Nava Bharat Energy India Limited V. Deputy Commissioner of Income Tax

WP/13784/2021

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Nava Bharat Energy India Limited filed a writ petition challenging the demand notice issued under the faceless assessment scheme for the Assessment Year 2018-19. The petitioner argued that the demand notice was arbitrary, illegal, and contrary to the assessment order, which had recorded a loss. The High Court found that the demand notice erroneously calculated a tax demand despite the recorded loss and directed a rectification to address the oversight in the TDS credit claimed by the petitioner.

• Counselvise Citation: [2021] 140 COUNSELVISE.COM (IT) 753458 (HC-TELANGANA)
• Appeal Type: Others
• Pronouncement Date: 22-12-2021
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961, Constitution of India
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: J V PRASAD; NAMAVARAPU RAO
• Assessee Lawyers: C V NARASIMHAM
• Keywords: Demand notice; Faceless assessment; Rectification Order; Taxable income; TDS credit; Writ of Mandamus
• Section: 143(3); 154; 234C; 156; 226

Judgement Text

"HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (Special Original Jurisdiction) WEDNESDAY. THE TWENTY SECOND DAY OF DECEIVBER TWO THOUSAND AND TWENTY ONE PRESENT Between: AND 1. 3 Nava Bharat Energy lndia Limited, 6-3-1 109/1 , Nava Bharat Chambers, Bhavan Road, Somajiguda, Hyderabad, Telanqana - 500082 No.AACCN7442G Represented by its Authorised Signalory Raj PAN ...PETITIONER 2.D A Deputy Commissioner of lncome Tax, National Faceless Assessment Centre lncome Tax Department Delhi 110 003 eluJy Commissioner of lncome Tax, qlr9le 5(1) otd Circle 16(1), t.T. Towers, .C Guards. [rlasab Tank, Hyderabad 50OOO4 Union of lndia , Rep by its_Secretary, -D-epartment of Revenue, tr,/inistry of Finance North Block New Delhi - 1 10 001 ...RESPONDENTS Petition under Article 226 of rhe constitution of lndia praying that in the circumstances stated in the affidavit filed therewith, the High court may be pleased to issue writ order or Direction more particularly in the nature of writ of Mandamus declaring the impugned demand notice no. lrBA/AST/S/15 612021- 2211032255991(1) dated 7l4t2o2l for assessment year 2018-19 issued under sectron 156 0f lncome Tax Act by the lst Respondent under faceless assessment scheme 2019 as being arbitrary, ilegar and contrary to assessment order and violative of Articres 1a and 19(i)(g) of constitution of rndia and consequenfly set aside the demand notice and direct the Respondents to rectify the demand notice and computation as per assessment order. IA NO: 1 oF 2021 Petition under section 15'1 cpc praying that in the circumstances stated in the affidavit fired in support of the petition, the High court may be preased to grant liberty to petitioner to independenfly chalenge the assessment order no. lrBA/AST/S/143(3)12021-22r10322s5965(1) dated 7r412021 for assessment year 2018-19 issued U/sec i43(3) of the rncome Tax Act. before the appeilate authority and direct the respondents to treat the tax demand as NrL for purpose of appear. THE HONOURABLE SRI JUSTICE UJJAL BHUYAN AND THE HONOURABLE SMT JUSTICE P.MADHAVI DEVI WRIT PETITION NO: 13784 OF 2021 IA NO: 2 OF 2021 Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to stay the tax demand of Rs.1 3,43,07,880/- and interest thereon demanded by the Respondent under notice no. ITBA/AST/S I 1 5612021 -2211 03225599 1 ( 1 ) dated 7t412021 for assessment year 2018-19, issued under section '1 56 of lncome Tax Act. NO: 4 OF 2021 Petition under section 151 cPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High court may be pleased to permit petitioner to amend the writ affidavit by inserting paras 3 to 9 above as paras 20A to 20G in the writ affidavit and also permit petitioner to amend the main prayer as stated in paa 11and carry out the amendments in the writ affidavit and writ petition and permit to make all consequential amendments' l.TheDeDutVCommissioneroflncomeTax,NationalFacelessAssessmentCentre lncome'Tal Depa(ment Delhi 110 003 2. The Deputy commissioner of lncome Tax, circle^s('1J old circle 16(1)' l.T. - t;;;;:A.b.Guaros'MasaoTank, Hvderabad 500004' PETITIONERS/RESPONDENT NO. 2&3 AND 1. Nava Bharat Energy lndia Limited 6-3-'1'1!9/1 , Nava Bharat Chambers' Rai ' ijh;;; R;;d; soil'ailgrdal Hvoirauaa, Telangana - 500082' Rep bv Authorised RePresentatlve. RESPONDENT/ WRIT PETITIONER 2. Union of lndia,, Rep. by its Secretary^, ^D€partment of Revenue' Ministry of Finance North Block New Delhi - 1 10 0U1 RESPONDENT /RESPONDENT NO. 3 Counsel for the Petitioner: SRI C' V' NARASIMHAM Counsel for the Respondent Nos' 1 and 2: SRI J V PRASAD' SC FOR INCOME TAX Counsel for the Respondent No' 3: SRI NAMAVAI|PU RAJESHWAR RAO' ASSISTANT SOLICITOR GENERAL The Court made the following: OROER lA NO: 3 OF 2021 PetitionunderSectionl5'lCPCprayingthatinthecircumstancesstatedin the affidavit fired in support of the petition, the High court may be preased to vacate the interim orders dated 22lOOl2O21 in l A'No 1 of 2021 and l A No 2 ol 2021 in W.P.No. 13784 of 2021 . THE HON'BLE SRI JUSTICE UJJAL BHUYAN AND THE HON'BLE SMT. JUSTICE P. MADHAVI DEVI WRI'I'PE TITION No.l '784 ol202l -t ORDER : (Per UB' J) We have heard Mr. C.V.Narasimham, learned counsel for petitioner and Mr.J.V.Prasad, learned Standing Counsel for the Income Tax Department. 2. In this writ petition, petitioner has challenged the legality and validity of the Demand Notice dared 07.04.202i issued by the 1\" respondent for the Assessment Year 20 1 8- 1 9 under Section I 56 of the lncome-Tax Act, 1961 (briefly 'the Act' hereinafter) on the ground that it is contrary to the Assessment Order for the said Assessment Year, dated 07.04.2021 . 3. From a perusal of the Assessment Order, we find that income of the petitioner was assessed at (-) 25,86,57,810.00. In other words, it was a loss figure. Nonetheless, in the Demand Notice, a sum of Rs.13,43,07,880.00 was directed to be paid by the petitioner. 4. lt appears that petitioner had flled a rectification petition undel' Section 154 of the Act. In the rectification petition filed on 06.08.2021, petitioner contended that interest under Section 234 (C) of the Act fbl an amount of Rs.46,71,624.00 was wrongly charged as such interest could not have been charged, there being no taxable income. It was also contended that credit for Tax Deduction at Source 2 titj. J & t,Ml). .1 lt-.1'.No. 1 -1781 of 202 I (TDS) for an amount of Rs.l 1,46,220.00 only was granted against the claim of Rs. I 6, I 9,410.00, thereby resulting in shortfall of TDS credit to the extent of Rs.4,73,190.00. 5. Respondent No.l-Deputy Commissioner of Income Tax, Circle-5( 1), Hyderabad has filed a Memo enclosing there with Rectification Order dated 04.12.2021. The Rectification Order reads as under : \"ln this case, assessment order u/s 143(3) r.w.s. 143(3A) & 143(38) of the lncome tax Act, 196l (hereinalier referred as 'Act') was completed for assessrnent year 2018-19 on 0710412021 by making addition of Rs.61,18,734l- towards 'Disallowance of decommissioning liability' and there by assessing the total loss at Rs.25,86,57,8 l4l- as against the returned loss of Fts.26,47,76,5481-. However, while computing the total income, the taxable income was eroneously taken at Rs.27,67,31,4601- and demand of Rs. 1 3,43,07,878/- was raised. Against the mistake committed in the computation sheet, the assessee filed application requesting for passing rectification order u/s 154 of the Act. Accordingly, the Rectification order u/s 154 of the Act was passed on 27lO7l2o2l. The assessee again filed an application dated 06/08/2021 stating that in the said rectification order, the interest uls 234C has been wrongly charged at Rs.46,71,6241- and requested to rectify the same. The claim of the assessee is veritled and found to be correct. Accordingly, the rectiflcation order passed u/s 154 of the Act dated 06/08/202 I is modilled through this order.\" 3 UB,J&PMD,J l/.P.No.13784 rtf 2021 6. Learned counsel fbr petitioner points out that even at this stage, the claim for TDS credit of Rs.4,73,190.00 has been overlooked by the Assessing Off-rcer while carrying out the rectification. '7. In the circunrstances, we direct respondent No.2 to pass a fresh rectiflcation order for the Assessment Year 2018- l9 considering the above grievance ol'the petitioner. The same shall be done within a period of 30 days fionr the date of receipt of a copy of this order. 8. This disposes of the writ petition. No order as to costs. 9. Pending miscellaneous applications, ifany, shall stand closed. //TRUE COPY// SD/.K.AMMAJI ASSISTANT REGISTRAR SECTION OFFICER To, NPJ BS 1. Deputy Commissioner of lncome Tax, National Faceless Assessment Centre lncome Tax Department Delhi 1 1 0 003 2. Deputy CommiSsioner of lncome Tax, Circle 5(1)old Circle 16('1 )' l.T. Towers, A.C.Guards, I rlasab Tank, Hyderabad 500004 3. The Secretary, Department'of Revenue, Union of lndia,, lt4inistry of Finance Norlh Block New Delhi - 110 001 4. One CC to SRI C. V. NARASIwHAM Advocate IOPUC] 5. One CC to SRI J. V. PRASAD (SC FOR INCOME TAX) Advocate IOPUC] - -- 6. One CC to SRI NAI 4AVARAPU RAJESHWAR RAO, ASSISTANT SOLICITOR GENERAL [OPUC] 7. Two CD Copies. B. One spare copy. $x HIGH COURT DATED:2211212021 ORDER WP.No.13784 of 2021 DISPOSING OF THE WRIT PETITION WITHOUT COSTS. nt s rAI€. '( .a ,) t.) 2I llilrl2m2 "