PCIT Vs Dakshin Haryana Bijli Vitran Nigam Ltd. (Punjab and Haryana High Court)
The Punjab and Haryana High Court adjudicated a batch of seven appeals filed by the revenue concerning a common issue—whether Section 43B of the Income-tax Act, 1961 applies to electricity duty collected by the assessee under the Punjab Electricity (Duty) Act, 1958. The Court examined the matter using the facts from one representative case.
The assessee, a licensee engaged in power distribution in Haryana under the Electricity Act, 2003, had filed its return for the assessment year 2008–09 declaring nil income. The assessment was completed under Section 143(3) at nil income. Subsequently, the Commissioner of Income Tax exercised revisional jurisdiction under Section 263, leading to a fresh assessment order dated 30.01.2014, wherein certain deductions were disallowed, including those relating to electricity duty.
The assessee challenged the disallowance before the Commissioner of Income Tax (Appeals), who deleted the addition made under Section 43B. Both the assessee and the revenue approached the Income Tax Appellate Tribunal. The Tribunal upheld the decision of the CIT(A), holding that Section 43B was not applicable to electricity duty in the present case.
Before the High Court, the revenue argued that since the assessee followed the mercantile system of accounting, Section 43B should apply to electricity duty. Reliance was placed on a judgment of the Gujarat High Court in the case of Ahmedabad Electricity Co. Ltd.
