Case Law Details
ACIT Vs Pashchimanchal Vidyut Vitran Nigam Limited (ITAT Delhi)
The Revenue appealed against the order of the CIT(A) deleting the disallowance relating to electricity transmission/wheeling charges for the assessment year 2022-23. The Assessing Officer had invoked Section 194Q of the Income-tax Act, 1961 on the ground that tax had not been deducted at source on such charges. The assessee submitted that the issue was already covered by Tribunal decisions in its own cases for assessment years 2012-13, 2014-15 and 2015-16.
The Tribunal noted its earlier order dated 2nd November, 2020, which held that the provisions relating to TDS were not applicable to wheeling/transmission charges and, therefore, no disallowance could be made under Section 40(a)(ia). The Tribunal further observed that Section 194Q applies to the purchase of goods and not to transmission charges, and therefore could not be invoked in the present case. It also recorded that the learned CIT-DR could not controvert or distinguish the assessee’s reliance on the earlier Tribunal decisions. Holding that the issue stood consistently covered in the assessee’s favour, the Tribunal confirmed the CIT(A)’s order deleting the addition and dismissed the Revenue’s appeal. The decision was pronounced on 23rd March, 2026.
FULL TEXT OF THE ORDER OF ITAT DELHI
This appeal by the Revenue is directed against the order of learned CIT(Appeals), Delhi dated 29th July, 2025 in appeal No.NFAC/2021-22/10353395. Assessment in this case was made by the ACIT, Circle-1(1)(1), Meerut vide order dated 23rd March, 2024 passed under Section 143(3) read with Section 144B of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’) for the assessment year 2022-23.
2. The only issue in this appeal of the Revenue is as regards the order of learned CIT(A) in deleting the disallowance claimed by the assessee on transmission charges/wheeling charges related to electricity invoking the provisions of Section 194Q as the assessee has not deducted TDS on the said transmission/wheeling charges.
3. At the outset, learned Counsel for the assessee stated that the assessee’s issue is covered by the decisions of the Tribunal in assessee’s own case in ITA No.983/Del/2018 & Others, order dated 16th January, 2020 for the assessment year 2012-13 & others, in ITA No.5647/Del/2015, order dated 21st June, 2017 for the assessment year 2015-16 and in ITA No.7308/Del/2017, order dated 2nd November, 2020 for the assessment year 2014-15. The Tribunal, vide order dated 2nd November, 2020 for the assessment year 2014-15 in assessee’s own case, dismissed the Revenue’s appeal in paragraph 17, as under:-
“We have heard the rival submissions and perused the material on record. The issue in the present ground is with respect to disallowance made by AO u/s 40(a)(ia) of the Act which has been deleted by CIT(A). We find that CIT(A) after relying on the various decisions, that were cited by it before CIT(A) and which has been referred to by CIT(A) in his order, has given a finding that provisions of TDS are not applicable to wheeling/transmission charges and therefore, no disallowance can be made u/s 40(a)(ia) of the Act. Before us no fallacy in the findings of CIT(A) has been pointed out by the Revenue. In such a situation we find no reason to interfere with the order of CIT(A) and thus the ground of Revenue are dismissed.”
4. As regards the applicability of Section 194Q, which is applicable on purchase of goods and not on transmission charges, hence, the provision of Section 194Q cannot be invoked in this case, and the relevant provision of Section 194Q states as under:-
“Section 194Q clearly states that ‘Any person, being a buyer who is responsible for paying any sum to any resident (hereafter in this section referred to as the seller) for purchase of any goods of the value or aggregate of such value exceeding fifty lakh rupees in any previous year, shall, at the time of credit of such sum to the account of the seller or at the time of payment thereof by any mode, whichever is earlier, deduct an amount equal to 0.1 percent of such sum exceeding fifty lakh rupees as income-tax.’”
5. When these facts were confronted to the learned CIT-DR, he could not controvert the above fact situation that the issue is not covered or it is distinguishable.
6. We have heard both the sides and perused the material placed before us. As the issue stands squarely covered in assessee’s favour consistently by the orders of the Tribunal in all the years cited above, we confirm the findings of the learned CIT(A) in deleting the addition.
7. In the result, the appeal of the Revenue is dismissed.
Decision pronounced in the open Court on conclusion of hearing on 23rd March, 2026.
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