2019 (8) TMI 727 - AT - Income Tax

Reopening of assessment u/s 147 - assessee claimed that issues raised in reopening was subject matter of the regular assessment' proceedings u/s. 143(3) and in appeal CIT(A) had given directions 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 sovereign qua principal. Therefore s. 43B cannot be invoked in making the assessment of the liability of the appellant under the IT Act with regard to the amounts collected by the appellant pursuant to the obligation cast on the appellant under s. 5 of the Electricity Duty Act, 1963. - In view of the above judgment of the Jurisdictional High Court, we are inclined to dismiss this ground of appeal of the Revenue. Computation of MAT income u/s 115JB - HELD THAT - Jurisdictional High Court in assessee s own case (supra) wherein it was held assessee, a statutory corporation constituted under s. 5 of the Electricity Supply Act, 1948, is not a company for the purpose of Companies Act and is not required to keep and maintain its accounts in the manner specified in the said Act and, therefore, the fiction laid down in s. 115JB is not applicable while making the assessment of the assessee - In view of the above judgment of the Jurisdictional High Court, we are inclined to dismiss this ground of appeal of the Revenue - decided against revenue

Summary

Issues Involved:
1. Validity of reopening of assessment under section 147 of the Income Tax Act.
2. Disallowance under section 43B towards Supply Surcharge, Inspection Fee, and Electricity Duty.
3. Applicability of Minimum Alternate Tax (MAT) under section 115JB of the Income Tax Act.

Issue-wise Detailed Analysis:

1. Validity of Reopening of Assessment under Section 147:

The Revenue challenged the CIT(A)'s decision that the reopening of assessment under section 147 was invalid. The CIT(A) had concluded that the reopening was based on arithmetical errors and issues already under appeal, thus making the reopening invalid per the second proviso to section 147. The CIT(A) observed that the reasons for reopening were subject matters of appeal before the CIT(A), and therefore, the reopening was not permissible under the second proviso to section 147, which states that the Assessing Officer may not assess or reassess income involving matters that are the subject of any appeal, reference, or revision. The Tribunal upheld the CIT(A)'s decision, noting that the issues for reopening were already discussed and decided in the original assessment appeal. Therefore, the Tribunal quashed the reassessment order passed under section 147, deeming it invalid.

2. Disallowance under Section 43B towards Supply Surcharge, Inspection Fee, and Electricity Duty:

The Revenue contested the CIT(A)'s deletion of disallowance under section 43B for Supply Surcharge, Inspection Fee, and Electricity Duty. The CIT(A) had relied on the jurisdictional High Court's decision in the assessee's own case (329 ITR 91), which held that section 43B could not be invoked for amounts collected by the assessee as an intermediary agent for the government. The Tribunal, agreeing with the CIT(A), cited the High Court's judgment that section 43B applies to sums payable by way of tax to the sovereign qua sovereign, not to sums payable by an intermediary agent. Therefore, the Tribunal dismissed the Revenue's appeal on this ground.

3. Applicability of Minimum Alternate Tax (MAT) under Section 115JB:

The Revenue argued that the CIT(A) erred in concluding that the assessee was not liable for MAT under section 115JB. The CIT(A) had followed the jurisdictional High Court's decision, which held that the assessee, a statutory corporation not required to maintain accounts as per the Companies Act, was not subject to section 115JB. The Tribunal upheld the CIT(A)'s decision, referencing the High Court's judgment that the fiction under section 115JB could not be applied to the assessee, as it was not a company under the Companies Act and was required to maintain accounts as prescribed by the Central Government. The Tribunal dismissed the Revenue's appeal on this ground as well.

Conclusion:

The Tribunal dismissed both appeals of the Revenue, upholding the CIT(A)'s decisions on all grounds. The reopening of assessment under section 147 was deemed invalid, disallowance under section 43B was correctly deleted, and the assessee was not liable for MAT under section 115JB. The Tribunal's decisions were based on the jurisdictional High Court's rulings in the assessee's own case.