Reliance Infrastructure Ltd. Vs ACIT (ITAT Mumbai)
CBDT Circular no. 9/2020 dated 22/04/2020, question no. 19, clearly enables the assessee to avail Vivad Se Vishwas Scheme to avail VSV only for one proceeding , even when two parallel proceedings were pending before appellate forums.
Facts-
The assessee had availed Vivad Se Vishwas Scheme by filing an application in Form No.1 & 2 only in respect of first proceedings pending before the ld. CIT(A) i.e.143(3) r.w.s. 250 dated 08/05/2018. The only dispute pending in this proceeding was settled by the assessee under Vivad Se Vishwas Scheme for the A.Y.2014-15.
However, the second appeal which was pending before the ld. CIT(A) against the order passed by the ld. AO u/s.143(3) r.w.s. 147 of the Act dated 18/03/2019 was never sought to be settled by the assessee under Vivad Se Vishwas Scheme.
Conclusion-
CBDT Circular no. 9/2020 dated 22/04/2020 question no. 19, clearly enables the assessee to avail Vivad Se Vishwas Scheme to avail VSV only for one proceeding , even when two parallel proceedings were pending before appellate forums. Hence, we hold that the ld. CIT(A) grossly erred in dismissing the appeal of the assessee as withdrawn on the mistaken premise that assessee had availed Vivad Se Vishwas Scheme.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
This appeal in ITA No.2406/Mum/2021 for A.Y.2014-15 arises out of the order by the ld. Commissioner of Income Tax (Appeals) National Faceless Appeal Centre (NFAC), dated 29/11/2021 (ld. CIT(A) in short) against the order of assessment passed u/s.143(3) r.w.s. 147 of the Income Tax Act, 1961 (hereinafter referred to as Act) dated 18/03/2019 by the ld. Dy. Commissioner of Income Tax- 14(3)(1), Mumbai (hereinafter referred to as ld. AO).
2. The assessee has raised the following grounds of appeal:-
“A. DISMISSAL OF APPEAL UNDER THE DIRECT TAX VIVAD SE VISHWAS ACT. 2020:
1. On the facts and in the circumstances of the case and in law, the Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [hereinafter referred to as CIT(A)] erred in dismissing the appeal as withdrawn under the Direct Tax Vivad se Vishwas Act, 2020 (VSV) in respect of appeal no. CIT(A) 22, Mumbai/10020/2019-20 filed against the Assessment Order passed u/s. 143(3) rws 147 of the Act dated 18.03.2019.
Your Appellant submits that the appeal no. CIT(A) 22, Mumbai/10020/2019-20 has been filed against the Assessment Order passed u/s. 143 rws 147 of the Act dated 18.03.2019 and that no dispute resolution under VSV was sought in respect of this appeal no. 10020/2019-20 and therefore the order of CIT(A) ought to be quashed.
2. On the facts and in the circumstances of the case and in law, the learned CIT(A) erred in dismissing appeal no. CIT(A) 22, Mumbai/10020/2019-20 related to the order u/s. 143(3) rws 147 of the Act instead of appeal no. CIT(A) 22, Mumbai/10068/2018-19 related to order u/s. 143(3) rws 250 of the Act.
Your Appellant submits that dispute resolution under VSV was sought in respect of appeal filed against the order u/s. 143(3) rws 250 of the Act for which final certificate in Form 5 bearing no. 33869700070421 dated 07.04.2021 was issued pursuant to which the CIT(A) order dated 05.12.2021 was passed dismissing the said appeal.
Your Appellant submits that the appeal no. CIT(A) 22, Mumbai/10020/2019-20 filed against the Assessment Order u/s. 143(3) rws 147 of the Act dated 18.03.2019 be decided on the facts and merits of the case.
Without prejudice to the above, our grounds on merit are as under:
B. RE-OPENING OF ASSESSMENT IS BAD IN LAW:
1. On the facts and in the circumstances of the case and in law, the Learned Deputy Commissioner of Income Tax – 14(3)(1), Mumbai [hereinafter referred to as Assessing Officer] erred in re-opening the assessment u/s.147 of the Income-tax Act, 1961 (“the Act”).
The Appellant submits that the re-opening of the assessment u/s. 147 of the Act is bad-in-law, illegal and the same ought to be quashed.
2. On the facts and in the circumstances of the case and in law, the Learned Assessing Officer erred in reopening the assessment u/s. 147 of the Act on basis of details / evidences received from the Directorate of Revenue Intelligence, Mumbai (“DRI”) without providing the same to the Appellant and without providing an opportunity for cross examination of the said information / party.
The Appellant submits that the reopening of assessment on the basis of details / evidences received from the DRI without providing the same to the Appellant and without providing an opportunity for cross examination of the said information / party is bad in law, illegal, void and the said order ought to be quashed.
C. PRINCIPLES OF NATURAL JUSTICE:
3. On the facts and in the circumstances of the case and in law, the Learned Assessing Officer erred in passing the re-assessment order u/s. 143(3) r.w.s. 147 of the Act without providing the details / evidences received from the DRI to the Appellant and without providing an opportunity for cross examination of the said information / party relied by the Assessing Officer, thereby passing the reassessment order in violation of principle of natural justice.
The Appellant submits that the re-assessment order u/s. 143(3) r.w.s. 147 of the Act passed is bad-in-law, illegal, void and the same ought to be quashed.
WITHOUT PREJUDICE TO THE ABOVE GROUNDS:
D. DISALLOWANCE OF SO-CALLED INFLATED COAL EXPENSES OF RS. 67,11,80.138:
4. On the facts and in the circumstances of the case and in law, the Learned Assessing Officer erred in disallowing the so-called inflated coal expenses of Rs. 67,11,80,138.
The Appellant submits that the above disallowance is wrongly made and the same ought to be deleted.
5. On the facts and in the circumstances of the case and in law, the Learned Assessing Officer erred in disallowing the so-called inflated coal expenses of Rs. 67,11,80,138 without providing the details / evidences received from the DRI to the Appellant and without providing an opportunity for cross examination of the said information / party relied by the Assessing Officer.
The Appellant submits that the above disallowance of so-called inflated coal expenses of Rs. 67,11,80,138 is wrongly made and the same ought to be deleted.
6. On the facts and in the circumstances of the case and in law, the Learned Assessing Officer erred in disallowing the so-called inflated coal expenses of Rs. 67,11,80,138 on the alleged ground that the Appellant has purchased coal at inflated price without appreciating the fact that the Appellant has purchased coal after taking quotations from various parties and thereafter purchased the coal at lowest price bid by vendors.
The Appellant submits that the purchase of coal cost is not at inflated price and the above disallowance of so-called inflated coal expenses of Rs. 67,11,80,138 is wrongly made and the same ought to be deleted.
7. On the facts and in the circumstances of the case and in law, the Learned Assessing Officer erred in disallowing the so-called inflated coal expenses of Rs. 67,11,80,138 without appreciating the fact that cost of coal is integral part for determining the tariff price and the cost of coal already recovered as part of tariff and credited to profit and loss account through tariff of electricity sold is offered to tax.
The appellant submits that the disallowance of the above coal cost has resulted in taxing the recovery of coal cost without allowing the coal cost. The Assessing Officer therefore be directed to delete the above disallowance.
8. Without prejudice to the above, the Assessing Officer be directed to exclude the amount of income offered for tax in respect of the above so-called inflated coal expenses while computing the total income of the Appellant.
3. We have heard rival submissions and perused the materials available on record. At the outset, we find that the ld. CIT(A) NFAC had dismissed the appeal filed by the assessee as withdrawn on the premise that assessee had availed Vivad Se Vishwas Scheme and settled this tax dispute. To buttress this fact, the following chronology of events would be relevant:-
