DCIT CIRCLE 16 1, NEW DELHI vs. NTPC VIDYUT VYAPAR NIGAM LIMITED, NEW DELHI

ITA 7288/DEL/2025Status: DisposedITAT Delhi28 April 2026AY 2016-174 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the assessee was merely a custodian of government money received from encashing bank guarantees. Following its earlier consistent view, the Tribunal upheld the CIT(A)'s deletion of the addition.

What were the facts?

The Revenue appealed against the CIT(A)'s decision to delete an addition of Rs. 5,68,60,563/- representing the retention of a bank guarantee. This issue had been previously decided by the ITAT against the Revenue in earlier assessment years.

What were the issues?

Whether the retention of bank guarantee amounts by the assessee, acting as a government custodian, constitutes income taxable in its hands.

Which sections of the Income-tax Act were involved?

Section 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH: ‘C’ NEW DELHI

Before: SHRI SATBEER SINGH GODARA & SHRI NAVEEN CHANDRA

For Appellant: Ms. Uma Upadhyay, CA

Hearing: 09.04.2026Pronounced: 09.04.2026

IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH: ‘C’ NEW DELHI BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER AND SHRI NAVEEN CHANDRA, ACCOUNTANT MEMBER ITA No. 7288/Del/2025 Assessment Year: 2016-17 Vs. NTPC Vidyut Vyapar Nigam DCIT Circle 16 1 419 4th Floor C R Building Limited IP Estate Core 5 Scope Complex 7 New Delhi- 02 Institutional Area Lodhi Road Kasturba Nagar New Delhi- 03 PAN: AABCN7433J (Appellant) (Respondent) Assessee by Ms. Uma Upadhyay, CA Department by Sh. Om Prakash Sr. DR Date of hearing 09.04.2026 Date of pronouncement 09.04.2026 ORDER PER SATBEER SINGH GODARA, JM This Revenue’s appeal for assessment year 2016-17, arises against the Commissioner of Income Tax/National Faceless Appeal Centre (in short, the “CIT(A)/NFAC”) Delhi’s dated 12.09.2025 passed in DIN & Order No. ITBA/NFAC/S/250/2025- 26/1080658871(1), involving proceedings u/s 143(3) of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’).

Heard both the parties. Case file perused.

ITA No.7288/Del/2025 2. Coming to the Revenue’s sole substantive ground that the CIT(A) herein has erred in law and on its facts in reversing the Assessing Officer’s assessment findings adding the amount in question of Rs. 5,68,60,563/- representing the retention of bank guarantee in the assessee’s hands, we noticed at the outset that this tribunal’s earlier common order in the latter’s case in assessment years 2013-14 and 2015-16, has already decided the very issue against the department; reading as under: “ 7.1 Grounds raised in the Revenue's appeal and ground no. 1 and 2 of the appeal of Assessee. There is no dispute to the fact that the assessee is carrying on Government of India mission working on behalf of the Government of India. The contracts have been executed under the policy in directions of Government of India. The bank guarantee was taken and encashed under the guidelines of the concerned ministry. The encashed amounts are deposited in a separate bank account as per the direction of Government of India. The directions of the Government of India through Ministry of New and Renewable Energy to not treat the amount encashed from bank guarantee as income leave no doubt that the assessee was 2 | P a g e

ITA No.7288/Del/2025 so far making irregular treatment of the amounts of bank encashment and interest thereupon by showing the same as income of the assessee. Thus, the assessee being custodian of the Government money such money into the hands of assessee cannot be termed as income at any stage.

7.2 The Bench is of considered opinion that Ld. CIT(A) was not in error in giving the finding that appellant is merely custodian of the money received from encashment of bank guarantee and that the assessee has rightly treated the amount receive on encashment of bank guarantee during financial year as a liability along with the interest is liability. However, he failed to appreciate that the directions of the ministry being clarificatory in nature and also carrying a mandate of compliance by the assessee cannot be prospective only. The administrative directions in financial matter of Government entities have to be taken to be retrospective to time to which controversy relates unless specifically directed to be prospective. Accordingly, Ld. CIT(A) erred in disallowing the reversal of amount received as bank guarantees and interest for earlier years to the extent of Rs. 1,15,82,16,659/-. Accordingly, the issue in the Revenue's appeals are decided against the Revenue and 3 | P a g e

ITA No.7288/Del/2025 the issue no. 1 in the appeal of assessee is decided in favour of the assessee.”

There is further no dispute that both the learned lower authorities have already held all the relevant facts in these assessment years as on similar footing only. We thus adopt judicial consistency to uphold the learned CIT(A) detailed discussion deleting the impugned addition of retention of bank guaranteeing encashment made in the assessee’s hand in very terms. The Revenue fails in its instant sole substantive ground therefore. No further ground or argument has been pressed before us.

This Revenue’s appeal is dismissed in above terms.

Order pronounced in the open court on 9th April , 2026.

Sd/- Sd/- (NAVEEN CHANDRA) (SATBEER SINGH GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 28.04.2026 Pooja Mittal/- Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi

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