M/S THDC INDIA LIMITED, RISHIKESH,RISHIKESH vs. PCIT, DEHRADUN, DEHRADUN

ITA 69/DDN/2024Status: DisposedITAT Dehradun24 December 2025AY 2020-2119 pages
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What did the Tribunal hold?

The Tribunal held that the AO and Ld. CIT(A) erred in including the Late Payment Surcharge (LPSC) on an accrual basis to the total income of the assessee, as opposed to the receipt basis declared by the assessee. The Tribunal relied on the principle of consistency and the revenue-neutral nature of the exercise, citing Supreme Court judgments in CIT vs. Bilahari Investment P.Ltd. and Excel Industries Ltd. The Tribunal directed the AO to delete the addition made towards LPSC on accrual basis and also delete the enhancement made by the Ld. CIT(A). Consequently, Grounds of appeal Nos. 3 & 4 were allowed. Regarding penalty proceedings under Section 270A, the Tribunal dismissed the ground as premature. For interest under Section 234A, the Tribunal allowed the ground, directing the AO not to charge interest as the return was filed within the extended due date (February 15, 2021) due to Covid-19. For interest under Sections 234B and 234C, the Tribunal directed the AO to charge interest under Section 234B on the income computed after giving effect to the Tribunal's order and Section 234C on the income declared in the return. This ground was partly allowed for statistical purposes. The issue regarding deduction under Section 80-IA was not explicitly addressed in the provided excerpt of the judgment, but the overall result indicates partial allowance.

What were the facts?

The assessee, M/s. THDC India Ltd., engaged in hydro and wind power generation, filed its return of income for Assessment Year 2020-21 on January 5, 2021, declaring a total income of INR 869,04,14,340. The Assessing Officer (AO) assessed the total income at INR 12,08,85,53,720 vide an order dated September 27, 2022. The assessee appealed to the National Faceless Appeal Centre (NFAC), Delhi, which dismissed the appeal via an order dated March 19, 2024. The assessee is now before the Income Tax Appellate Tribunal (ITAT) challenging the NFAC's order. The dispute involves denial of deduction under Section 80-IA, addition on account of late payment surcharge, and levy of interest.

What were the issues?

1. Whether the Hon'ble CIT(A) erred in upholding the AO's action in denying the benefit of deduction under Section 80-IA of the Act to an extent of Rs. 3,57,87,308 by alleging certain incomes to be not directly linked with the eligible business. The assessee argued that incomes such as interest from employees, rent receipts, sundry receipts, and fair value gain are inextricably linked to the power generating business and thus eligible for deduction. The revenue, through the Ld. Sr. DR, supported the orders of the lower authorities. 2. Whether the invocation of Section 251(1)(a) by the Hon'ble CIT(A) and the enhancement of the assessee's income by Rs. 56,06,82,000, along with the AO's addition of Rs. 280,34,10,000 on account of late payment surcharge levied on debtors, is valid. The assessee contended that the surcharge was consistently accounted for on a receipt basis due to realization uncertainty and accepted by the Department, aligning with industry practices, ICDS IV, and IND AS 115, and that the rule of consistency should apply. The revenue supported the lower authorities' orders. 3. Whether the initiation of penalty proceedings under Section 270A is erroneous due to no under-reporting of income. The assessee argued this point. The judgment does not record specific arguments from the revenue on this issue. 4. Whether the levy of interest under Section 234A is erroneous as the return was filed within the extended due date. The assessee argued this point. The judgment does not record specific arguments from the revenue on this issue. 5. Whether the levy of interest under Sections 234B and 234C is erroneous. The assessee argued this point. The judgment does not record specific arguments from the revenue on this issue.

Which sections of the Income-tax Act were involved?

Section 80-IA,Section 251(1)(a),Section 143(3),Section 144B,Section 270A,Section 234A,Section 234B,Section 234C,Section 139(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DEHRADUN “DB” BENCH: DEHRADUN

Before: SHRI YOGESH KUMAR U.S & SHRI MANISH AGARWAL

For Appellant: Shri Sanjay Arora, CA &, Ms. Pallavi, CA
For Respondent: Shri Mohal Lal Joshi, Sr. DR
Hearing: 09.10.2025

PER MANISH AGARWAL, AM :

The present appeal is filed by the assessee against the order dated

19.03.

2024 by Ld. Commissioner of Income Tax (A), National Faceless Appeal Centre (““NFAC”), Delhi [“Ld. CIT(A)”] in Appeal No. NFAC/2019- 20/10183461 passed u/s 250 of the Income Tax Act, 1961 [“the Act”] arising from the assessment order dt. 27.09.2022 passed u/s 143(3) r.w.s.144B of the Act pertaining to Assessment Year 2020-21. 2. Brief facts of the case are that assessee company is engaged in the business of generation and

The order continues below.

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