Facts of the Case

  • The assessee, BSES Rajdhani Power Ltd., claimed 80% depreciation on electronic/energy meters, asserting that they qualify as energy-saving devices.
  • The ITAT (order dated 05.10.2015) held that such meters could qualify for higher depreciation but remanded the matter to determine:
    • The extent of qualifying energy-saving meters
    • Whether bus bars formed an integral part of such meters
  • The AO, while giving effect to the remand, held that meters were not energy-saving devices, thereby denying depreciation.
  • The ITAT set aside the AO’s order, holding that the AO had exceeded the scope of remand.
  • The Revenue appealed before the Delhi High Court.

Issues Involved

  1. Whether the Assessing Officer exceeded jurisdiction by going beyond the scope of remand.
  2. Whether the ITAT erred in not directing the AO to strictly comply with its earlier remand order.
  3. Determination of eligibility of 80% depreciation on energy meters and bus bars under Section 32.

Petitioner’s Arguments (Revenue)

  • The Tribunal should have ensured final adjudication by directing the AO to strictly follow the remand order.
  • The AO failed to determine:
    • Percentage of energy-saving meters
    • Whether bus bars are integral to meters
  • The Tribunal incorrectly stopped short of ensuring compliance with its earlier directions

Respondent’s Arguments (Assessee)

  • The issue that energy-saving meters qualify for 80% depreciation already stands concluded by ITAT and affirmed by the High Court in earlier proceedings.
  • The AO cannot re-open settled issues under the guise of remand.
  • The AO acted beyond jurisdiction in revisiting already adjudicated matters.

Court’s Findings / Order

  • The High Court agreed that:
    • The AO cannot re-open settled issues beyond the scope of remand.
  • However, it also held:
    • The Tribunal failed to ensure adjudication of pending remanded issues.
  • Held:
    • The matter is remanded back to the AO with directions to strictly comply with the remand order dated 05.10.2015.
    • The AO must:
      • Determine the extent of energy-saving meters
      • Examine whether bus bars form an integral part of the meters

Important Clarification by the Court

  • Scope of Remand Principle:
    The Assessing Officer must strictly confine proceedings to the terms of remand and cannot revisit settled findings.
  • At the same time, incomplete adjudication by lower authorities must be corrected, ensuring finality of litigation.
  • Even if an issue is settled, factual verification directed in remand must still be completed.

Link to download the order -https://delhihighcourt.nic.in/app/case_number_pdf/2020:DHC:3916-DB/VSA08012020ITA22020_163529.pdf

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