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Income Tax Appellate Tribunal, Delhi Bench “D”, NEW DELHI
Before: SHRI AMIT SHUKLA & Dr. B.R.R. KUMAR
PER B.R.R.KUMAR, ACCOUNTANT MEMBER :
This appeal has been filed by the assessee against the order of the ld. CIT, Hisar, dated 27.03.2015. 2. Following grounds have been raised by the assessee:
“1. That on the facts and circumstances of the case and in law. the impugned order dated 27.3.2015 passed by the Commissioner of Income
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Tax (“CIT”) under section 263 of the Income-tax Act, 1961 (‘the Act’) is beyond jurisdiction, illegal and bad in law and is liable to be quashed.
1.1 That on the facts and circumstances of the case and in law, the impugned order dated 27.03.2015 passed by the CIT is illegal and bad in law, being barred by limitation prescribed under section 263(2) of the Act.
1.2 That on the facts and circumstances of the case and in law, the impugned order passed by the CIT seeking to revise the original assessment order dated 31.12.2007 passed under section 143(3) in the guise of revising the reassessment order dated 4.3.2013 passed under section 147/143(3) of the Act, is without jurisdiction, illegal and bad in law.
1.3 That on the facts and circumstances of the case in law, since the reassessment order was patently without jurisdiction, impugned revisionary proceedings were also without jurisdiction, illegal and bad in law.
1.4 That on the facts and circumstances of the case and in law, the impugned order dated 27.03.2015 passed under section 263 of the Act, without appreciating that the twin conditions of that section viz., assessment order being erroneous as well as prejudicial to the interests of the Revenue, were not satisfied, is illegal and bad in law.
1.5 That on the facts and circumstances of the
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case and in law, the CIT erred in exercising revisionary jurisdiction in respect of issues, which stood merged with the order(s) of the appellate authorities and, therefore, the impugned order is without jurisdiction, illegal and bad in law. 1.6 That on the facts and circumstances of the case, the impugned order dated 27.3.2015 passed by the CIT without affording reasonable opportunity of being heard to the appellant in violation of principles of natural justice, is illegal and bad in law. 1.7 That on the facts and circumstances of the case and in law, the impugned order dated 27.3.2015 passed by the CIT without disposing of the legal objections by passing a separate speaking order, is illegal and bad in law. 2. That on the facts and circumstances of the case and in law, the CIT erred in holding that reassessment order dated 4.3.2013 passed under section 147/143(3), was erroneous and prejudicial to the interests of the Revenue on the issue of claim of deduction under sections 80- IA and 80-IB of the Act. 2.1 That the CIT erred on facts and in law in holding that the appellant did not maintain separate books of accounts in respect of eligible unit(s), which is a condition precedent for allowing deduction under sections 80-IA and 80-IB of the Act. 2.2 That the CIT erred on facts and in law in alleging that the appellant failed to furnish various details/ documents and/or leveling various false/ baseless allegations, merely to justify exercise of revisionary jurisdiction under section 263 of the Act. 3. That the CIT erred on facts and in law in
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exercising revisionary jurisdiction and in holding that the assessing officer erred in allowing deduction under section 80-IA of the Act in respect of various captive power plants set up by the appellant.
3.1 That on the facts and circumstances of the case and in law, the CIT exceeded his jurisdiction in setting aside the reassessment order dated 4.3.2013 passed under section 147/143(3) on the aforesaid issue of deduction under section 80-IA of the Act, despite the fact that the said issue was not at all subject matter of reassessment proceedings.
3.2 That the CIT further failed to appreciate that claim of deduction under section 80-IA was extensively examined during the course of original assessment proceedings and therefore, the same was outside the scope of revisionary jurisdiction under section 263 of the Act. 3.3 That the CIT erred on facts and in law in exercising revisionary jurisdiction on the aforesaid issue of deduction under section 80-IA of the Act, without affording reasonable opportunity of being heard to the appellant.
That the CIT erred on facts and in law in exercising revisionary jurisdiction and in holding that the assessing officer erred in allowing deduction under section 80-IB of the Act in respect of various other manufacturing units [including Mini Blast Fumance (“MBF”) unit],
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, • 4.1 That on the facts and circumstances of the case and in law, the CIT exceeded his jurisdiction in setting aside the reassessment order on the aforesaid issue of deduction 80- IB of the Act, despite the fact that the eligibility to claim deduction under that section was not at all subject matter of consideration in the reassessment proceedings. 4.2 That the CIT erred on facts and in law in holding that the appellant is not entitled deduction under section 80-IB of the Act in respect of various manufacturing units. 5. That the CIT erred on facts and in law in failing to appreciate that even the issue of quantum of deduction under section 80-IB of the Act in respect of profits derived from MBF unit was outside the scope of revisionary jurisdiction.
5.1 That the CIT failed to appreciate that deduction under section 80-IB in respect of MBF was extensively examined during the course of original as well as reassessment proceedings and the same was, therefore, outside the scope of revisionary jurisdiction under section 263 of the Act.
The appellant craves leave to add, amend or vary the above grounds of appeal on or before the date of hearing
Brief Facts: 3. The Assessee is a public limited company engaged in the business of manufacture/ generation of steel, power, iron, pig iron, sponge iron, etc. For assessment year the year under
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consideration, the Assessee filed revised return of income on 30.03.2007 declaring income of Rs.92,06,88,890 after claiming following deductions under sections 80-IA and 80-IB of the Act:
S. Particulars Amount (Rs.) No. 196,70,79,113 Deduction under section 80IA of the Act in respect of various independent/ 1. eligible power generating undertakings
Deduction under section 80IB of the Act in respect of MBF unit 41,20,57,046
16,92,26,199 Deduction under section 80IB of the Act in respect of other independent/ eligible units
Total 254,83,62,358
The aforesaid deductions claimed under sections 80-iA and 80-IB of the Act were duly supported by the audit report in prescribed Form No.l0CCB filed along with return of income. It is the case of the Assessee that all the units in respect of which deduction under sections 80-I A and 80-IB were separate industrial units/ undertaking, independently eligible for deduction under the respective sections. Further, the said units were set up in the earlier assessment year(s) and the eligibility, per se, of the applicant to claim deduction was subject matter of extensive examination/ verification not only in the earlier assessment year(s), but also in the assessment year under consideration.
Original assessment
That original assessment under section 143(3) was completed vide order dated 31.12.2007 after extensively examining/verifying claim of deduction under sections 80-IA and 80-IB of the Act. In fact, deductions claimed were not at all accepted in toto, but were substantially varied/ reduced for the reason of rate of transfer of
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power. The details are below-:
S.No Particulars Amount claimed Amount allowed (Rs.) (Rs.)
Deduction under section 80IA of the Act 1,96,70,79,113 1,17,78,86,782 in respect of various independent/ eligible power generating undertakings
41,20,57,046 47,39,65,444 Deduction under section 80IB of the Act 2. in respect of MBF unit 3. Deduction under section 80IB of the Act 16,92,26,199 24,56,60,182 in respect of other independent/ eligible units Total 2,54,83,62,358 1,89,75,12,408
The fact that the claim of deductions under sections 80-IA and 80- IB were verified by the AO in the original assessment order dated 31.12.2007
The Assessee filed appeal before CIT(A), which was partly allowed vide order dated 11.11.2008. The CIT(A) examined the claim of deduction under sections 80-IA and 80-IB and therefore, on the said issue of deduction claimed under the said sections, the assessment order stood merged with the order of the CIT(A)
Against the aforesaid order, cross-appeals were filed by the Assessee and the Department before this Tribunal, which were decided vide order dated 06.03.2014.
In the meanwhile, reassessment proceedings for AY 2005-06, were initiated by the AO vide notice dated 23.03.2012, issued under section 148 of the Act. The AO, thereafter, proceeded to complete reassessment vide order dated 04.03.2013 reducing the amount eligible for deduction in respect of MBF units to
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Rs.32,36,61,107 from Rs. 41,20,57,046/- on the ground that accumulated losses upto AY 2004-05 amounting to Rs. 8,53,95,939/- were required to be reduced for working out the allowable deduction u/s 80IB..
The Assessee challenged this order before this Hon’ble ITAT. The ITAT vide order dated 08.06.2018 set aside the order of the CIT(A) and remanded it back to the file of the CIT(A) to adjudicate the initiation of 148 proceedings.
Impugned revisionary proceedings u/s 263:
Subsequently, the Ld. PCIT, issued notice dated 22.10.2013 under section 263 for assessment year 2005- 06 proposing to revise the reassessment order dated 04.03.2013.
In the said show cause notice, it was primarily stated that from the records, figure of losses in respect of MBF unit for the assessment years 2003-04 and 2004-05 was not ascertainable. It was further stated that the AO, in the reassessment proceedings, ought to have made efforts to ascertain the losses of earlier year(s), and also ought to have examined/ verified the items of income/ expenditure shown in the Profit & Loss Account in respect of the MBF unit for the assessment year 2005-06. On these grounds, it was alleged that the reassessment order dated 04.03.2013 was erroneous and prejudicial to the interests of Revenue.
In another show-cause notice dated 18.03.2015, the ld.CIT alleged that separate books of accounts were not being maintained in respect of MBF unit and therefore, MBF unit was not eligible for deduction under section 80-IB of the Act. Further, in paras 27 to 29
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of the said show-cause notice the CIT, observed that the issue of separate books of account raised in the context of MBF unit was equally applicable in respect of other units eligible for deduction under sections 80-IA and 80-IB and therefore, the reassessment order was erroneous and prejudicial to the interests of revenue on account of failure of the AO to examine claim of deduction under the said sections in respect of all the units. The assessee filed objections before the Ld. CIT :
• All the units were set up as separate and independent units in the earlier assessment year(s); • eligibility to claim deduction under sections 80-IA and 80- IB of the Act in respect of the units was extensively examined by the AO not only in the year of setting up of unit(s) but also in all subsequent assessment year(s); • this issue stood finally concluded in the earlier assessment years and was never a subject matter of dispute; • issue of eligible deduction under sections 80-IA and 80-IB was extensively examined/ verified by the AOin every assessment year(s), which is evident from the fact that in various assessments,claim of deduction(s) were substantially varied/ reduced; • on the issue of claim of deduction under sections 80-IA and 80-IB of the Act, appeals were filed before the CIT(A) and therefore, assessments for various assessment years stood merged with the order(s) of the CIT(A). Further, in certain assessment years, this issue also stood decided by this Hon’ble Tribunal; • books of account were produced, verified and examined by the AO in various assessment years, including assessment year 2005-06, the year under consideration.
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Finally the Ld.PCIT passed order dated 27.03.2015 under section 263 of the Act.
We find delay in filing of the present appealis owing to the appeal filed by the assessee before th Hon’ble High court by way of alternative remedy before Hon’ble Court.
Arguments of the Assessee 13. Revisionary order u/s 263 - barred by limitation:
In the guise of revising reassessment order dated 04.03.2013, which was passed under section 147 on the limited issue of quantum of deduction under section 80-IB only in respect of MBF unit, the CIT passed order under section 263 of the Act on issues arising out of the original assessment order, which is clearly without jurisdiction and bad in law.
It is further submitted that original assessment was completed vide order dated 31.12.2007 and consequently, the time limit for revising the said order under sections 263(2) of the Act, expired on 31.03.2010. The issue of eligibility of deduction under sections 80- IA and 80-IB in respect of various units of the applicant (including MBF unit) was, it is submitted, not at all subject matter of dispute in the reassessment order. In reassessment order dated 04.03.2013, the only issue was quantum but not eligibility of deduction under section 80-IB of the Act, that too, only in respect of MBF unit but not of other independent eligible units. Hence, the 263 order is barred by limitation.
The aforesaid issue is squarely covered in favour of the Applicant by the decision of the Hon’ble Supreme Court in the case of CIT vs. Alagendran Finance Ltd: 293 ITR 1 (SC). The Apex Court held: (Pg. 28-35 CLC)
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"We, therefore, are clearly of the opinion that keeping in view the facts and circumstances of this case and, in particular, having regard to the fact that the Commissioner of Income- tax exercising his revisional jurisdiction reopened the order of assessment only in relation to lease equalisation fund which being not the subject of reassessment proceedings, the period of limitation provided for under sub-section (2) of section 263 of the Act would begin to run from the date of the order of assessment and not from the order of reassessment. The revisional jurisdiction having, thus been invoked by the Commissioner of Income-tax beyond the period of limitation, it was wholly without jurisdiction rendering the entire proceeding a nullity."
It is also important to mention that identical issue has been adjudicated in favour of the Assessee in Assessee’s own case for AY 2009-10 it has been held that the proceedings are barred by time limitation.
Also, the Hon’ble Delhi High Court in the case of CIT V. Bharti Airtel Limited: [2013] 218 Taxman 112 (Pg. 36-37 CLC) held that where subject matter of additions made in revisionary order were not dealt with in reassessment order passed under section 147, limitation for revision would begin from date of original assessment order under section 143(3) of the Act, and not from the date of reassessment order. In that case, reassessment order was passed on two issues, viz., non- deduction of tax on payment of interest and allowability of ESOP expenses. Therefore, revisionary order passed on issue of non- deduction of tax at source on free airtime and roaming charges was held to be barred by limitation since limitation had to be seen from the original assessment order. Hon’ble Bombay High Court in Ashoka Buildcon Ltd V. ACIT: 325 ITR 574 (Bom) Pg. 38-44 of CLC has also taken the same view.
That similar issue was also considered in the case of CIT V.
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ShriramEngg. Construction Co. Ltd: 330 ITR 568 (Mad). (Pg. 45-49 CLC)
It is important to mention a recent decision of Indira Industries vs. PCIT, Madras High Court ([2018] 95 taxmann.com 292 (Madras)) has followed the said Supreme Court ruling and has stated that initiation of 263 proceedings is illegal and bad in law.
Reliance was also placed on the decision of Allahabad High Court in the case of L.G. Electronics India (P.) Ltd. v. PCIT: 388 ITR 135 in a writ petition challenging validity of notice under section 263, been held that notice under section 263(1) of the Act has been issued with reference to a discrepancy occurred in original assessment order and it has nothing to do with reassessment order, limitation would run from date of regular order of assessment and not from date of reassessment order.
The Delhi Bench of the Tribunal in the case of Prosperous Buildcon Pvt. Ltd. vs. Pr. CIT - ITA No. 2648/Del/2016 has taken the similarview.
It has similarly been held in the following decisions: AshokaBuildcon Ltd V. ACIT: 325 ITR 574 (Bom) CIT vs. Lark Chemicals Limited: 230 Taxman 305 CIT vs. ICICI Bank Limited: 343 ITR 74
(i) Claim of deduction u/s 80-IA/ IB already allowed by Hon ’ble IT AT
It is further submitted that the CIT exceeded his jurisdiction in setting aside the claim of deduction under sections 80-IA and 80- IB, even though the said claims were extensively examined and considered in the original assessment order dated 31.12.2007, which order stood merged with the order of CIT(A) dated
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11.11.2008 and order of this Hon’ble Tribunal dated 06.03.2014.
In the present case, deduction under section 80IA in respect of various power undertakings and under section 80IB of the Act in respect of MBF unit as well as other manufacturing units, was extensively examined and considered in the original assessment completed vide order dated 31.12.2007 for AY 2005-06.
Further, against the assessment order for AY 2005-06 substantially reducing deductions claimed, the Assessee filed appeal before CIT(A), who vide order dated 11.11.2008, considered the claim of deductions under sections 80-IA and 80-IB of the Act. Further, against the order of the CIT(A), cross-appeals were filed before the Hon’ble ITAT, which were decided vide order dated 06.03.2014.
In the aforesaid circumstances, it is patently clear that the issue of deductions claimed under sections 80-IA and 80-IB of the Act, stood merged with the order of the CIT(A) and the Hon’blel TAT.
Reliance, in this regard, is placed on the following decisions, wherein it has been held that, where any aspect of an issue has been specifically considered by the CIT(Appeals), the entire issue merges with the order of CIT(Appeals) and no other aspect of that issue can be subjected to revision under section 263 of the Act:
Oil India Ltd. v. CIT, Calcutta: 138 ITR 836 Smt. Sujatha Grower v. DICT: 74 TTJ 347 Sahara India Mutual Benefit Co. Ltd v. ACIT: 74 TTJ 67 Saw Pipes Limited v. ACIT: 94 TTJ 1036 Sonal Garments v. JCIT: 95 ITD 363 Maricolndustries Ltd. v. ACIT: 115 TTJ 497
In view of the aforesaid, the assessment order qua the issues/ claim, which was subject matter of appeal before the CIT(A) and ITAT (deduction under sections 80IA and 80IB of the Act), merged with the order of the CIT(A). Consequently, the said claim/ issue(s)
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was clearly beyond the scope of revisionary power vested in the CIT under section 263 of the Act.
(iii) Claim u/s 80IA and 80IB allowed by the AO after due application of mind 19. In respect of the year under consideration, the AO after due application of mind, and after detailed examination and verification, partially allowed the claim of the Assessee, in the original assessment order dated 31.12.2007. The same is evident from the replies filed by the Assessee and the order passed by the AO. Hence, the same cannot be subject matter of 263 proceedings now. The fact that the claim of deductions under sections 80-IA and 80- IB were verified by the AO is evident from discussions in the original assessment order dated 31.12.
iv. Reassessment order neither ‘erroneous’ nor ‘prejudicial to the interests of revenue- twin conditions not satisfied 20. The scope of provisions of section 263 of the Act is no longer res-integra. The Commissioner can, revise an order of assessment only if it is erroneous and prejudicial to the interests of Revenue. The two conditions must be cumulatively satisfied. Reference, in this regard, may be made to the following decisions:
• Malabar Industries Co. Ltd. vs. CIT 243 ITR 83 (SC)- Pg. 58- 62 CLC CIT vs. Max India Limited: 268 ITR 128 (P&H) [affirmed in 295 ITR 282 (SC)] Hari Iron Trading Co. vs. CIT: 263 ITR 437 (P&H) • CIT v. Kwality Steel Suppliers Complex: 395 ITR 1(SC) • Vimgi Investment (P) Limited 290 ITR 505 (Del) • CIT vs. Gabriel India Limited: 203 ITR 108 (Bom)-
• In the light of the aforesaid settled legal position, re- assessment order, is neither erroneous nor prejudicial to the interests of the Revenue.
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A mere suspicion/ statement that the assessment order seems to be erroneous/ prejudicial is not sufficient for a valid action under section 263 of the Act. In the present case, the very fact that the CIT has used the expression/ words ‘appeared’; ‘seemed’; ‘probably’, etc., clearly demonstrate that the instant revisionary proceedings undertaken by the CIT cannot be said to be based on an ‘erroneous’ order passed by the AO.
Reassessment order dated 04.03.2013 passed under section 147 was itself without jurisdiction and therefore, CIT could not have exercised jurisdiction to revise the said reassessment order under section 263 of the Act.Pertinently, reassessment proceedings were initiated on the ground that losses of MBF unit relating to assessment years 2003-04 and 2004-05 (which already stood absorbed against profits of other units in those years) should have been, on a notional basis, set off against profits of MBF unit for assessment year 2005-06 for computing eligible deduction under section 80-IB of the Act.
On the aforesaid issue, a specific and categorical finding was recorded by the AO in the original assessment order and therefore, reassessment order was passed, bn mere change of opinion, that too, in proceedings initiated after expiry of 4 years from end of relevant assessment year, was without jurisdiction, illegal and bad in law. Allowed by the DRP itself in A Y 2013-14. A Y 2014-15 and A Y 2015-16 21. The Ld.Dispute Resolution Panel (“DRP”) has on merits adjudicated this issue in favour of the Assessee and held that the deduction u/s 80IA and 80IB cannot be denied merely on the ground that separate books of accounts were not maintained. Hence, even on merits this issue stands covered totally in favour of
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the Assessee. It is submitted that on the same issue addition were proposed by AO on the draft assessment order for AY 2013-14, 2014-15 and 2015-16 and Assessee had filed objection before DRP. Considering the merits of the case, the DRP had decided the issue in favour of the Assessee and held that there is no mandate of law to maintain separate books of accounts for eligible undertaking in conventional form. It is submitted that since the DRP had already decided the issue on the merits of the case, the order passed under Section 263 of the Act is illegal, bad in law and without jurisdiction. In AY 2013-14 the Assessee had filed objection before Hon’ble Dispute Resolution Panel (“DRP”). Considering the merit of the case the DRP had given its finding on the issue as follows; 2.4.5 On perusal of the above provisions of law it is apparent that there is no imbargo on the claim of deduction in a case where power generated is used captively, and there is no mandate to maintained separate books of accounts. The only mandate of law is that "the profits and gain of an eligible business ... shall .. be computed as if such eligible business were the only source of income of the assessee ...” (sub-section 5 of s. 80IA) and “the assessee furnishes, along with his return of income, the report of such audit in the prescribed form duly signed and verified by such accountant, i.e. in Form-1 OCCB [to be furnished electronically as per Rule-18BB8(12)(2)], Thus, the basic premise on which the deduction claimed has been disallowed by the AO, i.e. separate books of accounts were not maintained for the respective eligible units, is not in accordance with law. The AO has not examined the accounts of the assessee and the Form-1 OCCB, alongwith which unit- wise balance sheet and P&L accounts have also been enclosed, latter also submitted by the assessee to the AO during the assessment proceedings. The assessee has submitted the computation of the profits of the eligible units which is as per Annexure-5 (enclosed with this Directions). The DRP has decided the issue in favour of the Assessee and held that there is no mandate of law to maintain separate books of accounts for eligible undertaking in
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conventional form. One is required to submit the accountant certificate in Form 10CCB for claiming deduction u/s 80IA of the Act, which has been done. Further, the DRP has followed the direction of AY 2013-14 in the AY 2014-15 as well and pass the order vide dated 18th Sept 2019. The Relevant extract of the order is reproduced as under:
DRP Directions: The facts of the matter are simitar to 4.2.12 that in the case of the assessee in AY 2013-14 considered and decided by us vide our Directions dt. 24.09.2018. In this year the AO has deait with the matter at pages-3 to 112 of the assessment order wherein he has reproduced the assessment order of AY 2011- 12 at pages-4 to 108. Even the concluding part in para- at pages-108 to 112 is verbatim the same as at para-5.15 pages-99 to 101 of the draft assessment order for AY 2011-12, except for the observation at para-4.2.12(vii) that,
"Further the AR has raised another point regarding the Hon’ble DRP in AY 2013-14 has considered the assessee's submission allowed (lie relief on both the issues i.e. Captive power plants are undertaking within the meaning of Sec 80IA and maintenance of separate books of accounts for power units. The Assessee submitted that to take the same view in this year aswell as decided by the Hon'ble DRP. The assessee's request cannot be acceded on the following reasons. First, in taxation each assessment year is separate year and Hie AO can analyse any issue based on tho available facts. Second, the appeals for the earlier years on the issue are ponding before tho Hon'ble ITAT for adjudication. Therefore in view of the above the request of the assessee is rejected.” 5.2. The AO has proposed addition of the entire amount of deduction claimed of Rs.
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483,06,62,4577-. We have dealt with this matter in details in our Directions for AY 2013-14 dt. 24.09.2018 at paras-2.4.1 to 2.4.7 pages-5 to 15. There being no reason to differ, following our directions in AY 2013-14 the AO is directed to delete the proposed addition. Further, he has followed the direction of AY 2013-14 & AY 2014-15 in the AY 2015-16 as well and pass the order vide dated 18,h Sept 2019. The Relevant extract of the order is reproduced as under:
DRP Directions:
The facts of the matter are similar to that in the 16.1 case of the assessee in AY 2013-14 considered and decided by us vide our Directions dt. 24.09,2018. In this year the AO has dealt with the matter at pages-3 to 113 of the assessment order wherein he has reproduced the assessment order of AY 2011-12 at pages-4 to 111. Even the concluding part in para- at pages-111 to 113 is verbatim the same as at 4.2.12 para-5.16 pages-99 to 101 of the draft assessment order for AY 2011-12, and the observation at para- 4.2.12(vii) regarding DRP’s direction in AY 2013-14 is the same as that in AY 2014-15. The AO has proposed addition of the entire amount of deduction claimed of Rs. 539,87,13,562/-. We have dealt with this matter in details in our Directions for AY 2013-14 dt. 24.09.2018 at paras-2.4.1 to 2.4.7 pages-5 to 15. There being no reason to differ, following our directions in AYs 2013- 14 & 2014-15 the AO is directed to delete the proposed addition. In view of the above, the DRP has taken a consistent view on the above ground and held that there is no mandate as per the law to maintenance of separate books of account u/s 80IA of the Act. Further, the final order was passed by the then AO incorporating the direction of the DRP. The same should also be taken into consideration for the year under consideration. Therefore, it is humbly submitted that since the DRP had
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already decided the issue in subsequent year in favor of assessee.
Department has examined and allowed the issue in earlier years/ settled principles of consistency:
All the units in respect of which deduction was claimed by the appellant in the return of income for the assessment year under consideration were set up and had commenced operations in the assessment year(s) prior to the year under consideration. The eligibility of the units to claim deduction under sections 80IA and 80IB of the Act was repeatedly examined and verified in the earlier assessment years, as would be evident from the following:
• Scrutiny assessments under section 143(3) of the Act have been undertaken for all the assessment years, viz. assessment years 2000-01 to 2010-11 wherein the claim has been allowed in principle • Deduction under sections 80IA and 80IB are evident on the face of returns/ computation of income for the assessment years 2000-01 to 2010-11; • Deduction for all years is duly supported by certificate(s) in Form 10CCB duly certified by the Chartered Accountant and also separate balance sheet and Profit & Loss Account filed during the course of assessment proceedings. • There is, in fact, elaborate discussion of the claim of deduction under sections 80IA and 80IB of the Act in the regular assessment orders for earlier AY starting assessment years 2000-01. Further, claim of deduction under the said sections were substantially varied in all the assessment years.
There being no change either in facts or in law, as compared to earlier and subsequent years, the position determined by the department needs to be followed even on the principle of consistency. Specific Queries with regard to the unit wise accounts
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maintained by the assesse was asked by the AO and find mention in the assessment orders of various years. The assesse has submitted on various occasions - Form No. 10 CCB for power undertaking eligible for deduction and unit wise books of account for each undertaking. Assessee has specifically submitted in reference to the above-mentioned assessment years that deduction u/s 80IA of the Act was framed on the basis on separate books of accounts maintained at all the locations, where from specific profit and loss accounts were prepared for said units. In this regard, reference is made to submission dated 23.08.2004 for AY 2000- 2001, submission dated 21.05.2002 for AY 2001-2002 and submission dated 11.03.2004 submission dated 05.04.2005 for AY 2003-2004 submission dated 26.04.2006 for AY 2004-2005 and submission dated 22.01.2007 for AY 2006-07 submission for AY 2007-08 and submission for AY 2008-09 .It is therefore, submitted that the issue in regard to the maintenance of separate books of accounts has been examined by department in earlier and subsequent years. However, no disallowance in this regard is made during the course of regular assessment. The AO has formed an opinion in regard to the maintenance of books of accounts in earlier and subsequent years.
On the other hand Ld. DR argued that the order is correct as it is prejudicial and erroneous to the interests of revenue. It was argued that there is no bar to go and revise the original assessment order when the proceedings have not come to a hilt. The carried forward process of the MBF unit have not been examined by the AO and the carried forward process have to be examined right from the beginning of the incurring of losses otherwise taking into consideration only the earlier year losses would give a skewed picture of the total profits of the assessee.
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Heard the arguments of both the parties and perused the material available on record.
We find that the original assessment u/s 143(3) was completed on 31.12.2007. The reassessment u/s 148 has been completed on 04.03.2013. The order u/s 263 was passed on 27.03.2015. The order passed u/s 148 relates to deduction u/s 80IB of MBF unit and reduction of accumulated losses up to the Assessment Year 2004-05 while allowing the deduction u/s 80IB in 80IA which has been duly taken into consideration earlier during the original assessment proceedings. We find that the AO has prejudiced the accumulated losses of 8.83 crores and also considered the profit of MBF unit which has claimed 100% deduction u/s 80IB earlier. Thus, the issue of eligible of deduction u/s 80IA and 80IB in respect of various units of the assessee including MBF unit which is a subject matter of u/s 263 is not an issue before the AO during the reassessment proceedings. The subject matter of the deduction in the reassessment order was the quantum of deduction but not the eligibility of the deduction and even in that case also the deduction pertaining to MBF unit but not other units whereas the revisionary proceedings dealt extensively with the eligibility of the deduction per se maintenance of separate books of accounts change of opinion by the CIT where the Ld. CIT and also the contrary reviews taken by the DRP for the successive assessment years allowing the deduction. The revisionary proceedings cannot go beyond the issue of the reassessment proceedings. In case, if any issue out of the original assessment is to be revised the limitation time for passing of such order would recon from 31.12.2007. Since the issues raised by the Ld. CIT in the order passed u/s 263 do not emanate from the assessment
22 ITA No.1462.Del.2016 Jindal Steel & Power Limited
order dated from 04.03.2013, we hereby hold that the order of the Ld. CIT has not been held to be legally valid. 27. In the result, appeal of the assessee is allowed.
Order pronounced in the open Court on 16th day of November, 2021.
Sd/- Sd/- (AMIT SHUKLA) (Dr. B.R.R.KUMAR) JUDICIAL MEMBER ACCOUNTANT MEMBER
*Binita* Dated : 16/11/2021 Copy forwarded to: 1.Appellant 2.Respondent 3.CIT 4.CIT(A), New Delhi. 5.CIT(ITAT), New Delhi. AR, ITAT NEW DELHI.