Reassessment barred by pending appeal issues, and electricity duty liabilities escaped section 43B and section 115JB treatment.

Reassessment under section 147 could not be sustained where the recorded reasons related to matters already pending in appeal, because the proviso excludes income forming the subject matter of appellate, revisional, or reference proceedings. The tribunal also applied binding High Court rulings that electricity duty and allied statutory amounts held by the assessee were not disallowable under section 43B as a liability payable to the sovereign in a fiduciary capacity, and that section 115JB did not apply to a statutory corporation not treated as a company under the Companies Act. The reopening and the additions were therefore unsustainable.

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Issues: (i) whether reassessment under section 147 of the Income-tax Act, 1961, could be sustained when the reasons recorded for reopening were already the subject matter of appeal; (ii) whether disallowance under section 43B and liability under section 115JB of the Income-tax Act, 1961, could be sustained in respect of the assessee's electricity duty and allied statutory liabilities.

Issue (i): whether reassessment under section 147 of the Income-tax Act, 1961, could be sustained when the reasons recorded for reopening were already the subject matter of appeal.

Analysis: The reasons for reopening concerned matters that had already been considered in appeal against the original assessment. The second proviso to section 147 excludes income involving matters which are the subject matter of any appeal, reference or revision. As the reopening was based on issues already under appellate consideration, the reassessment could not be reopened on those grounds.

Conclusion: The reopening and reassessment were invalid and unsustainable.

Issue (ii): whether disallowance under section 43B and liability under section 115JB of the Income-tax Act, 1961, could be sustained in respect of the assessee's electricity duty and allied statutory liabilities.

Analysis: The jurisdictional High Court had already held in the assessee's own case that amounts collected and held by the assessee under the Electricity Duty Act were not exigible to disallowance under section 43B as liability payable to the sovereign qua sovereign. On the MAT issue, the High Court had also held that the assessee, being a statutory corporation and not a company for the purpose of the Companies Act, was not amenable to the fiction under section 115JB. Those binding decisions governed the present appeals.

Conclusion: The disallowance under section 43B and the MAT addition under section 115JB were not sustainable.

Final Conclusion: The Revenue's appeals failed on both the reopening issue and the merits of the additions, and the relief granted by the appellate authority was affirmed.

Ratio Decidendi: Reassessment cannot be initiated on issues already forming the subject matter of appeal, and the deeming provisions of sections 43B and 115JB do not apply where the statutory liability is held in a fiduciary capacity and the assessee is not a company for Companies Act purposes.

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