ACIT, CIR. 2, ASANSOL vs. EASTERN COALFIELD LIMITED, W.BURDWAN

The present appeal has been preferred by the revenue against the order dated 19-02-2020 passed by the Commissioner of Income Tax (Appeals) [hereinafter referred to as the CIT(A), Asansol for the AY 2008-09.

The only issue raised by the revenue is against the order of the Ld.CIT(A) allowing relief of Rs.34,07,60,000/- by holding that this amount only represented the cumulative figures of “provisions for various liability” of earlier years.

The registry has pointed out that the appeal is time barred by 318 days, however, in view of the decision of the Hon’ble Supreme Court in the case of Miscellaneous Application No. 665 of 2021 in SMW(C) No. 3 of 2020, the period of filing appeal during the COVID– 19 pandemic is to be excluded for the purpose of counting the Eastern Coalfields Ltd. limitation period. In view of this, the appeal is treated as filed within the limitation period.

The facts in brief are that the assessee is a public sector undertaking and is engaged in the business of coal mining. During the assessment proceedings ,the Ld. AO noted that provisions for various liabilities amounting to Rs. 13,37,84,83,000/- was appearing under the head “provisions” in the balance sheet which were not allowable and consequently added the same to the income of the assessee while framing the assessment u/s. 143(3) of the Income-tax Act, 1961 ( in short, referred to as the ‘Act’) vide order dated 31.12.2010. However, as a matter of fact the assessee charged to the profit and loss account a sum of Rs. 1246.57 lakhs on account of provisions created during the year and suo motto added back while computing the total income and correct income was returned in the return of income. The AO ,however, added the amount of cumulative provisions for various liabilities amounting to Rs. 13,37,84,83,000/- which was appearing under the head “provisions” under the head current liabilities in the balance sheet while framing the assessment. The matter was taken up in appeal before the First Appellate Authority and the Ld. CIT(A) allowed the assessee’s appeal by directing the Ld.AO to delete the addition on the ground that this amount was not charged to the P & L account and in fact represented cumulative figure of “provisions for various liability” of earlier years. While giving appeal effect to the order of the ld. CIT(A) ,the AO reduced Rs. 1303,77,23,000/- instead of Rs. 13,37,84,83,000/-, thereby not deleted the disallowance/addition to the tune of Rs.34,07,60,000/- from the assessed income.

Hence, the assessee preferred an appeal before the Ld. CIT(A). In the appellate order, the ld. CIT(A) recorded a find that , the ld. AO

After hearing the rival submissions and perusing the materials on record including the appellate order, we observe that Ld. CIT(A) has correctly allowed the appeal by directing the Ld.AO to reduce a sum of Rs. 34,07,60,000/-, as the Ld. AO has wrongly taken the figure of Rs. 1303,77,23,000/- instead of Rs.1337,84,83,000/-.In view of above facts, we do not find any infirmity in the order of the ld. CIT(A) and therefore the same is upheld by dismissing the appeal of the revenue.

In the result, the appeal of revenue is dismissed.