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2019 (8) TMI 727

..... ions to the AO for allowing claims after verification of the facts/documents - HELD THAT:- When the issues were subject matter of appeal before the CIT(A) in the case of original assessment, in our opinion, the Assessing Officer cannot re-visit the same by re-opening the assessment u/s. 147 of the Act and also in view of second proviso to section 147. Further, the Jurisdictional High Court in assessee’s own case [2010 (11) TMI 127 - KERALA HIGH COURT] has deleted the addition made u/s. 43B with regard to supply surcharge, inspection fee and electricity duty and liability u/s. 115JB of the Act in favour of the assessee. Being so, in our opinion, re-opening of the assessment is bad in law and hence, the assessment order passed u/s. 147 of the Act vide order dated is 31.12.2010 is quashed. Disallowance of the Supply surcharge, Inspection fee, Electricity Duty u/s 43B - HELD THAT:- The Jurisdictional High Court in assessee’s own case [2010 (11) TMI 127 - KERALA HIGH COURT] wherein it was held when s. 43B(a) speaks of the sum payable by way of tax etc., the said provision is dealing with the amounts payable to the sovereign qua sovereign, but not the amounts payable to the s .....

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..... under this Act has been computed. 3. The Ld. Commissioner of Income-tax(Appeals) held the reopening made u/s 147 of the Act by issue of notice u/s 148 of the Act on 30.03.2010 js invalid on the ground that the reasons recorded by the Assessing officer for reopening of assessment are subject matters of appeal before the CIT(A). Ld. CIT(A) ought to have noticed that the appeal was filed on the issue involved and not on the quantum of addition and hence proviso to 148 does not apply. 4. The Ld. Commissioner of Income-tax(Appeals) ought to have noticed that the issues regarding admissibility of allowance/deduction has not reached finality as the same is pending before the Apex Court. 5. For these and other grounds that may be advanced at the time of hearing the order of the learned Commissioner of appeals, Trivandrum on the above points may be set aside and that of the Assessing Officer restored. 3. The facts of the case are that the assessee filed return of income for AY 2005-06 on 31.10.2005 declaring total income of Rs. Nil. The assessment under section 143(3) of the I.T. Act was completed on 24.12.2007 by assessing total income at ₹ 3,81,97,748/- under normal provisions and .....

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..... ent order and the assessment was reopened for purely for correcting those arithmetical mistakes. However, while disposing the appeal against the original assessment order, the CIT(A) had discussed all these issues and decided in the appeal order passed on 26.02.2008. The appeal effect giving order was passed by the Assessing Officer on 31.03.2008. Thus, according to the CIT(A), the reopening was made on issues which were under appeal before CIT(A). The CIT(A) referred to the relevant provisions of section 147 of the Act are as under: "Income escaping assessment. 147. If the Assessing Officer has reason to believe that any income chargeable to tax has escaped assessment for any assessment year, he may, subject to the provisions of sections 148 to 153, assess or reassess such income and also any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in the course of the proceedings under this section, or recompute the loss or the depreciation allowance or any other allowance, as the case may be, for the assessment year concerned (hereafter in this section and in sections 148 to 153 referred to as the relevant assessment year): Prov .....

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..... the Department was partly allowed in the case of original assessment which was completed u/s. 143(3) of the Act. 6.1 Further, the CIT(A) vide order dated 26.02.2008 had made observations on the following issues as under: 6.2 On the first issue regarding addition of electricity duty payable and supply surcharge payable, the CIT(A) concurring with the contention of the assessee observed that the electricity duty payable u/s. 4(1) of the Kerala State Electricity Duty Act, 1963 amounting to ₹ 15,50,02,113. Electricity duty u/s. 3(1) of the above Act amounting to ₹ 54,98,40,000 and supply surcharge payable under the above Act amounting to ₹ 5,26,62,852/- levied and unpaid are not to be treated as the income of the assessee for the assessment year on the ground that the same are trading receipts covered by section 43B of the Act. The electricity Duty u/s. 4(1) of the Act and supply surcharge payable under Kerala State Electricity Duty Act, 1963 are not items of trading receipts being amounts collected by the Board only as an intermediary agent and there is no liability on the part of the Board to make payment of these sums to the Govt. if it is not collected from the co .....

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..... ,23,36,00,000/- as expenditure incurred wholly and exclusively for the purpose of business after due verification of the supporting documentary evidences by giving an opportunity to the assessee to adduce evidence and also accepting the submission that the interest paid is only of a compensatory nature and the Assessing Officer was asked to pass a speaking order on the issue. 6.5 When these issues were subject matter of appeal before the CIT(A) in the case of original assessment, in our opinion, the Assessing Officer cannot re-visit the same by re-opening the assessment u/s. 147 of the Act and also in view of second proviso to section 147 which reads as follows: Provided also that the Assessing Officer may assess or reassess such income, other than the income involving matters which are the subject matters of any appeal, reference or revision, which is chargeable to tax and has escaped assessment." [Emphasis Supplied] 6.6 Further, the Jurisdictional High Court in assessee s own case reported in (2010) 329 ITR 91 has deleted the addition made u/s. 43B with regard to supply surcharge, inspection fee and electricity duty and liability u/s. 115JB of the Act in favour of the assess .....

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..... of Bombay Electricity Duty Act, 1958, whose provisions are analogous to the provisions of the Kerala State Electricity Duty Act, 1963, that "the liability of the electricity company to pay the duty collected to the Government had been spelt out in clear terms in the relevant statute and it cannot be held as not liable to pay the duly collected to the State Government on the ground that the relationship is only one of principal qua agent and hence provisions of section 43B is applicable". 3. The Ld. Commissioner of Income-tax(Appeals) erred in concluding that the appellant is not liable for MAT u/s 1 15JB: (i) The Learned Commissioner of Income-tax(Appeals) failed to note that the Hon'ble Kerala High Court's decision in assessee's own case for the earlier years (A Ys 2002-03 to 2005-06) reported in 329 ITR 91 and relied on by him on the issue of liability u/s. 115JB has not become conclusive as the SLP filed by the department against this order is pending for decision before the Hon'ble Apex Court. (ii) The Learned Commissioner of Income-tax (Appeals) ought to have noticed that the decision of Hon'ble HC of Kerala on the applicability of sec. 115JB to t .....

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..... pted from the liability of income-tax or it should be treated as income for the purpose of the Act. Those questions will have to be independently examined, having regard to the other provisions of the IT Act, primarily by the assessing authority. In view of the above judgment of the Jurisdictional High Court, we are inclined to dismiss this ground of appeal of the Revenue. 11. Regarding Ground No. 3, the facts of the case are that the assessee had not computed the income chargeable under section 115JB of the Act in the return of income filed. The Assessing Officer had computed MAT income under 115JB of the Act at ₹ 331,75,83,578/-. 12. On appeal, the CIT(A) observed that the Assessing Officer had also observed that the issue of MAT tax liability was covered in favour of the assessee by the decision of Hon'ble High Court of Kerala vide order dated 12.11.2010 for AY 2002- 03 to 2005-06. Following the decision of jurisdictional High Court, the CIT(A) held that the assessee wass not liable for MAT tax under section 115JB of the Act and allowed this ground of the assessee. 13. After hearing both the parties, we find that a similar issue was considered by the Jurisdictional Hig .....

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..... of accounts, balance sheet, etc. in such form as may be prescribed by the Central Government. Thus, the appellant though is deemed to be a "company"-both by virtue of operation -of s. 80 of the Electricity Supply Act for the purpose of IT Act and by virtue of the definition of the expression "company" under the IT Act-the appellant is required to keep and maintain its accounts in a manner specified by the Central Government, and not in the manner specified in the Companies Act. When s. 115B was introduced, the section expressly excluded from its operation bodies like the appellant. Coming to s. 115JA, though such express exclusion is absent, the CBDT issued a Circular No. 762, dt. 18th Feb., 1998 excluding the bodies like the appellant from the operation of the said section. Though under the normal rules of interpretation of statutes the omission of a clause which existed in the statute at some point of time by a subsequent amendment would indicate that the legislature intended not to give the benefit of such clause any more to those who were getting the benefit of such exclusion clause, it Is not an absolute rule. The other attendant circumstances, the context, .....

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