M/S BHARAT COKING COAL LTD ,DHANBAD vs ACIT CIR-1 , DHANBAD

Income Tax Appellate Tribunal, “RANCHI BENCH, RANCHI

Before: Shri Sanjay Garg & Shri Manish Borad

I.T.A. No.130/Ran/2018 Assessment Year: 2014-15 M/s Bharat Coking Coal Ltd. IN THE INCOME TAX APPELLATE TRIBUNAL “RANCHI BENCH, RANCHI VIRTUAL HEARING AT KOLKATA Before Shri Sanjay Garg, Judicial Member and Shri Manish Borad, Accountant Member I.T.A. No.130/Ran/2018 Assessment Year: 2014-15 M/s Bharat Coking Coal Ltd…………..…...…......................……...…..….. Appellant Finance Directorate, Ground Floor, Koyla Bhawan, Koyla Nagar, Dhanbad-826005. [PAN: AAACB7934M] vs. ACIT, Circle-1, Dhanbad…..……………………….……….…………….. Respondent Appearances by: Shri M. K. Choudhary, Advocate, appeared on behalf of the appellant. Shri Saumyajit Das Gupta, CIT-DR, appeared on behalf of the Respondent. Date of concluding the hearing : August 26, 2022 Date of pronouncing the order : September 20, 2022 ORDER Per Sanjay Garg, Judicial Member: The present appeal has been preferred by the assessee against the order dated 20.09.2017 of the Commissioner of Income Tax (Appeals), Dhanbad [hereinafter referred to as ‘CIT(A)’] passed u/s 250 of the Income Tax Act (hereinafter referred to as the ‘Act’).

At the outset, the ld. Counsel for the assessee has submitted that the only issue involved in this appeal is relating to disallowance u/s 40(a)(ia) on account of non- deduction of TDS on interest expenditure amounting to Rs.132,20,00,000/-. The ld. Counsel has further submitted that an order u/s 201(1)/201(1A) dated 20.03.2018 was passed by the Assessing Officer raising TDS demand of Rs.13,22,00,000/- and interest of Rs.6,21,34,000/- totalling to Rs.19,43,34,000/- in respect of aforesaid interest payable. The ld. Counsel has further submitted that the appeal relating to the aforesaid TDS demand has been settled by the assessee under Vivad Se Viswas Scheme 2020 1

I.T.A. No.130/Ran/2018 Assessment Year: 2014-15 M/s Bharat Coking Coal Ltd. and Form No.5 has been issued by the Department accepting the settlement made by the assessee. The assessee has also placed on record the copy of the aforesaid Form No.5 dated 26.11.2022. The ld. Counsel for the assessee has submitted as per the aforesaid Vivad Se Viswas Scheme 2020, since the assessee has settled the demand against the order passed u/s 201(1)/201(1A) of the Act, therefore, the demand/disallowance u/s 40(a)(ia) of the Act is required to be withdrawn. He, in this respect, has made the following submissions:

That this has further reference to the question No. 31 and its answer as contained in CBDT circular No. 7/2020 dated 4th March, 2020, the relevant portion of which is as under:- Question 31. Where assessee settles TDS liability as deductor of TDS under Vivad se Vishwas (i.e against order u/s 201), when will he get consequential relief of expenditure allowance under proviso to section 40(a)(i)/(ia)? Answer: In such cases, the deductor shall be entitled to get consequential relief of allowable expenditure under proviso to section 40(a)(i)/(ia) in the year in which the tax was required to be deducted. To illustrate, let us assume that there are two appeals pending, one against the order under section 201 of the Act for non-deduction of TDS and another one against the order under section 143(3) of the Act for disallowance under section 40(a)(i)/(ia) of the Act. The disallowance under section 40 is with respect to same issue on which order under section 201 has been issued. If the dispute is settled with respect to order under section 201, assessee will not be required to pay any tax on the issue relating to disallowance under section 40(a)(i)/(ia) of the Act in accordance with the provision of section 40(a)(i)/(ia) of the Act. In case, in the order under section 143(3) there are other issues as well, and the appellant wants to settle the dispute with respect to order under section 143(3) as well, then the disallowance under section 40(a)(i)/(ia) of the Act relating to the issue on which he has already settled liability under section 201 would be ignored for calculating disputed tax. If the assessee has challenged the order under section 201 on merits and has won in the Supreme Court or the order of any appellate authority below Supreme Court on this issue in favour of the assessee has not been challenged by the Department on merit (not because appeal was not filed on account of monetary limit for filing of appeal as per applicable CBDT circular), then in a case where disallowance under section 40(a)(i)(ia) of the Act is in consequence of such order under section 201 and is part of disputed income as per order under section 143(3) in his case, such disallowance would be 2

I.T.A. No.130/Ran/2018 Assessment Year: 2014-15 M/s Bharat Coking Coal Ltd. ignored for calculating disputed tax, in accordance with the proviso to section 40(a)(i)/(ia) of the Act. It is clarified that if the assessee has made payment against the addition representing section 40(a)(i)/(ia) disallowance, the assessee shall not be entitled to interest under section 244A of the Act on amount refundable, if any, under Vivad se Vishwas. It is further clarified that if the assessee wish to settle disallowance under section 40(a)(i)/(ia) in a search case on the basis of settlement of the dispute under section 201, shall be required to pay higher amount as applicable for search cases for settling dispute in respect of that TDS default under section 201. 4. That in view of the aforesaid circular of the CBDT, the consequential relief of aforesaid addition of Rs.132,20,00,000/- be given. 3. A perusal of the impugned order of the CIT(A) in this case reveals that the assessee had not pressed the above issue relating to disallowance u/s 40(a)(ia) in respect of payment of interest on loan amounting to Rs.132,20,00,000/- without deduction of TDS. The issue for the first time has been taken in the ground of appeal before this Tribunal which did not germane from the appeal order of the CIT(A) dated 20.09.2017. However, in view of the settlement under Vivad Se Viswas Scheme made by the assessee in respect of TDS demand raised vide order dated 20.03.2018 passed u/s 201(1)/201(1A) of the Income Tax Act, the consequential effect, if any, has to be given by the concerned Assessing Officer including relating to the disallowance u/s 40(a)(ia) of the Act. In view of this, this matter is restored to the file of the Assessing Officer with a direction to consider the above submission of the assessee and grant the assessee the appropriate relief as admissible to the assessee under Vivad Se Viswas Scheme, in respect of disallowance u/s 40(a)(ia) of the Act as noted above.

In the result, the appeal of the assessee is partly allowed for statistical purposes.

Kolkata, the 20th September, 2022. Sd/- Sd/- [Manish Borad] [Sanjay Garg] Accountant Member Judicial Member

I.T.A. No.130/Ran/2018 Assessment Year: 2014-15 M/s Bharat Coking Coal Ltd. Dated: 20.09.2022. RS Copy of the order forwarded to: 1. M/s Bharat Coking Coal Ltd 2. ACIT, Circle-1, Dhanbad 3. CIT(A)- 4. CIT- , 5. CIT(DR),

//True copy// By order Assistant Registrar, Kolkata Benches

M/S BHARAT COKING COAL LTD ,DHANBAD vs. ACIT CIR-1 , DHANBAD