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TMI Blog2019 (8) TMI 727X X X X Extracts X X X X X X X X Extracts X X X X ..... 147 was initiated as per explanation 2c(iii) & (iv) given under provisos to section 147 whereby excessive relief allowed and excessive loss or any other allowance admitted are deemed to be a case where income chargeable to tax has escaped assessment, i.e. the reopening was done on the income which has been made subject of excessive relief under the Act and excessive loss or any other allowance 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 Commissi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gh reported 'in (2010) 329 1TR 91 allowing the issue in favour of the assessee. Hence, the reassessment order dt.31.12.2010 may be quashed / set aside as illegal. 4.1 The CIT(A) observed that from the reasons stated for reopening of the assessment, it was evident that there were arithmetical errors in the computation of income in the original assessment 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 wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Assessing Officer was already a subject matter of appeal before the CIT(A) and the CIT(A) considered the issue on the above reasons for re-opening of the assessment and gave relief. Further, the same additions were the subject matter of appeal before the Tribunal in assessee's own case in ITA No. 785/Coch/2008 dated 23rd February, 2010 wherein the appeal of 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 Rs. 15,50,02,113. Electricity duty u/s. 3(1) of the above Act amounting to Rs. 54,98,40,000 and supply surcharge payable under the above Act amounting to Rs. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on belated payment of electricity duty u/s. 3(1) of Kerala Electricity Duty Act, 1963, the CIT(A) observed that claim is liable to succeed considering that C&AG had entered into a finding that this expenditure relates to the current year in question and therefore, directed the Assessing Officer to allow deduction of the sum of Rs. 1,23,36,00,000/- 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ricity Duty Act, it is to be disallowed u/s. 43B of the Income Tax Act. (iv) The Ld. CIT(A) ought to have brought his attention to the decision of Hon'ble High Court of Gujarat on identical issue as reported in CIT vs. Ahmedabad Electricity Company (262 ITR 97) wherein the Hon'ble High Court has held, after an analysis of the provisions 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 hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... B 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. It is clarified that the above conclusion does not mean that the said amount is either exempted 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 Rs. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ral meeting contemplated under s. 166 of the Companies Act is not possible in the case of the appellant as there are no shareholders for the appellant board. On the other hand, under s. 69 of the Electricity Supply Act, the appellant is obliged to keep proper accounts, including the P&L a/c, and prepare an annual statement 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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