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Appellant submits that the order u/s 154 of the Act is bad in law and not in accordance with the provisions of the IT Act


Court :
ITAT Mumbai

Brief :
These are appeals by the assessee against the order of learned Commissioner of Income Tax (Appeals), Mumbai (‘ld.CIT(A) for short) for the concerned assessment years.

Citation :
ITA Nos.5421& 5422 /Mum/2019

“D” Bench, Mumbai
Before Hon’ble Justice P.P.Bhatt, President
Shri Shamim Yahya, Accountant Member
ITA Nos.5421& 5422 /Mum/2019
(Assessment Years: 2009-10 & 2010-11)

Reliance Industries Limited
3rd Floor, Maker Chamber IV
222, Nariman Point
Mumbai-400 021


29th Floor, Center No.1
World Trade Centre
Cuffe Parade, Mumbai-400 005

Assessee by : Shri Nimesh Vora-AR
Revenue by : Ms. R.M.Madhavi-CIT(DR)
Date of Hearing : 18.08.2021
Date of Pronouncement : 03.09.2021

The appellant submits that since the interest on income fax refund was not credited to profit and loss account as per the accounting policy consistently followed by the appellant, the learned CIT{A) erred in confirming the action of the AO in making
adjustment to the book profit, which is not enumerated in clause (a) to (k) of Explanation 1 to section 115JB of the Act. The CIT (A) ought to have deleted the addition of interest on income tax refund to the book profit u/s 115JB of the Act.

2. Brief facts of the case are that assessee is a public limited company. During the year under appeal, the appellant was engaged in Business of Oil Exploration, Manufacturing and trading of Petrochemicals, Polyester, Fibre intermediate, Textiles, Generation and Distribution of Power and Operation of Jetties and related Infrastructure and investments. The assessee filed its return of income on 30.09.2009 declaring total income of Rs.2551,67,29,0787- under normal provision and Rs. 10648,47,54,158/- under section 115JB of the Income Tax Act, 1961 (Act). The assessee electronically filed a revised return on 23.03.2011 declaring total income of
Rs.2905,36,58,6047- under normal provisions and Rs.10634,55,98,256/- under section 115JB of the Act.

3. We have heard both the parties and perused the records. It has been pleaded by assessee that the order passed under section 154 is bad in law as there is no mistake apparent from records. Further the assessee has moved for admission of additional
ground of appeal where in appellant has challenged the order under section 154 as invalid as same is passed beyond the time limit prescribed under section 154(7) of the Act.

4. The Appellant in the light of above facts submit that the interest on income tax refund and Pre-Operative income has not been credited to the profit and loss following the accounting policies as well as Accounting Standards in compliance to which the financial statement of the Appellant has been prepared as required under the Companies Act Thus, the Appellant has not credited the interest on income tax refund and Pre-Operative income in accordance with the provisions of Accounting Standard - 9 and generally accepted accounting principles in India which is also in  compliance of provisions of section 211 of the Companies Act - 1956.

5. Upon careful consideration, we first refer to the additional ground. Since, the additional ground challenged the very jurisdiction of the 154 of the order passed in this case. We refer to the same in the first place Since it is a legal issue on the touchstone of Hon’ble Supreme Court decision in the case of National Thermal Power Company, we admit the additional ground. It is noted that the additional ground, it is the plea of the assessee that the rectification order passed by the AO in this case, which is dated 30.11.2018 is time barred inasmuch as section 154(7) provides that no order u/s. 154 shall be passed after expiry of four years from the end of the financial year in which the order sought to be amended was passed.

Please find attached the enclosed file for the full judgement


Poojitha Raam
on 17 September 2021
Published in Income Tax
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