TMI Blog2020 (5) TMI 360X X X X Extracts X X X X X X X X Extracts X X X X ..... to revision were pertaining to original assessment and not the reopened assessment; the limitation should also start from the original assessment. In this case as original assessment order u/s 143(3) of the act was passed on 16.01.2014, the revision thereof could have been taken up to 31.3.2016. Impugned order u/s 263 of the act was passed on 26/2/2019, therefore it is clearly beyond the limitation prescribed u/s 263 (2) of the act. Thus the impugned order is barred by limitation and hence quashed. - Decided in favour of assessee. - ITA No. 4607/Del/2019 - - - Dated:- 14-5-2020 - Shri Prashant Maharishi, Accountant Member And Shri K N Charry, Judicial Member For the Assessee : ShriSalilKapoor, Adv.; ShriSunitLal; Ms. Chandani, Advs.; Ms. AnanyaKapoor, Adv. For the Revenue : ShriRaman Chopra[CIT] DR ORDER PER PRASHANT MAHARISHI, A. M. : 01 This appeal is filed by assessee, M/s Jindal steel and Power Ltd ( Assessee, Appellant) against the order u/s 263 of The Income Tax Act, 1961[ The Act] dated 30/3/2019 for Assessment Year 2009 10 passed by The Principal Commissioner of Income Tax, Gurgaon holding that assessment order passed u/s 143 (3) read with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der passed by the PCIT without considering the reply and objections of the Assessee, is illegal and bad in law. 9. That on the facts and circumstances of the case and in law, the PCIT erred in holding that reassessment order dated 30.12.2016 passed under section 147/143(3), was erroneous and prejudicial to the interests of the Revenue on the issue of examination of quantum of production/ mined quantities of iron ore recorded in books of accounts, having regard to some report of Justice MB Shah Commission on illegal mining issued in June, 2013. 10. That the PCIT exceeded his jurisdiction in setting aside the reassessment order on issue of examination of quantum of production/ mined quantities of iron ore, despite the fact that the said issue was not at all subject matter of reassessment proceedings. 11. That the PCIT erred in setting aside the reassessment order on aforesaid issue on vague/ general ground for examination of quantum of production/ mined quantities of iron ore, without pointing out the error, much less prejudice, in the earlier assessments. 12. That in the facts and circumstances of the case the impugned order is illegal and bad in law as no indepe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssion of enquiry, report on illegal mining of Iron Ore manganese dated June 13, page number 35, the production of the assessee for the financial year 2008 09 (relevant to assessment year 2009 10) has been 2205780 metric ton from TRB Iron Ore Mines.During assessment proceedings, AO did not make specific enquiries to ascertain whether the production as mentioned in the justice Shah commission of enquiry report from the TRB mines has been duly incorporated in the books of accounts of the assessee for the relevant assessment year as per the judgment of the honourable Punjab and Haryana High Court in Majinder Singh Kang V CIT 344 ITR 358. So it was stated in show cause notice that it is clear that the order passed by the AO in this case is erroneous and prejudicial to the interest of revenue. Therefore, assessee was provided an opportunity to show cause as to why the assessment order passed by The Deputy Commissioner Of Income Tax, Circle 1 (1), Gurgaon dated 30/12/2016 for the impugned assessment year should not be revised u/s 263 of the income tax act. 07 The assessee submitted its reply by letter dated 18/03/2019 stating that present revision of the proceedings are barred b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section I-I 7 clearly depicts that the Assessing Officer has power to make additions even on the ground on which reassessment notice might not have been issued during reassessment proceedings, hut he arrives at a conclusion that such other income has escaped assessment which comes to his notice during course of proceedings of reassessment under section 148. The provision no where postulates or contemplates that it is only when there is some addition on the ground on which reassessment had been initialed, that the Assessing Officer can make additions on any other ground on the busts of m huh mi mm nun have escaped assessment. The assessing officer failed to make specific inquiry to ascertain whether the production mentioned in the Justice MB Shah Commission of Inquiry report from TRB iron Ore Mines has been incorporated in the books of the assesses- for the relevant assessment year. As the point was not verified by the A O, the order passed by the AO has been erroneous and prejudice to the interest of revenue. The assessment records of the aforesaid assessee for the A. Y.2009-10 were examined. On perusal the order made by the A.O. u/s 143(3) r.w.s. 147 dated 30.12.2016 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... company had furnished all necessary details documents in respect of the share capital raised by it such as name, address. PAN of the Share applicants etc. there was no need of further enquiry. The AO has made inquiries and accepted the same. The ld AR submitted that in the light of his discussion, the provisions of section 263 should not be invoked, as it was accepted by ld AO after verifying necessary documents. I have considered the various case laws quoted by 1.d. AR. it is found that the u of the case laws are not exactly related to the instant case. Perusal of the assessment records shows that the A.O. has no. made any independent inquiries have been made and questioned about the incorporation of above facts in the books of accounts of the assessee for the relevant assessment year. Since, the assessing officer has failed to verify the inquiry report recommendations; the order so passed by the AO has been erroneous and prejudicial to the revenue. The Apex Court in the case of SumatiDayalvs, CIT 12.4 ITR 801) held that the true nature of a transaction has to be ascertained in the light of surrounding circumstances. Thus, it is now well settled that tax authorities ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ved:- These two decisions show that it is not necessary for the Commissioner to make further inquiries before cancelling the assessment order of the Income-tax Officer. The Commissioner can regard the order as erroneous on the ground that in the circumstances of the case the Income-lax Officer should have made further inquiries before accepting the statements made by the assessee in his return. In view of the above facts and circumstances of the case. I am of the confirmed view that the A.O. by not pursued the inquiries to their logical end has made the order erroneous and prejudicial to the interest of revenue. Hence the same deserves to be revised u/s 263 of 1.1. Act. 1961. Therefore, the said order passed by the Assessing Officer is set aside on this particular issue only. The assessing officer is directed to pass fresh assessment order after making thorough and detailed inquiries on this particular issue only. The assessing officer should pass a speaking order after providing adequate opportunity to the assessee. (KrinwantSahay) Principal Commissioner of Income Tax.Gurgaon [ Bold supplied by us] 09 Thus this order is under challenge before u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the decision of the honourable Bombay High Court in case of Asoka BuildconLtd versus PCIT [325 ITR 574], CIT versus Lark chemicals Ltd [230 taxman 305] and CIT versus ICICI bank Ltd [343 ITR 74]. He further submitted that on the issues raised in the present revisionary proceedings, limitations to pass revisionary order has to be, if at all, should be counted from the original assessment order dated 16/1/2014 passed under section 143 (3) of the act which already expired on 31/3/2016. Therefore, he submitted that the order passed under section 263 of the act is barred by limitation and thus the present proceedings are liable to be dropped on this preliminary ground itself. III. He further stated that since the implementation of the reassessment order itself stands stayed by the honourable High Court vide an interim order dated 6/12/2016, any proceeding arising there from is premature, illegal, bad in law and without jurisdiction. IV. He submitted that even otherwise the reassessment order is neither erroneous and nor prejudicial to the interest of the revenue as the twin conditions are not satisfied. He also relied upon several judicialprecedents for the same. V. He reli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld AO on the various issues noted in its order under section 263 was erroneous and prejudicial to the interest of the revenue. Thus, he stated that the order passed by the learned Principal Commissioner of Income Tax is premature, illegal, and bad in law and without jurisdiction. 10 The learned CIT DR vehemently supported the order of the learned Principal Commissioner Of Income Tax.He submitted that :- i. He referred to the notice dated 26/2/2019 which clearly mentions that the production of the assessee for the financial year 2008 09 has been 2205780 metric ton from TRB Iron Ore Mines and during the course of assessment proceedings no specific inquiries were made to ascertain whether the production as mentioned in the enquiry committee report has been duly incorporated in the books of account of the assessee. He therefore submitted that the order passed by the learned assessing officer is correctly held to be anerroneous and prejudicial to the interest of the revenue. ii. He further referred that in the impugned order the learned principal Commissioner has applied his mind which is clearly demonstrated at paragraph number [3] of the page number [3] of the order where ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esser productions shown by the assessee as Shah Commission s report also deals with the same. He also submitted that assessee has not maintained separate books ofaccounts therefore it cannot be said that what the actual production isshown by the assessee on which deduction is claimed. Thus, the issue in reopened proceedings as well as revisionary proceedings is same and both relate to the computation of income of the assessee. 11 In the end, he vehemently supported the order of The Principal Commissioner of Income Tax passed under section 263 of The Income Tax Act. 12 We have carefully considered the rival contention. In the present case, the assessee filed its return of income on 30-9-2009. Ld AO passed draft assessment order on 28- 03-2013. Assessee filed objections before DRP and there-after the order u/s 143 (3) of the act was passed on 16-01-2014. This order was challenged before ITAT and order in ITA no 893 of 2014 was passed on 29-04- 2019. Subsequently, the ld AO issued notice u/s 148 of the act on 31/3/2016 recording following reasons. ANNEXURE A The assessee, M/s Jindal Steel Power Ltd furnished return of Income for A.Y. 2009-10 on 29.11.2011 u/s 139 (1) o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in writing) before the Commissioner of Income Tax, Hissar that the assessee company does not maintain separate unit -wise books of accounts in cnm/RatianaUarum say cash book, bank book, party leader, stock register etc. 4.1 Similarly during assessment proceedings for A.Y. 2011-12 the counsels of the assessee also admitted (in writing) before the Assessing Officer that the assessee company does not maintain separate unit-wise books of accounts in conventional forum say cash book, bank book, party ledger, stock register etc. it was explained that the assessee keeps consolidated books of account on SAP Computer System. 4.2 From the facts as admitted by the counsel of the assessee it is evidence that condition of separate books of accounts is not fulfilled by the company. In view of the factual position it is apparent that the balance sheet P L etc. of the units claiming 801 A and 801B are made on estimated basis only. It is also beyond understanding how the auditors the transactions of the units. Separately when no separate record is maintained and no separate details are kept. 5. In respect of claim of deduction u/s 801A and 801B of the I.T. Act for A.Y. 2009-10 also the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r was passed in FY 2013 - 2014.Impugned order us/ 263 of the act was passed on 26/02/2019. 15 Subsequently, the learned assessing officer recorded the reason for reopening of the assessment which is provided to the assessee on 29/6/2016 by The Deputy Commissioner Of Income Tax. Such reasons captioned are already reproduced above. It is apparent that case of the assessee was reopened to examine the deduction u/s 80 IA and 80 IB of the act as assessee claimed the same on power plant used for captive consumption and further it was not maintaining allegedly separate books of accounts of the eligible undertaking. Thus the issue of production of coal mines was not at all an issue in reopened assessment proceedings. The preciseissues for which an action u/s 263 isinitiated are for assessing the income of the assessee on account of showing the alleged incorrect production as per M B Shah Report. Actions u/s 263 of the act is not initiated for claim of deduction of the assessee u/s 80 IA or 80 IB of the act. Therefore the issue for which revision u/s 263 is proposed is not the issue for which case of the assessee was reopened u/s 147 of the act. Thus it is apparent that action u/s 263 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 143(3)/144C(1) of Act, 1961 was passed on 27.12.2010 proposing some disallowances and addition of income of ₹ 61,00,79,579/ being subsidy by way of sales tax incentive received under the scheme formulated by Government of U.P. The Assessing Officer suggested that it is revenue receipt and not capital receipt as claimed by petitioner though in Maharashtra a similar incentive was treated as capital receipt .Aggrieved by draft assessment order dated 27.12.2010 petitioner filed objection before Dispute Resolution Panel whereupon direction under Section 144C(5) was issued on 27.09.2011 to AO to pass final order. AO thereafter made final assessment on 31.10.2011 assessing total income to ₹ 5,83,91,17,785/ after making addition of ₹ 61,00,79,579/ on account of sales tax incentive treating it as revenue receipt.Petitioner preferred appeal before Income Tax Appellate Tribunal, New Delhi under Section 253(1)(d) of Act, 1961. Tribunal allowed appeal partly vide order dated 08.12.2014. It confirmed addition of ₹ 61,00,79,579/ towards sales tax subsidy treating it as revenue receipt . Against this order petitioner filed further appeal before Honourable hig ..... X X X X Extracts X X X X X X X X Extracts X X X X
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