TMI Blog2021 (6) TMI 620X X X X Extracts X X X X X X X X Extracts X X X X ..... cord on behalf of the Department to take a different view. Therefore, to preserve the consistency in view, as approved by the Hon ble Supreme Court in the case of Radhasoami Satsang [ 1991 (11) TMI 2 - Supreme Court ] and respectfully following the view taken by coordinate Bench, we allow the claims of assessee. - ITA No. 3931/Del/2018 - - - Dated:- 18-6-2021 - Shri Prashant Maharishi, Accountant Member And Shri K. Narasimha Chary, Judicial Member For the Appellant : Sh. S.S. Rana, C.A. For the Respondent : Sh. Sohail Malik, Sr. DR ORDER PER K. NARASIMHA CHARY, J.M. Aggrieved by the order dated 19.03.2018 passed by the learned Commissioner of Income Tax (Appeals)-12, New Delhi ( Ld. CIT(A) ) for the assessment year 2013-14, Modern Papers ( the assessee ) filed this appeal. 2. Brief facts of the case are that the assessee is engaged in the business of Agro Chemicals and set up a manufacturing unit in the State of Jammu Kashmir, which is notified area, entitling the assessee all the benefits of Excise Duty Refund in accordance with the Excise NotificationNos. 56 57 of 2002 dated 14.11.2002 issued by the Central Excise Department and in accordance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (5) of the Act whereas no such bar in so far as Income-tax Appellate Tribunal is concerned. In such circumstances, the CIT(A) also refused to consider the claim of assessee and dismissed the appeal. 5. Aggrieved by such an order, the assessee preferred this appeal originally stating that to allow the additional claim of assessee by treating Excise Duty Refund is within the power of Income-tax Appellate Tribunal. Subsequently, the assessee, however, filed additional ground preferring the claim for deduction of education cess in computing the tax liability also. 6. So far as admission of additional ground is concerned, the law is fairly settled in view of decision of Hon ble Supreme Court in the case of Jute Corporation of India Ltd. vs. CIT, 187 ITR 688 (SC) and National Thermal Power Co. Ltd. vs. CIT, 229 ITR(SC) and other catena of decisions from various authorities, wherein it is held that if consideration of additional grounds does not require any additional material and such additional grounds could be adjudicated with reference to the material already available on record, it would be just and proper to entertain the additional ground for adjudication, as under the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the similar set of facts. Observations and findings reached by Coordinate Bench read as under : 8. Heard the arguments of both the parties and perused the material available on record. 9. In the case of Jute Corporation of India Ltd. Vs CIT vide order dated 04.09.1990, 1991 AIR 241 held that the Hon ble Apex Court while adjudicating on the issue of additional ground held that the declaration of law is clear that the power of the Appellate Assistant Commissioner is coterminus with that of the Income Tax Officer. If that be so, there appears to be no reason as to why the appellate authority cannot modify the assessment order on an additional ground even if not raised before the Income Tax Officer. No exception could be taken to this view as the Act does not place any restriction or limitation on the exercise of appellate power. Even otherwise an Appellate Authority while hearing appeal against the order of a subordinate authority has all the powers which the original authority may have in deciding the question before it subject to the restrictions or limitation if any prescribed by the statutory provisions. In the absence of any statutory provisions to the contrary t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing with the case of NTPC, the Hon ble Apex Court enunciated that it would not be proper if the Tribunal is confined only to issues arising out of the appeal before the Commissioner of Income-tax (Appeals) and it amounts to taking too narrow a view of the powers of the Appellate Tribunal. Undoubtedly, the Tribunal will have the discretion to allow or not allow a new ground to be raised. But where the Tribunal is only required to consider a question of law arising from the facts which are on record in the assessment proceedings we fail to see why such a question should not be allowed to be raised when it is necessary to consider that question in order to correctly assess the tax liability of an assessee. Thus, we find that the Courts have always upheld the powers of the Tribunal or rather directed the Tribunals to assess the correct tax liability of the assessees. In case the assessee has wrongly or owing to lack of knowledge pays tax on an item of amount which is not taxable in accordance with the provisions of the Income Tax Act, the assessee would have every right to pray for right taxation of his taxable income. 13. Thus, it can be said that the claim of the assessee has to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... after taking into account all relevant material which he has gathered, the Assessing Officer shall, by an order in writing, make an assessment of the total income or loss of the assessee, and determine the sum payable by him or refund of any amount due to him on the basis of such assessment. 17. The CBDT Circular No. 772 dtd. 23.12.1998-- explaining the above substituted provision of Section 143(3) explicitly stated that under the erstwhile provisions, there was no provision to issue refund and the Assessing Officer was only empowered to determine the sum payable by the assessee, but under the amended provisions the A.O. is empowered to provide for determination of sum payable by the assessee as well as the refund of any amount due to him. 18. On harmonious reading of these provisions after giving due consideration of the legislative history of Section 143(3) and the judgment of the Hon'ble Calcutta High Court in the case of CIT Vs Britannia Industries Ltd in ITA No. 03/2013 vide order dated 13.07.2017 held that even if it (accepting the fresh claim of the assessee) results in an assessment below the returned income and consequently refund arises, it is valid as pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue of allowability of the claim, we hereby hold that the assessee is eligible to raise the issue at appellate levels. 22. Having said so, the issue whether the Excise Duty subsidy and interest subsidy can be treated as capital receipt is examined. The similar subsidy has been allowed as capital receipt and also the issue of computation of profits u/s 115JB has been examined by the Co-ordinate Bench of Tribunal in ITA No. 3837/Del/2016 in the case of M/s DhanukaAgritech Ltd. wherein the appeal of the assessee is allowed. The same is squarely applicable to the facts of the instant case. Further, the matter stands squarely covered by the order of the Hon ble Jammu Kashmir High Court in the case of Shri Balaji Alloys Vs CIT 333 ITR 335. The snippets of the order of the Hon ble High Court and the decision of the Hon ble Apex Court on the issue is as under: The assessee, pursuant to the New Industrial Policy announced for the State of J K, received excise refund and interest subsidy, etc which it claimed to be a capital receipt. In the alternative, it was claimed that the same was eligible for deduction u/s 80-IB. The AO, CIT (A) and Tribunal rejected the claim and held the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (SC)). Therefore, for the aforesaid reasons given above, the revenue's ground of appeal is dismissed. 24. The appeal of the assessee on the ground of Excise Duty subsidy and interest subsidy as capital receipt is hereby allowed. 25. Regarding the claim of education cess as an allowable expenditure, we find that the CBDT vide Circular No. 91/58/66 ITJ(19) clarified as under: Interpretation of provisions of Section 40(a)(ii) of the I.T Act clarification regarding. Section 40(a)(ii) Recently a case has come to the notice of the Board where the ITO has disallowed the cess paid by the assessee on the ground that there has been no material change in the provisions of Section 10(4) of the old Act and Section 40(a)(ii) of the new Act. 2. The view of the ITO is not correct. Clause 40(a)(ii) of the IT Bill, 1961 as introduced in the Parliament stood as under: (a) any sum paid on account of any cess, rate or tax levied on the profits or gains of any business or profession or assessed at a proportion of, or otherwise on the basis of, any such profits or gains. When the matter came up before the Select Committee, it was decided to omit the word ces ..... X X X X Extracts X X X X X X X X Extracts X X X X
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