DCIT, Yamunanagar V. M/s Yamuna Nagar Power & Infrastructure Ltd., Jagadhari

MA 80/CHANDI/2017

• Counselvise Citation: [2017] 123 COUNSELVISE.COM (IT) 5605 (ITAT-CHANDIGARH)
• Duration Of Justice: 6 month(s) 30 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 28-12-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 29-05-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGH
• Section: 143(3); 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH B, CHANDIGARH BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER M.A.NO.77/CHD/2017 IN ITA NO.1087/CHD/2016 (ASSESSMENT YEAR : 2009-10) & M.A.NO.80/CHD/2017 IN ITA NO.561/CHD/2016 (ASSESSMENT YEAR : 2008-09) THE D.C.I.T., VS. M/S YAMUNA POWER & CIRCLE YAMUNA NAGAR. INFRASTRUCTURE LIMITED, YAMUNA NAGAR. SARDANA NAGAR, AMBALA ROAD, JAGADHRI. PAN: AAACY0554A (APPELLANT) (RESPONDENT) APPLICANT BY : SHRI MANJIT SINGH, SR. DR RESPONDENT BY : SHRI SUDHIR SEHGAL DATE OF HEARING : 06.10.2017 DATE OF PRONOUNCEMENT : 28.12.2017 ORDER PER ANNAPURNA GUPTA, A.M . : BOTH THE ABOVE MISCELLANEOUS APPLICATIONS RELATE T O THE SAME ASSESSEE, PERTAINING TO SEPARATE ORDERS PASSED BY I.T.A.T. FOR ASSESSMENTS YEARS 2009-10 AND 2008-09 IN ITA NO. 1087/CHD/2016 & ITA NO. 561/CHD/2016 DATED 15.3.2017 & 28.11.2016 RESPECTIVELY. 2. IT WAS SUBMITTED BEFORE US THAT THE MISTAKE IN B OTH THE ORDERS SOUGHT TO BE RECTIFIED BY THE REVENUE WA S IDENTICAL. THEREFORE, BOTH THE MISCELLANEOUS APPLIC ATIONS WERE HEARD TOGETHER AND ARE BEING DISPOSED OFF BY W AY OF THIS COMMON ORDER. FOR THE SAKE OF CONVENIENCE, WE SHALL BE 2 DEALING WITH THE MISCELLANEOUS APPLICATION NO. 77/CHD/2017. MA/77CHD/2017 : 3. THE MISTAKE SOUGHT TO BE RECTIFIED BY THE REVENU E PERTAINS TO THE FINDING OF THE ITAT AT PARA 12 OF I TS ORDER THAT THE ISSUE OF THE INITIAL ASSESSMENT YEAR FOR T HE PURPOSE OF CLAIMING DEDUCTION UNDER SECTION 80IA OF THE INC OME TAX ACT HAD ATTAINED FINALITY SINCE THE LD. CIT(APPEALS ) HAD ACCEPTED THE INITIAL ASSESSMENT YEAR AS A.Y. 2008-0 9 DESPITE THE ASSESSEE MENTIONING THE SAME AS A.Y 200 4-05 IN ALL THE AUDIT REPORTS RELATING TO ASSESSMENT YEAR 2 008-09, 2010-11 AND 2011-12, BY ALLOWING THE ASSESSEE TO FI LE FRESH AUDIT REPORT MENTIONING THE INITIAL ASSESSMENT YEAR AS 2008-09 AND NO APPEAL HAD BEEN FILED BY THE REVENU E AGAINST THIS FINDING OF THE CIT(APPEALS). A BRIEF BACKGROUND OF THE CASE IS THAT THE ASSESSEE COMPANY HAD ESTABLISHED TWO WIND MILLS IN JAISALMER, RAJAST HAN ON 30.03.2004 AND 24.01.2004. DURING THE IMPUGNED ASSESSMENT YEAR I.E. ASSESSMENT YEAR 2008-09, THE A SSESSEE CLAIMED DEDUCTION UNDER SECTION 80IA OF 100% OF THE PROFITS EARNED FROM THIS BUSINESS OF WIND POWER GENERATION PROJECT AMOUNTING TO RS. 96,22,131/-. THE INCOME OF ASSESSE E WAS ASSESSED UNDER SECTION 143(3) OF THE ACT AFTER ALLO WING THE SAID CLAIM. THEREAFTER THE CIT, PANCHKULA PASSED A N ORDER UNDER SECTION 263 HOLDING THAT THE ASSESSMENT ORDER WAS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENU E SINCE THE ASSESSEE HAD BEEN INCORRECTLY ALLOWED ENTIRE DE DUCTION 3 OF ITS PROFITS FROM THE WIND MILL BUSINESS, WHEN TH E SAME WAS REQUIRED TO BE SET OFF AGAINST HUGE DECLARED LO SSES OF PRECEDING THREE YEARS, AFTER SETTING OF WHICH NO PR OFIT REMAINED FOR DEDUCTION. ACCORDINGLY, THE ASSESSMENT ORDER WAS CANCELLED AND THE ASSESSING OFFICER WAS DIRECTE D TO RECOMPUTE THE DEDUCTION CLAIMED BY THE ASSESSEE. DU RING ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER CONCL UDED THAT AFTER SETTING OFF LOSSES PERTAINING TO PRECEDI NG YEARS THE INCOME FROM ELIGIBLE BUSINESS WAS NIL AND, THER EFORE, DENIED THE CLAIM MADE BY THE ASSESSEE OF DEDUCTION UNDER SECTION 80IA AMOUNTING TO RS.96,22,131/-. 4. THE MATTER WAS CARRIED IN APPEAL BEFORE THE LD. CIT(APPEALS) WHO DELETED THE ADDITION MADE BY THE ASSESSING OFFICER, FOLLOWING HIS OWN ORDER IN THE C ASE OF THE ASSESSEE FOR ASSESSMENT YEAR 2010-11 WHICH WAS ALSO UPHELD BY THE I.T.A.T. AND FOLLOWING THE CLARIFICAT ION ISSUED BY THE CBDT VIDE CIRCULAR NO.1/2016 DATED 15.2.2016 CLARIFYING THAT THE TERM INITIAL ASSESSMENT YEAR WOULD MEAN THE FIRST YEAR OPTED FOR BY THE ASSESSEE FOR C LAIMING DEDUCTION UNDER SECTION 80IA,WHICH IN THE PRESENT C ASE WAS THE IMPUGNED A.Y ,I.E A.Y 2008-09,THUS NOT REQUIRIN G ANY PRECEDING YEAR LOSSES TO BE SET OFF FROM THE PROFIT S OF THE YEAR. 5. AGAINST THIS ORDER OF THE CIT(APPEALS) THE REVEN UE FILED AN APPEAL BEFORE THE I.T.A.T. WHO VIDE ITS OR DER IN ITA NO.1087/CHD/2016 DISMISSED THE DEPARTMENTAL APPEAL RELYING UPON ITS DECISION IN THE CASE OF THE ASSESS EE FOR 4 ASSESSMENT YEAR 2010-11 AND 2011-12. THE I.T.A.T. G IVING ITS FINDINGS AT PARA 9&10 OF THE ORDER HELD THAT I N VIEW OF DECISIONS OF HIGH COURTS AND I.T.A.T. AND FURTHER I N VIEW OF THE CBDT CIRCULAR NO. 1/2016 DATED 15.02.2016 THE O PTION OF CHOOSING THE INITIAL ASSESSMENT YEAR FOR THE PUR POSE OF CLAIMING DEDUCTION UNDER SECTION 80IA RESTED WITH T HE ASSESSEE AND SINCE THE ASSESSEE HAD OPTED FOR THE I MPUGNED YEAR THAT IS ASSESSMENT YEAR 2008-09 AS THE INITIAL ASSESSMENT YEAR, THE LOSSES PERTAINING TO THE PRECE DING YEARS WERE NOT TO BE SET OFF AGAINST THE PROFITS OF THE IMPUGNED YEAR. THUS IT WAS HELD THAT THE ASSESSEE W AS ENTITLED TO CLAIM THE DEDUCTION OF ENTIRE PROFITS O F ITS ELIGIBLE BUSINESS AMOUNTING TO RS.96,22,131/- AND T HE ORDER OF THE LD. CIT(APPEALS) WAS UPHELD. THEREAFTE R THE I.T.A.T. TOOK UP GROUND NOS. 1AND 2 RAISED BY THE R EVENUE WHICH WAS AGAINST THE ACCEPTANCE BY THE CIT(APPEALS ) OF THE ASSESSMENT YEAR 2008-09 AS THE INITIAL ASSESSMENT Y EAR DESPITE THE ASSESSEE MENTIONING 2004-05 AS THE INIT IAL ASSESSMENT YEAR IN ALL AUDIT REPORTS RELATING TO AS SESSMENT YEAR 2004-05, 2008-09, 2009-10 AND 2010-11 BY ALLOW ING THE ASSESSEE TO ALTER THE INITIAL ASSESSMENT YEAR F ROM 2004- 05 TO 2008-09 BY FILING A FRESH AUDIT REPORT. THE I .T.A.T. DISMISSED THIS GROUND RAISED BY THE REVENUE ON THE BASES THAT THIS ISSUE DID NOT ARISE FROM THE ASSESSMENT O RDER PASSED WHICH HAD LIMITED ITSELF TO THE DIRECTION GI VEN BY CIT IN HIS ORDER PASSED UNDER SECTION 263 OF ACT OF REC OMPUTING THE ELIGIBLE PROFITS OF THE ASSESSEE. THE I.T.A.T. HELD THAT SINCE THE ASSESSMENT ORDER DID NOT GO INTO THE ISSU E OF 5 ALTERATION OF INITIAL ASSESSMENT YEAR IN THE AUDIT REPORT, TAKING UP THIS ISSUE NOW TANTAMOUNTED TO THE REVENU E ATTEMPTING TO EXPAND THE SCOPE OF ASSESSMENT ORDER PASSED AND GO BEYOND THE DIRECTIONS OF CIT IN HIS ORDER PA SSED UNDER SECTION 263 OF THE ACT. THE I.T.A.T. FOR THIS REASON DISMISSED THE GROUND RAISED BY THE REVENUE. ALTERN ATELY, THE ITAT FOUND THAT IDENTICAL ISSUE HAD COME IN APP EAL IN ASSESSMENT YEAR 2010-11 BEFORE THE CIT(APPEALS) WHO HAD HELD THE MENTIONING OF 2004-05 AS THE INITIAL ASSES SMENT YEAR AS AN ERROR ON THE PART OF ASSESSEE, SINCE IN ASSESSMENT YEARS 2008-09, 2009-10 AND 2010-11 THE A UDIT REPORT SHOWED THE INITIAL ASSESSMENT YEAR AS 2008-0 9 ONLY. THE I.T.A.T. FOUND THAT AGAINST THIS FINDING OF THE CIT(APPEALS) THE REVENUE HAD NOT FILED AN APPEAL TO THE I.T.A.T. AND, THEREFORE, HELD THAT THE ISSUE HAD AT TAINED FINALITY. FOR THIS REASON ALSO, THE I.TAT HELD THAT THE REVENUE COULD NOT CHALLENGE THE SAME IN THE IMPUGNE D YEAR. 6. IN THE PRESENT MISCELLANEOUS APPLICATION, THE RE VENUE HAS CONTENDED THAT THE FINDING OF THE ITAT THAT THE ISSUE HAD ATTAINED FINALITY IN ASSESSMENT YEAR 2010-11 SI NCE NO APPEAL HAD BEEN FILED BY THE REVENUE AGAINST THE OR DER OF THE CIT(APPEALS) HOLDING THE MENTIONING OF ASSESSME NT YEAR 2004-05 IN THE AUDIT REPORT AS THE INITIAL ASSESSME NT YEAR AS ERRONEOUS, WAS INCORRECT. IT HAS BEEN CONTENDED IN THE APPLICATION BEFORE US THAT THOUGH NO APPEAL HAD BEE N FILED AGAINST THE ORDER OF CIT(APPEALS) AS HELD THE I.T.A .T., THIS 6 ISSUE HAD BEEN RAISED BEFORE THE HONBLE HIGH COURT IN THE APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF TH E I.T.A.T FOR ASSESSMENT YEAR 2010-11. THE SUBSTANTIAL QUESTI ONS OF LAW RAISED BY THE DEPARTMENT BEFORE THE HIGH COURT WERE MENTIONED IN THE APPLICATION AND ON THIS BASIS, IT HAD BEEN CONTENTED THAT THE ISSUE OF INITIAL ASSESSMENT YEAR HAD NOT ATTAINED FINALITY AND THE FINDING OF THE I.T.A.T I N THIS REGARD WAS INCORRECT. 8. THE LD. COUNSEL FOR ASSESSEE, ON THE OTHER HAND, STATED THAT THERE WAS NO MISTAKE IN THE ORDER OF TH E I.T.A.T. SINCE, AS ADMITTED BY THE REVENUE ITSELF I N ITS PRESENT MISCELLANEOUS APPLICATION, THE FINDINGS OF THE I.T.A.T. THAT NO APPEAL HAD BEEN FILED AGAINST THE ORDER OF THE CIT(APPEALS), WAS CORRECT AND THE CONCLUSION, THEREFORE, DRAWN FROM THE SAME WAS NOT ERRONEOUS. THE LD. COUNSEL FOR ASSESSEE STATED THAT THE CONTENTION OF THE REVENUE THAT IT HAD RAISED THE ISSUE BEFORE THE HON 'BLE HIGH COURT REQUIRES NO CONSIDERATION SINCE THE REVE NUE HAS NOT ADDUCED ANY EVIDENCE THAT THE QUESTION OF L AW RAISED BY THEM HAD BEEN ADMITTED BY THE HON'BLE HIG H COURT. ALTERNATIVELY, THE LD.COUNSEL FOR THE ASSES SEE STATED THAT THE MISTAKE POINTED OUT BY THE REVENUE IN ANY CASE DID NOT ALTER THE OUTCOME OF THE DECISION ON T HE ISSUE SINCE IT HAD ALREADY BEEN HELD BY THE I.T.A.T. THAT THE GROUND RAISED WAS OF NO CONSEQUENCE SINCE IT DID NO T ARISE FROM THE ASSESSMENT ORDER AT ALL. 7 9. WE HAVE HEARD THE CONTENTION OF BOTH THE PARTIES . WE FIND NO MERIT IN THE PRESENT MISCELLANEOUS APPLICAT ION FILED BY THE REVENUE. AS RIGHTLY POINTED OUT BY TH E LD. COUNSEL FOR ASSESSEE THE FINDING OF THE I.T.A.T. TH AT NO APPEAL HAD BEEN FILED AGAINST THE ORDER OF THE LD.CIT(APPEALS) FOR ASSESSMENT YEAR 2010-11 ON THE IMPUGNED GROUND HAS BEEN ADMITTED TO BE CORRECT BY THE REVENUE ITSELF. TO THAT EXTENT THE FINDINGS OF THE I.T.A.T. CANNOT BE SAID TO BE ERRONEOUS. MOREVER, THOUGH TH E REVENUE HAS CONTENDED BEFORE US THAT THE ISSUE HAS BEEN RAISED BEFORE THE HON'BLE HIGH COURT NO EVIDENCE OF ADMISSION OF THE SUBSTANTIAL QUESTION RAISED BY THE REVENUE HAS BEEN FILED BEFORE US. THEREFORE, IT CAN NOT BE STATED THAT THE ISSUE IS ALIVE AND HAS NOT ATTAINED FINALITY, AS RIGHTLY HELD BY THE I.T.A.T. IN ITS ORDER. FURTH ER THE FACT THAT THIS FINDING OF THE I.T.A.T. DOES NOT CHA NGE THE DECISION ON THE ISSUE IS ALSO UNDISPUTED SINCE THE GROUND RAISED BY THE REVENUE HAD BEEN DISMISSED FOR THE RE ASON THAT THE ISSUE RAISED IN THE GROUND DID NOT ARISE F ROM THE ORDER OF THE ASSESSING OFFICER AT ALL AND, THEREFOR E, COULD NOT BE RAISED BEFORE THE I.T.A.T. ALSO. IN VIEW OF THE ABOVE, WE FIND NO MERIT IN THE MISCELLANEOUS APPLICATION FILED BY THE REVENUE AND THE SAME IS, THEREFORE, DISMISSED. 10. THE MISCELLANEOUS APPLICATION FILED BY THE REVE NUE IS DISMISSED. MA/80CHD/2017 : 8 11. SINCE THE ISSUE INVOLVED IN THIS MISCELLANEOUS APPLICATION IS IDENTICAL TO THE ISSUE INVOLVED IN MA/77/CHD/2017 , THE FINDINGS GIVEN IN MA/77/CHD/2017 SHALL APPLY TO THIS MISCELLANEOUS APPLICATION ALSO WITH EQUAL FORCE. THE MISCELLANEOUS APPLICATION FILED BY THE REVENUE IS DISMISSED. 12. IN THE RESULT, BOTH THE MISCELLANEOUS APPLICATI ONS FILED BY THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT. (SANJAY GARG) (ANNAPURNA GUPTA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 28 TH DECEMBER, 2017 *RATI* COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. THE CIT 5. THE DR ASSISTANT REGISTRAR, ITAT, CHANDIGARH