M/s Uttar Haryana Bijli Vitran Nigam Ltd., Panchkula V. DCIT, Panchkula

MA 46/CHANDI/2015

• Counselvise Citation: [2015] 124 COUNSELVISE.COM (IT) 3745 (ITAT-CHANDIGARH)
• Duration Of Justice: 7 month(s) 12 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 10-12-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 04-12-2015
• Assessment Year: 2003-2004
• Appeal Filed On: 28-04-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: HARISH NAYYAR
• Keywords: Depreciation
• Section: 143(3); 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND MS. RANO JAIN, ACCOUNTANT MEMBER M.A. 46/CHD/2015 IN ITA NO. 752/CHD/2011 ASSESSMENT YEAR: 2003-04 UTTAR HARYANA BIJLI VITRAN VS THE DCIT, NIGAM LTD., CIRCLE, SECTOR 6, PANCHKULA. PANCHKULA. PAN : AAACU4562G (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI HARISH NAYYAR RESPONDENT BY : SHRI MANOJ MISHRA, CIT-DR DATE OF HEARING : 04.12.2015 DATE OF PRONOUNCEMENT : 10.12.2015 O R D E R PER BHAVNESH SAINI,JM THIS MISCELLANEOUS APPLICATION HAS BEEN FILED BY TH E ASSESSEE FOR RECALLING OF THE EARLIER ORDER OF THE TRIBUNAL DATED 16.04.2014. 2. BRIEFLY THE FACTS OF THE CASE ARE THAT DEPARTMEN TAL APPEAL IN ITA 752/CHD/2011 FOR ASSESSMENT YEAR 2003 -04 WAS ALLOWED FOR STATISTICAL PURPOSES BY THE TRIBUNA L. IN THE APPEAL BEFORE THE TRIBUNAL, THE REVENUE HAS CHALLEN GED THE ORDER OF LD. CIT(APPEALS) IN DELETING THE ADDITION ON ACCOUNT OF DISALLOWANCE OF DEPRECIATION ON ASSETS CREATED O UT OF CAPITAL GRANTS AND CONSUMER CONTRIBUTIONS. THE REV ENUE 2 WAS ALSO AGGRIEVED BY DECISION OF THE LD. CIT(APPEA LS) IN HOLDING THAT ISSUE INVOLVED IN THE PRESENT CASE IS DEBATABLE AND HENCE NOT COVERED UNDER SECTION 154 OF THE INCO ME TAX ACT. IN THIS CASE, ASSESSMENT UNDER SECTION 143(3) WAS COMPLETED. THEREAFTER, ASSESSING OFFICER PASSED OR DER UNDER SECTION 154 ON THE ISSUE OF DEPRECIATION. AF TER CONSIDERING THE REPLY OF THE ASSESSEE, THE ASSESSIN G OFFICER REDUCED THE ENTIRE GRANT-IN-AID FROM THE COST AND DEPRECIATION WAS DISALLOWED. SIMILARLY, ASSESSING OFFICER NOTED THAT AMOUNT WAS PAID BY THE CONSUMERS TOWARDS COST OF ASSETS, SUCH AS METER, TRANSFORMER, TRANSMISSION LINES, SPECIALLY LAID DOWN FOR THE CONSUMER. THE ASSESSEE HAD NOT REDUCED THE SAID AMOUNT TO CONSUMER CONTRIBUTION FR OM THE ACTUAL COST OF ASSETS AND ASSESSING OFFICER, THUS, DISALLOWED THE DEPRECIATION OUT OF SUCH CONTRIBUTION ALSO. 3. THE LD. CIT(APPEALS) DID NOT AGREE WITH THE ORDE R OF THE ASSESSING OFFICER UNDER SECTION 154 OF THE INCOME T AX ACT BECAUSE THE DEPRECIATION COULD NOT BE WITHDRAWN UND ER SECTION 154 OF THE INCOME TAX ACT AND ALLOWED THE A PPEAL. IN THE DEPARTMENTAL APPEAL, THE TRIBUNAL, AFTER CON SIDERING SUBMISSIONS OF BOTH THE PARTIES, ALLOWED THE APPEAL OF THE REVENUE AND FINDINGS OF THE TRIBUNAL IN PARA 9 & 10 ARE REPRODUCED AS UNDER : 9. THE ISSUE ARISING IN THE PRESENT APPEAL IS IN R ELATION TO SUCH EXERCISE OF POWER UNDER SECTION 154 OF THE ACT. THE ASSESSEE HAD REWORKED THE DEPRECIATION OF CERTAIN P ORTION OF THE ASSETS WHICH WERE NOT ADMISSIBLE IN VIEW OF THE PROVISIONS OF EXPLANATION 10 TO SECTION 43(1) OF TH E ACT. 3 THE NON-APPLICATION OF PROVISIONS OF THE ACT IS A M ISTAKE AND SUCH MISTAKES ARE AMENABLE TO RECTIFICATION BY EXERCISE OF POWERS UNDER SECTION 154 OF THE ACT. THE COMPLEX ITY OF THE WORKING OF THE ALLOWABLE DEPRECIATION TO RE-WOR K VALUE OF ASSETS DOES NOT IN ANY MANNER RESTRAIN THE ASSES SING OFFICER AND THE ASSESSING OFFICER IS OPEN TO CARRY OUT THE RECTIFICATION UNDER SECTION 154 OF THE ACT IN ORDER TO CORRECT ANY MISTAKE IN APPLICATION OF LAW. WE FIND THAT THIS ISSUE IS SQUARELY COVERED BY THE DECISION OF THE HO N'BLE PUNJAB & HARYANA HIGH COURT IN CIT VS INVESTMENT TR UST OF INDIA LTD. 184 TAXMAN 381 (P&H). HOWEVER, WE DI RECT THE ASSESSING OFFICER TO RECOMPUTE THE DEPRECIATION ON REDUCED VALUE OF ASSETS AFTER GIVING A REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE IN THIS REGA RD. THE ASSESSEE IS DIRECTED TO PRODUCE THE RELEVANT DATA/M ATERIAL BEFORE THE ASSESSING OFFICER IN THIS RESPECT. ACCOR DINGLY, THE GROUNDS OF APPEAL RAISED BY THE REVENUE ARE ALL OWED FOR STATISTICAL PURPOSES. 10. IN THE RESULT, APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. 4. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT ASSESSEE RELIED UPON DECISION OF THE HON'BLE PUNJAB & HARYAN A HIGH COURT IN THE CASE OF CIT V INVESTMENT TRUST OF INDI A LTD., 184 TAXMAN 381 BEFORE THE TRIBUNAL WHICH IS ALSO QUOTED IN THE FINDINGS. IN THIS CASE, IT WAS HELD THAT DEPRECIATION GRANTED IN ORIGINAL PROCEEDINGS CANNOT BE WITHDRAWN IN RECT IFICATION PROCEEDINGS. THE TRIBUNAL NOTED IN THE ORDER THAT ISSUE IS COVERED BY JUDGEMENT OF HON'BLE PUNJAB & HARYANA HI GH COURT IN THE CASE OF CIT V INVESTMENT TRUST OF INDIA LTD. (SUPRA) BUT THE FINDINGS ARE CONTRARY TO THE SAME JUDGEMENT. T HEREFORE, THERE IS A MISTAKE APPARENT ON RECORD AND THE ORDER OF THE 4 TRIBUNAL MAY BE RECALLED AND PARTIES MAY BE HEARD A CCORDINGLY ON MERITS. 5. THE LD. DR, HOWEVER, SUBMITTED THAT TRIBUNAL HAS NO POWER TO REVIEW THE ORDER ALREADY PASSED ON MERITS. THEREFORE, MISCELLANEOUS APPLICATION FILED BY ASSESSEE MAY BE DISMISSED. 6. WE HAVE CONSIDERED RIVAL SUBMISSIONS. THE ISSUE BEFORE THE TRIBUNAL WAS WITH REGARD TO WITHDRAWAL OF DEPRE CIATION IN PROCEEDINGS UNDER SECTION 154 OF THE INCOME TAX ACT . THE LD. CIT(APPEALS) HELD THAT THE EXERCISE DONE BY THE ASS ESSING OFFICER IS NOT PERMISSIBLE UNDER SECTION 154 OF THE INCOME TAX ACT AND FURTHER, THE ISSUE IS DEBATABLE AND ACCORDI NGLY ALLOWED THE APPEAL OF THE ASSESSEE. THE ASSESSEE R ELIED UPON DECISION OF HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT V INVESTMENT TRUST OF INDIA LTD. (SUPRA) AND THE SAME JUDGMENT IS ALSO QUOTED BY EARLIER BENCH OF THE TRI BUNAL IN THE IMPUGNED ORDER AND ALSO NOTED THAT ISSUE IS COVERED BY DECISION OF HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT V INVESTMENT TRUST OF INDIA LTD. WE MAY NOT E HERE THAT THE JUDGEMENT OF HON'BLE PUNJAB & HARYANA HIGH COUR T IN THE CASE OF CIT V INVESTMENT TRUST OF INDIA LTD. (SUPRA ) IS IN FAVOUR OF THE ASSESSEE, THEREFORE, ISSUE WAS COVERE D IN FAVOUR OF THE ASSESSEE. HOWEVER, THE TRIBUNAL DID NOT DEC IDE THE ISSUE IN FAVOUR OF THE ASSESSEE AND IT HAS TAKEN A DIFFERENT VIEW ON THE MATTER AND ALLOWED THE APPEAL OF THE RE VENUE. WHEN THE DECISION OF JURISDICTIONAL HIGH COURT IS N OT FOLLOWED BY THE TRIBUNAL, CERTAINLY IT WOULD CONSTITUTE MIST AKE APPARENT ON RECORD. THE ASSESSEE IS, THEREFORE, JUSTIFIED I N FILING THE 5 MISCELLANEOUS APPLICATION CONTENDING THEREIN THAT T HE FINDINGS IN THE MATTER IN ISSUE DO NOT APPEAR TO BE IN AGREE MENT WITH THE OBSERVATIONS OF THE EARLIER BENCH OF THE TRIBUN AL IN THE LIGHT OF DECISION OF HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT V INVESTMENT TRUST OF INDIA LTD. (S UPRA). SINCE CONTRADICTORY FINDINGS HAVE BEEN GIVEN BY THE EARLI ER BENCH OF THE TRIBUNAL, THEREFORE, WE FIND THAT THERE IS A MI STAKE APPARENT ON RECORD WHICH SHALL HAVE TO BE RECTIFIED . 7. CONSIDERING THE ABOVE DISCUSSION, WE FIND IT APP ROPRIATE TO RECALL THE EARLIER ORDER OF THE TRIBUNAL DATED 1 6.04.2014 AND FIX THIS CASE FOR RE-HEARING ON MERITS. IN VIE W OF THE ABOVE, WE RECALL EARLIER ORDER OF THE TRIBUNAL DATE D 16.04.2014 AND DIRECT THE OFFICE TO RE-FIX THE DEPARTMENTAL AP PEAL FOR HEARING ON MERIT AFRESH. NOTICE BE ISSUED TO BOTH PARTIES FOR HEARING OF THE DEPARTMENTAL APPEAL ON 28.01.2016. 8. IN THE RESULT, MISCELLANEOUS APPLICATION FILED B Y THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (RANO JAIN) (BHAVNESH SAI NI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 10 TH DECEMBER,2015. POONAM COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT(A), THE CIT, DR ASSISTANT REGISTRAR, ITAT CHANDIGARH