2019 (9) TMI 1399

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....u/s. 143(3) of the Act dated 26/12/2016 for the AY 2014-15 with a direction to redo the assessment considering the applicability of provisions of Sec. 40(a)(iib) of the Act for disallowance of Electricity Duty paid/payable amounting to Rs. 43,87,44,000/-. The Pr. CIT ought to have noted that such order was passed without satisfying the twin conditions stipulated in sec. 263 of the Act that the assessment order should be erroneous as well as prejudicial to the interest of Revenue as has been held by the Supreme Court in the case of Malabar Industrial Co. (243 ITR 83). The Pr. CIT ought to have noted that there was no error in the assessment order passed u/s. 143(3) of the Act in as much as that the Electricity Duty levied u/s. 3(1) of the Ke....

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....s erred in law in directing the assessing officer to make a disallowance of the Electricity Duty as per sec. 3(1) of the KSED Act amounting to Rs. 43,87,44,000/- while setting aside the assessment, which is not in accordance with the provisions of sec. 263 of the I.T. Act as per the legal decisions of various Hon'ble High Courts and ITATs as given below: 1) CIT vs. J.L. Morrison (India) Ltd. (Calcutta High Court) Judgment delivered on June 18, 2014. ii) PCIT vs. Ballarpur Industries Limited (Bombay High Court) judgment delivered on October 13, 2016. iii) Antala Sanjaykumar Ravjibhai vs. CIT (2012) 135 ITD 506 (Rajkot Trib.) iv) Manish Kumar vs. CIT (2012) 134 ITD 27 (Indore Trib.) v) Amira Pure Foods Pvt. Ltd. vs. Pr.CIT (ITAT Del....

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.... 3) Malabar Industrial Co. Ltd. vs. CIT (2000) (243 ITR 83). 4. Against this, the assessee is in appeal before us. The Ld AR submitted that provisions of first limb of Section 40a(iib) of the IT Act 1961 is not applicable to the assessee since Electricity duty under Section 3(1) of the Kerala State Electricity Duty Act 1963 is applicable to all 10 licensees set up and operating in the state of Kerala by the private, state, central and bodies/authorities. It was submitted that levy is not therefore an exclusive levy as provided in the section. The Ld. AR submitted that levy of duty /taxes on consumption or sale of electricity is provided for in Entry no 53 list H (state list seventh schedule) of the constitution of India and hence, duty l....

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....ular purpose". According to Macmillan dictionary the meaning of the term appropriation is "to take something away from someone". According to the Ld. AR, while presenting Union Budget an appropriation bill to the proposed law is presented that authorises the expenditure out of government funds and the bill authorises withdrawal of funds out of consolidated fund of Govt of India to meet expenditure provided for in the budget. From the above discussion, it was submitted that the term appropriation is synonymous with taking funds out of an account of one entity whether it is governmental or private. Therefore, it was submitted that duty imposed under Section 3(1) of the electricity duty Act 1963 which is levied or collected from all licensees ....

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....lator" may have been different or the result is harsh or undesirable. The literal rule is what the law says instead of what the law means. 2. The landmark rulings /decisions on interpretation which stand to the support of the above are given below. (i) A literal construction would not be denied only because the consequences to comply with the same may lead to a penalty. The courts should not be over zealous in searching for ambiguities or obscurities in words which are plain. (Tata Consultancy Services V. State of A.P. (2005) 1 SCC 308). (ii) Another important point regarding the rule of literal construction is that exact meaning is preferred to loose meaning in an Act of Parliament. In the case of Pritipal Singh V. Union of India (AI....

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....e made further inquiries before accepting the wrong claims made by the assessee. The Assessing Officer cannot remain passive in the face of a claim, which calls for further enquiry to know the genuineness of it. In other words, he must carry out investigation where the facts of the case so require and also decide the matter judiciously on the basis of materials collected by him as also those produced by the assessee before him. The Assessing Officer was statutorily required to make the assessment under Section 143(3) after scrutiny and not in a summary manner as contemplated by Sub-section (1) of Section 143. The Assessing Officer is therefore, required to act fairly while accepting or rejecting the claim of the assessee in cases of scrutin....