TaxTMI 
TaxTMI 
2022 (10) TMI 84
X X X X Extracts X X X X
X X X X Extracts X X X X
....wing substantial questions of law: "Whether the impugned order of the tribunal dated 21st December 2018 setting aside the order under Section 263 of the Income Tax Act, 1961 passed by the Commissioner is erroneous in law ?" We have heard Ms. Smita Das De, learned standing counsel for the appellant/revenue and Ms. Udita Saraf, learned advocate appearing for the respondent/assessee. The short question involved in the instant case is whether the learned Tribunal was right in setting aside the order passed by the Principal Commissioner of Income Tax-III, Kolkata (PCIT) dated 12th January, 2017 passed under Section 263 of the Act. The assessee raised several grounds before the Tribunal and the first and foremost ground raised before the Trib....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t they have been established under the Central Act, 1948 and engaged in the business of generation and distribution of power. They operate hydro and thermal power stations which are set up in various location in the State of Jharkhand and State of West Bengal. For the thermal plants, the principal raw materials is coal which the assessee sources from subsidiaries of Coal India Limited which is another public sector undertaking. For the purpose of sourcing of coal, the assessee entered into a coal supply agreement with Coal India Limited in terms of which the subsidiaries of Coal India Limited supply the coal to various plants of the respondent/assessee. Further, it was contended that since the Coal India Limited enjoys almost monopoly stat....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... was arrived at between representative of Bharat Coking Coal Ltd. (BCCL) and the assessee in respect of coal supplies made by BCCL to assessee's Mejia Thermal Power Plant (MTPP). The joint reconciliation was carried out in the month of December 2010 in meeting attended by the representatives of BCCL & DVC. A copy of the Joint Reconciliation Statement signed and executed in December 2010 is enclosed for your ready reference and record. After the joint reconciliation was arrived at the same was sent to the fuel section of MTPP for final approval and onward recommendation to the head office for passing requisite accounting entries in the assessee's books. Inadvertently, however, the senior account executives of the assessee posted at MTPP were....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e facts and circumstances set out in the foregoing, it shall be appreciated that the liability to pay Rs.39,34,86,241/- had attained finality only in the relevant FY 2011-12. Accordingly, such sum which was debited in the assessee's financial books under the head "prior period expenditure" had been rightly claimed by the assessee and allowed by the AO as deduction from the profits of the business for the relevant year. It is further material to submit that the amount claimed as deduction in AY 2012-13 pertained to supply of coal. The consumption of coal is a prerequisite for carrying on assessee's business of power generation. Cost of coal supply is always allowed as deduction in computing assessee's business income. In the year in which ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rest of revenue solely on the ground that the assessing officer failed to verify necessary facts. Furthermore, there was no such allegations made in the show cause notice under Section 263 of the Act and, therefore, no opportunity was afforded on the said issue. Thus, the learned Tribunal taking note of the decision of the Hon'ble Supreme Court in the case of CIT vs. Amitabh Bachchan reported in 384 ITR 200 (SC) held that failure to give any opportunity would render the revisional order under Section 263 of the Act legally fragile not on the ground of lack of jurisdiction but on the ground of violation of principles of natural justice. Thus, we are of the considered view that the learned Tribunal rightly went into the matter and held in f....