TaxTMI 
TaxTMI 
TaxTMI 
2022 (5) TMI 1690
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....s 1617/Hyd/2017, ITA No.1618/Hyd/2017 and ITA No.1576/Hyd/2017 and ITA No.1577/Hyd/2017, had dismissed the appeal of the assessee and allowed the appeal in favour of the revenue. II. The Hon'ble ITAT while deciding the issue against the assessee has erred in not considering the decision of the Hon'ble Tribunal Co-ordinate Bench in the appellant's own case for the Assessment year 2004-05 to 2009-10 dated: 29-02-2012 where in the issue has been set aside to the file of AO for further verification. III. The Hon'ble ITAT in the case of the appellant in ITA No. 1017/H/2016 and 1018/H/2016 for the assessment years 2011-12 & 2012-13 on the same issue of claiming deduction u/s 80lA directed the Id. CIT(A) to follow the order of the Hon'ble ITAT dated 29.02.2012 in ITA No. 347/Hyd/2008. IV. However, for the year under consideration Hon'ble ITAT without following the precedent of the Hon'ble Tribunal Co-ordinate Bench in the appellant's own case for the Assessment Year 2004-05 to 2009-10 dated: 29.02.2012 dismissed the appeal of the assessee for the AY of 2013-14. for the AY 2013-14. Thus, there is an inconsistency with the earlier decision of the sai....
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....distribution of power. In the present case, the assessee is not in the business of transmission or distribution of power. However, Id. AR has submitted that in the case of Kinfra Exports (supra), on the similar issue, the ITAT, Cochin Bench has allowed deduction u/s 80IA(4) (iv) (b). On careful reading of the said judgment, we find that the assessee in the said case was already in the business of transmitting and distributing electricity and it had claimed deduction u/s 80IA(4)(iv)(b) by laying new network of transmission lines. In the case under consideration, it is different as the assessee is not in the line of generation & distribution of power. However, assessee could have claimed deduction u/s 80IA(4)((iv) (c). As per this section, a unit which undertakes substantial renovation on modernizing of existing network of transmission or distribution lines at any time during the period beginning on the 1st day of April, 2004 and ending 31/03/2013, is eligible to claim the said deduction. However, the meaning of substantial renovation and modernization is explained as increase in the plant and machinery in the network of transmission and distribution lines by at least 50% book value ....
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....mmarizing the Grounds, Ld.Counsel for the assessee submitted that Ground Nos.1 to 4 relates to allowability of the deduction u/s. 80IA(4)(iv)(b) of the Act and Ground No.5 pertains to disallowance made u/s.14A of the Act. 6. Regarding Ground Nos.1 to 4 for the AY.2011-12, covering the issues raised in the Grounds of both the appeals for both the years, Ld.Counsel for the assessee made the following written submissions, and the same are extracted as under: "Issues involved in these appeals are: Deduction under section 80IA(4)(i)(c) in respect of civil works including irrigation Projects and 80IA(4)(iv)(b) in respect of Electrical Projects 1. Assessee Appeal are in relation to disallowance of deduction under section 80IA in respect of Electrical projects u/s 80IA(4)(iv)(b) : The CIT(A) based on the appeal order of the CIT(A) & ITAT for the Assessment year 2010-11 in ITA No. 765/Hyd/2014, 740/Hyd/2014 & CO No. 47/Hyd/2014 dated 29-02-2016, differing from the earlier ITAT order in Assessee's own case for Assessment year 2004-05 to 2009-16 ITA No. 347/Hyd/200S & 13 others dated 29-02-2012. The Hon'ble ITAT in its order in ITA No 347/Hyd/2005, at pages 16 to 21 the....
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.... and dismiss the ground of appeal of assessee." We submit that the undertaking referred to in section 80IA(4)(iv) and undertaking referred to in the proviso to section 80IA(4)(iv)(b) are different and cannot be the same. The Undertaking referred to in section 80IA(4)(iv) can be confined to the power transmission or distribution undertaking whereas the undertaking referred to the proviso to this section is different. The proviso reads as under: "Provided the deduction under this section to an undertaking under sub-clause (b) shall be allowed only in relation to the profits derived from laying of such 'network of new lines for transmission or distribution." In case the undertaking involved in transmission and distribution undertakes laying of the such network of new lines will be capital and nature and cannot earn profit for such laying of new lines, therefore, there has to be another undertaking. Hence your appellant is eligible for deduction on profits from electrical projects. It is prayed that deduction under section 80IA(4)(iv)(b) may be allowed. 2. The Department appeal are in respect of deduction allowed by CIT(A) under section 80IA(4)(i)(c) - The CIT(A) ....
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....n the said order, it was held that these contracts are not in the nature of works contracts and thereby Explanation to the provisions of section 80IA(13) are not attracted. Hence, just to maintain consistency with the stand of the revenue and to keep the issue alive, AO has disallowed the deduction u/s 80IA(4)(i)(c). Apart from that there is no merit in such disallowance. However, the Id. CIT(A) has allowed assessee's claim u/s 80IA(4)(i)(c) relying on the order of the coordinate bench of this tribunal (supra), hence, we are inclined to uphold the order of CIT (A). in this regard as the order of the CIT(A) is in line with the order of ITAT." in view of the above, the Department appeals may be dismissed". 6.1. Further, relying on the decision of Hon'ble ITAT vide its order dt.29-02-2012 in ITA No.347/Hyd/2008 and others, Ld. Counsel for the assessee submitted that all these issues have to be remanded to the file of CIT(A) for passing an order in compliance with the said order of the Tribunal. Referring to above note, Ld.Counsel for the assessee submitted that the assessee is entitled to deduction u/s.80IA(4) of the Act in respect of both the types of the Projects. The sai....
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....t to the second limb that whether the assessee is entitled for claiming deduction u/s 80IA(4)(i)(c) of the Act or not, ld.AR has drawn our attention to the order of Tribunal dt.23.11.2021 before us, more particularly, Paras 6 and 6.1 wherein the observations of AO and contentions of ld.AR were reproduced. It was submitted by the ld.AR that all the previous years (from A.Y. 2004-05 till A.Y 2012-13), Tribunal had granted the deduction to the assessee. 6. Second issue relates to AO's action in not allowing deduction of Rs. 10,77,41,470/- u/s. 80IA(4)(i)(c) of the Act. AO's observations are as under: "5.1. With regard to the claim of deduction u/s. 80IA(4)(i)(c) the auditor has certified the deduction at Rs. 107741470/- in Form 10CCB. It is seen that this deduction is claimed in respect of 9 projects viz. KBJNL Work, Guddadamallapur LIS, Singatlur 2nd lift, singatlur 3rd lift, Teggisiddapur, Sanyasikuppa Work, Ubrani Amurthapura LIS, Jammu Road Work And HMWS & SB Project. It is noticed from the agreements that in all these 8 projects, the assessee is required to maintain the works for 24 months which in fact is nothing but the maintenance during the warranty period. In som....
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....sment was completed in the following manner: The Assessing Officer denied deduction under section 80IA of the Income Tax Act, 1961 without proper appreciation of the facts of the case. During the course of hearing copies of all the agreements of the development work undertaken were submitted along with a detailed note was submitted. In fact in your appellants own case the Hon'ble ITAT vide its order dated 29-2-2013 in ITA No. 347/Hyd/2008 & others for AY 2003-04 to 2009-10 had allowed the deduction under section 80IA in respect of the irrigation projects as well as electrical projects. It was also submitted that new works in respect of electrical distribution lines had been undertaken on total turnkey basis which should considered separately without being prejudiced by the decision of the earlier years. The Assessing Officer simply brushed a side these agreements and on the ground that the facts are similar to the earlier year and that Irrigation projects are not eligible as there is no operation and maintenance, this fact is not correct as evident from the contracts there is maintenance period. Your Appellant submits that in view of the various decisions of the High Courts a....
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....equested for recalling the order. 13. The ld.AR further submitted that the decision of Tribunal in the case of assessee for earlier assessment years is required to be followed and not following the decision of co-ordinate Bench of the Tribunal and deciding the issue against the assessee is a mistake apparent from record and in view of the decision of hon'ble Supreme Court in the case of Honda Siel Power Products Ltd Vs. CIT (2007) 165 Taxman 307 and the decision in the case of III Member Case of Bangalore ITAT in the case of ITO Vs. M/s. Minnow Trading Company Pvt. Ltd. dt.29.01.2020 (M.P Nos.182 and 183/Bang/2017 in ITA Nos.5927 and 5929/Bang/2008), Hence it was submitted that the present M.A.s are required to be recalled. 14. Lastly, ld.AR submitted that the mistake committed by the Tribunal will have impact on the appeals pending before hon'ble High Court as the Tribunal has wrongly mentioned in its order at Para 6 of Page 28 that in preceding assessment years, Tribunals nowhere discussed the clinching operation of the "Explanation" of section 80IA. The ld.AR had submitted that the Revenue had filed the appeal against the favourable order passed by the Tribunal and the same is....
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....d. Importantly, the assessee has stated that the order for Assessment year 2004-05 to 2009-10 dated: 29-02-2012 vide ITA No.1471-1487/Hyd/2017 in the assessee's own case is in his favour. However, the factual position is that in the said appeals, the issue has been set aside to the file of AO for further verification. The relevant extract of para 30 of the said order is reproduced below, which clarifies that there was no clear order in favour of the assessee: 30. We find that the decision relied on by the learned counsel for the assessee in the case of CIT vs. Laxmi civil Engineering works [supra] squarely applicable to the issue under dispute which is in favour of the assessee wherein it was held that mere development of a infrastructure facility is an eligible activity for claiming deduction under section 80IA of the Act after considering the Judgement of the Mumbai High Court in the case of ABG Heavy Engineering [supra]. The case of ABG is not the pure developer whereas, in the present case, the assessee is the pure developer. We also find that Section 80IA of the Act, intended to cover the entities carrying out developing, operating and maintaining the infrastructure facilit....
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.... involves design, development, operating & maintenance, financial involvement, and defect correction and liability period, then such contracts cannot be called as simple works contract to deny the deduction u/s 80IA of Act. In our opinion the contracts which contain above features to be segregated on this deduction u/s. 80-IA has to be granted and the other agreements which are pure works contracts hit by the explanation section 80IA(13), those work are not entitle for deduction u/s 80IA of the Act. The profit from the contracts which involves design, development, operating & maintenance, financial involvement, and defect correction and liability period is to be computed by assessing officer on pro-rata basis of turnover. The assessing officer is directed to examine the records accordingly and grant deduction on eligible turnover as directed above. It is needless to say that similar view has been taken by the Chennai Bench of the Tribunal and deduction u/s. 80IA was granted in the case of M/s. Chettinad Lignite Transport Services (P) Ltd., in ITA No. 2287/Mds/06 order dated 27 July, 2007 for the assessment year 2004-05. Later in ITA No. 1179/Mds/08 vide order dated 26 Th February, ....
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....on 254(2) cannot be used for recalling entire order as it would amount to review which is beyond 5. The existing understanding about the scope and powers under section 254(2) ae bound by the ruling in CIT v. Reliance Telecom Ltd. - [2021] 133 taxmann.com 41 (SC), Hon'ble SC has held that the order passed by the ITAT recalling its earlier order is beyond the scope and ambit of the powers under section 254(2). In exercise of powers under section 254(2), the ITAT may amend any order passed by it to rectify any mistake apparent from the record only. The Tribunal cannot revisit its earlier order and go into detail on merits. The powers under section 254(2) are only to correct and/or rectify the mistake apparent from the record. Merely because the assessee might have filed detailed submissions, it does not confer jurisdiction upon the ITAT to pass the order de hors Section 254(2). In the instant case, a detailed order was already passed by the ITAT, which was held in favour of the revenue. Therefore, the said order could not have been recalled by ITAT in the exercise of powers under section 254(2). If the assessee believed that the order passed by the ITAT was erroneous, either o....
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....been conferred by Section 114 and Order 47, Rule 1 of the Code. The rule states as follows: Any person aggrieved: by a decree or order from which an appeal is allowed but from which no appeal has been preferred. by a decree or order from which no appeal is allowed. by a decision on a reference from a court a small causes, may apply for a review of judgment to the court which passed the decree or made the order on any of the following grounds: 1. discovery by the applicant of new and important matter or evidence which after the exercise of due diligence was not within his knowledge or could not be produced by him at the time when the decree was passed or order made. 2. on account of some mistake or error apparent on the face of the record. 3. for any other sufficient reason. Discovery of new and important matter or evidence: The party seeking review must show that he exercised greatest care in adducing all possible evidence and that the new evidence is such as is relevant and that if it had been given in the suit it might possibly have altered the judgment. It is not only the discovery of new and important evidence which entitles a party to apply for a review....
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....long drawn process of reasoning on points where there may conceivably be two opinions cannot be said to be an error apparent on the face of the record. A decision on a debatable point of law is not a mistake apparent from the record-see Sidhramappa AndannappaManvi v. Commissioner of Income-tax [1952] 21 ITR 333 (Bom.). The power of the officers mentioned in section 154 of the Income-tax Act, 1961, to correct "any mistake apparent from the record" is undoubtedly not more than that of the High Court to entertain a writ petition on the basis of an "error apparent on the face of the record." In this case it is not necessary for us to spell out the distinction between the expressions "error apparent on the face of the record" and "mistake apparent from the record". But suffice it to say that the Income-tax Officer was wholly wrong in holding that there was a mistake apparent from the record of the assessments of the first respondent. 8. Accordingly, the decision of the Honourable Supreme Court in the case of Reliance Telecom Limited reported in 133 taxmann.com 41 is squarely applicable to this case as the assessee has taken the grounds of inconsistency with the earlier decisions of t....
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....er the statutory explanation to section 80IA read along with the analysis of The 5-Judge Constitutional Bench's Decision In CC v. Dilip Kumar (2018) 9 SCC 1 On Rules Of Interpretation in allowing deductions and exemptions. The Hon'ble bench would be conscious that the knowledge 5-Judge Constitutional Bench's Decision In CC v. Dilip Kumar (2018) 9 SCC 1 was not available to the benefit of the Hon'ble Tribunal in deciding the previous precedents. The Hon'ble bench went on to analyse the impact of the inserted explanation to the nature and ambit of Works contract in para 6. With such a detailed application of mind by the Hon'ble Tribunal in ITA No. 1617 & 1618/HYD/2017 for AY 2013-14 and AY 2014-15, there is absolutely no scope for the assessee to file a Miscellaneous application on the nonexisting ground of inconsistency. 11. The Ld. Counsel for the assessee has placed reliance on the cases of Minnow Trading Company of ITAT Bangalore and Vijay Solvex Ltd of ITAT Jaipur about following of rule of precedent in assessee's case. The case laws are not applicable in the current scenario as the Hon'ble ITAT has placed reliance on a decision which is favourable to revenue in dismissing th....
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.... to the Tribunal's mistake, error or omission, then it is the duty of the Tribunal to set it right. Atonement to the wronged party by the Court or Tribunal for the wrong committed by it has nothing to do with the concept of inherent power to review. In the instant case, the Tribunal was justified in exercising its powers under section 254(2) when it was pointed out to the Tribunal that the judgment of the co-ordinate Bench was placed before the Tribunal when the original order came to be passed but it had committed a mistake in not considering the material, which was already on record. The Tribunal had acknowledged its mistake; it had accordingly rectified its order. If prejudice had resulted to the party, which prejudice is attributable to the Tribunal's mistake, error or omission and which error is a manifest error then the Tribunal would be justified in rectifying its mistake. The same thing had been done in the instant case. [Para 13] For the aforestated reasons, the impugned judgment of the High Court was set aside and the order passed by the Tribunal allowing the rectification application filed by the assessee was restored. Consequently, the appeal was allowed. 13. The ....
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....EE 80IA 752/H/2020 2016-17 DEPT 80IA 699/H/2020 2016-17 ASSESSEE 80IA 700/H/2020 2017-18 ASSESSEE 80IA 753/H/2020 2017-18 DEPT 80IA 754/H/2020 2018-19 DEPT 80IA 701/H/2020 2018-19 ASSESSEE 80IA None of the case laws and arguments relied upon by the assessee distinguish or oppose the existing understanding about the scope and powers under section 254(2) as bound by the ruling in CIT v. Reliance Telecom Ltd. - [2021] 133 taxmann.com 41 (SC), Accordingly, as categorically established from the above submission, there is no mistake apparent from record and the current MA is liable to be quashed." 17. We have heard the rival submissions and perused the material on record. Admittedly, there is no quarrel with regard to the order of Tribunal dt.05.12.2019 for the A.Ys. 2011-12 and 2012-13 wherein, the Tribunal has considered the contentions of the assessee herein as well as of the Revenue. In Para 6 of the said order (supra), Tribunal had reiterated the submissions of assessee. In said Para 6, the contentions of ld.AR was that for A.Ys. 2004-05 to 2009-10, the Tribunal vide order dt.29.02.2012 in ITA 347/Hyd/2008 and others had decided the issue in favour of as....
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.... law only u/s 260A of the Act. If the Tribunal, by mistake failed to adjudicate the fact, then in our opinion, it is a mistake apparent from record and the order of the Tribunal suffers from said mistake which if goes remains unrectified, then it will harm the parties. Further we may point out in some cases, where the tax effect is less than threshold limit, no appeal can be filled by the department against the said mistake before High Court, therefore this power of rectification is required to exercise by the Tribunal, where it came across such mistake. The judgments relied upon by the ld. DR, nowhere deals with the above said issue and therefore, in our view, the Tribunal is within its right to correct the apparent mistake. 23. Further, the incorrect finding recorded by Tribunal whereby the Tribunal had committed mistake by recording in paragraph 6 of its impugned order that none of the previous bench(es) had considered the scope of Explanation to section 80IA. In our considered opinion, the Tribunal in its order dt.29.02.2012 in the case of assessee (in ITA No.347/Hyd/2008 and others) had considered the Explanation to section 80IA. It may fruitfully here to refer Para 28, 29, 3....
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....quality and quantity irrespective of the cost of such material. The Government does not provide any material to the assessee. It provides the works in packages and not as a works contract. The assessee utilizes its funds, its expertise, its employees and takes the responsibility of developing the infrastructure facility. The losses suffered either by the Govt. or the people in the process of such development would be that of the assessee. The assessee hands over the developed infrastructure facility to the Government on completion of the development. Thereafter, the assessee has to undertake maintenance of the said infrastructure for a period of 12 to 24 months. During this period, if any damages are occurred it shall be the responsibility of the assessee. Further, during this period, the entire infrastructure shall have to be maintained by the assessee alone without hindrance to the regular traffic. Therefore, it is clear that from an un-developed area, infrastructure is developed and handed over to the Government and as explained by the CBDT vide its Circular dated 18-05-2010, such activity is eligible for deduction under section 80IA (4) of the Act. This cannot be considered as ....
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....A of the Act, in the Finance Act 2001, to give effect to the aforesaid circulars issued by the CBDT. We also find that, to avoid misuse of the aforesaid amendment, an Explanation was inserted in Section 80IA of the Act, in the Finance Act-2007 and 2009, to clarify that mere works contract would not be eligible for deductions under section 80IA of the Act. But, certainly, the Explanation cannot be read to do away with the eligibility of the developer; otherwise, the parliament would have simply reversed the Amendment made in the Finance Act, 2001. Thus, the aforesaid Explanation was inserted, certainly, to deny the tax holiday to the entities who does only mere works contact or sub- contract as distinct from the developer. This is clear from the express intension of the parliament while introducing the Explanation. The explanatory memorandum to Finance Act 2007 states that the purpose of the tax benefit has all along been to encourage investment in development of infrastructure sector and not for the persons who merely execute the civil construction work. It categorically states that the deduction under section 80IA of the Act is available to developers who undertakes entrepreneuria....
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....s, highways, airports, ports and rapid urban rail transport systems. For that purpose, private sector participation by way of investment in development of the infrastructure sector and not for the persons who merely execute the civil construction work or any other work contract has been encouraged by giving tax benefits. Thus the provisions of section 80IA shall not apply to a person who executes a works contract entered into with the undertaking or enterprise referred to in the section but where a person makes the investment and himself executes the development work, he carries out the civil construction work, he will be eligible for the tax benefit under section 80IA." 31. The above order was followed in subsequent assessment years 2007-2008 & 2008-09 in ITA Nos. 1312 & 1313/Mds/2011 vide order dated 18.11.2011 in the case of the same assessee. Being so, we are inclined to partly allow the ground relating to claiming of deduction u/s. 80IA." 24. In our considered opinion, once there are binding decisions in the case of assessee for A.Ys. 2004-05 to 2012-13, then it is required to be followed by the Tribunal and if the Tribunal on a mistaken belief had not followed the decisi....
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....Tribunal has power to rectify any mistake apparent on the face of the record and the hon'ble Supreme Court in the case of Honda Siel Power Products Ltd (supra) held that when there was a mistake, error or omission on part of the Tribunal, then it is the duty of Tribunal to set it right. 27. In the present case, since the facts have not been adjudicated, which have not been denied by the Revenue and therefore, there are mistakes apparent from record. It is settled position of law that the mistakes of the Court should not harm any person. 28. The mistake apparent from record had not been defined in the I.T Act, however there are many mistakes which had been considered by the Hon'ble Supreme Court and High Courts as mistake apparent from record. I. M/s.Universal Cold Storage Ltd Vs. DCIT (2020) 168 Taxman 178 (Mad) - When the Tribunal passed order dismissing the appeal of assessee on account of nonappearance of the assessee, then it has power to recall its order. II. Hon'ble Supreme Court of India in Assistant Commissioner of Income Tax vs. Saurashtra Kutch Stock Exchange Limited (2008) 219 CTR (SC) 90 settled long ago that non-consideration of the decision of the jurisdictional....
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....h a power must be held to be inherent in the Tribunal since it would be a case where the party has suffered prejudice for no fault of his and on account of the mistake or error on the part of the Tribunal. It held that the failure to deal with the preliminary objection relating to the maintainability of the appeal on the ground of limitation amounted to an error apparent on the face of the record which empowered the Tribunal to reopen the appeal and rectify the mistake if it was so satisfied. VII. In Kil Kotagiri Tea and Coffee Estates Company Ltd. vs. ITAT (1988) 174 ITR 579 the Kerala High Court held that where the Tribunal had relied on a decision of a single Judge of the Kerala High Court which was subsequently overruled the order passed by the Appellate Tribunal disclosed a mistake apparent from the record and that the Tribunal ought to have exercised its powers under Section 254(2) and rectified its order on the basis of the assessee's application for rectification. VIII. Non consideration of a provision of law which would have material bearing on the decision is a glaring obvious and self-evident mistake apparent from the record. Such a mistake would be required to be co....