DCIT, CIRCLE - 9(1), , KOLKATA vs M/S. DAMODAR VALLEY CORPORATION, KOLKATA

Income Tax Appellate Tribunal, KOLKATA ‘D’ BENCH, KOLKATA

Before: Shri P.M. Jagtap, Vice-(KZ) & Shri S.S. Viswanethra Ravi

Per Shri P.M. Jagtap, Vice-President (Kolkata Zone):- This appeal is preferred by the Revenue against the order of ld. Commissioner of Income Tax (Appeals)-23, Kolkata dated 27.08.2018 and the grounds raised

therein by the Revenue read as under:-

1. Whether the CIT(A) is justified in facts and in law to allow the appeal of the assessee against the revision assessment order of the Assessing Officer dated 22.12.2017 on the mere ground that the Hon'ble ITAT vide its order dated 21.02.2018 had quashed the revision order of Pr.CIT-3, Kolkata passed on 12.01.2017 and not verifying the facts and circumstances of the case?

Whether the CIT(A) is justified in facts and in law to declare the impugned revision assessment order of the Assessing Officer dated 22.12.2017 as non-est without considering the facts of the case based on its merit?

3. Whether the CIT(A) is justified in facts and in law to declare the impugned revision assessment order of the Assessment Year: 2012-2013 M/s. Damodar Valley Corporation

Assessing Order dated 22.12.2017 as non-est. and deleted the disallowance by AO on account of prior period expenditure of Rs.39,34,86,241/- without considering the fact that the said disallowance was made by the AO based on the fact that the dues payable to BCCL for earlier years (prior to FY 2011-12)?

2. The assessee in the present case is a Company, which is engaged in the business of Generation and Distribution of Power as well as Irrigation and Flood Control. In the assessment originally completed under section 143(3) vide an order dated 30.03.2015, the total income of the assessee was determined by the Assessing Officer at a loss of Rs.1010,98,86,395/- and book loss was computed at Rs.838,93,15,387/-. The said assessment was subsequently set aside by the concerned ld. Principal CIT vide an order dated 12.01.2017 passed under section 263 with a direction to the Assessing Officer to make the assessment afresh as per the direction given in his order. In pursuance of the order passed by the ld. Principal CIT under section 263, a fresh assessment was made by the Assessing Officer vide an order dated 22.12.2017 passed under section 143(3) read with section 263 of the Act, whereby he determined the total loss of the assessee at Rs.971,64,00,154/- after making an addition of Rs.39,34,86,241/- on account of disallowance of prior period expenses.

Against the order passed by the Assessing Officer under section 143(3) read with section 263, an appeal was preferred by the assessee before the ld. CIT(Appeals). Meanwhile an appeal filed by the assessee against the order passed by the ld. CIT under section 263 came to be disposed of by the Tribunal vide an order dated 21.02.2018 passed in whereby the order passed by the ld. Principal CIT under section 263 was quashed by the Tribunal. Consequently the order passed by the Assessing Officer originally under section 143(3) on 30.03.2015 stood restored and the order passed by the Assessing Officer under section 143(3) read with section 263 on 22.12.2017 became non- est. The ld. CIT(Appeals) accordingly cancelled the order passed by the Assessing Officer under section 143(3) read with section 263 and allowed Assessment Year: 2012-2013 M/s. Damodar Valley Corporation the appeal of the assessee vide his appellate order dated 27.08.2018. Aggrieved by the order of the ld. CIT(Appeals), the Revenue has preferred this appeal before the Tribunal.

At the time of hearing fixed in this case today, none has appeared on behalf of the assessee. This appeal of the Revenue is, therefore, being disposed of ex-parte qua the respondent-assessee after hearing the arguments of the ld. D.R. and perusing the relevant material available on record. As already noted by us, the order dated 12.01.2017 passed by the concerned ld. CIT under section 263 having been quashed by the Tribunal vide its order dated 21.02.2018 passed in the order passed by the Assessing Officer in pursuance of the order of ld. Principal CIT passed under section 263 became non-est in the eyes of law and the ld. CIT(Appeals), in our opinion, was fully justified in cancelling the same and in allowing the appeal of the assessee filed against the said order. Even the ld. CIT (DR) has not been able to dispute this position. He has also not brought anything on record to show that the relevant order of the Tribunal quashing the order of the ld. CIT passed under section 263 has been reversed or disturbed in any manner by the Hon’ble Calcutta High Court. We, therefore, uphold the impugned order passed by the ld. CIT(Appeals) and dismiss the appeal filed by the Revenue.

In the result, the appeal filed by the Revenue is dismissed. Order pronounced in the open Court on April 09, 2019.

DCIT, CIRCLE - 9(1), , KOLKATA vs. M/S. DAMODAR VALLEY CORPORATION, KOLKATA