M/S. ODISHA COAL AND POWER LIMITED.,BHUBANESWAR vs. PR. CIT-1, BHUBANESWAR

आयकर अऩीऱीय अधधकरण, कटक न्यायऩीठ,कटक IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK BENCH CUTTACK (THROUGH VIRTUAL HEARING) BEFORE SHRI GEORGE MATHAN, JUDICIAL MEMBER AND SHRI GIRISH AGRAWAL, ACCOUNTANT MEMBER आयकर अऩीऱ सं/ITA No.116/CTK/2023 (ननधाारण वषा / Assessment Year : 2018-2019) M/s Odisha Coal and Power Ltd Vs Pr.CIT, Bhubaneswar-1 Zone A, Ground Floor, Fortune Tower, Chadrasekharpur, Bhubaneswar-751023 PAN No. :AACCO 0959 K (अऩीऱाथी /Appellant) (प्रत्यथी / Respondent) .. ननधााररती की ओर से /Assessee by : Sh B.K.Mahapatra & Sh.A.K.Sabat, CAs राजस्व की ओर से /Revenue by : Dr. Abani Kanta Nayak, CIT-DR सुनवाई की तारीख / Date of Hearing : 29/11/2023 घोषणा की तारीख/Date of Pronouncement : 29/11/2023 आदेश / O R D E R Per Bench : This is an appeal filed by the assessee against the order of the ld. Pr.CIT, Bhubanesar-1, dated 15.03.2023, passed u/s.263 of the Act in DIN & Order No.ITBA/REV/F/REV5/2022-23/1050797164(1), for the assessment year 2018-2019. 2. It was the submission of the ld. AR that the assessee is a company, which was set up and engaged in set up with objective of mining & supply of coal. The return filed by the assessee for the impugned assessment year came to be processed u/s.143(3) of the Act by the National E-Assessment Centre on 19.01.2021 accepting the returned income. The ld. Pr.CIT issued a show cause notice u/s.263 of the Act on the ground that the assessee had claimed depreciation to an

2 ITA No.116/CTK/2023 extent of Rs.13,48,19,616/-. The said depreciation was in respect of intangible assets representing mining rights. The ld. Pr.CIT issued show cause notice to the assessee and the assessee had also replied to the same that the intangible assets of Rs.49,01,85,439/- represented mining lease rights and the rights for use of forest land. It was also brought to the attention of the ld. Pr.CIT that the intangible asset was entitled to the depreciation. It was the submission that the ld. Pr.CIT did not accept the contention of the assessee and had proceeded to set aside the assessment with a direction to the AO in para 8 of his order, which reads as under :- 8. Thus, considering the facts of the case and the judicial views crystallized through of judgments as narrated above, I hold that the assessment order in this case dated 29/09/2018 is erroneous in so far it is prejudicial to interest of revenue. The assessment is set aside on this limited issue & the AO is directed to examine and disallow, as warranted, the depreciation claims of the assessee as made in the return of income and re-compute the total income, after affording due opportunity to the assessee & within the period of limitation. 3. It was the submission that while setting aside the issue of depreciation on the intangible assets to the AO the ld. Pr.CIT has directed to the AO to examine “and disallow” as warranted the depreciation claimed by the assessee. It was the submission that the direction “and disallow” was in fact the direction to the AO to make the disallowance. It was the submission that this direction of the ld. Pr.CIT was erroneous. It was the submission that the issue of the investment in the intangible assets had been considered by the AO when considering the assessment u/s.143(3) of the Act. It was the submission that the order passed u/s.263

3 ITA No.116/CTK/2023 of the Act was liable to be quashed or in the alternative the direction of the ld. Pr.CIT was to be modified to remove the term “and disallow”. 4. In reply, ld. CIT-DR submitted that in para 3 of the assessment order the AO has specifically mentioned that the details filed by the assessee had been examined only with regard to the reasons for which the case was selected for complete scrutiny. It was the submission that it was the investment in the intangible assets that has been considered and not to the depreciation in respect of the intangible assets. It was the submission that he had no objection in modifying the order of the ld. Pr.CIT to remove the term “and disallow”. It was the submission that, except the above, the order of the ld. Pr.CIT was liable to be upheld. 5. We have considered the rival submissions. A perusal of the assessment order passed u/s.143(3) of the Act clearly shows that in the course of assessment, only the investment in the intangible assets has been examined by the AO. The depreciation in respect of the same has not been considered by the AO. This being so, we are of the view that the direction of the ld. Pr.CIT u/s.263 of the Act to examine the depreciation claim of the assessee as made in the return of income is on the right footing and does not call for any interference. However, in the direction of the ld. Pr.CIT the words used as “and disallow” stand removed, insofar as once the ld. Pr.CIT gives a direction to examine and recompute after giving an opportunity to the assessee, he cannot give a direction to make disallowance. On this finding, the order of the ld. Pr.CIT passed u/s.263 of the Act stands upheld.

4 ITA No.116/CTK/2023

Order dictated and pronounced in the open court on 29/11/2023.

Sd/- Sd/- (GIRISH AGRAWAL) (GEORGE MATHAN) ऱेखा सदस्य/ ACCOUNTANT MEMBER न्यानयक सदस्य / JUDICIAL MEMBER कटक Cuttack; ददनाांक Dated 29/11/2023 Prakash Kumar Mishra, Sr.P.S. आदेश की प्रनतलऱपऩ अग्रेपषत/Copy of the Order forwarded to : 1. अऩीऱाथी / The Appellant- M/s Odisha Coal and Power Ltd Zone A, Ground Floor, Fortune Tower, Chadrasekharpur, Bhubaneswar-751023 प्रत्यथी / The Respondent- 2. Pr.CIT, Bhubaneswar-1 आयकर आयुक्त(अऩीऱ) / The CIT(A), 3. 4. आयकर आयुक्त / CIT ववभागीय प्रतततनधध, आयकर अऩीऱीय अधधकरण, कटक / DR, 5. ITAT, Cuttack 6. गार्ड पाईऱ / Guard file. सत्यावऩत प्रतत //True Copy// आदेशानुसार / BY ORDER,

(Assistant Registrar) आयकर अऩीऱीय अधधकरण, कटक/ITAT, Cuttack Date Initial 1. Draft dictated on 29.11.23 Sr.PS 2. Draft placed before author 29.11.23 Sr.PS 3. Draft proposed & placed before the second JM/AM member 4. Draft discussed/approved by Second Member. JM/AM 5. Approved Draft comes to the Sr.PS/PS Sr.PS/PS 6. Kept for pronouncement on Sr.PS 7. File sent to the Bench Clerk Sr.PS 8. Date on which file goes to the OS 9. Date on which file goes to the AR 10. Date of dispatch of Order.