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Judgment
PER SATBEER SINGH GODARA, JM
This Revenue’s appeal for assessment year 2016-17, arises against the Commissioner of Income Tax/National Faceless Appeal Centre (in short, the “CIT(A)/NFAC”) Delhi’s dated 12.09.2025 passed in DIN & Order No. ITBA/NFAC/S/250/2025-26/1080658871(1), involving proceedings u/s 143(3) of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’). Heard both the parties. Case file perused.
Coming to the Revenue’s sole substantive ground that the CIT(A) herein has erred in law and on its facts in reversing the Assessing Officer’s assessment findings adding the amount in question of Rs. 5,68,60,563/-representing the retention of bank guarantee in the assessee’s hands, we noticed at the outset that this tribunal’s earlier common order in the latter’s case in assessment years 2013-14 and 2015-16, has already decided the very issue against the department; reading as under:
“ 7.1 Grounds raised in the Revenue's appeal and ground no. 1 and 2 of the appeal of Assessee. There is no dispute to the fact that the assessee is carrying on Government of India mission working on behalf of the Government of India. The contracts have been executed under the policy in directions of Government of India. The bank guarantee was taken and encashed under the guidelines of the concerned ministry. The encashed amounts are deposited in a separate bank account as per the direction of Government of India. The directions of the Government of India through Ministry of New and Renewable Energy to not treat the amount encashed from bank guarantee as income leave no doubt that the assessee was so far making irregular treatment of the amounts of bank encashment and interest thereupon by showing the same as income of the assessee. Thus, the assessee being custodian of the Government money such money into the hands of assessee cannot be termed as income at any stage.
7.2The Bench is of considered opinion that Ld. CIT(A) was not in error in giving the finding that appellant is merely custodian of the money received from encashment of bank guarantee and that the assessee has rightly treated the amount receive on encashment of bank guarantee during financial year as a liability along with the interest is liability. However, he failed to appreciate that the directions of the ministry being clarificatory in nature and also carrying a mandate of compliance by the assessee cannot be prospective only. The administrative directions in financial matter of Government entities have to be taken to be retrospective to time to which controversy relates unless specifically directed to be prospective. Accordingly, Ld. CIT(A) erred in disallowing the reversal of amount received as bank guarantees and interest for earlier years to the extent of Rs. 1,15,82,16,659/-. Accordingly, the issue in the Revenue's appeals are decided against the Revenue and the issue no. 1 in the appeal of assessee is decided in favour of the assessee.”
There is further no dispute that both the learned lower authorities have already held all the relevant facts in these assessment years as on similar footing only. We thus adopt judicial consistency to uphold the learned CIT(A) detailed discussion deleting the impugned addition of retention of bank guaranteeing encashment made in the assessee’s hand in very terms. The Revenue fails in its instant sole substantive ground therefore.
No further ground or argument has been pressed before us.
This Revenue’s appeal is dismissed in above terms.