Ita/1090/2018 Of Pr. Commissioner Of Income Tax Delhi -11 v. M/S Indian Farmers Fertilizers Cooperative Ltd

$~10 *IN THE HIGH COURT OF DELHI AT NEW DELHI+ITA 1090/2018 & CM APPL. Nos.40595/2018, 45166/2018PR. COMMISSIONER OF INCOME TAX DELHI -11 ..... Appellant Through:Mr.Zoheb Hossain, Sr. Adv withMr.Deepak Anand, Adv. versus M/S INDIAN FARMERS FERTILIZERS COOPERATIVE LTD. ..... Respondent Through:Ms. Kavita Jha, Adv. CORAM:HON'BLE MR. JUSTICE SANJIV KHANNAHON'BLE MR. JUSTICE ANUP JAIRAM BHAMBHANIO R D E R%29.10.2018 CM APPL. 40595/2018 (seeking condonation of delay) Learned counsel for the respondent-assessee does not oppose thisapplication seeking condonation of 26 days delay in re-filing the appeal. In view of the statement, the application is allowed. ITA 1090/2018 2.This appeal by the Revenue under Section 260A of the Income TaxAct, 1961 (Act) in the case of M/s Indian Farmers Fertilizers Coop. Ltd.(Respondent-assessee) relates to assessment year 2011-12.By theimpugned order dated 19.03.2018, the Income Tax Appellate Tribunal hasquashed the order dated 09.08.2016 passed by the Principal Commissionerunder Section 263 of the Act. 3.Learned counsel for the Revenue accepts that similar order passed bythe Principal Commissioner in the case of respondent-assessee for theassessment year 2010-11 under Section 263 of the Act was quashed by the Tribunal. 4.It also accepts that appeal under Section 260A filed by the Revenue,ITA No. 597/2017 for the assessment year 2010-11, was dismissed by thisHigh Court vide order dated 02.08.2017. 5.Learned counsel for the Revenue submits that facts relating toassessment year 2010-11 are distinguishable and the order passed should notbe followed as there was reduction in tax slabs/rate paid by the respondent-assessee in Oman from 30% to 12%. This factum was duly noticed by theAssessing Officer in the assessment order dated 27.03.2014 under Section143(3) of the Act for the present assessment year 2011-12. 6.Operative portion of the order under Section 263 of the Act passed bythe Principal Commissioner of Income Tax for the assessment year 2011-12reads as under: “DECISION 9. I have carefully considered the submissions of the assessee.Similar issues had arisen in the case of the assessee for theA.Y. 2010-11.Similar issues had arisen in the case of the assessee for theA.Y. 2010-11. 10. A detailed order was passed on 29.03.2016 u/ s 263. 11. The AO is directed to follow the order passed u/s 263 forthe A.Y. 2010-11 even for the A.Y. 2011-12.the A.Y. 2010-11 even for the A.Y. 2011-12. 12. It may be mentioned that on the issue of tax credit theassessee had relied upon letters dated 06.08.2000 and11.12.2000 before the Hon'ble ITAT in the case of KRIBHCO.The assessee had also relied upon the decision of the Hon'bleassessee had relied upon letters dated 06.08.2000 and11.12.2000 before the Hon'ble ITAT in the case of KRIBHCO.The assessee had also relied upon the decision of the Hon'ble ITAT in the case of M/ s KRIBHCO for advancing hisarguments in the case of M/ s IFFCO.arguments in the case of M/ s IFFCO. 13. In the similar case i.e. M/ s KRIBHCO, the Hon'ble ITAThas given relief to the assessee on the issue of tax creditdeemed to be paid in Oman and quashed the proceedings u/ s263. The Department is not accepting the decision of theHon'ble IT AT in the case of M/ s KRIBHCO and the CCIT-1has given relief to the assessee on the issue of tax creditdeemed to be paid in Oman and quashed the proceedings u/ s263. The Department is not accepting the decision of theHon'ble IT AT in the case of M/ s KRIBHCO and the CCIT-1 & CCIT-2 has already authorized the PCIT to file appealbefore the Hon'ble Delhi High Court. 14. It may be noted that the assessee was specifically askedvide this office letter dated 14.07.2016(reproduced above inpara 6) to show whether these letters were before the AO onthe basis on which the Hon'ble ITAT has given the relief. & CCIT-2 has already authorized the PCIT to file appealbefore the Hon'ble Delhi High Court. 14. It may be noted that the assessee was specifically askedvide this office letter dated 14.07.2016(reproduced above inpara 6) to show whether these letters were before the AO onthe basis on which the Hon'ble ITAT has given the relief. 15. The assessee filed reply vide letter dated 27.07.2016wherein it was admitted by the assessee that these letters werenot before the AO. The assessee has simply stated that even ifthe letters issued by Secretary Generalof Taxation areignored for a moment, the claim of the society for tax creditfalls within the four comers of Article-25(4) w.r.s. 90(1)(a)(ii).This means these letters were not before the AO. This itselfshows the lack of enquiry on part of the AO and falls withinthe assumption of jurisdiction u/s 263. 16. In the result, the matter is restored back to the file of the AOfor making the assessment de novo in view of the observationsgiven above and also the order u/ s 263 in the case of theassessee for the A.Y. 2010-11. The assessee may be givensufficient opportunity before finalizing the order”. 7.The aforesaid quotation clearly refers to the earlier order passed bythe Principal Commissioner under Section 263 of the Act relating to theassessment year 2010-11. It is also recorded that the Tribunal had quashedthe said order for the assessment year 2010-11; however, an appeal had beenpreferred by the Revenue before the Delhi High Court. Hence, the PrincipalCommissioner for consistency and as the issue had not attained finality hadpassed the order under Section 263 of the Act for the assessment year 2011-12. 8. In the aforesaid background, ex facie the order dated 02.08.2017 passedin ITA No. 597/2017 for the assessment year 2010-11 would equally applyto the present appeal. 9.The contention of the Revenue that there was material change in view of the reduction of tax rate applicable to the respondent-assessee in Oman isinconsequential and misconceived. The assessing officer in his originalorder dated 27.03.2014 for the present year had allowed and given rebate oftax paid in Oman at the rate of 12% and not at the rate of 30%. Accordingly,the respondent-assessee was given tax credit of Rs. 17,37,09,837/- out of thetotal dividend paid in Oman of Rs. 144,75,81,978/-. Thus, the assessingofficer had taken notice of the reduction of rate of tax and tax credit wasonly given for the tax paid in Oman. Change in tax rates/slab, therefore,would not make any difference; nor would it negate the ratio of the decisiondated 02.08.2017 passed by the Division Bench of this Court in ITANo.597/2017 pertaining to the assessment year 2010-11. The ratio of theorder would accordingly apply. For the reasons stated in the order dated02.08.2017 passed in ITA No. 597/2017 for the assessment year 2010-11 wehold that no substantial question of law arises for consideration in thepresent appeal. 10.This appeal is accordingly dismissed with no order as to costs. SANJIV KHANNA, J. OCTOBER 29, 2018uj ANUP JAIRAM BHAMBHANI, J.