Tribunal quashes orders for assessment years 2013-14 and 2014-15 due to lack of enquiry.

The Tribunal quashed the orders passed under Section 263 for assessment years 2013-14 and 2014-15, citing lack of enquiry and non-application of mind by the Pr. CIT. Consequently, appeals by both the assessee and revenue were dismissed as infructuous.

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Issues Involved:
1. Condonation of Delay in Filing Appeals
2. Validity of Proceedings under Section 263 for Assessment Year 2013-14
3. Validity of Proceedings under Section 263 for Assessment Year 2014-15
4. Non-Consideration of Assessee's Replies by Pr. CIT
5. Necessity and Scope of Enquiry by Pr. CIT under Section 263

Summary:

1. Condonation of Delay in Filing Appeals:
The appeals filed by the assessee were barred by a delay of 269 days. The delay was attributed to the clerk's negligence in the Chartered Accountant's office. The Tribunal, after hearing both sides, found the delay reasonable and condoned it, admitting the appeals for hearing on merits.

2. Validity of Proceedings under Section 263 for Assessment Year 2013-14:
For the assessment year 2013-14, the Pr. CIT initiated proceedings under Section 263 concerning issues like TDS not deducted on payments to Power Grid Corporation of India Ltd (PGCIL), deferred tax liability, wheeling charges, excess claim of regulatory asset, and non-recognition of income from subsidy. The Tribunal found that the Pr. CIT had not considered the assessee's replies nor provided findings on how the original assessment orders were erroneous and prejudicial to the revenue. The Tribunal concluded that the Pr. CIT's order was passed without application of mind and in a mechanical manner, thus quashing the order under Section 263.

3. Validity of Proceedings under Section 263 for Assessment Year 2014-15:
For the assessment year 2014-15, the Pr. CIT invoked Section 263 on issues like excess claim in the regulatory asset, non-recognition of income from subsidy, and computation of income under Section 115 JB (MAT). Similar to the previous year, the Tribunal found that the Pr. CIT did not consider the assessee's replies or conduct any verification. The Tribunal held that the order under Section 263 was unsustainable due to the lack of enquiry and application of mind, thus quashing the order.

4. Non-Consideration of Assessee's Replies by Pr. CIT:
The Tribunal noted that the Pr. CIT had extracted the issues and the assessee's replies in his order but did not discuss or reject the replies. The Tribunal emphasized that the Pr. CIT was required to consider the replies and give a finding, which was not done, indicating non-application of mind.

5. Necessity and Scope of Enquiry by Pr. CIT under Section 263:
The Tribunal referred to various judicial precedents to highlight that the Pr. CIT must make or cause to make necessary enquiries before passing an order under Section 263. The Tribunal found that the Pr. CIT did not conduct any enquiry or verification after receiving the assessee's replies, making the order under Section 263 invalid.

Conclusion:
The Tribunal quashed the orders passed under Section 263 for both assessment years 2013-14 and 2014-15 due to the lack of enquiry and non-application of mind by the Pr. CIT. Consequently, the related appeals by the assessee and revenue became infructuous and were dismissed.

Order dictated and pronounced in the open court on 29/03/2023.

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