IVL DHUNSERI PETROCHEM INDUSTRIES PRIVATE LIMITED,KOLKATA V. D.C.I.T., CIRCLE - 11(1), KOLKATA, KOLKATA

ITA 1712/KOL/2024

AI Insights

The case involves IVL Dhunseri Petrochem Industries Pvt. Ltd., which appealed against various orders related to the assessment year 2020-2021 concerning transfer pricing adjustments, penalty proceedings, and tax credit issues. The primary contention was the downward adjustment made by the TPO regarding the transfer value of power by the captive power plant at Haldia, which the assessee argued was benchmarked correctly against the tariff charged by the West Bengal State Electricity Board. The Tribunal found merit in the assessee's arguments, referencing previous decisions in favor of the assessee and the Supreme Court's judgment in a similar case. The Tribunal also addressed procedural issues regarding the filing of forms related to the disallowance of education cess and the computation of interest and tax credits.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 126891 (ITAT-KOLKATA)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-04-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2020-2021
• Other Referred Cases: Jindal Steel & Power Ltd. vs. DCIT, PCIT vs. Gujarat Alkalies & Chemicals Ltd., CIT vs. Godawari Power & Ispat Ltd., Reliance Infrastructure Ltd. vs. DCIT, DCIT vs. Birla Corporation Ltd., Star Paper Mills Ltd. vs. DCIT, DCIT vs. Balrampur Chini Mills Ltd., CIT Vs ITC
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRADIP KUMAR MONDAL
• Assessee Lawyers: AKKAL DUDHEWALA; VIDHI
• Keywords: Set aside; Business income; Opportunity of being heard; Transfer pricing; Fair market value; TDS; Initiation of penalty proceedings; Grounds of appeal; Dismissed; Judgment; HRA; Timing difference; AMP; Statistical purposes; Transfer; Transactions; Deleted; Electricity Purchase; Due date of filing; Department; Affirmed; Hon'ble Apex Court; Claim of deduction; Explanation; Services; Form 3; Refundable; Functional Dissimilarity; CUP Method; Legislative mandate
• Section: 43; 22; 13; 10B; 80IA

Judgement Text

" आयकर अपीलीय अधिकरण, “सी” न्यायपीठ, कोलकाता IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH, KOLKATA BEFORE SHRI RAJESH KUMAR, ACCOUNTANT MEMBER AND SHRI PRADIP KUMAR CHOUBEY, JUDICIAL MEMBER आयकर अपील सं/ITA No.1712/KOL/2024 (नििाारण वर्ा / Assessment Year : 2020-2021) IVL Dhunseri Petrochem Industries Pvt. Ltd. Dhunseri House, 4A Woodburn Park, L.R.Sarani, West Bengal-700020 Vs DCIT, Circle-11(1), Kolkata PAN No. :AAFCD 5214 M (अपीलार्थी /Appellant) .. (प्रत्यर्थी / Respondent) नििााररती की ओर से /Assessee by : Shri Akkal Dudhewala, CA and Vidhi Ladia, CA राजस्व की ओर से /Revenue by : Pradip Kumar Mondal, CIT-DR सुनवाई की तारीख / Date of Hearing : 19/03/2025 घोषणा की तारीख/Date of Pronouncement : 23/04/2025 आदेश / O R D E R RAJESH KUMAR, AM : This is an appeal filed by the assessee against the order dated 26/07/2024, passed by the Assessment Unit, National Faceless Assessment Centre u/s.143(3) r.w.s.144C(13) r.w.s.144B of the Act, for the assessment year 2020-2021 on the following grounds :- 1.(a) For that on the facts and in the circumstances of the case and in law, the TPO erred in making a downward adjustment of Rs.24,72,79,392/- in respect of the transfer value of power by the captive power plant at Haldia, West Bengal. (b) For that on the facts and in the circumstances of the case and in law, the methodology followed by the assessee to benchmark the arm's length value of the power transferred by the eligible unit to the non-eligible unit fulfilled the internal CUP parameters and in that view of the matter the transfer pricing adjustment made by the TPO was impermissible on the given facts and in law. (c) For that on the facts and in the circumstances of the case and in law, the manner in which the DRP/TPO has benchmarked ITA No.1712/KOL/2024 2 the arm's length value of the power generated by the eligible unit was wholly fallacious and suffered from serious infirmities and in that view of the matter the downward adjustment of Rs.24,72,79,392/- deserves to be deleted 2. For that on the facts and in the circumstances of the case and in law, the NFAC erred in recommending the initiation of penalty proceedings u/s 270A of the Act in respect of the claim of deduction for education cess to the tune of Rs.59,46,067/- despite having had taken cognizance of the fact that the appellant had suo moto disallowed the same by way of filing of Form 69. 3. For that on the facts and in the circumstances of the case and in law, the interest of Rs.61,40,757/- levied u/s 234A of the Act was unjustified and deserves to be deleted. 4. For that on the facts and in the circumstances of the case and in law, the JAO erred in not granting credit for advance tax of Rs. 17,40,00,000/-, TDS of Rs.1,47,89,550/- and TCS of Rs. 1,93,442/- while computing the tax payable/refundable. 5. For that on the facts and in the circumstances of the case and in law, the NFAC was unjustified in not granting credit for DDT taxes of Rs. 1,31,04,000/- paid u/s 115-0 of the Act. 6. For that the appellant craves leave to submit additional grounds and/or amend or alter the grounds already taken either at the time of hearing of the appeal or before. 2. The issue raised in ground No.1 is against the order of TPO/AO making downward adjustment of Rs.24,72,79,392/- in respect of transfer value of power by the captive power plant at Haldia, West Bengal. 3. Facts in brief to the ground No.1 are that the assessee company claimed deduction of Rs.24,72,79,392/- u/s.80IA of the Act for the eligible units against the specified domestic transactions. Accordingly, the TPO restricted the downward adjustment to the transfer price of power to the amount of claim made by the assessee u/s.80IA of the Act. The DRP also dismissed the objections filed by the assessee against the draft assessment order and the AO accordingly passed the final assessment ITA No.1712/KOL/2024 3 order. Pertinent to note that the assessee has entered into specified domestic transactions with its AEs. The assessee had set up two captive power plants located in Haldia namely PU-I & PU-III in order to meet the power requirements of its PET resin manufacturing units at the same location . The assessee claimed tax holidays as per section 80IA in respect of their profits from generation of electricity from capitive power plants. The details of the transactions were duly mentioned in form 3CEB filed by the assessee. The assessee benchmarked the transfer power from the eligible units to the assessee on the tariff charged by the West Bengal State Electricity Board. The TPO in his order dated 28.07.2023 passed u/s 92CA(3) ,the transfer price of power was proposed to be reduced to Rs. 41,34,73,831/-. Since the assessee has claimed the deduction u/s 80IA of Rs. 24,72,79,392/-for eligible units against the specified domestic transactions and accordingly the downwards adjustments made by the TPO was restricted to the amount of claim u/s 80IA by the assessee. 4. At the outset, the counsel for the assessee submitted that the issue is squarely covered by the decision of the coordinate bench in the case of in its own case reported in (2022) 144 taxmann.com 110(Kol), wherein the issue has been decided in favour of the assessee. Therefore, the issue in the instant appeal is squarely covered by assessee’s own case in A.Y. 2015-16. The ld. AR also submitted that the issue has been finally settled by the Hon'ble Supreme Court in the case of Jindal Steel & Power Ltd, reported in (2023) 157 taxmann.com 207(SC) n which the similar ITA No.1712/KOL/2024 4 issue has been decided by the Hon'ble Apex Court in favour of the assessee. Accordingly, the ld. AR of the assessee prayed that following the above decision, the ground No.1 raised in the present appeal of the assessee may be allowed. 5. On the other hand, ld. CIT-DR relied on the orders of the DRP/TPO/AO. 6. After hearing the rival submissions of the parties and perusing the material available on record including the decision of the coordinate bench of the Tribunal in the case of DCIT Vs Dhunseri Ventures Ltd. (supra), we note that the facts of the assessee are identical to the facts considered in the case of Dhunseri (supra) and, therefore, the issue is squarely covered in favour of the assessee. The operative part of the order of the coordinate bench of the Tribunal read as under :- 9.5. We have heard rival submissions and perused the material as placed before us carefully including the impugned order and case laws relied upon by the assessee and the revenue. The undisputed facts in brief are that the assessee has two CPPs or eligible units generating electricity which was consumed captively by other non- eligible units i.e PET Resin Manufacturing Units(hereinafter referred to as Non Eligible Units). for carrying out the manufacturing. Noteworthy that non eligible units have also consumed power by purchasing the same from SEB. We observe that the assessee determined the ALP of specified domestic transactions at rate ranging from Rs. 7.66 per unit to Rs. 7.87 per unit which was the Average Annual Landed Cost (AALC) at which the non-eligible unit procured power from SEB. Thus , the assessee followed internal CUP for bench marking the specified domestic transactions of transfer of power from CPPs to non eligible unit at average landed cost at which the non eligible units procured electricity from the SEB by taking non eligible units as the tested party in the TP Study Report and accordingly ALP of the power captively consumed has been benchmarked at ALC of power purchased by the tested party from SEB. The assessee also duly reported these transactions in the audited report in Form 3CEB. Accordingly to the TPO the average rate of Rs. 3.47 per unit calculated on the basis of sale data of power by independent CPPs/IPPs as determined by various tariff orders would be the ALP of the domestic specified ITA No.1712/KOL/2024 5 transactions. Accordingly the TPO recommended adjustment to the tune of Rs. 6,75,22,00,000/- and the AO passed the draft assessment accordingly. According to the assessee the internal CUP has to be used for the determination of ALP at which the non- eligible units/manufacturing units procured the power from unrelated party i.e. SEB. Now the issue before us whether the CUP method can be applied to bench mark specified domestic transactions of transferring power by CPPs to non eligible units. We have also perused the provisions as contained in Rule 10B of the Income Tax Rules which provide as to where the CUP can be and has to be applied. We observe from the said rule 10B that we have to see the price at which the property ,goods or service has been acquired under similar market conditions. It is also settled that choice of tested party is of lesser significance for the purpose of application of CUP method but instead key factor in application of CUP is product comparability and similar market conditions. Further the CUP method can be classified into two categories i.e. internal CUP method and external CUP method. Under internal CUP method the transactions between the AE’s involving buying or selling of goods and services are comparable to the transactions entered into by the AE’s with the unrelated parties for buying and selling similar goods and service under similar circumstances. However when such internal data was not available then one may apply external CUP which involves comparison of price paid/charged between the two unrelated parties in uncontrolled condition for transactions entered into between the AE’s. In the instant case as noted elsewhere hereinabove that the CPPs bench marked the transactions with non eligible units at a rate at which power is supplied by the SEB to the non eligible units and therefore is the prevailing rate at which the power has been supplied by the SEB to other parties/factories located in the same geographical areas/location. It is also undisputed that both CPPs as well as SEB supplied/sold power during the year and thus there is no timing difference as well. Thus we are in agreement with the conclusion of Ld. CIT(A) that transactions of purchase of power by the non eligible units from SEB fulfil the internal CUP parameters vis product comparability and similar market conditions and thus the ALC paid by the non eligible units to the SEB represented the internal comparable ALP. 9.6. According to Ld. CIT(A), the excess surplus power sold in the open market at a price which was lower than the price at which the manufacturing units procured electricity from the SEB cannot the arm’s length price of the power. Thus, the Ld. CIT(A) reversed the order of TPO/AO by directing that the price at which the SEB sold power in the open market under uncontrolled conditions is reliable internal CUP and accordingly came to the conclusion that ALC notified by the SEB is a fair, reliable and reasonable basis to bench mark the power procured by non-eligible unit from the eligible unit. The Ld. CIT(A) while allowing the appeal of the assessee has relied on the series of decisions namely PCIT vs. Gujarat Alkalies & Chemicals Ltd. (supra), CIT vs. Godawari Power & Ispat Ltd. (supra) and Reliance Infrastructure Ltd. in ITA No. 2180 of 2011 ITA No.1712/KOL/2024 6 (Bombay-High Court) and the decision of Coordinate Bench of Kolkata in the case of DCIT vs. Birla Corporation Ltd. in ITA No. 971/Kol/2012 for AY 2008-09. We note that in all the above decisions, the AALC at which the power is purchased by the non- eligible unit of the assessee was considered to be the fair market value / transfer price of power supplied by the eligible unit to the non-eligible unit. Before us, the Ld. A.R also argued that non- eligible units has to be held as a tested party and AALC at which the power was purchased by the tested party from SEB/ third party is the most appropriate ALP to bench mark the transfer of power supplied by eligible unit to noneligible unit. The said view of the assessee is squarely covered by the two decisions of Hon’ble Benches namely Star Paper Mills Ltd. vs. DCIT (supra) and DCIT vs. Balrampur Chini Mills Ltd. (supra). Having considered the ratio laid down, we are of the view that there is no infirmity in the order of Ld. CIT(A) which is a very reasoned and speaking order passed after following the decision of various Hon’ble High Courts and decision of Co-ordinate Benches of the Tribunal. We have also noted the arguments advanced by the ld DR that average rate of Rs. 3.47 per unit as calculated on the basis of sale data of power by independent CPPs /IPPs as determined by various tariff orders should be taken as ALP however can not overlook the fact that the said transactions did not take place under similar market conditions and that price cannot be taken as ALP under CUP method. The power supplied by the CPPs to non eligible units was business to consumer (commonly known As B2C) meaning thereby the rate at which the ultimate consumers can purchase the power for their consumption is relevant. In the instant case before us, the B2C market comprises the sale of power by SEB and other distribution companies to different categories of consumers. Thus the power sold by other CPPs/IPPs to unrelated parties was in altogether different market conditions which is business to business commonly known as B2B model and the said rate represented the rate at which the distribution companies purchased power from generation companies. Further no consumer can buy the power in the open market at a rate generation companies sell power to distribution companies. Thus we do not find any force in the contentions of the ld DR that rate at which the power was sold to unrelated parties by the CPP is the ALP. We also note that decision of the Calcutta High court in the case of CIT Vs ITC 236 Taxman 612 which was relied by the TPO/AO and the functional dissimilarity between CPPs and SEB have been considered by the coordinate bench of the tribunal in the case of Star Paper Mills Ltd Vs DCIT in ITA No. 127/Kol/2021. Therefore , we are inclined to uphold the order of Ld. CIT(A) by holding that the ALC at which the power is procured by non-eligible units from SEB is the most appropriate ALP to bench mark the specified domestic transactions and accordingly the order passed by Ld. CIT(A) is upheld by dismissing the revenue’s appeal on this issue. The grounds of appeal pertaining to this issue are dismissed. ITA No.1712/KOL/2024 7 7. Besides, the case is also covered by the decision of Hon'ble Supreme Court in the case of Jindal Steel & Power Ltd, (supra) which has finally settled the issue in which the similar issue has been decided by the Hon'ble Apex Court in favour of the assessee. The operative para of the decision of the Hon'ble Supreme Court in the said case read as under:- 21. We have noticed that the Tribunal had rejected such contention of the revenue which has been affirmed by the High Court. In this proceeding, we are called upon to decide as to which of the two views is the correct one. 22. Reverting back to sub-section (8) of Section 80-IA, it is seen that if the assessing officer disputes the consideration for supply of any goods by the assessee as recorded in the accounts of the eligible business on the ground that it does not correspond to the market value of such goods as on the date of the transfer, then for the purpose of deduction under Section 80-IA, the profits and gains of such eligible business shall be computed by adopting arm's length pricing. In other words, if the assessing officer rejects the price as not corresponding to the market value of such good, then he has to compute the sale price of the good at the market value as per his determination. The explanation below the proviso defines market value in relation to any goods to mean the price that such goods would ordinarily fetch on sale in the open market. Thus, as per this definition, the market value of any goods would mean the price that such goods would ordinarily fetch on sale in the open market. 23. This brings to the fore as to what do we mean by the expression \"open market\" which is not a defined expression. 24. Black's Law Dictionary, 10th Edition, defines the expression \"open market\" to mean a market in which any buyer or seller may trade and in which prices and product availability are determined by free competition. P. Ramanatha Aiyer's Advanced Law Lexicon has also defined the expression \"open market\" to mean a market in which goods are available to be bought and sold by anyone who cares to. Prices in an open market are determined by the laws of supply and demand. 25. Therefore, the expression \"market value\" in relation to any goods as defined by the explanation below the proviso to sub- section (8) of Section 80 IA would mean the price of such goods determined in an environment of free trade or competition. \"Market value\" is an expression which denotes the price of a good arrived at between a buyer and a seller in the open market i.e., where the ITA No.1712/KOL/2024 8 transaction takes place in the normal course of trading. Such pricing is unfettered by any control or regulation; rather, it is determined by the economics of demand and supply. 26. Under the electricity regime in force, an industrial consumer could purchase electricity from the State Electricity Board or avail electricity produced by its own captive power generating unit. No other entity could supply electricity to any consumer. A private person could set up a power generating unit having restrictions on the use of power generated and at the same time, the tariff at which the said power plant could supply surplus power to the State Electricity Board was also liable to be determined in accordance with the statutory requirements. In the present case, as the electricity from the State Electricity Board was inadequate to meet power requirements of the industrial units of the assessee, it set up captive power plants to supply electricity to its industrial units. However, the captive power plants of the assessee could sell or supply the surplus electricity (after supplying electricity to its industrial units) to the State Electricity Board only and not to any other authority or person. Therefore, the surplus electricity had to be compulsorily supplied by the assessee to the State Electricity Board and in terms of Sections 43 and 43A of the 1948 Act, a contract was entered into between the assessee and the State Electricity Board for supply of the surplus electricity by the former to the latter. The price for supply of such electricity by the assessee to the State Electricity Board was fixed at Rs. 2.32 per unit as per the contract. This price is, therefore, a contracted price. Further, there was no room or any elbow space for negotiation on the part of the assessee. Under the statutory regime in place, the assessee had no other alternative but to sell or supply the surplus electricity to the State Electricity Board. Being in a dominant position, the State Electricity Board could fix the price to which the assessee really had little or no scope to either oppose or negotiate. Therefore, it is evident that determination of tariff between the assessee and the State Electricity Board cannot be said to be an exercise between a buyer and a seller in a competitive environment or in the ordinary course of trade and business i.e., in the open market. Such a price cannot be said to be the price which is determined in the normal course of trade and competition. 27. Another way of looking at the issue is, if the industrial units of the assessee did not have the option of obtaining power from the captive power plants of the assessee, then in that case it would have had to purchase electricity from the State Electricity Board. In such a scenario, the industrial units of the assessee would have had to purchase power from the State Electricity Board at the same rate at which the State Electricity Board supplied to the industrial consumers i.e., Rs. 3.72 per unit. ITA No.1712/KOL/2024 9 28. Thus, market value of the power supplied by the assessee to its industrial units should be computed by considering the rate at which the State Electricity Board supplied power to the consumers in the open market and not comparing it with the rate of power when sold to a supplier i.e., sold by the assessee to the State Electricity Board as this was not the rate at which an industrial consumer could have purchased power in the open market. It is clear that the rate at which power was supplied to a supplier could not be the market rate of electricity purchased by a consumer in the open market. On the contrary, the rate at which the State Electricity Board supplied power to the industrial consumers has to be taken as the market value for computing deduction under Section 80 IA of the Act. 29. Section 43A of the 1948 Act lays down the terms and conditions for determining the tariff for supply of electricity. The said provision makes it clear that tariff is determined on the basis of various parameters. That apart, it is only upon granting of specific consent that a private entity could set up a power generating unit. However, such a unit would have restrictions not only on the use of the power generated but also regarding determination of tariff at which the power generating unit could supply surplus power to the concerned State Electricity Board. Thus, determination of tariff of the surplus electricity between a power generating company and the State Electricity Board cannot be said to be an exercise between a buyer and a seller under a competitive environment or a transaction carried out in the ordinary course of trade and commerce. It is determined in an environment where one of the players has the compulsive legislative mandate not only in the realm of enforcing buying but also to set the buying tariff in terms of the extant statutory guidelines. Therefore, the price determined in such a scenario cannot be equated with a situation where the price is determined in the normal course of trade and competition. Consequently, the price determined as per the power purchase agreement cannot be equated with the market value of power as understood in the common parlance. The price at which the surplus power supplied by the assessee to the State Electricity Board was determined entirely by the State Electricity Board in terms of the statutory regulations and the contract. Such a price cannot be equated with the market value as is understood for the purpose of Section 80IA (8). On the contrary, the rate at which State Electricity Board supplied electricity to the industrial consumers would have to be taken as the market value for computing deduction under Section 80 IA of the Act. 30. Thus on a careful consideration, we are of the view that the market value of the power supplied by the State Electricity Board to the industrial consumers should be construed to be the market ITA No.1712/KOL/2024 10 value of electricity. It should not be compared with the rate of power sold to or supplied to the State Electricity Board since the rate of power to a supplier cannot be the market rate of power sold to a consumer in the open market. The State Electricity Board's rate when it supplies power to the consumers have to be taken as the market value for computing the deduction under Section 80-IA of the Act. 31. That being the position, we hold that the Tribunal had rightly computed the market value of electricity supplied by the captive power plants of the assessee to its industrial units after comparing it with the rate of power available in the open market i.e., the price charged by the State Electricity Board while supplying electricity to the industrial consumers. Therefore, the High Court was fully justified in deciding the appeal against the revenue. 32. Revenue has relied upon the decision of the Calcutta High Court in CIT Vs. ITC Ltd. (supra). In that case, the High Court rejected the first contention of the revenue that the assessee therein was not entitled to the benefit under Section 80-IA of the Act because the power generated was consumed at home or by other business of the assessee. After holding so, the High Court however, answered the question on the point of computation of profits and gains of the eligible business against the assessee. On going through the judgment, we find that facts of that case are clearly distinguishable from the facts of the present batch of appeals. It is noticeable that though an opportunity was granted by the assessing officer to the assessee to adduce evidence to justify the price of electricity sold by it to its paper unit, the same could not be availed of by the assessee. The electricity generated was sold by the assessee entirely to its paper unit. There was no surplus electricity to be supplied to the State Electricity Board and consequently, there was no contract between the assessee and the State Electricity Board determining the rate of tariff for the electricity supplied by the assessee to the State Electricity Board. On the other hand, it was noticed that the Electricity Act, 2003 had come into force whereby and whereunder, the rate at which electricity could be supplied is determined, notably by Sections 21 and 22 thereof. That apart, there is the tariff regulatory commission which has the mandate for fixing the rates for sale and purchase of electricity by the distribution licensee. Thus it was noted that there is an inbuilt mechanism to ensure permissible profit both to the generating companies and to the distribution licensees. Therefore, it was held by the High Court that the assessee's generating unit could not claim any benefit under Section 80-IA of the Act computing the profits and gains on the basis of the rate chargeable by the distribution licensee from the consumer and that the benefit could only be claimed on the basis of the rates fixed by the tariff regulatory commission for sale of electricity by the ITA No.1712/KOL/2024 11 generating company. Facts being clearly distinguishable, this decision can be of no assistance to the revenue. 33. Before parting with this issue, we may mention that reliance placed by Mr. Rupesh Kumar, learned counsel for the revenue on the definition of the expression \"market value\" as defined in the explanation below sub-section (6) of Section 80 A of the Act is totally misplaced inasmuch as sub-section (6) was inserted in the statute with effect from 01.04.2009 whereas in the present case we are dealing with the assessment year 2001-2002 when this provision was note even borne. 34. That being the position, we have no hesitation in answering this issue in favour of the assessee and against the revenue. 8. Considering the facts of the assessee's case vis a vis the decision of the Hon'ble Supreme Court(supra), we set aside the order of the DRP/AO/TPO and direct the AO to delete the downward adjustment of Rs.24,72,79,392/- in respect of the transfer value of power by the captive power plants at Haldia, West Bengal. Ground No.1 is allowed. 9. The issue raised in ground No.2 is against the order of NFAC in recommending the initiation of penalty proceedings u/s.270A of the Act, in respect of the claim of deduction for education cess to the tune of Rs.59,46,067/- despite the fact that the assessee had suo motto disallowed the same by way of filing of form 69. 10. Facts in brief are that the assessee claimed deduction for education cess of Rs.59,46,067/- as expenditure under the head 'any other amount allowable as deduction' and accordingly a refund of income tax was claimed. The AO accordingly issued a show cause notice to the assessee which was replied by the assessee by submitting that vide letter dated 10.08.2023, the assessee has already brought on record the fact that the assessee has already disallowed the education cess of the above amount ITA No.1712/KOL/2024 12 claimed in the computation of taxable business income for the relevant assessment year 2020-2021 by filing Form 69 as notified in terms of provisions contained in Section 115(18) of the Act as introduced by the Finance Act, 2022 and also furnished copy of the said form. The assessee submitted that it has suo moto offered the disallowance in respect of the education cess for A.YU.2020-2021 at Sl.No.4 thereof copy of which is attached at page no. 212 to 220 of the paper book and in case the same is disallowed, it would result in double taxation. We note that that the assessee has filed form 69 on 29.11.2022. The AO further noticed that the CBDT clarified the issue of Education Cess vide Notification dated 28/09/2022 and as per the said notification the assessee is required to file Form No.69 before the due date i.e. 31/03/2023 and on receipt of the application in Form No.69, the AO shall recompute the total income by amending the relevant order and issue notice u/s.156 of the Act specifying the time period within which amount of tax payable, if any, to be paid. The AO further noticed that it is verified from the ITBA Module that the assessee has not furnished required Form No.70. Moreover, the assessee had claimed the amount against education cess in original return of income erroneously. The effect of the same had also not neutralized by filing revised computation of income. Accordingly, deduction claimed in respect of Education Cess is not allowable to the assessee and is required to be disallowed u/s.40(a)(ii) of the Act. ITA No.1712/KOL/2024 13 11. Before the DRP, the assessee submitted the factual position and the DRP directed the AO to re-verify the updated position regarding issuance of Form No.70 and decide the issue accordingly keeping in consideration that double disallowance cannot be made. Thereafter the AO noted that pursuant to the appeal direction the e-proceedings of the assessee company is re-verified and found that Form No.70 has not been uploaded in the case of the assessee till date and thereafter reiterated that the assessee had claimed the education cess as expenses in its original return of income and reduced the income to the extent of that amount and had not revised its return of income. The AO further noted that during the course of assessment proceedings it has mentioned that it has filed application for re-computation of Income u/s 155(18) of the Act in form No. 69 on 29.11.2022. But, the requisite Form No. 70 was still not filed. Finally, the amount was added to total income of the year under consideration and the AO initiated the penalty proceedings u/s.270A of the Act for under reporting of income. 12. Ld. CIT-DR, on the other hand, relied on the orders of the DRP/TPO/AO. 13. After hearing the rival submissions of the parties and perusing the material available on record, we note that the assessee has correctly filed Form No.69 before the AO on 29.11.2022 furnishing the revised computation and requested the AO to recompute the income. Further the AO has mentioned that Form No.70 has not been uploaded, however, the assessee has already disallowed the same suo moto by filing Form No.69 ITA No.1712/KOL/2024 14 which has also not been denied by the department. Moreover, it the /ao who issues the form 70 and not the assessee. Considering the facts and circumstances of the case, we are of the view that the penalty proceedings initiated by the AO is invalid and the AO is directed to drop the same. Thus, ground NO.2 is allowed. 14. The issue raised in ground No.3 is against the levy of interest of Rs.61,40,757/- u/s.234A of the Act. 15. After hearing the rival submissions of the parties and perusing the material available on record, we find that the assessee has filed return of income with the extended time but despite that the AO had charged interest u/s.234A of the Act. We note that the due date of filing of return originally was 30.09.2020 which was extended to 15.02.2021 and the assessee has filed return of income on 13.02.2021, which is within the extended due date. Accordingly, the action of the AO in charging interest u/s.234A of the Act is wrong and thus, the AO is directed to delete the same. Ground No.3 is allowed. 16. The issue raised in ground No.4 is against the order of the AO in not granting credit for advance tax of Rs.17,40,00,000/-, TDS of Rs.1,47,89,550/- and TCS of Rs.1,93,442/- while computing the tax payable/refundable. 17. Similarly, in ground NO.5 the issue raised is against the order of AO in not granting credit for DDT taxes of Rs.1,31,04,000/- paid u/s.115-O of the Act. ITA No.1712/KOL/2024 15 18. After hearing the rival submissions of the parties and perusing the material available on record, we find that both the issues raised in ground no. 4 and 5 need to be verified at the level of AO. Accordingly, we restore both the issues raised in ground NO.4 & 5 to the file of AO with a direction to examine the same and allow the credits after being necessary verification after providing adequate opportunity of being heard to the assessee. Thus, ground No.4 & 5 are allowed for statistical purposes. 19. Ground No.6 is general in nature. The same does not require any adjudication. 20. In the result, appeal of the assessee is partly allowed for statistical purposes. Order pronounced in the open court on 23/04/2025. Sd/- (PRADIP KUMAR CHOUBEY) Sd/- (RAJESH KUMAR) न्यानयक सदस्य / JUDICIAL MEMBER लेखा सदस्य/ ACCOUNTANT MEMBER कोलकाता Kolkata; ददनाांक Dated 23/04/2025 Prakash Kumar Mishra, Sr.P.S. आदेश की प्रनतललपप अग्रेपर्त/Copy of the Order forwarded to : आदेशािुसार/ BY ORDER, (Assistant Registrar) Income Tax Appellate Tribunal, Kolkata 1. अपीलार्थी / The Appellant- 2. प्रत्यर्थी / The Respondent- 3. आयकर आयुक्त(अपील) / The CIT(A), 4. आयकर आयुक्त / CIT 5. विभागीय प्रविविवि, आयकर अपीलीय अविकरण, कोलकाता / DR, ITAT, Kolkata 6. गार्ड फाईल / Guard file. सत्यापपत प्रतत //True Copy// "