DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE-2, NAGPUR, NAGPUR vs. WESTERN COALFIELDS LIMITED, NAGPUR
Facts
The Revenue appealed against the CIT(A)'s order for AY 2021-22. The assessee had sought concessional tax rates under Section 115BAA and filed Form 10-IC belatedly due to COVID-19 related hardship, which was condoned by the CIT(A). A subsequent rectification order under Section 154 had already reduced the assessee's tax liability to nil, making the Revenue's appeal contentious.
Held
The ITAT dismissed the Revenue's appeal. It held that the CIT(A)'s direction to the AO for verification of Form 10-IC was a limited direction and not an order setting aside the assessment. Grounds 1 and 2 were dismissed as the benefit had already been granted via rectification proceedings. Ground 3, challenging the Section 154 rectification order, was dismissed as premature, not having been an issue before the CIT(A).
Key Issues
Whether the CIT(A) could direct the AO to verify Form 10-IC without setting aside the assessment under Section 251(1)(a), and the validity of a Section 154 rectification order when issues were pending before CIT(A), specifically regarding the application of Section 115BAA and condonation of delay in filing Form 10-IC.
Sections Cited
251(1), 144, 154, 143(1), 115BAA
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, NAGPUR BENCH, NAGPUR
Before: SHRI NARENDER KUMAR CHOUDHRY & SHRI K.M. ROY, ACCOUNTANT, MEMBER
IN THE INCOME TAX APPELLATE TRIBUNAL NAGPUR BENCH, NAGPUR
BEFORE SHRI NARENDER KUMAR CHOUDHRY, JUDICIAL MEMBER AND SHRI K.M. ROY, ACCOUNTANT, MEMBER
ITA no.205/Nag./2025 (Assessment Year : 2021–22) Dy. Commissioner of Income Tax ……………. Appellant Circle–2, Nagpur v/s Western Coalfields Ltd. ……………. Respondent Coal Estate, Civil Lines Nagpur 440 001 Assessee by : Shri K.P. Dewani Revenue by : Shri Pankaj Kumar
Date of Hearing – 24/06/2025 Date of Order – 22/09/2025
O R D E R PER K.M. ROY, A.M.
By this appeal, the Revenue has challenged the impugned order dated 20/01/2025, passed by the learned Commissioner of Income Tax (Appeals)–1, Noida, [“learned CIT(A)”] for the assessment year 2021–22.
The grounds raised by the Revenue are extracted below:–
“1. Whether on the facts and circumstances of the case, the Id. CITIA) was justified in directing the AO to do verification, considering provision 251(1) which only empower CIT(A) to such appeal is against an order of assessment made under section 144, he may set aside the assessment and refer the case back to the Assessing Officer for making a fresh assessment, when, the Hon'ble ITAT Nagpar Bench in the case of Firoz
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Faruk Hussain vs ITO Ward 1, Wardha in ITA No. 244/NAG/2019 has held that the Id. CITIA) do not have any power to set aside any issue for verification to the AO. 2. Whether on the facts and circumstances of the case, the Id. CIT(A) was justified in directing the AD to verify, when, as per the provisions of section 251(1)(a) of the Act, the ld. CTT(A) does not have power to set aside the order to the file of the AO for verification as held by Hon'ble ITAT Chennai in ITA No 2244/CHNY 2018 in the case of ACIT vs. Shri Mohamed Hassan considering that order appealed against was order 143(1) of the Act. 3. Whether on the facts and circumstances of the case, the order passed by CPC u/s 154 of the Act dated 08.04.2024 for AY 2021-22 is valid in law, when, the issues decided by CPC in the order u/s 154 of the Act were pending for adjudication with Id. CIT(A) and therefore, the order passed u/s 154 of the Act by CPC was void ab-initio.”
It has been brought to our notice that vide rectification order under section 154 of the Act dated 08/04/2024, the relief sought by the assessee was extended and tax liability was reduced to nil. Accordingly, the learned Authorised Representative for the assessee submitted that there is no substance in appeal of the Revenue since the matter has already reached finality. The learned CIT(A) had granted relief by holding as follows:–
“4.6. Applicability of Section 115BAA and Form 10-IC • Section 115BAA(5) mandates the filing of Form 10-IC to exercise the option for concessional tax rates. However, it is noted that the appellant had exercised the option in the return of income for both AY 2020-21 and AY 2021-22, adhering to the conditions under section 115BAA. • The delay in filing Form 10-IC has been attributed to genuine hardship caused by the COVID-19 pandemic. The CBDT, through Circular No. 6/2022 dated 17/03/2022, extended the due date for filing Form 10-IC for AY 2020-21 to 30/06/2022, acknowledging the difficulties faced by taxpayers during the initial implementation of section 115BAA. • Given the appellant's subsequent compliance by filing Form 10-IC electronically and the bona fide reasons for the delay, the procedural lapse
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should be condoned in the interest of justice. The AO is directed to verify the filing of Form 10-IC and allow the benefit under section 115BAA accordingly.”
He has also given direction to the Assessing Officer to verify the filing of Form no.10–IC. This observation does not tantamount to setting aside the assessment since it is a limited direction. Accordingly, grounds no.1 and 2, are dismissed since the Revenue cannot possibly be aggrieved with such direction for verification particularly when benefit was already extended in rectification proceedings.
Further, ground no.3, is premature, because the rectification order was never an issue for consideration before the appellate authority.
We cannot countenance with the ground so raised whereby objection is directly raised before this forum without raising it before the learned CIT(A), because it is directly against the norms of judicial hierarchy.
In the result, Revenue’s appeal is dismissed. Order pronounced in the open Court on 22/09/2025
Sd/- Sd/- N.K. CHOUDHRY K.M. ROY JUDICIAL MEMBER ACCOUNTANT MEMBER NAGPUR, DATED: 22/09/2025
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Copy of the order forwarded to: (1) The Assessee; (2) The Revenue; (3) The PCIT / CIT (Judicial); (4) The DR, ITAT, Nagpur; and (5) Guard file. True Copy By Order Pradeep J. Chowdhury Sr. Private Secretary Sr. Private Secretary ITAT, Nagpur
