Assistant Commissioner Of Income Tax-12 Raipur vs. Sharda Energy And Minerals Ltd.

PDF · subscribers
TAXC/12/2012HC ChhattisgarhCGHC01004641201011 August 2015Bench: HON'BLE THE CHIEF JUSTICE,HON'BLE SHRI JUSTICE P. SAM KOSHY2 pages
AI SummaryDismissed

What did the High Court hold?

The High Court dismissed the appeals filed by the Department. The Court noted that the issue concerning the sale of electricity from the Captive Power Plant and the applicable rates was covered by a prior decision of the Court in Tax Case No. 31 of 2012. Furthermore, the Tribunal had relied on multiple earlier decisions of its own and had rightly disapproved of the Commissioner of Income Tax's approach. The Tribunal's finding that the Commissioner's exercise was "devoid of legally sustainable basis" and its criticism of the Commissioner's "judicial adventurism" were endorsed. The ratio decidendi is that a Commissioner cannot arbitrarily revise an assessment order if it is based on earlier Tribunal precedents and lacks a legally sustainable foundation, especially when the matter is covered by a High Court ruling. The appeals were dismissed in terms of the earlier High Court order.

What were the facts?

The appeals were filed by the Department (Assistant Commissioner of Income Tax – 1(2), Raipur) against the common orders of the Income Tax Appellate Tribunal (ITAT) for different assessment years, with Sarda Energy and Minerals Ltd. (formerly Chhattisgarh Electricity Co. Ltd.) as the common assessee. The core issue revolved around the sale of electricity produced from a Captive Power Plant to another unit of the assessee and the rates applied. The Department challenged the ITAT's decision to disapprove the Commissioner of Income Tax's approach, which had differed from earlier Tribunal orders. The High Court noted that the Tribunal had found the Commissioner's exercise to be "devoid of legally sustainable basis" and criticized the Commissioner's "judicial adventurism" within the hierarchical system of quasi-judicial forums.

What were the issues?

1. Whether the Commissioner of Income Tax was justified in revising the assessment order under Section 263 of the Income Tax Act, 1961, concerning the sale of electricity produced from a Captive Power Plant to another unit of the assessee and the rates thereof. Assessee's Contention: The assessee, through its counsel, argued that the question regarding the sale of electricity and the rates was covered by a previous order of the High Court in Tax Case No. 31 of 2012 and that the appeal should be disposed of in terms of that order. Revenue's Contention: The revenue, through its counsel, argued that the Commissioner of Income Tax was correct in revising the assessment order. The judgment does not explicitly record the revenue's specific arguments beyond their filing of the appeals and the general challenge to the ITAT's order. However, the context implies they supported the Commissioner's revisionary powers.

Which sections of the Income-tax Act were involved?

Section 263

AI-generated summary — verify with the full judgment below

1 NAFR HIGH COURT OF CHHATTISGARH, BILASPUR Tax Case No.6 of 2012 Assistant Commissioner of Income Tax – 1(2), Raipur, Chhattisgarh ---- Appellant versus Sarda Energy and Minerals Ltd. (Formerly Chhattisgarh Electricity Co. Ltd.), 73-A, Central Avenue, Nagpur ---- Respondent Tax Case No.10 of 2012 Assistant Commissioner of Income Tax – 1(2), Raipur, Chhattisgarh ---- Appellant versus Sarda Energy and Minerals Ltd. (Formerly Chhattisgarh Electricity Co. Ltd.), 73-A, Central Avenue, Nagpur ---- Respondent AND Tax Case No.12 of 2012 Assistant Commissioner of Income Tax – 1(2), Raipur, Chhattisgarh ---- Appellant versus Sarda Energy and Minerals Ltd. (Formerly Chhattisgarh Electricity Co. Ltd.), 73-A, Central Avenue, Nagpur ---- Respondent For Appellant

: Smt. Naushina Afrin Ali, Advocate For Respondent : Shri Neelabh Dubey, Advocate Hon'ble Shri Navin Sinha, Chief Justice Hon'ble Shri Justice P. Sam Koshy Judgment on Board Per Navin Sinha, Chief Justice 12/8/2015 1. In this batch of appeals filed by the Department, the assessee is

2 common and only the assessment years differ. The facts and the questions of law with regard to Section 263 of the Income Tax Act, 1961 (for short 'the Act') are also common and therefore they have been heard together and are being disposed by this common order. 2. Vakalatnama has been filed on behalf of the assessee in Tax Case No.10 of 2012. Shri Neelabh Dubey, Advocate submits that he has been authorised to represent the assessee in all the other appeals and shall be filing his Vakalatnama within a period of one week. Learned Counsel for the Appellant has no objection to the same. 3. Learned Counsel for the Appellant submits that the question with regard to sale of electricity produced from the Captive Power Plant to another unit of the assessee and the rates with regard to the same stand covered by an order of the Court in Tax Case No.31 of 2012. The appeal may therefore be disposed in terms of the same. 4. We additionally find that the Tribunal has also noticed more than one earlier decisions of the Tribunal on the issue and has rightly disapproved the approach of the Commissioner of Income Tax differing with the earlier orders of the Tribunal holding that the very foundation of the exercise conducted by the Commissioner “was devoid of legally sustainable basis”. The Tribunal has rightly criticised the judicial adventurism indulged in by the Commissioner of Income Tax in a system of hierarchy with regard to quasi-judicial forums and Tribunals. 5. The appeals are dismissed. Sd/- Sd/- (Navin Sinha) (P. Sam Koshy) CHIEF JUSTICE

JUDGE Gopal

More judgments on Section 263

All 13,616 judgments and leading authorities on Section 263 →

Recent GST High Court judgments

Search GST case law →