Kerala State Electricity Board Ltd, Thiruvananthapuram V. The D CIT, Cir-1(1), Tvm, Tvm

MA 125/COCH/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 2514 (ITAT-COCHIN)
• Duration Of Justice: 4 month(s) 15 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 09-03-2020
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 06-03-2020
• Assessment Year: 2014-2015
• Appeal Filed On: 24-10-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: MRITUNJAYA SHARMA
• Assessee Lawyers: YEDU KRISHNAN G
• Keywords: Set aside
• Section: 143(3); 254(2); 263

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFOR E S/ SHRI CHANDRA POOJARI , AM & GEORGE GEORGE K., J M M.P. NO . 125 /COCH/2019 (ARISING OUT OF IT A NO. 462 /COCH/2018) ASSESSMENT YEAR: 2014 - 15 M/S. KSEB LTD., VYDYUTHI BHAVANAM, PATTOM P.O., TRIVANDRUM - 695 004 [PAN: AAECK 2277N] VS. THE DEPUTY COMMISSIONER OF INCOME - TAX, CIRCLE - 1(1), TRIVANDRUM. ( ASSESSEE - APPELLANT) ( REVENUE - RESPONDENT) ASSESSEE BY SHRI YEDU KRISHNAN G., CA REVENUE BY SHRI MRITUNJAYA SHARMA, SR. DR D ATE OF HEARING 0 6 /0 3 /20 20 DATE OF PRONOUNCEMENT 09 / 0 3 /20 20 O R D E R PER CHANDRA POOJARI, AM: BY TH IS MISCELLANEOUS PETITION, THE ASSESSEE IS SEEKING RECALL OF THE ORDER OF THE TRIBUNAL IN ITA NO. 462/COCH/ 2018 DATED 26/09/2019. 2 . IN THE MI SCELLANEOUS PETITION, THE ASSESSEE HAS SUBMITTED AS FOLLOWS: 1. THE APPEAL FILED BY THE PETITIONER FOR THE ABOVE ASSESSMENT YEAR WAS DISMISSED BY THE HON'BL E BENCH, AS PER THE ORDER DT. 26.09.2019. 2. IN THE APPEAL FILED, THE PETITIONER HAD RAISED A GROU ND AS UNDER, WHICH HAS NOT BEEN ADJUDICATED UPON BY THE HON'BLE BENCH : YOUR PETITIONER WISH TO DRAW THE KIND ATTENTION OF THE HON'BLE BENCH THAT IN THE APPELLATE ORDER PASSED BY THE HON'BLE BENCH DT. 26. 09. 2019, THE GROUND NO. 3 M.P. NO .125/ COC H/ 2019 2 RAISED BY YOUR PETITION ER, WHICH IS REPRODUCED IN PARA 3 PAGE 2 OF THE ORDER HAS BEEN OMITTED TO BE ADJUDICATED UPON IN THE APPELLATE ORDER. THE GROUND RAISED IS REPRODUCED BELOW: THE PR. COMMISSIONER OF INCOME TAX HAS ERRED IN LAW IN DIRECTING THE ASSESSING OFFICER TO MAKE DI SALLOWANCE OF ELECTRICITY DUTY AS PER SEC . 3(1) OF THE KERALA STATE ELECTRICITY DUTY ACT, 1963 AMOUNTING TO RS.43, 87,44,000 WHILE SETTING ASIDE THE ASSESSMENT, WHICH IS NOT IN ACCORDANCE WITH THE PROVISIONS OF THE SEC. 263 OF THE INCOME - TAX ACT, 1961 AS P ER LEGAL DECISIONS CITED BELOW : I) CIT VS. J.L. MORRISON (INDIA) LTD. (CALCUTTA HIGH COURT) JUDGMENT DELIVERED ON JUNE 18, 2014 II) PCIT VS. BALLARPUR INDUSTRIES LIMITED (BOMBAY HIGH COURT) JUDGMENT DELIVERED ON OCTOBER 13. 2016. I I I) ANTALA SANJAYKUMAR RAVJIBHAI VS. CIT (2012) 135 ITD 506 (RAJKOT TRIB.) IV) MANISH KUMAR VS. CIT (2012) 134 ITD 27 (INDORE TRIB.) V) AMIRA PURE FOODS PVT. LTD. VS. PR.CIT (1TAT DELHI) (ORDER DATED 29 LH NOVEMBER. 2017). 3. IT IS PRAYED THAT HON'BLE BENCH MAY PLEASE POST THE HEARING OF THE MISCELLANEOUS PETITION TO ADJUDICATE UPON THE ABOVE GROUND AND DIRECT T HE ASSESSING OFFICER TO PASS ORDER WITHOUT BEING INFLUENCED BY THE DIRECTIONS OF THE COMMISSIONER OF INCOME TAX THIRUVANANTHAPURAM TO MAKE ADDI TION OF ELECTRICITY DUTY AS ABOVE. 4. THE LD. DR SUBMITTED THAT THERE IS NO MISTAKE APPARENT ON RECORD SO AS TO RECTIFY THE ORDER OF THE TRIBUNAL U/S. 254(2) OF THE I.T. ACT. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RECORD. THE ASSE SSEE CAME IN APPEAL BEFORE THIS TRIBUNAL CHALLENGING THE ORDER OF THE PR. CIT PASSED U/S. 263 OF THE I.T. ACT DATED 07/08/2018 RAISING THE FOLLOWING GROUNDS OF APPEAL : M.P. NO .125/ COC H/ 2019 3 1. THE PR. CIT HAS ERRED IN LAW IN SETTING ASIDE THE ASSESSMENT ORDER PASSED U/S. 143( 3) OF THE ACT DATED 26/12/2016 FOR THE AY 2014 - 15 WITH A DIRECTION TO REDO THE ASSESSMENT CONSIDERING THE APPLICABILITY OF PROVISIONS OF SEC. 40(A)(IIB) OF THE ACT FOR DISALLOWANCE OF ELECTRICITY DUTY PAID/PAYABLE AMOUNTING TO RS.43,87,44,000/ - . THE PR. CI T OUGHT TO HAVE NOTED THAT SUCH ORDER WAS PASSED WITHOUT SATISFYING THE TWIN CONDITIONS STIPULATED IN SEC. 263 OF THE ACT THAT THE ASSESSMENT ORDER SHOULD BE ERRONEOUS AS WELL AS PREJUDICIAL TO THE INTEREST OF REVENUE AS HAS BEEN HELD BY THE SUPREME COURT IN THE CASE OF MALABAR INDUSTRIAL CO. (243 ITR 83). THE PR. CIT OUGHT TO HAVE NOTED THAT THERE WAS NO ERROR IN THE ASSESSMENT ORDER PASSED U/S. 143(3) OF THE ACT IN AS MUCH AS THAT THE ELECTRICITY DUTY LEVIED U/S. 3(1) OF THE KERALA STATE ELECTRICITY DUTY ACT 1963 (KSED ACT) ON THE APPELLANT WAS NOT AN EXCLUSIVE LEVY BUT WAS APPLICABLE TO ALL THE LICENCEES FOR DISTRIBUTION OF POWER IN THE STATE OF KERALA AS PER THE DEFINITION OF THE TERM LICENSEE IN SECTION 2(D) OF THE KSED ACT. 2 . NOTWITHSTANDING THE ABO VE CLAIM AND WITHOUT PREJUDICE TO THE ABOVE SUBMISSIONS, ON MERITS OF THE CASE ALSO, THE ACTION OF THE PR. CIT IN SETTING ASIDE THE ASSESSMENT AND RE - DOING THE SAME IS NO SUSTAINABLE IN LAW GOING BY THE PROVISIONS OF SEC. 40(A)(IIB) OF THE I.T. ACT SINCE DUTY UNDER KSED ACT IS NOT AN EXCLUSIVE LEVY ON THE APPELLANT CONSIDERING THE PROVISIONS OF SECTION 3 (1) OF THE KSED ACT AND THE DEFINITION O F THE TERM LICENSEE IN SEC. 2(D) OF THE KSED ACT. AS PER SEC. 2(D) OF THE SAID ACT ALL PERSONS WHO HAVE BEEN GIV EN A LICENCE FOR DISTRIBUTION OF POWER IN THE STATE OF KERALA ARE LICENCEES AND AS PER THE FACTS OF THE CASE, THERE ARE TEN LICENCEES IN THE STATE OF KERALA AS COULD BE NOTED FROM THE INFORMATION DOWNLOADED FROM THE WEBSITE OF KERALA STATE ELECTRICITY REGU LATORY COMMISSION (KSERC). OF THE TEN LICENCEES, TWO OF THEM, I.E., YOUR APPELLANT AND KINESCO POWER & UTILITY PVT. LTD. ARE STATE PUBLIC SECTOR UNDERTAKINGS (STATE PSU) AS DEFINED IN EXPLANATION TO CLAUSE B OF SECTION 40(A)(IIB) OF THE INCOME - TAX ACT, 19 61. THEREFORE, FINDING OF THE PR. CT THAT THE APPELLANT IS THE ONLY STATE PSU IS ALSO FACTUALLY ERRONEOUS AND NEEDS TO BE SET ASIDE/STRUCK DOWN BEING NOT SUSTAINABLE IN LAW. 3. THE PR. CIT HAS ERRED IN LAW IN DIRECTING THE ASSESSING OFFICER TO MAKE A DI SALLOWANCE OF THE ELECTRICITY DUTY AS PER SEC. 3(1) OF THE KSED ACT AMOUNTING TO RS.43,87,44,000/ - WHILE SETTING ASIDE THE ASSESSMENT, WHICH IS NOT IN ACCORDANCE WITH THE PROVISIONS OF SEC. 263 OF THE I.T. ACT AS PER THE LEGAL DECISIONS OF VARIOUS HONBLE HIGH COURTS AND ITATS AS GIVEN BELOW: 1) CIT VS. J.L. MORRISON (INDIA) LTD. (CALCUTTA HIGH COURT) JUDGMENT DELIVERED ON JUNE 18, 2014. II) PCIT VS. BALLARPUR INDUSTRIES LIMITED (BOMBAY HIGH COURT) JUDGMENT DELIVERED ON OCTOBER 13, 2016. III) ANTALA SANJ AYKUMAR RAVJIBHAI VS. CIT (2012) 135 ITD 506 (RAJKOT TRIB.) M.P. NO .125/ COC H/ 2019 4 IV) MANISH KUMAR VS. CIT (2012) 134 ITD 27 (INDORE TRIB.) V) AMIRA PURE FOODS PVT. LTD. VS. PR.CIT (ITAT DELHI) (ORDER DATED 29 TH NOVEMBER, 2017) THE TRIBUNAL HAD DISMISSED THE APPEAL S BY ADJU DICATING TH E ABOVE GROUNDS. THE CONTENTION OF THE LD. AR IS THAT GROUND NO. 3 WAS NOT ADJUDICATED BY THE TRIBUNAL. THE MAIN ISSUE RAISED BEFORE THE TRIBUNAL WAS WITH REGARD TO DISALLOWANCE OF RS.43,87,44,000/ - WHICH WAS DEBITED IN THE PROFIT AND LOSS ACCOU NT TOWARDS ELECTRICITY DUTY U/S. 3(1) OF THE KSED ACT. THE PR. CIT HELD THAT THE AMOUNT DEBITED TOWARDS ELECTRICITY DUTY U/S. 3(1) OF THE KSED ACT BEING AN EXCLUSIVE LEVY ON THE ASSESSEE WHICH IS A STATE GOVERNMENT UNDERTAKING BY THE STATE GOVERNMENT IS T O BE DISALLOWED U/S. 40(A)(IIB) OF THE ACT. ACCORDINGLY, THE PR. CIT GAVE DIRECTION TO THE ASSESSING OFFICER TO DISALLOW THE SAME U/S. 40(A)(IIB) OF THE I.T. ACT WHICH WAS CONFIRMED BY THE TRIBUNAL. GROUND NO. 3 IS NOTHING BUT CHALLENGING THE DIRECTION G IVEN BY THE PR. CIT IN HIS ORDER PASSED U/S. 263 OF THE I.T. ACT TO DISALLOW THE SAID ADDITION U/S. 40(A)(IIB) OF THE I.T. ACT. WHILE ADJUDICATING THE ABOVE ISSUE, THE TRIBUNAL HAD CONSIDERED THE ENTIRE FACTS OF THE CASE AND CONFIRMED THAT DISALLOWANCE U/S . 40(A)(IIB) IS TO BE MADE IN RESPECT OF PAYMENT TOWARDS ELECTRICITY DUTY U/S. 3(1) OF THE KSED ACT. IN ARRIVING AT THE DECISION, THE TRIBUNAL HAD TAKEN NO TE OF ALL THE RELEVANT MATERIAL . HENCE, THERE IS NO NEED TO RECTIFY THE ORDER OF THE TRIBUNAL. IN OU R OPINION, THE ORDER OF THE TRIBUNAL NEED NOT BE SCRUTINISED SENTENCE BY SENTENCE TO FIND OUT WHETHER ALL THE FACTS HAVE BEEN SET OUT IN DETAIL BY THE TRIBUNAL OR WHETHER SOME INCIDENTAL FACTS WHICH ARE APPARENT ON RECORD, HAVE NOT BEEN NOTICED M.P. NO .125/ COC H/ 2019 5 BY THE TRIB UNAL IN ITS ORDER. FURTHER, IF ON A FAIR READING OF THE ORDER OF THE TRIBUNAL, IT IS FOUND THAT IT HAS TAKEN INTO ACCOUNT ALL RELEVANT MATERIAL AND HAS NOT TAKEN INTO ACCOUNT IRRELEVANT MATERIAL IN BASING ITS CONCLUSIONS, THEN THE DECISION OF THE TRIBUNAL IS NOT LIABLE TO BE INTERFERED WITH UNLESS, OFCOURSE, THE CONCLUSIONS ARRIVED AT ARE REVERSED. KEEPING IN MIND THESE PRINCIPLES, IN THE PRESENT CASE, WE FIND THAT THE TRIBUNAL HAS TAKEN NOTE OF ALL THE RELEVANT CIRCUMSTANCES WHICH ARE APPARENT ON RECORD AND WHICH WERE REFERRED BY THE ASSESSEE IN ITS GROUNDS/ARGUMENTS BY THE LD. AR AND IT HAS NOT TAKEN INTO ACCOUNT ANY MATERIAL WHICH COULD BE SAID TO BE IRRELEVANT IN ARRIVING AT ITS CONCLUSIONS. THE ONLY ISSUE IN THIS APPEAL IS WITH REGARD TO DISALLOWANCE OF RS. 43,87,44,000/ - BEING PAYMENT TOWARDS ELECTRICITY DUTY U/S. 3(1) OF THE KSED ACT WHICH WAS RIGHTLY ADJUDICATED BY THE TRIBUNAL. NOW, THE LD. AR IS ARGUING THE CASE ON THE PRETEXT THAT GROUND NO. 3 OF THE ASSESSEE WAS NOT CONSIDERED BY THE TRIBUNAL WHICH IS FAR FROM TRUTH. HENCE, WE REJECT THE ARGUMENTS OF THE LD. AR ON THIS ISSUE. ACCORDINGLY, THE MISCELLANEOUS PETITION FILED BY THE ASSESSEE IS DISMISSED. 6. IN THE RESULT, THE MISCELLANEOUS PETITION FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 9 TH MARCH, 2020. SD/ - SD/ - (GEORGE GEORGE K.) (CHANDRA POOJARI) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE: KOCHI DATED: 9 TH MARCH , 2020 GJ COPY TO: M.P. NO .125/ COC H/ 2019 6 1 . M/S. KSEB LTD., VYDYUTHI BHAVANAM, PATTOM P.O., TRIVANDRUM - 695 004 2. THE THE DEPUTY COMMISSIONER OF INCOME - TAX, CIRCLE - 1(1), TRIVANDRUM. 3. THE COMMISSIONER OF INCOME - TAX(APPEALS), TRIVANDRUM. 4 . THE COMMISSIONER OF INCOME - TAX, TRIVANDRUM. 5 . D. R., I.T.A.T., COCHIN BENCH, COCHIN. 6 . GUARD FILE. BY ORDER (ASSISTANT REGISTRAR) I.T.A.T., COCHIN