Itxa/1356/2017 Of Commissioner Of Income Tax-Ltu v. Nuclear Power Corporation Of India Ltd

PURTIPRASAD IN THE HIGH COURT OF JUDICATURE AT BOMBAYPARABORDINARY ORIGINAL CIVIL JURISDICTIONDigitally signed byPURTI PRASADPARABDate: 2021.10.04INCOME TAX APPEAL NO. 1356 OF 201713:48:12 +0530 Commissioner of Income Tax LTU V/s.Nuclear Power Corporation ofIndia Ltd. ….Appellant ….Respondent ----- Mr. Suresh Kumar for Appellant.Co. for Respondent. Mr. K. Gopal a/w Mr. Jitendra Singh and Ms. Simran Hasija i/b M.V. Kini & ----- CORAM : K.R. SHRIRAM &R.I. CHAGLA, JJ. DATED : 30[th] SEPTEMBER, 2021 P.C. : 1.The assessee i.e., respondent Nuclear Power Corporation ofIndia Ltd., is a Government of India enterprise. Respondent filed its returnof income for assessment year 2009-2010 declaring total income as NILunder normal provisions of the Income Tax Act, 1961 (the Act). The BookProfit as per the provisions of Section 115 JB of the Act was Rs. 28,003.83Lakhs MAT (Minimum Alternate Tax) and amount payable under Section115 JB of the Act was worked out to Rs.3,172.83 Lakhs. Respondent hasclaimed TDS credit of Rs.94.3 Lakhs. The return of income was processedunder Section 143 (1) of the Act and notice dated 18/08/2010 underSection 143 (3) of the Act was issued. An order under Section 143 (3) ofthe Act was passed on 09/12/2011 wherein the addition ofRs.109,31,36,711/- was made under normal provisions of the Act. The Assessing Officer while computing the book profit under Section 115 JB of the Act did not add this amount of Rs.109,31,36,711/- to the book profits. The breakup of this Rs.109,31,36,711/- is as under : 2. On 12[th] March, 2014 CIT-LTU (Large Tax Payer Unit) (hereinafter referred to as CIT) issued a notice to respondent calling upon respondent to show case as to why the amount of Rs.109,31,36,711/- should not be added to the book profit. Respondent replied to the said show cause notice and after considering the response, CIT passed the order dated 26[th] March, 2014 exercising powers under Section 263 of the Act and set aside the order dated 9[th] December, 2011 of the Assessing Officer. The Assessing Officer was also directed to add that amount ofRs.109,31,36,711/- to the profit as per Profit and Loss Account to arrive atthe book profit under Section 115 JB of the Act . 3. Aggrieved by this order of CIT, respondent preferred an appeal to the Income Tax Appellate Tribunal (ITAT). The ITAT vide its order dated11[th] January, 2017 allowed the appeal filed by respondent. The ITAT heldthat nobody can travel beyond the line drawn by Section 115 JB of the Act. The disputed four items are not part of the list appearing in the said sectionand therefore there was no justification for CIT to use his revisionarypowers in the case under consideration. Impugning this order of the ITAT,appellant has approached this court proposing the following questions of law to be framed. SUBSTANTIAL QUESTION OF LAW i.“Whether, on the facts and in the circumstances of thecase and in law, the Hon’ble Tribunal was right in holdingthat, the AO had applied his mind while passing the order u/s143 (3) of the Act and after application of mind the amount ofRs.109,31,36,711/- was not added in Book profits of theassessee computed u/s 115 JB of the Act ignoring the fact thatthere is no discussions in the Assessment order passed u/s 143(3) of the Act with regard to addition of impugned amount inbook profit u/s 115 JB of the Act?” ii. “Whether, on the facts and in the circumstances of thecase and in law, the Hon’ble Tribunal was right in holdingthat, the act of the AO in dropping the proceedings initiatedu/s 154 of the Act suggests that he had applied his mind innot adding the amount of Rs.109,31,36,711/- in Book profitsof the assessee computed u/s 115 JB of the Act ignoring thefact that the remedial action for the loss of the Revenue has tobe taken when the order is erroneous and prejudicial to theinterest of the Revenue?” ii. “Whether, on the facts and in the circumstances of thecase and in law, the Hon’ble Tribunal was right in holdingthat, the act of the AO in dropping the proceedings initiatedu/s 154 of the Act suggests that he had applied his mind innot adding the amount of Rs.109,31,36,711/- in Book profitsof the assessee computed u/s 115 JB of the Act ignoring thefact that the remedial action for the loss of the Revenue has tobe taken when the order is erroneous and prejudicial to theinterest of the Revenue?” iii. “Whether, on the facts and in the circumstances of thecase and in law, the Hon’ble Tribunal was right in deleting theaddition of Rs.109,31,36,711/- in book profit of the assesseecomputed u/s 115 JB of the Act holding that the four itemsare not part of the list appearing in the Section ignoring thefact that the amount of levies and interest on various fundstransferred by the assessee to reserves in the Balance Sheetare clearly covered by clause (b) of the Explanation (1) toSection 115 JB also ignoring the decision of the Hon’ble ApexCourt in the case of Apollo Tyres Ltd. vs. CIT, 255 ITR 273,wherein, the Hon’ble Apex Court has permitted the making ofadjustments to the net profit shown in the P & L Account on account of various items specified in the explanation toSection 115 JB of the Act?” 4.We have considered the order passed by the Assessing Officer,CIT as well as the ITAT. We see no reason to interfere and do not find anyperversity in the order passed by the ITAT. Respondent had furnished all thedocuments called for by the Assessing Officer during the assessmentproceedings. The Assessing Officer has applied his mind while computingthe income under the normal provisions as well as under Section 115 JB ofthe Act. The Assessing Officer had issued notice under Section 154 of theAct wherein he had asked respondent as to why remedial action should notbe taken forcomputing income under the MAT provisions. Respondent hadmade detailed submissions in that regard, the method of computation ofbook profit had been provided as per the explanation below Section 115 JB(2) of the Act and based on that Assessing Officer concluded that noadjustment on account of decommissioning levy and interest thereon,interest on renovation and modernization fund and income interest onresearch and development would fall under any of the heads of items givenin the explanation below Sub Section 2 of Section 115 JB of the Act. 5.Therefore, in our view, the Assessing Officer has applied hismind while passing the original order and dropping the rectificationproceedings. It is settled law that no revisionary jurisdiction would lie onwhich issues are debatable. It is also settled law that once the Assessing Officer has taken one of its two possible views it cannot be regarded asbeing erroneous. What we find is in the order passed by CIT, there is nomention any where as to under which category of the explanation A to Kbelow Sub Section 2 of Section 115 JB of the Act these four itemsmentioned above would fall. If the CIT felt that the Assessment Orderpassed by the Assessing Officer is erroneous, he ought to have identifiedunder which category from A to K in the explanation below Sub Section 2 ofSection 115 JB of the Act these four items would fall. This is mainlybecause the Assessing Officer took a view that these four items would notfall under the items mentioned in the explanation. In fact, the ITAT has alsoobserved that the disputed four items are not part of the list appearing inthe section. Without identifying under which part of the list disputed fouritems form part of CIT could not have exercised its revisionary powers. 6.In our view, the Tribunal has not committed any perversity orapplied incorrect principles to the given facts and when the facts andcircumstances are properly analysed and correct test is applied to decide theissue at hand, then, we do not think that question as pressed raises anysubstantial question of law. The appeal is devoid of merits and it is dismissed with no orderas to costs. (R.I. CHAGLA J.) 6.In our view, the Tribunal has not committed any perversity orapplied incorrect principles to the given facts and when the facts andcircumstances are properly analysed and correct test is applied to decide theissue at hand, then, we do not think that question as pressed raises anysubstantial question of law. The appeal is devoid of merits and it is dismissed with no orderas to costs. (R.I. CHAGLA J.) (K.R. SHRIRAM, J.)