WESTERN COALFIELDS LIMITED, Nagpur V. THE ACIT-RANGE-2, Nagpur

ITA 85/NAG/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 7648 (ITAT-NAGPUR)
• Duration Of Justice: 3 year(s) 1 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-03-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 27-06-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 20-02-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A R NINAWE
• Keywords: Principle of natural justice; Revenue expenditure
• Section: 263

Judgement Text

1 ITA NO. 85/NAG/2014. IN THE INCOME TAX APPELLATE TRIBUNAL, NAGPUR BENCH, NAGPUR BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER AND SHRI RAM LAL NEGI, JUDICIAL MEMBER.. I.T.A. NO. 85/NAG/2014. ASSESSMENT YEAR : 2009 - 10. WESTERN COALFIELDS LTD., THE ASSTT. COMMISSIONER OF INCOME - TAX, NAGPUR. VS. RANGE - 2, NAGPUR. PAN AAACW1578L. APPELLANT. RESPONDENT. APP ELLANT BY : SHRI K.P. DEWANI. RESPONDENT BY : SHRI A.R. NINAWE. DATE OF HEARING : 2 3 - 03 - 2017. DATE OF PRONOUNCEMENT : 23RD H MARCH, 2017. O R D E R. PER SHAMIM YAHYA, A.M. : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX - I, NAGPUR DATED 31 - 01 - 2014 AND PERTAINS TO ASSESSMENT YEAR 2009 - 10. THE GROUNDS OF APPEAL READ AS UNDER : 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED COMMISSIONER OF INCOME TAX ERRED IN ASSUMING JURISDICTION UNDER SECTION 263 OF THE INCOME TAX ACT,1961 ('THE ACT') AND, HENCE, ORDER PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX IS VOID - AB - INITIO AND BAD IN LAW. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED COMMISSIONER OF INCOME TAX HAS ERRED IN HOLDING THAT THE DUTY OF LEARNED ASSESSING OFFICER TO EXAMINE THE NATURE AND OBTAIN THE DETAILS IN RESPECT OF EACH AND EVERY EXPENDITURE BEFORE ALLOWING THE SAME AS REVENUE EXPENDITURE EVEN WHEN THE SAME POINT ( OVER BURDEN REMOVAL) HAS BEEN DECIDED IN ASSESSEE'S FAVOUR FOR THE PERIOD FROM 1976 - 77 TO 1984 - 85 BY ITAT, NAGPUR BENCH AND THE COD HAS DENIED PERMISSION TO INCOME TAX DEPARTMENT TO LITIGATE THE MATTER FURTHER ON ALREADY DECIDED / SETTLED CASES. IN THE PRESENT CASE UNDER CONSIDERATION ALSO THE FACTS AND CIRCUMSTANCES ARE SAME AS IN THE ASSESSMENT YEARS 1976 - 77 TO 1984 - 85 AND THERE IS NO REASONS WHY THE DECISIONS OF THE HONOURABLE TRIBUNAL, NAGPUR BENCH SHOULD NOT BE APPLIED. 2 ITA NO. 85/NAG/2014. . . 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED COMMISSIONER OF INCOME TAX HAS ERRED IN DIRECTING ASSESSING OFFICER TO EXAMINE THE NATURE AND DETAILS OF EXPENDITURE INCURRED ON OVER BURDEN EXPENDITURE. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED COMMISSIONER OF INCOME TAX HAS ERRED IN DENYING NATURAL JUSTICE TO THE APPELLANT BY PASSING IMPUGNED ORDER BY NOT GIVING DETAILS /SOURCE OF INFORMATION REGARDING HEAD UNDER WHICH THESE EXPENDITURE TO THE EXTENT OF RS. 366.94 LACS HAS BEEN SHOWN IN OUR ACCOUNTING STATEMENT . THE ASSESSEE HAS SOUGHT DETAILS IN HIS WRITTEN SUBMISSION DURING PERSONAL HEARING ON 29.01 . 2014 BEFORE THE LEANED COM MISSIONER OF INCOME TAX , BUT WITHOUT GIVING DETAILS ,LEARNED COMMISSIONER OF INCOME TAX HAS PASSED THE IMPUGNED ORDER. IN THE ABOVE IMPUGNED ORDER LEARNED COMMISSIONER SAID THAT SIMILAR EXPENDITURE WAS DISALLOWED IN AY 2010 - 11 AND 2011 - 12. BUT IT IS NOT CORRECT, IN THE AY 2010 - 11 DISALLOWED UNDER THIS HEADS WAS RS, 385.73 LAKHS WHICH ARE AGAINST THE SAME ITEM OF COMMUNITY DEVELOPMENT AND TRIBAL WELFARE PLAN. MORE OVER IN AY 2010 - 11 TH I S EXPENDITURE WE RE NOT COVERED UNDER CSR BUT UNDER 20 POINTS PROGRAMME OF CENTRAL GOVERNMENT. FROM AY 2011 - 12 CONCEPT OF CSR APPLICABLE , WHERE AMOUNT BOOKED UNDER HIS HEAD WAS DISALLOWED BY THE AO. SO, THERE WERE NO SIMILARITY OF SUCH ADDITIONAL DIS - ALLOWANCE OF EXPENS ES OF RS. 366.94 LAKHS AS IN AY201O - 11 & 2011 - 12 . MOREOVER THE EXPENDITURE UNDER COMMUNITY DEVELOPMENT AND TRIBAL PLAN ' HAS BEEN ALLOWED BY THE COMMISSIONER OF INCOME TAX (APPEALS) FOR AY 2009 - 10, 2. IN THIS CASE THE LEARNED CIT EXERCISED HIS JURISDICTION U/S 263 OF THE I.T. ACT WITH REGARD TO THE ASSESSEES CLAIM OF EXPENDITURE ON ACCOUNT OF OVER BURDEN REMOVAL (OBR) AT RS.28037.09 LAKHS AND EXPENDITURE OF RS366.94 LAKHS ON ACCOUNT OF CORPORATE SOCIAL RESPONSIBI LITY. 3. ON THE ISSUE OF OVER BURDEN REMOVAL EXPENSES, LEARNED CIT WAS INFORMED THAT THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE INASMUCH AS THE ITAT HAD DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE IN EARLIER YEARS AND THE HIGH POWER COMMITTEE ON DISPU TES HAS DENIED PERMISSION TO THE DEPARTMENT TO PURSUE THE MATTER FURTHER BEFORE THE HONBLE HIGH COURT. HOWEVER, THE LEARNED CIT IGNORED THIS SUBMISSION AND HELD THAT THE ITATS DECISION IN PRINCIPLE HAS NOT BEEN ACCEPTED BY THE DEPARTMENT. HE FURTHER HELD THAT SINCE THIS ISSUE HAS NOT BEEN EXAMINED BY THE AO, THE AO SHOULD EXAMINE THE SAME AFRESH. 4. ON THIS ISSUE WE HAVE HEARD BOTH THE COUNSEL AND PERUSED THE RECORDS. WE FIND THAT NOTHING IS ON RECORD TO SUGGEST THAT THE AO HAS NOT EXAMINED THIS 3 ITA NO. 85/NAG/2014. ISSUE. T HIS IS AN ITEM OF EXPENDITURE AND HOW THE LEARNED CIT CAME TO THE CONCLUSION THAT THIS ISSUE WAS NOT EXAMINED BY THE AO AND HE SHOULD EXAMINE THE SAME AFRESH IS BEYOND COMPREHENSION. FURTHER MORE BY DECLINING TO ACCEPT THE ITATS DECISION IN ASSESSEES OW N CASE THE LEARNED CIT HAS NOT EXHIBITED PROPER RE SPECT TO THE HI E RARCHY OF THE JUDICIAL DISCIPLINE. ACCORDINGLY IN OUR CONSIDERED OPINION, FIRSTLY SINCE THE ISSUE WAS COVERED IN FAVOUR OF THE ASSESSEE BY THE ITATS DECISION IN ASSESSEES OWN CASE AND SECONDLY THERE IS NOTHING ON RECORD TO SUGGEST THAT THE AO HAS NOT EXAMINED THIS ISSUE, THERE WAS NO OCCASION FOR THE LEARNED CIT TO EXERCISE HIS JURISDICTION U/S 263 AND DIRECT THE AO TO EXAMINE THE ISSUE AFRESH. 5. THE SECOND ISSUE ON WHICH THE LEARNE D CIT HAS EXERCISED HIS JURISDICTION IS COMMUNITY DEVELOPMENT AND TRIBAL WELFARE EXPENDITURE INCURRED UNDER THE HEAD CORPORATE SOCIAL RESPONSIBILITY. ON THIS ISSUE ALSO WE NOTE THAT THE LEARNED CIT HAS EXERCISED HIS JURISDICTION BY HOLDING THAT THE AO HAS NOT EXAMINED THIS EXPENDITURE. THERE IS NOTHING ON RECORD TO SUGGEST THAT THE AO HAS NOT EXAMINED THIS ISSUE. FURTHER MORE WE FIND THAT THE LEARNED CIT WAS DULY INFORMED THAT IDENTICAL ISSUE HAS BEEN DECIDED BY THE ITAT, MUMBAI BENCH IN THE CASE OF HINDUS TAN PETROLEUM CORPORATION LTD. 96 ITD 186 AND ITAT NAGPUR BENCH IN THE CASE OF SOUTH EASTERN COALFIELDS LTD. 85 IT D 608, LEARNED CIT CHOSE TO IGNORE THE DECISIONS OF HIGHER AUTHORITY WHICH WAS BINDING UPON HIM. WE FURTHER NOTE THAT THE ISSUE OF COMMUNITY D EVELOPMENT EXPENDITURE UNDER CORPORATE SOCIAL RESPONSIBILITY HAS ALSO BEEN DECIDED BY THE ITAT IN ASSESSEES FAVOUR IN SUBSEQUENT APPEALS IN ITA NO. 241/NAG/2013 FOR ASSESSMENT YEAR 2009 - 10 AND THE DEPARTMENT HAS CHOSEN NOT TO PURSUE THIS ISSUE BEFORE THE HONBLE HIGH COURT. IN SUCH CIRCUMSTANCES WHEN THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY TRIBUNALS DECISION IN ASSESSEES OWN CASE AND THERE IS NOTHING ON RECORD TO SUGGEST THAT THE AO HAS NOT EXAMINED THIS ISSUE IN THE COURSE OF ASSESSMENT, THE EXERCISE OF JURISDICTION BY THE LEARNED CIT 4 ITA NO. 85/NAG/2014. U/S 263 ON THIS ISSUE IS COMPLETELY DEVOID OF LEGALITY AND IS LIABLE TO BE QUASHED. ACCORDINGLY IN THE BACKGROUND OF THE AFORESAID DISCUSSION AND PRECEDENTS, WE HAVE NO HESITATION IN QUASHING THE ORDER PASSED BY THE LEARNED CIT U/S 263 . HENCE WE QUASH THE SAME. 6. IN THE RESULT, THIS APPEAL FILED BY THE ASSESSEE STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 23 RD DAY OF MARCH, 2017. SD/ - SD/ - (RAM LAL NEGI) ( SHAMIM YAHYA) JUDICIAL MEMBER. ACOUNTANT MEMBER. NAGPUR, DATED: 23 RD MARCH, 2017. COPY FORWARDED TO : 1. WESTERN COALFIELDS LIMITED, COAL ESTATE, CIVIL LINES, NAGPUR. 2. AC.I.T., RNGE - 2 , NAGPUR. 3. C.I.T. - I, NAGPUR. 4. D.R., ITAT, NAGPUR. 5. GUARD FILE TRUE COPY BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, NAGPUR BENCH, NAGPUR. WAKODE.