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Case Law Details

Case Name : Paschimanchal Vidhyut Vitran Nigam Ltd. Vs DCIT (ITAT Delhi)
Appeal Number : ITA No.7146/Del/2017
Date of Judgement/Order : 02/11/2020
Related Assessment Year : 2014-15
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Paschimanchal Vidhyut Vitran Nigam Ltd. Vs DCIT (ITAT Delhi)

AO noticed that assessee had made assessment of electricity duty of Rs. 5,52,98,00,000/- of which Rs. 3,44,22,00,000/- was adjusted from the subsidy and the balance amount of Rs.2,08,76,00,000/-was not paid by the assessee before filing the return of income. Assessee was asked to justify as to why the amount unpaid not be disallowed u/s 43B of the Act to which the assessee inter alia submitted that electricity duty is tax on electricity consumption imposed on the consumer based upon their consumption. It was further submitted that assessee collects the duty from the customer and pays to the U. P. Government and the amount of electricity duty is deducted by the U. P. Government from the subsidy given by it. It was thus submitted that electricity duty is collected by the assessee on behalf of Government of U. P. and the provisions of section 43B are not applicable to the assessee. The submissions of the assessee were not found acceptable to AO. AO was of the view that provisions of 43B are applicable to the amounts which have remained unpaid till the date of filing the return of income and accordingly he disallowed Rs.208,76,00,000/-.

as per section 4 of the Electricity Duly Act 1963 the duty is levied on the consumer of electricity specified in column 2 of the schedule and u/s.5 of the Act, the assessee is oblige to collect from the consumers above mentioned duty and pay to the Government at the time and in the manner as prescribed by the rules, thus we find that the Electricity Duty collected on behalf of the Government of Uttar Pradesh as their agent and credited to the State Government Account periodically as directed by the State Government. Sometimes, the duties also adjusted against the subsidy received by the assessee from the Government of Uttar Pradesh. Thus, the amount so collected as electricity Duty is not air tax payable by the assessee but the same is amount collected by the assessee as the agent of State of Uttar Pradesh, therefore, this does not amounts any sum payable by the assessee by way of tax duty or fee by whatever name called under any the tithe being in force as-provided u/s.43B(a) of the Act.

We are therefore of the opinion that Section 43B cannot be invoked in making the assessment of the liability of the appellant under the Income Tax Act with regard to the amounts collected by the appellant pursuant to the obligation cast on the appellant under Section 5 of the Electricity Duty Act, 1963.

We find that the assessee has collected amount as agent on behalf of State of Uttar Pradesh pursuant to the statutory obligation to collect such an amount only as agent of the Government of Uttar Pradesh, as per provisions of Section 4 & 5 the Electricity Duty Act, 1963, therefore, the same is not covered under Clause u/s. 43B(a) of the Act as the any sum payable by the assessee by way of tax duty which means the tax is the indicative of nature of liability. Therefore, the obligation of the assessee being an agent of Uttar Pradesh Government the amount collected by duty is in the fudiciary capacity, therefore, respectfully following the principle laid down in the aforesaid decision, we allow the appeal of the assessee on this ground.

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