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TMI Blog2022 (11) TMI 774X X X X Extracts X X X X X X X X Extracts X X X X ..... on Energy Ltd was claimed as capital receipt by the assessee in revised return filed on 31/03/2011 itself. AO had framed the original assessment u/s. 143(3) of the Act on 30/12/2011 by considering the said revised return. If at all there is any error, the error could only be in the said assessment order dated 30/12/2011. Hence, the time limit for reckoning revision jurisdiction u/s 263 has to be from that date on 30/12/2011 in terms of Section 263(2) of the Act and not from the search assessment framed on 29/03/2016. Hence, we hold that the revision order passed u/s.263 by the PCIT for A.Y.2009-10 is barred by limitation and accordingly, quashed. Appeal of the assessee is allowed. - ITA No.3202/Mum/2018 - - - Dated:- 15-11-2022 - Shri M.Balaganesh, Accountant Member And Shri Pavan Kumar Gadale, Judicial Member For the Assessee : Shri Yogesh Thar Ms. Sukanya Jayaram For the Revenue : Shri Manoj Kumar ORDER PER M.BALAGANESH (AM): This appeal in ITA Nos.3202/Mum/2018 for A.Y.2009-10 is directed against the order passed by the ld. Principal Commissioner of Income Tax, (PCIT in short), Central-1, Mumbai for the A.Y.2009-10 against the search assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 15/10/2013 which was converted into search and seizure operation by issuance of search warrant u/s.132 of the Act in the name of ABMCPL and in the case of its group Executive President Shri Shubhendu Amitabh at his residential premises on 16/10/2013. The search and seizure action resulted into seizure of unaccounted cash of Rs.25,13,41,000/-; jewellery and billion worth of Rs.44,82,394/- besides incriminating documents from the office of the ABMCPL and from the residence of Shri Shubhendu Amitabh. Several books of accounts, documents etc., were found seized and inventorised as Annexure-1 to Annexure-23. Also various computer hard discs and laptops were seized which were inventorised as Annexure-24 to Annexure-40. 3.2. The Annexure A-8 seized from the premises of ABMCPL which was subjected to search u/s.132 of the Act was a petty cash book of M/s. Essel Mining Industries Ltd i.e. the assessee before us. This petty cash book belonging to Essel Mining and Industries Ltd was found and seized from the said premises of ABMCPL and since the said entries suggest that the ownership of unaccounted cash lies in the hands of M/s. Essel Mining Industries Ltd and therefore, it has dire ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the same did not emanate or arose for the first time in the search assessment completed u/s.153C r.w.s. 143(3) of the Act on 29/03/2016. Accordingly, it was pointed out that the limitation for invoking proceedings u/s 263 of the Act should be reckoned from the date of completion of original assessment i.e. from 30/12/2011 and not from the search assessment framed on 29/03/2016. Reliance in this regard is placed on the decision of the Hon ble Supreme Court in the case of CIT vs. Alagendran Finance Ltd reported in 293 ITR 1. (ii) Since search took place in the case of Aditya Birla Group on 16/10/2013, consequently proceedings were initiated in the hands of the assessee u/s.153C of the Act on 26/11/2014. As on that date, the proceedings for A.Y.2009-10 in the case of the assessee herein had already been concluded and hence it becomes an unabated assessment. The seized documents passed on by the ld. AO of the searched person u/s.153A of the Act was only petty cash book marked as Annexure A-8 which belong to the assessee and the same was handed over to the ld. AO of the assessee, pursuant to which, the proceedings u/s. 153C of the Act were initiated on the assessee company on 26/11 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... trued as revenue receipt still the same would be eligible for deduction u/s.80IA of the Act for the assessee and thereby, becoming Revenue neutral. Hence, there cannot be any prejudice that could be caused to the interest of the Revenue in this regard warranting invocation of revision jurisdiction by the ld. PCIT u/s.263 of the Act. 3.4. The ld. PCIT ignored all the aforesaid conditions of the assessee and treated the order by the ld. AO on 29/03/2016 u/s.153C r.w.s. 143(3) of the Act as erroneous and prejudicial to the interest of the Revenue on the ground that the same was passed without making any enquiries or verification or without application of mind which should have been made in terms of Clause(a) of Explanation 2 to Section 263 of the Act. Aggrieved, the assessee is in appeal before us. 3.5. The ld. DR before us filed a detailed written submission in respect of each and every ground raised by the assessee before us which are reproduced hereunder:- i) The Return of Income u/s 139(1) of the Income Tax Act, 1961, was filed on 30.09.2009 declaring total income of Rs. 1345,80,61,460/- ii)The Revised Return of Income was filed u/s 139(5) of the Income Tax Act, 196 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the same are offered hereunder. At the outset attention is invited to the judgement of Hon'ble High Court of Delhi in the case of CIT v/s Jansampark Advertising and Marketing (P) Limited, ((2015) 375 ITR 0373 (Delhi)), wherein the Hon'ble High Court vide paragraph no.42 has ruled as under 42. The AO here may have failed to discharge his obligation to conduct a proper inquiry to take the matter to logical conclusion. But CIT (Appeals), having noticed want of proper inquiry, could not have closed the chapter simply by allowing the appeal and deleting the additions made. It was also the obligation of the first appellate authority, as indeed of ITAT, to have ensured that effective inquiry was carried out, particularly in the face of the allegations of the Revenue that the account statements reveal a uniform pattern of cash deposits of equal amounts in the respective accounts preceding the transactions in question. This necessitated a detailed scrutiny of the material submitted by the assessee in response to the notice under Section 148 issued by the AO, as also the material submitted at the stage of appeals, if deemed proper by way of making or causing to be made a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an omission or a wrong statement.... CIT v/s Andhra Cottons Mills Limited and ....For a valid revised return under s. 139(5) it is necessary that omission or wrong statement in the original return must be due to a bona fide inadvertence or mistake on the part of the assessee.... Sunanda Ram Deka v/s CIT. This principle is sorely absent in the instant case. This being so, the tenability and validity of the Revised Return of Income filed u/s 139(5) of the Income Tax Act, 1961, has been struck at its foundation itself. Therefore, the Petitioners claim that the matter was disclosed before the Assessing Officer and formed his opinion stands demolished In this regard, it noteworthy that the opening paragraph of the Assessment Order u/s 143(3) of the Income Tax Act, 1961, dated 30.12.2011 does not mention about the Assessee having filed Revised Return of Income. Thus, the Assessee has not pin-pointed this fact to the Assessing Officer during the course of assessment proceedings. As a result, the Assessing Officer has not formed his opinion on the issue of amount of Rs 22,22,18,000/- on account of nature of Compensation for Short Fall in Guaranteed Performanceand treatm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rmance. Accordingly, after giving an opportunity of being heard through Show Cause Notice dated 21.02.2018 an Order u/s 263 of the Income Tax Act, 1961, was passed on 22.03.2018. Vide this Order, the Pr. CIT, Central-1, Mumbai, set aside the assessment, on the issue of allowing deduction the amount of Rs.22,22,18,000/- on account of Compensation for Short Fall in Guaranteed Performance. In this regard, the Ground of Appeal raised by the Assessee is not correct for the obvious reason that it an indisputable fact that non-taxing of the amount of Rs.22,22,18,000/- on account of Compensation for Short Fall in Guaranteed Performance in the Assessment Order, has rendered the Assessment Order erroneous and prejudicial to the interests of Revenue. In this regard it also needs to be emphasised upon that, following the precedent of Hon'ble Income Tax Appellate Tribunal, Mumbai's decision for Assessment Year 2008-09 in the Assessee's own case, Compensation for Short Fall in Guaranteed Performance is Revenue Receipts in the Assessee's hands. Further, in this regard it also needs to be further emphasised that the income had not been generated from the business of generation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted by the provisions of Section 153C(1) of the Income Tax Act, 1961. The relevant part of the Section is reproduced hereunder Section 153C(1) -Notwithstanding anything contained in section 139, section 147, section 148, section 149, section 151 and section 153, where the Assessing Officer is satisfied that, A careful reading of the above statutory provision clearly shows that the Sections starts with the non-obstante clause 'Notwithstanding and includes sections relevant to the income that has escaped assessments. This statutory provision clearly vindicates the fact that the proceedings u/s Section 143(3) r.w.s. 147 and proceedings u/s 153C r.w.s. 143(3) of the Income Tax Act, 1961, are not identical provisions but later supersedes the former. Therefore, the Supreme Court decision relied upon by the Assessee has no application to the facts of the case, which negates the Assessee's claim. As a result, the time limit for invoking and finalising the assessment proceedings u/s 263 of the Income Tax Act, 1961, is to be reckoned from 29.03.2016 i.e. the date of finalising the assessment u/s 153C r.ws: 143(3) of the income Tax Act, 1961. Third Issue Vi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Commissioner of Income Tax, Central-1, Mumbai, found that considering the ruling of the Hon'ble Income Tax Appellate Tribunal, in the Assessee's own case for A.Y. 2008-09, the impugned income on account of Compensation for Short Fall in Guaranteed Performance is Revenue receipt and not Capital receipt as claimed by the Assessee. Further, this being income not derived from the business of generation of electricity does not qualify for deduction u/s 80IA of the Income Tax Act, 1961, which negates the Assessee's claim that the variation, if any, is Revenue Neutral Further, it needs to be mentioned that the Department is in Appeal before the Hon'ble Supreme Court of India in the case of Bombay High Court judgement in the case Continental Warehousing Corporation, which justifies that the addition not made in the assessment order u/s 153C r.w.s 143(3) of the income Tax Act, 1961, on the basis of incriminating material, is not sustainable. Taking this aspect into consideration, the Ground of Appeal of the Assessee is not acceptable. Fifth Issue Vide Ground No.5 of Form No.36, the Assessee has alleged that the Principal Commissioner of Income Tax has no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... equipment so installed this liability of the payment of damages arises. In the absence of operation, the issue of payment of such damages would not arise. It is only when the wind mill becomes operational on short fall on the production such payment is made. Hon'ble Madhya Pradesh High Court in the case of Prakash Oils Ltd. (supra) held that the payment made as an liquidated damages for not honouring the contract for sale of oil and deoiled cake, such income is directly derived from industrial undertaking, hence eligible deduction u/s 80IA. In our view, the Ld. CIT (A) erred in holding that such income is not derive from the business of the undertaking. Therefore, we direct the Assessing Officer to allow deduction u/s 80IA on this receipt. This ground of the assessee's appeal is allowed. 3.7. It is also relevant to note that the Jaipur Tribunal while rendering the decision had placed reliance on the decision of the Hon ble Madhya Pradesh High Court in the case of CIT vs. Prakash Oils Ltd reported in 58 DTR 279; decision of the Hon ble Supreme Court in the case of CIT vs. Meghalaya Steels Ltd reported in 383 ITR 217 and the decision of the Hon ble Delhi High Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pinion that keeping in view the facts and circumstances of this case and, in particular, having regard to the fact that the Commissioner of Income-tax exercising its revisional jurisdiction reopened the order of assessment only in relation to lease equalization fund which being not the subject of the reassessment proceedings, the period of limitation provided for under sub-section (2) of section 263 of the Act would begin to run from the date of the order of assessment and not from the order of reassessment. The revisional jurisdiction having, thus, been invoked by the Commissioner of Income-tax beyond the period of limitation, it was wholly without jurisdiction rendering the entire proceeding a nullity. 3.10. Hence, we hold that the revision order passed u/s.263 of the Act by the ld. PCIT for A.Y.2009-10 is barred by limitation and accordingly, quashed. 3.11. In view of the aforesaid observations, we hold that the revision order u/s. 263 of the Act passed by the ld. PCIT is unsustainable in the eyes of law for more than one reason as detailed supra. Accordingly, we quash the same. Accordingly, the grounds raised by the assessee are allowed. 4. In the result, appeal of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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