Aztec Shiva Handicrafts & Arts Pvt. Ltd., JODHPUR V. ACIT, JODHPUR

CO 31/JODH/2012

• Counselvise Citation: [2012] 122 COUNSELVISE.COM (IT) 8022 (ITAT-JODHPUR)
• Duration Of Justice: 8 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 12-10-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2003-2004
• Appeal Filed On: 04-10-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: A K KHANDELWAL
• Assessee Lawyers: T L JAIN
• Keywords: Reassessment proceedings
• Section: 143(3); 80HHC; 80IB; 148; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH, JODHPUR BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI N.K.SAINI, ACCOUNTANT MEMBER ITA NO. 66/JU/2012 A.Y: 2003-04 THE A.C.I.T VS. M/S AZTEC SHIVA HANDICRAFTS CIRCLE 3 & ARTS (P) LTD JODHPUR G-134, BORANADA III PHASE, JODHPUR PAN NO. AACCA 3071 E CO NO. 31/JU/2012 A/O ITA NO. 66/JU/2012 [A.Y: 2003-04] M/S AZTEC SHIVA HANDICRAFTS VS. THE A.C.I.T & ARTS (P) LTD CIRCLE - 3 G-134, BORANADA III PHASE, JODHPUR JODHPUR (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI T.L. JAIN DEPARTMENT BY : SHRI A.K. KHANDELWAL DATE OF HEARING : 08.10.2012 DATE OF PRONOUNCEMENT : 12.10.2012 2 ORDER PER HARI OM MARATHA, J.M. THIS APPEAL FOR ASSESSMENT YEAR 2003-04 FILED BY THE REVENUE AND CROSS OBJECTION FILED BY THE ASSESSEE A RISE OUT OF COMMON SET OF FACTS AND ARE DIRECTED AGAINST THE ORDER OF THE CIT(A), JODHPUR, DATED 12.12.2011. THEREFOR E, WE PROCEED TO DECIDE THEM BY THIS COMMON ORDER. 2. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESS EE IS A PRIVATE LIMITED COMPANY AND DERIVES INCOME FROM MANUFACTURING AND EXPORTS. THE ASSESSEE WAS CLAIMI NG DEDUCTION U/S 80HHC AND 80IB OF THE INCOME-TAX ACT, 1961 [HEREINAFTER REFERRED TO AS THE ACT, FOR SHORT] CONSISTENTLY. FOR THE ASSESSMENT YEAR 2003-04, THE ASSESSEE COMPANY FILED ITS RETURN OF INCOME ON 2.12 .2003 U/S 139(1) OF THE ACT IN WHICH IT CLAIMED DEDUCTION UNDER SECTION 80HHC AND 80IB OF THE ACT. AFTER VERIFICATI ON OF BOOKS OF ACCOUNTS AND CALLING FOR OTHER DETAILS, TH E A.O. PASSED ORDER OF ASSESSMENT U/S 143(3) OF THE ACT ON 3 31.1.2006. THE A.O. ALLOWED THE CLAIM OF THE ASSES SEE MADE UNDER SECTION 80HHC AND 80IB OF THE ACT. SUBSEQUENTLY, THE A.O. ISSUED NOTICE U/S 154 OF THE ACT ON 20.12.2007 ON THE PREMISE THAT THE ASSESSEE HAD NOT FILED AUDIT REPORT IN FORM NO. 10CCB AS REQUIRED U/S 80IB OF THE ACT AND THEREFORE, DEDUCTION U/S 80IB HAS BEEN WRON GLY ALLOWED. THE A.O. PROPOSED TO RECTIFY THE ORDER OF ASSESSMENT SO AS TO WITHDRAW THE DEDUCTION OF SECTI ON 80IB. THE ASSESSEE REPLIED ON 26.2.2008 THAT THE R EPORT IN FORM NO. 10CCB HAD DULY BEEN FILED WITH THE RETURN AND THAT THE DEDUCTION U/S 80IB WAS PROPERLY ALLOWED. THE ASSESSEE ALSO ENCLOSED ONE MORE COPY OF REPORT IN F ORM NO. 10CCB ALONGWITH THE REPLY. THE A.O. CONSIDERED THE ASSESSEES SUBMISSIONS AND, ON BEING SATISFIED, DRO PPED THE PROCEEDINGS INITIATED U/S 154 OF THE ACT. THER EAFTER, ON 17.3.2010, THE A.O. ISSUED NOTICE U/S 148 OF THE ACT ON THE GROUND THAT DEDUCTION U/S 80IB HAS BEEN WRONGLY ALLOWED. AGAIN, THE A.O. HAS TAKEN THE SAME REASON FOR INITIATION OF REASSESSMENT PROCEEDINGS THAT THE ASS ESSEE DID NOT SUBMIT REPORT IN FORM NO. 10CCB. THE ASSES SEE 4 TOOK STRONG OBJECTION AGAINST THIS NOTICE. BUT THE A.O. FINALLY PASSED ORDER U/S 143(3) R.W.S. 147 OF THE A CT ON 29.12.2010 WHEREIN DEDUCTION U/S 80IB WAS DISALLOWE D. THE ASSESSEE PREFERRED FIRST APPEAL AND THE LD. CIT (A) ALLOWED DEDUCTION U/S 80IB OF THE ACT BY REVERSING THE ORDER OF THE A.O. NOW THE REVENUE IS IN APPEAL BEF ORE US. 3. THE ASSESSEE HAS ALSO COME IN APPEAL VIA CROSS OBJECTION VIDE WHICH IT HAS CHALLENGED EVEN THE INI TIATION OF RE ASSESSMENT PROCEEDINGS UNDER THE PROVISIONS O F SECTON 147 R.W.S 148 OF THE ACT. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE PER USED THE RELEVANT MATERIAL ON RECORD AS WELL AS THE CITE D DECISIONS. WE FIND THAT THE ASSESSEE IS ELIGIBLE FO R CLAIMING DEDUCTION U/S 80IB OF THE ACT SINCE THE A.O., ORIGI NALLY, AFTER CONSIDERING THE REQUISITE CONDITIONS FOR ALLO WABILITY OF THIS DEDUCTION HAD ALLOWED THIS CLAIM OF THE ASS ESSEE AND THEREAFTER, DENIAL OF DEDUCTION U/S 80IB OF THE ACT ON THE BASIS OF NON-RECEIPT OF NON-FILING OF AUDIT REP ORT IS NOT 5 AT ALL JUSTIFIED. THIS ISSUE STANDS COVERED BY A C ATENA OF DECISIONS INCLUDING THE FOLLOWING: A. CIT VS. CONTIMETERS ELECTRICAL P. LTD. 317 ITR 249 [DEL] B. CIT VS. JENSON & NICHOLSON INDIA LTD 23 DTR [CAL ] 289 C. CIT VS. PANAMA CHEMICAL WORKS 245 ITR 684 [MP] 4. IN SO FAR A THE CLAIM QUA DDB/DEPB AMOUNT IS CONCERNED, THE LD. CIT(A) HAS FOUND IT TO BE NOT EL IGIBLE IN VIEW OF THE DECISION IN THE CASE OF LIBERTY INDIA L TD REPORTED IN 317 ITR 218 [SC]. 5. NOW COMING TO THE LEGAL OBJECTION OF THE ASSESSE E REGARDING INITIATION OF REASSESSMENT PROCEEDINGS AF TER LAPSE OF FOUR YEARS, WHEN ORIGINAL ASSESSMENT WAS COMPLETED U/S 143(3) OF THE ACT AND THERE WAS NO FA ILURE ON THE PART OF THE ASSESSEE IN DISCLOSING ALL FACTS TRULY AND FULLY NECESSARY FOR ASSESSMENT, FIRST PROVISO APPEN DED TO SECTION 147 COMES TO THE RESCUE OF THE ASSESSEE. T HE ASSESSMENT UNDER CONSIDERATION 2003-04 WHICH ENDED ON 6 31.3.2004, THIS PERIOD PERMITTED UNDER THE ABOVE PR OVISO EXPIRES ON 31.3.2008. NOTICE U/S 148 WAS ISSUED ON 17.3.2010 WHICH IS CLEARLY AFTER A LAPSE OF FOUR YE ARS. THE SOLE REASON FOR ISSUANCE OF NOTICE AS RECORDED BY T HE A.O. IS THT THE ASSESSEE DID NOT SUBMIT REPORT IN FORM N O. 10CCB. THERE IS NO ALLEGATION THAT THE ASSESSEE DI D NOT DISCLOSE FULLY AND TRULY ANY MATERIAL FAT NECESSARY FOR MAKING ASSESSMENT. SO, THIS PROVISO IS DIRECTLY AP PLICABLE. THUS, THE ACTION TAKEN BY THE A.O. AFTER PERMITTED TIME IS BARRED BY LIMITATION AND VOID AB INITIO. REASSESSM ENT PROCEEDINGS AND NOTICE ISSUED U/S 148 BEING TIME BA RRED, IS LIABLE TO BE QUASHED. IN ANY CASE, EVEN IF IT I S PRESUMED THAT THE AUDIT REPORT IN FORM NO. 10CCB WAS NOT PRO DUCED ALONGWITH RETURN, IT IS, AT BEST, A TECHNICAL BREAC H OF PROCEDURAL LAW ONLY AND IN VIEW OF THE HON'BLE GUJA RAT HIGH COURT DECISION IN THE CASE OF EAGLE FASHION [P ] LTD. VS. DCIT REPORTED IN 40 DTR 1 [GUJ] WHEREIN IT HAS BEEN HELD THAT IF THE AUDIT REPORT WAS FILED DURING ASSE SSMENT PROCEEDINGS, EVEN THEN THE DEDUCTION SHOULD HAVE BE EN ALLOWED. THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE 7 OF CIT VS. A.R. ENTERPRISES P. LTD REPORTED IN 255 ITR 121 [RAJ] ALSO COMES TO THE RESCUE OF THE ASSESSEE. ACCORDINGLY, THE NOTICE ISSUED U/S 148 IS CLEARLY T IME BARRED AND, THEREFORE, IT IS QUASHED AND CONSEQUENT RE ASSESSMENT ORDER IS ALSO QUASHED. 6. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D WHEREAS THE CROSS OBJECTION OF THE ASSESSEE IS ALLO WED. ORDER PRONOUNCED IN THE COURT ON 12 TH OCTOBER 2012. SD/- SD/- (N.K.SAINI) [HARI OM MARATHA] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 12 TH OCTOBER, 2012 VL/- COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) BY ORDER 5. THE DR ASSISTANT REGISTRAR ITAT, JODHPUR