MADHYA PRADESH MADHYA KSHETRA VIDUT VITARAN COMPANY LIMITED,BHOPAL V. THE DCIT- 2-(1), BHOPAL

ITA 551/IND/2023

AI Insights

The case involves Madhya Pradesh Madhya Kshetra Vidut Vitaran Company Limited, an electricity distribution company, which appealed against the penalty imposed by the Deputy Commissioner of Income-Tax under section 271(1)(c) of the Income-tax Act, 1961. The penalty was related to the disallowance of a deduction claimed for 'Provisions for bad and doubtful debt', which was initially allowed but later disallowed upon revision by the PCIT-1, Bhopal. The CIT(A) upheld the penalty, leading to the current appeal. The Tribunal found that the CIT(A) had incorrectly assumed that the assessee had settled the dispute under the 'Vivad Se Vishwas Scheme, 2020', which was not the case for the penalty dispute, and thus set aside the CIT(A)'s order.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 312992 (ITAT-INDORE)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-04-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2012-2013
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Matter Remanded
• Court: TRIBUNAL
• Department Lawyers: FORASSESSEECARRIEDUSTOPARA; OFIMPUGNEDORDERPASSED; FORREVENUEDOESNOTHAVEANYOBJECTIONTOTHESUBMISSIONSOF; SHRIRAM KUMAR YADAV
• Assessee Lawyers: SHRIGAGANTIWARI; RS
• Keywords: Set aside; Revision of order
• Section: 143(3); 263; 271(1)(c)

Judgement Text

"Page 1 of 4 आयकरअपीलीयअिधकरण, इंदौरɊायपीठ, इंदौर IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI B.M. BIYANI, ACCOUNTANT MEMBER AND SHRI PARESH M. JOSHI, JUDICIAL MEMBER ITA No.551/Ind/2023 Assessment Year: 2012-13 Madhya Pradesh Madhya Kshetra Vidut Vitaran Company Limited, 1, Nishtha Parisar, Bijli Nagar Colony, Govindpura, Bhopal बनाम/ Vs. DCIT-2(1) Bhopal (Assessee/Appellant) (Revenue/Respondent) PAN: AADCM6799G Assessee by Shri Gagan Tiwari, Advocate & AR Revenue by Shri Ram Kumar Yadav, CIT-DR Date of Hearing 28.04.2025 Date of Pronouncement 30.04.2025 आदेश/ O R D E R Per B.M. Biyani, A.M.: Feeling aggrieved by order of first-appeal dated 03.11.2023 passed by learned Commissioner of Income-Tax (Appeals)-NFAC, Delhi [“CIT(A)”] which in turn arises out of penalty-order dated 31.03.2018 passed by learned DCIT-2(1), Bhopal [“AO”] u/s 271(1)(c) of Income-tax Act, 1961 [“the Act”] for Assessment-Year [“AY”] 2012-13, the assessee has filed this appeal on the grounds mentioned in Appeal Memo (Form No. 36). Madhya Pradesh Madhya Kshetra Vidut Vitaran Company Limited, ITA No. 551/Ind/2023 - AY 2012-13 Page 2 of 4 2. The background facts leading to this appeal are such that the assessee is an electricity distribution company. For AY 2012-13, the assessee filed return declaring a loss of Rs. 10,82,05,00,000/-. The case was selected for scrutiny and the AO passed assessment order dated 24.03.2015 u/s 143(3) reducing loss to Rs. 1,31,27,00,000/- due to certain additions/disallowances. Thereafter, the PCIT-1, Bhopal [“PCIT”] found the assessment-order passed by AO as erroneous-cum-prejudicial to the interest of revenue, raising an issue that the AO had wrongly allowed deduction of Rs. 57,52,00,000/- claimed by assessee on account of “Provisions for bad and doubtful debt”. The PCIT carried such a view on the footing that the deduction of “Provisions for bad and doubtful debt” is allowed only to banks and financial institutions u/s 36(1)(viia) and not to assessee which is engaged in electricity distribution. Ultimately, the PCIT passed revision- order dated 23.03.2017 u/s 263 directing the AO to re-frame assessment after examining the issue of deduction of “Provisions for bad and doubtful debt”. Pursuant to such revision-order, the AO passed order of fresh assessment dated 15.06.2017 u/s 143(3) r.w.s. 263 wherein he made an addition of Rs. 57,52,00,000/- by disallowing the claim of assessee. This addition/disallowance made by AO further reduced loss of assessee by Rs. 57,52,00,000/-. Therefore, the AO also initiated penalty proceedings u/s 271(1)(c) and ultimately passed penalty-order dated 31.03.2018 imposing a penalty of Rs. 18,70,00,000/- qua the addition/disallowance of Rs. 57,52,00,000/-. Aggrieved by penalty-order, the assessee filed first-appeal to Madhya Pradesh Madhya Kshetra Vidut Vitaran Company Limited, ITA No. 551/Ind/2023 - AY 2012-13 Page 3 of 4 CIT(A) but did not get any success. Now, the assessee has come in next appeal before us. 3. Ld. AR for assessee carried us to Para 2 & 3 of impugned order passed by CIT(A), reading as under: “2. अपीलीयकायŊवाहीकेदौरान, įरकॉडŊ परउपलɩ िववरणकेअनुसार, यहदेखागया हैिकिनधाŊरणवषŊ 2012-13 केउपरोƅ िवचाराधीनअपीलके᎘लएŮȑƗ करिववादसे िवʷासयोजना, 2020 केतहतफॉमŊ 5 िदनांक10.05.2023 (बकायाकरकेपूणŊ और अंितमभुगतानके᎘लएआदेश) कोनािमतŮािधकारीयानीŮधानआयकरआयुƅ केȪारा जारीिकयागयाहै।चूंिकअपीलकताŊ नेिववादसेिवʷासयोजना, 2020 औरफॉमŊ 5 का लाभलेनेकािवकʙ चुनाहै, जोपहलेसेहीनािमतŮािधकारीȪाराजारीिकयागयाहै, वतŊमानअपीलकोŮȑƗ करिववादसेिवʷास, अिधिनयम, 2020 कीधारा4 (2) के Ůावधानोंकेअनुसारवापसले᎘लयागयामानाजाताहै। 3. पįरणामˢŝप, सांİƥकीयउȞेʴ के᎘लएअपीलकोवापसलेनेकेआधारपरखाįरज करिदयाजाताहै।” 4. Referring to above, Ld. AR submitted that the CIT(A) has dismissed assessee’s first-appeal on a wrong assumption of fact that the assessee has settled its case under ‘Vivad Se Vishwas Scheme, 2020’ [“VsV”]. He explained that the correct position is such that the assessee settled under VsV its case of dispute arising from assessment-order dated 24.03.2015 passed by AO u/s 143(3) and not the dispute arising from penalty-order dated 31.03.2018 which was subject-matter of appeal before CIT(A). Ld. AR has also filed copies of Form No. 1 to 5 of VsV at Pages 1-15 of Paper-Book to demonstrate this correct position. Therefore, Ld. AR requested, the order Madhya Pradesh Madhya Kshetra Vidut Vitaran Company Limited, ITA No. 551/Ind/2023 - AY 2012-13 Page 4 of 4 of first-appeal passed by Ld. CIT(A) deserves to be set aside and the case be restored at the level of CIT(A) for a fresh adjudication on merit. 5. Ld. DR for revenue does not have any objection to the submissions of Ld. AR. 6. The submissions made by parties as above are accepted and in view of same, the impugned order passed by CIT(A) is set aside and the CIT(A) is directed to re-fix the first-appeal of assessee and dispose of same on merit after hearing assessee. 7. Resultantly, this appeal is allowed for statistical purpose. Order pronounced in open court on 30/04/2025 Sd/- Sd/- (PARESH M. JOSHI) (B.M. BIYANI) JUDICIAL MEMBER ACCOUNTANT MEMBER Indore िदनांक/Dated : 30/04/2025 Patel/Sr. PS Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File By order UE COPYSr. Private Secretary Income Tax Appellate Tribunal Indore Bench, Indore "