Rajasthan Renewable Energy Corporation Ltd., Jaipur V. DCIT, Circle-6, Jaipur, Jaipur

ITA 385/JPR/2024

• Counselvise Citation: [2024] 101 COUNSELVISE.COM (IT) 6349 (ITAT-JAIPUR)
• Duration Of Justice: 2 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-06-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 27-03-2024
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 250; 80IA; 13

Judgement Text

vk;dj vihyh; vf/kdj.k] t;iqj U;k;ihB] t;iqj IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,” B”-Bench” JAIPUR Jh jkBkSM+ deys'k t;UrHkkbZ] ys[kk lnL; ,o aJh ujsUnz dqekj] U;kf;d lnL; ds le{k BEFORE: SHRI RATHOD KAMLESH JAYANTBHAI, AM & SHRI NARINDER KUMAR, JM vk;dj vihy la-@ITA. No. 385/JPR/2024 fu/kZkj.k o"kZ@Assessment Year : 2013-14 Rajasthan Renewable Energy Corporation Ltd. E/166 Yudhishisthir Marg, C-Scheme, Jaipur. cuke Vs. DCIT, Circle-6, Jaipur. LFkk;hys[kk la-@thvkbZvkj la-@PAN/GIR No.: AAACL3171C vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksjls@Assessee by : Shri P. C. Parwal (C.A.) jktLo dh vksjls@Revenue by: Shri Anoop Singh (Addl.CIT) lquokbZ dh rkjh[k@Date of Hearing : 24/06/2024 mn?kks"k.kk dh rkjh[k@Date of Pronouncement: 25/06/2024 vkns'k@ORDER PER: Narinder Kumar, Judicial Member Assessee-Rajasthan Renewable Energy Corporation Ltd. has filed this appeal challenging order dated 01.02.2024 passed by Learned CIT(A)/NFAC. The matter pertains to assessment year 2013-14. 2. The assessee is feeling aggrieved by the dismissal of its appeal filed before Learned CIT(A)/NFAC. 2 ITA No. 385/JPR/2024 Rajasthan Renewable energy Corporation Ltd. The assessee was before Learned CIT(A) feeling dissatisfied with the order dated 16.07.2019 passed by the Assessing Officer. The Assessing Officer had assessed income of the assessee, u/s 143(3) of the Income Tax Act, 1961 Act (hereinafter referred to as the “Act”), at Rs. 21,62,29,500/-, by observing in the manner as :- “Income as per order u/s 250/143(3) dated 09.05.2018: Rs. 24,91,051,843/- Add: Relief allowed in order u/s 250 but issues set-aside (i) Publicity and advertisement expenses Rs. 28,99,317/- (ii) Deduction u/s 80IA Rs. 9,73,405/- Rs. 38,72,722/- Rs. 25,29,74,565/- Less: relief allowed by Hon’ble ITAT (i) Contribution of Construction of Raj Bhawan Rs. 1,00,00,000/- (ii) Prior period expenses Rs. 2,32,977/- Rs.1,02,32,997/- Rs.24,27,41,568/ Less: Deduction u/s 80IA allowed Rs. 2,65,12,067/- (4,13,09,353-1,47,97,286=2,65,12,067/-) Total Income Rs.21,62,29,501/- R/o Rs. 21,62,29,500/-“ 3. Learned CIT(A) has dismissed the appeal, while observing that the assessee did not respond to any of the notices issued by his office and that 3 ITA No. 385/JPR/2024 Rajasthan Renewable energy Corporation Ltd. he had no option to dismiss the appeal, after considering the records and merits of the case. 4. Hence, this appeal. 5. Arguments heard. File perused. 6. Learned AR for the assessee has contended that three notices dated 27.12.2021, 08.09.2021 and 08.12.2021 were issued by the office of Learned CIT(A)/NFAC during the Covid period, but the same could not be responded. He has further submitted that the effective notice issued by the said office to the assessee, was of 12.01.2024, but, Shri Mukesh Goyal, CA of the assessee could not respond thereto, due to oversight. Shri Mukesh Goyal, CA is present in the Court. He states at Bar that it was due to his oversight that the notice issued by Learned CIT(A) on 12.01.2024 could not be responded to by him. 7. Even otherwise, Section 250 of the Act provides that while deciding an appeal, points for determination are required to be stated with reasons for arriving at the decision. Here, Learned CIT(A) dismissed the appeal simply observing that due to no response from the side of the assessee, there was no option, but to dismiss the same, considering records and merits. 4 ITA No. 385/JPR/2024 Rajasthan Renewable energy Corporation Ltd. But, Learned CIT(A) while passing the impugned order, did not state any point for determination, as raised by the assessee in Form 35, what to say of adjudication of or discussion on any of grounds of appeals on merits. Learned CIT(A) neither referred to the facts nor discussed so as to appreciate or uphold the reasoning given by the Assessing Officer. Absence thereof also invalidates the order which has led to dismissal of the appeal. To be more specific, vide impugned order, the appeal cannot be said to have been decided on merits. Deductions under Section 80 IA of the Act The ld. AR for the assessee-appellant has pointed out that while dealing with an earlier matter between the parties, relating to the assessment year 2013-14, this Appellate Tribunal restored the matter to the files of the Assessing Officer, while observing in the manner as under:- “The second issue relates to allocation of indirect expenses incurred at the Head office in form of employees and administrative/establishment expenses. The ld AR has contended that the assessee has worked out the allocation of indirect expenses as per the directions of the Coordinate Bench in AY 2011-12 and as per its working, the indirect expenses allocable to the eligible undertakings amounts to Rs 18,49,771. Further, taking the same into account, as per the revised working, it is eligible for deduction u/s 80IA at Rs 8,56,70,349 as against original claim of Rs 12,21,63,337.” 5 ITA No. 385/JPR/2024 Rajasthan Renewable energy Corporation Ltd. The contention raised by ld. AR for the assessee is that on restoration, when the matter came up before the Assessing Officer, the assessee submitted that a statement bifurcating receipts from Power Projects and Promotional & Other Activities and also the expenditure directly related to power generating activities, promotional & other activities and the common expenditure relatable to both the activities . On that basis the assessee revised its calculation for the purposes of deductions under section 80-IA at Rs.8,56,70,349/-but, the A.O without pointing out any mistake / discrepancy in the allocation made by the assessee considered the indirect head office expenses at Rs.7,53,19,050/- and allocated the same with reference to the turnover of power generating plant to the total turnover of the assessee and thus allowed claim of deductions u/s 80-IA at Rs.4,13,09,353/- upheld by CIT(A) NFAC. Accordingly, the contention is that Assessing Officer having erred in passing the assessment order, in the manner indicated above, the matter deserves to be restored to the files of the Assessing Officer, instead of Learned CIT(A), for decision afresh, taking into consideration the material relied on by the assessee, on the aforesaid aspect. 8. In the paper book submitted today, on behalf of the assessee, copy of reply dated 20.06.2019 by the assessee to the Assessing Officer, has also 6 ITA No. 385/JPR/2024 Rajasthan Renewable energy Corporation Ltd. been presented. In para 13 of the said submission by the assessee before the Assessing Officer, being relevant, is reproduced as under:- “13. The Company also submitted that the company has two activities, one is from sale of power eligible for deduction u/s 80-IA and another is receipts form services FDR Interest and other receipts not eligible for deduction u/s 80-IA. Against the sale of power and short fall in generation of power of Rs 302545701/-., the expenditure directly relatable to this activities is Rs 211466341/- and thus, profit from this activity is Rs 91079361/-. From this amount after reducing the office expenses and salary expenses of those units who are exclusively looking after this activity at RS 3559240/-, the remaining profit from this activity is Rs 87520120/-. After considering the direct expenses, the indirect expenses remains at Rs 2793611/-.. This expenditure when allocate in the ration of turnover of both the activities, the expenditure allocable to the activities eligible for deduction u/s 80-IA works out at Rs 18,49,771/- and thus the profit eligible for deduction u/s 80-IA works out at Rs 85670349/- (87520120-1849771/-. Therefore as against the claim made by the company u/s 30-IA at Rs 122163337/-, The assessee is eligible for deduction at Rs 85670349/- as per the revised working placed at PB- 7-8. This working has been accepted by Hon able ITAT in AY 2011- 2012as per the discussion made at para 42 to 45 pf the order and the same was followed in AY 2012-13 as per the finding extracted at Pg 35 of the order of Ld CIT(A).” 9. In view of what stands recorded in para 13 of the submission, the Assessing Officer was also required to take into consideration the entire material made available by the assessee, on the aforesaid aspect. 7 ITA No. 385/JPR/2024 Rajasthan Renewable energy Corporation Ltd. However, in the assessment order, it was observed that the assessee did not provide any basis to substantiate as to how expenses claimed under the “ common expenses” head and material to explain its claim of Rs. 21,14.66,340/- as directly related to power generation activity. 10. In the given facts and circumstances, we deem it a fit case to restore the matter of the Assessing Officer, who shall take into consideration the entire material made available by the assessee, on the aforesaid aspect and to decide the issue afresh, after providing reasonable opportunity to the assessee, of being heard. Disallowance of Publicity and Advertisement expenses of Rs. 98,63,341/- . 11. As noticed above, the assessee had claimed publicity and advertisement expenses to the tune of Rs. 57,98,634/-, but the the Assessing Officer disallowed the same. When the matter came up before Learned CIT(A), the assessee was allowed 50% of the said expenses. However, when the matter came up before this Appellate Tribunal, the matter was restored to the files of the Assessing Officer with the direction to examine the detailed expenditure incurred under publicity and advertisement. 8 ITA No. 385/JPR/2024 Rajasthan Renewable energy Corporation Ltd. When the matter came up before the Assessing Officer, by way of restoration, the Assessing Officer verified certain bills and vouchers submitted by the assessee and found that thereby certain payments were paid to ‘Journalist Welfare Fund’ , which according to the Assessing Officer was not a allowable expenses, and as such, in his view, no alteration was called for as regards the addition of Rs. 57,98,634/- already made in the assessment. 12. Ld. AR for the assessee has contended that in the assessment proceedings initially conducted, Learned CIT(A) had disallowed 50% of the expenses, and as such, on restoration of the matter, the Assessing Officer erred in upholding the entire addition of Rs. 57,98,634/-. As regards ‘Journalist Welfare Fund’, Ld. AR for the assessee has placed on record, copy of publicity and advertising ledger account, for the period 01.04.2013 from 31.03.2013 and pointed out that on 01.12.2012 actually the amount was paid to M/s Kanchal Lata; that on 07.01.2013, payment was made to M/s Wave lane; and that on 22.01.2013, the payment was made to M/s Prayas Creation , Jaipur, but the Assessing Officer has not properly considered said entries. 9 ITA No. 385/JPR/2024 Rajasthan Renewable energy Corporation Ltd. 13. In view of the material relied on by the Ld. AR for the assessee, ld. DR for the department has no option for restoration of the matter to the Assessing Officer for decision afresh, on the aforesaid aspect as well. 14. In the given facts and circumstances, we deem it a fit case to restore the matter to the Assessing Officer even on this aspect, for decision afresh, after taking into consideration the entire material made available by the assessee, and providing reasonable opportunity to the assessee, of being heard. Result 15. In view of the above discussion, this appeal is hereby disposed of for statistical purposes and the matter is restored to the files of the Assessing Officer to provide reasonable opportunity to the assessee, of being heard, and then to decide the appeal afresh, in accordance with law. Order pronounced in the open court on 25/06/2024. Sd/- Sd/- jkBkSM+ deys'k t;UrHkkbZ ½ ¼ujsUnz dqekj½ (RATHOD KAMLESH JAYANTBHAI) (NARINDER KUMAR) ys[kk lnL; @Accountant Member U;kf;d lnL;@Judicial Member Tk;iqj@Jaipur fnukad@Dated:- 25/06/2024 *Santosh vkns'k dh izfrfyfivxzsf’kr@Copy of the order forwarded to: 1. The Appellant- Rajasthan Renewable Energy Corporation Ltd, Jaipur. 2. izR;FkhZ@ The Respondent- DCIT, Circle-6, Jaipur. 10 ITA No. 385/JPR/2024 Rajasthan Renewable energy Corporation Ltd. 3. vk;djvk;qDr@ The ld CIT 4. foHkkxh; izfrfuf/k] vk;djvihyh; vf/kdj.k] t;iqj@DR, ITAT, Jaipur 5. xkMZQkbZy@ Guard File ITA No. 385/JPR/2024) vkns'kkuqlkj@ By order, lgk;d iathdkj@Asstt. Registrar