351/HYD/2013 & CO 29/H/13 M/S. NSL POWER AND INFRATECH LIMITED, HYDERABAD 2 REVENUES APPEAL: ITA NO.351/HYD/2013 : ASSESSMENT YEAR 2006-07 2. EFFECTIVE GROUNDS OF THE REVENUE IN THIS APPEAL ARE AS FOLLOWS- 1. CIT(A) ALLOWED RELIEF TO THE ASSESSEE ON THE BA SIS OF INFORMATION FILED BY THE ASSESSEE. THE CIT(A) OUGHT TO HAVE GIVEN THE OPPORTUNITY TO VERIFY THE ADDITIONAL EVID ENCE AND SUBMIT REMAND REPORT AS PER RULE 46A. 2. THE ORDER IS PASSED ON THE DIRECTIONS OF THE CIT IV, VIDE ORDER U/S. 263 OF IT ACT, WITH REGARD TO THE AM OUNT OF LOAN. LEARNED CIT(A) HAS NO JURISDICTION TO OVERSIDE THE DIRECTIO NS OF CIT IV U/S. 263. 3. ALL THE ADDITIONS ARE MADE AFTER GIVING OPPORTUN ITY TO THE ASSESSEE. NON-COMPLIANCE TO THE SHOW CAUSE NOTICES , THE ADDITIONS ARE MADE AND ORDER PASSED U/S. 144 OF I T ACT. UNDER THE CIRCUMSTANCES, THE CIT(A) WAS NOT CORRECT IN AL LOWING RELIEF TO THE ASSESSEE ON THE BASIS OF IFNORMATION FILED B Y THE ASSESSEE. 4. 3. FACTS OF THE CASE IN BRIEF ARE THAT THE ASSESSE E, ENGAGED IN THE BUSINESS OF GENERATION AND DISTRIBUTION OF POWE R HAS FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2006-07 ON 11.12.200 6 ADMITTING NIL INCOME. THE ASSESSING OFFICER COMPLETED THE ASSESSM ENT UNDER S.143(3) OF THE ACT ON 17.11.2008, ACCEPTING THE RETURNED IN COME. LATER, THE COMMISSIONER OF INCOME-TAX IV, HYDERABAD, WHILE PER USING THE RECORDS, FOUND THE ASSESSMENT THUS MADE TO BE ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF THE REVENUE, AND ACCORDINGLY EXERCISIN G REVISIONARY JURISDICTION UNDER S.263, SET ASIDE THE SAID ASSESS MENT, AND DIRECTED THE ASSESSING OFFICER TO REFRAME THE ASSESSMENT, AFTER MAKING THE ADDITIONS ON FOLLOWING COUNTS- 1.INTEREST NOT OFFERED TO TAX 2.EXCESS CLAIM OF EXPENDITURE ITA NO.351/HYD/2013 & CO 29/H/13 M/S. NSL POWER AND INFRATECH LIMITED, HYDERABAD 3 THE COMMISSIONER OF INCOME-TAX ALSO DIRECTED THE AS SESSING OFFICER TO LEVY INTEREST UNDER S.201(1A) FOR NON-DEDUCTION OF TAX ON PAYMENT OF INTEREST OF RS.9,71,452 AND SHORT DEDUCTION OF TAX ON PAYMENT OF PROFESSIONAL CHARGES OF RS.1,83,176. 4. IN THE ASSESSMENT FRAMED IN PURSUANCE OF THE O RDER OF THE COMMISSIONER OF INCOME-TAX UNDER S.263, THE ASSESSI NG OFFICER DETERMINED THE TOTAL INCOME OF THE ASSESSEE AT RS.1 ,99,04,730, AFTER MAKING THE FOLLOWING ADDITIONS- 1.DISALLOWANCE U/S. 40(A)(IA) RS. 9,71,452 2.INTEREST NOT OFFERED TO TAX RS.1,83,97, 530 3.EXCESS CLAIM OF EXPENDITURE RS. 5, 37,748 5. ON APPEAL, THE CIT(A) DELETED THE ADDITIONS OF RS.9,71,452 ON ACCOUNT OF DISALLOWANCE U/S. 40(A)(IA) AND OF RS.5, 37,748 ON ACCOUNT OF EXCESS CLAIM OF EXPENDITURE, IN THEIR ENTIRETY, AND GAVE PARTIAL RELIEF OUT OF THE ADDITION OF RS.1,83,97,530 MADE ON ACCOUNT O F INTEREST NOT OFFERED TO TAX. AGGRIEVED BY THE RELIEFS GRANTED BY THE CI T(A), REVENUE IS IN APPEAL BEFORE US, WITH THE GROUNDS ALREADY EXTRACTE D ABOVE. 6. WE HEARD BOTH SIDES AND PERUSED THE ORDERS OF T HE LOWER AUTHORITIES, AND OTHER MATERIAL ON RECORD. IT HAS B EEN BROUGHT TO OUR NOTICE THAT THE ORDER OF THE COMMISSIONER OF INCOME -TAX IV, HYDERABAD DATED 23.3.2011 PASSED UNDER S.263 OF THE ACT, WHIC H GAVE RISE TO THE PRESENT PROCEEDINGS IN WHICH THE ADDITIONS IN DISPU TE HAVE BEEN MADE, WAS SUBJECT MATTER OF APPEAL BEFORE THIS TRIBUNAL. THE TRIBUNAL, VIDE ITS ORDER DATED 24.1.2013 IN ITA NO.1219/HYD/2011, HAS ACCEPTED THE CONTENTIONS OF THE ASSESSEE IN RELATION TO LEVY OF INTEREST UNDER S.201(1A) FOR NON-DEDUCTION OF TAX AT SOURCE ON INTEREST PAYM ENT OF RS.9,71,452 AND INTEREST NOT OFFERED TO TAX OF RS.1,83,97,530, AND SET ASIDE THE ORDER ITA NO.351/HYD/2013 & CO 29/H/13 M/S. NSL POWER AND INFRATECH LIMITED, HYDERABAD 4 OF THE COMMISSIONER OF INCOME-TAX PASSED UNDER S.26 3 ON THOSE ISSUES, BUT INSOFAR AS EXCESS CLAIMED EXPENDITURE OF RS.5,3 5,748, THE TRIBUNAL HAS MODIFIED THE ORDER OF THE COMMISSIONER OF INCOM E-TAX, WHO HAS GIVEN SPECIFIC DIRECTION FOR DISALLOWANCE, THEREBY DIRECTING THE ASSESSING OFFICER TO EXAMINE THE MATTER AND REDETERMINE THE D ISALLOWANCE, IF ANY WARRANTED. IN VIEW OF THE ABOVE ORDER OF THE TRIBU NAL DATED 24 TH JANUARY, 2013, IN SO FAR AS THE FIRST TWO ISSUES RELATING TO DISALLOWANCE UNDER S.40(A)(IA) AND INTEREST NOT OFFERED TO TAX ARE CON CERNED, THE ENTIRE ADDITIONS MADE BY THE ASSESSING OFFICER IN PURSUANC E OF THE SPECIFIC DIRECTION OF THE COMMISSIONER OF INCOME-TAX HAVE NO LEGS TO STAND, AND AS SUCH THEY HAVE BECOME REDUNDANT. IN ANY CASE OF THE MATTER, THE DISALLOWANCE MADE U/S. 40(A)(IA) BY THE ASSESSING O FFICER IN THE CONSEQUENTIAL ASSESSMENT ORDER IS ALSO BEYOND THE SCOPE OF THE DIRECTIONS GIVEN BY THE CIT(A) UNDER S.263, AS HE H AS ONLY DIRECTED THE ASSESSING OFFICER TO LEVY INTEREST UNDER S.201(1A) FOR NON-DEDUCTION OF TAX AT SOURCE ON INTEREST PAYMENT OF RS.9,71,452. C ONSEQUENTLY THE RELIEF GRANTED BY THE CIT(A) CANNOT BE FOUND FAULT WITH. EVEN AS FOR THE THIRD AND REMAINING ADDITION OF RS.5,35,748 ON ACCOUNT OF EXCESS EXPENDITURE CLAIMED, WE FIND THAT THE REASONS GIVEN BY THE CIT( A) FOR GIVING RELIEF TO THE ASSESSEE ARE VALID AND REASONABLE AND WE DO NOT FIND ANY JUSTIFICATION TO INTERFERE WITH HIS ORDER. WE DO NOT FIND ANY AD DITIONAL EVIDENCE, HAVING BEEN ENTERTAINED BY THE CIT(A) IN THE IMPUGN ED ORDER, FOR GRANTING RELIEF IN FAVOUR OF THE ASSESSEE ON THIS I SSUE. IN THE CIRCUMSTANCES, WE FIND NO MERIT IN THE GROUNDS OF T HE REVENUE IN THIS APPEAL, WHICH ARE ACCORDINGLY REJECTED. 7. IN THE RESULT, REVENUES APPEAL IS DISMISSED. ITA NO.351/HYD/2013 & CO 29/H/13 M/S. NSL POWER AND INFRATECH LIMITED, HYDERABAD 5 ASSESSEES C.O.NO.29/HYD/2013 (ITA NO.351/HYD/2013) : ASSESSMENT YEAR 2006-07 8. AT THE TIME OF HEARING, LEARNED COUNSEL FOR TH E ASSESSEE, DID NOT PRESS FOR THE CROSS-OBJECTION OF THE ASSESSEE. IT IS ACCORDINGLY DISMISSED AS NOT PRESSED. 9. TO SUM UP, REVENUES APPEAL AS WELL AS ASSESSEE S CROSS- OBJECTION ARE DISMISSED. ORDER PRONOUNCED IN THE COURT AT THE CONCLUSION O F HEARING ON THESE MATTES ON 27.6.2013 SD/- SD/- (CHANDRA POOJARI) (SAKTIJIT DEY) ACCOUNTANT MEMBER JUDICIAL MEMBER. DT/- 27 TH JUNE, 2013 COPY FORWARDED TO: 1. 2. 3 4. M/S. NSL POWER AND INFRATECH LIMITED, NSL ICON, 4 TH FLOOR, 8-2-684/2/A, ROAD NO.12, BANJARA HILLS HYDERABAD 50 0 034 INCOME TAX OFFICER WARD 16(2), HYDERABAD COMMISSIONER OF INCOME-TAX(APPEALS) V, HYDERABAD COMMISSIONER OF INCOME-TAX IV HYDERABAD 5 . DEPARTMENTAL REPRESENTATIVE, ITAT, HYDERABAD B.V.S.