TaxTMI 
TaxTMI 
2026 (6) TMI 1316
X X X X Extracts X X X X
X X X X Extracts X X X X
..... 2. We would first take-up appeal for the Assessment Year 2012-2013. ITA No. 4525/Mum/2025 [Assessment Year 2012-2013] 3. The present appeal preferred by the Assessee is directed against the Order, dated 14/06/2023, passed by National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as 'the CIT(A)'] under Section 250 of the Income Tax Act, 1961 [hereinafter referred to as 'the Act'] whereby the Learned CIT(A) had dismissed the appeal against the Assessment Order, dated 31/03/2017, passed under Section 143(3) read with Section 263 of the Act for the Assessment Year 2012-2013. 4. There was delay of 685 days in filing the present appeal before the Tribunal. When the appeal was taken up for hearing Learned Authorized Representative for the Assessee appearing before us submitted that the delay in filing the present appeal be condoned and in this regard reliance was placed upon the supporting affidavit filed along with application seeking condonation of delay which reads as under: "I, Pramod Suryakant Hatkar, PAN-AAZPH6156R, age about 53 years, residing at Flat No. 503, Siddhivinayak Residency, Plot No. 40, Sector 9, Kamothe, District Raigad, Maharashtr....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ompany was entitled to amortize a sum of Rs. 77,12,92,535/- as against which the Ld. AO allowed only a sum of Rs. 12,17,04,558/-. 7. I say that, the issue of amortization went into litigation with the Department. The Ld. Appellate Commissioner did not agree with the contention of our company and rejected our appeal for the AY 2012-13. An Appeal was filed before the ITAT, Mumbai Bench against the order of the Appellate Commissioner. The ITAT after considering our arguments and evidences set aside the Appellate Order and restored the issue to the file of the Ld. CIT(A) for fresh adjudication. 8. I say that, the Ld. CIT(A), pursuant to the order of the ITAT, Mumbai Bench, again rejected our contention and passed on order on 14.06.2023. Copy of this order was received by email. 9. I say that, we forwarded a copy of the Appellate Order to our Auditor Shri Prashant Prabhu G. having Office in Bengaluru seeking his opinion on further action to be taken on this issue. 10 I say that, even after lapse of considerable time no opinion was received from Shri Prashant Prabhu G for taking further action in respect of the Appellate Order dated 14.06.2023. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ce was received. Since, the management of the Assessee-company was also outside India, there was lack of communication between the erstwhile tax consultant/auditor and the management. For the same reasons the appointment of new tax consultant took time. On account of aforesaid reasons, there was a delay in filing of the present appeal. 4.2. On perusal of the material on record we find that the submissions made on behalf of the Assessee are supported by the material on record. We note that the Assessee is a joint venture company which had taken the work of building four lane road, operation/maintenance and toll collection in respect of 211.6 Kms long road of Bhiwandi-Kalyan Shil Phata Highway including Bhiwandi Bypass junction to Durgadi Chowk, Kalyan of National Highway 222 in the State of Maharashtra under a Concession Agreement, dated 25/08/2006, with the MSRDC. The issue raised in the present appeal pertains to the period over which the cost of construction and development of the aforesaid road/highway is to be amortized and allowed as business expenditure. As per the said Concession Agreement the concession period for the project being 6 years 8 months 4 days. Out of whic....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r the general welfare. The object of providing legal remedy is to repair the damage caused by reason of legal injury. If the explanation given does not smack malafides or is not shown to have been put forth as a part of dilatory strategy, the court must show utmost consideration to the suitor. In this context it was observed: "It is axiomatic that condonation of delay is a matter of discretion of the court Section 5 of the Limitation Act does not say that such discretion can be exercised only if the delay is within a certain limit. Length of delay is no matter, acceptability of the explanation is the only criterion. Sometimes delay of the shortest range may be uncondonable due to want of acceptable explanation whereas in certain other cases delay of very long range can be condoned as the explanation thereof is satisfactory. Once the court accepts the explanation as sufficient it is the result of positive exercise of discretion and normally the superior court should not disturb such finding, much less in reversional jurisdiction, unless the exercise of discretion was on whole untenable grounds or arbitrary or perverse. But it is a different matter when the first cut refuses....
X X X X Extracts X X X X
X X X X Extracts X X X X
....al on record, we are of the view that the delay in filing the present appeal was on account of bonafide reasons as explained by the Assessee and considered hereinabove. Therefore, accepting the explanation given by the Assessee to be reasonable, we hold that in the present case the Assessee was prevented by the sufficient cause from filing the appeal before the Tribunal within the prescribed time. Therefore, keeping in view the above judgments of the Hon'ble Supreme Court we condone the delay of 685 days and proceed to adjudicate the grounds raised in the present appeal. 5. The Assessee had raised following grounds of appeal in appeal for the Assessment Year 2012-2013: "1. The Ld. CIT(A), NFAC, Delhi, erred in not appreciating that the Ld. Assessing Officer ("Ld. AO") had erred in disallowing assessee's claim of depreciation of Rs. 32,79,11,340/- without correctly appreciating the terms and conditions of the Concession Agreement and the tenure of the Concession Agreement. 2. Without prejudice to Ground No. 1, the Ld. CIT(A), NFAC, Delhi, erred in not considering the fact that the Ld. AO had not considered the fact that the Concession Agreement was terminate....
X X X X Extracts X X X X
X X X X Extracts X X X X
....pect of the cost of highway project. While passing assessment order in the scrutiny assessment proceedings, the Assessing Officer accepted the aforesaid claim. However, the Learned Commission of Income Tax (Exemptions) [for short 'CIT(E)'], passed order under Section 263 of the Act directing the Assessing Officer to allow deduction for amortization of the expenses as per the Circular. Pursuant to the direction of the Learned CIT(E), the Assessing Officer passed Assessment Order, dated 31/03/2017, under Section 143(3) read with Section 263 of the Act. The Assessing Officer rejected the claim of depreciation of INR. 44,96,15,898/- and allowed deduction of INR. 12,17,04,558/- as amortization expenses. 9. In appeal before the Learned CIT(A), the Assessee explained that the Assessing Officer has incorrectly taken 'remaining period of toll concessionaire agreement' as 14 years, 10 months and 10 days. According to the Assessee the Concession Agreement was valid till 28/04/2013. The proposed extension from dated 25/08/2009 to 10/07/2024 was not granted to the Assessee. However, the Learned CIT(A) rejected the contention of the Assessee. Further, the Learned CIT(A) had made enhancement b....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nts corresponding to the above dates and events, the as per the Concession Agreement the original term was to expire on 28/04/2013. It emerges that while the Concession Agreement was proposed to be extended till 10/07/2024, the requisite Toll Notification extending the operation period was never issued. The subsequent Toll Notification extended the operation period only till 26/10/2013 and that too with the additional condition of keeping the toll collected in an Escrow Account. This was not acceptable to the Assessee and therefore, the Concession Agreement came to end with effect from 28/04/2013 on termination by the Assessee. Therefore, we hold that the Assessing Officer was not justified in taking 10/07/2024 as the date of validity of concession agreement and concluding that 'remaining period of toll concessionaire agreement' was 14 years, 10 months and 10 days while computing the quantum of amortization expenses. Taking into consideration the fact that Toll Notification actually issued extended the operation period till 26/10/2013 only, we direct the Assessing Officer to calculate the 'remaining period of toll concessionaire agreement' taking 26/10/2013 as the end date. The Ass....
X X X X Extracts X X X X
X X X X Extracts X X X X
....opment of road/highways on BOT basis where ownership is not vested with the assessee under the concessionaire agreement."(Emphasis Supplied) From the above it is evident that no addition/disallowance is required to be made in respect of deduction already allowed in the earlier years where the total deduction so claimed for the prior assessment years, is deducted from the initial cost of infrastructure facility of roads/highways and the such reduced cost is amortized equally over the remaining period of toll concessionaire agreement. Accordingly, the addition made by the Learned CIT(A) in respect of excess depreciation claimed by the Assessee in the prior years is deleted. At the same time, while complying with our directions in paragraph 12 above, the Assessing Officer is directed to verify that the depreciation claimed by the Assessee for the prior assessment years has been deducted from the initial cost of infrastructure facility of roads/highways and that the deduction of amortization expenses has been claimed and is allowed only in respect of the cost so reduced. 14. In terms of directions given in paragraph 12 and 13 above, Ground No. 1 & 2 raised by the Assessee are par....
X X X X Extracts X X X X
X X X X Extracts X X X X
..... The Ld CIT(A), NFAC, erred in sustaining the Penalty Order passed under section 271(1)(c) for furnishing inaccurate particulars of income without appreciating the full facts and circumstances of the case and the Appellate Order is liable to be set aside. 2. The Ld CIT(A), NFAC, erred in not considering the fact that the Ld AO had initiated penalty proceedings while passing the Assessment Order in a mechanical manner without specifying as to whether the assessee had concealed the particulars of income or had furnished inaccurate particulars of income and the proceedings were vague and ambiguous. 3. The Ld CIT(A), NFAC, erred in not appreciating that the Ld AO imposed penalty for furnishing inaccurate particulars of income though he had not initiated the penalty proceedings specifically on this ground which has rendered the Penalty Order bad in law. 4. The Ld CIT(A), NFAC, erred in not appreciating that for levy of penalty under section 271(1)(c) it must be demonstrated that the conditions provided in this section existed. 5. The Ld CIT(A), NFAC, erred in not appreciating that the assessee had not furnished inaccurate particulars with regard to d....