Bnasrum Agro exports (P) Ltd., CHENNAI V. DCIT, Dindigul

CO 41/CHNY/2015

• Counselvise Citation: [2016] 123 COUNSELVISE.COM (IT) 2498 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 6 month(s) 3 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 18-10-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 28-09-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 15-04-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: R KUMAR
• Assessee Lawyers: R DURAIPANDIAN
• Keywords: Opportunity of being heard; Condonation of delay; Reason to believe
• Section: 143(3); 10B; 148; 139

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, CHENNAI , ! . ! # $ , % $& BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI G. PAVAN KUMAR, JUDICIAL MEMBER ./ ITA NO.485/MDS/2015 & C.O. NO.41/MDS/2015 (IN I.T.A. NO.485/MDS/2015) % ( !)( / ASSESSMENT YEAR : 2007-08 THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE I, DINDIGUL. V. M/S BNAZRUM AGRO EXPORTS (P) LTD., SIRUMALAI ROAD, ERANDALAPARAI, RETTIARPATTI POST, DINDIGUL 624 006. PAN : AABCB 2418 B (+,/ APPELLANT) ( RESPONDENT & CROSS-OBJECTOR) +, - . / APPELLANT BY : SHRI R. DURAIPANDIAN, JCIT /0+, - . / RESPONDENT BY : SHRI R. KUMAR, ADVOCATE # ! - 1 / DATE OF HEARING : 28.09.2016 23) - 1 / DATE OF PRONOUNCEMENT : 18.10.2016 / O R D E R PER G. PAVAN KUMAR, JUDICIAL MEMBER: THE REVENUE HAS FILED THE APPEAL AGAINST THE ORDE R OF THE COMMISSIONER OF INCOME TAX (APPEALS) IN ITA NO.24/2 013-14 DATED 02.12.2014 AND THE CROSS-OBJECTION WAS FILED BY THE ASSESSEE. 2 I.T.A. NO.485/MDS/15 C.O. NO.41/MDS/15 2. AT THE TIME OF HEARING, THE LD. AR OF THE ASSESS EE DID NOT PRESS THE C.O. NO.41/MDS/2015, THEREFORE, THE SAME IS DISMISSED AS NOT PRESSED. 3. THE GROUNDS RAISED BY THE REVENUE ARE AS UNDER:- (1) THE CIT(A) ERRED IN HOLDING THAT THE ASSESSEE HAS F ILED THE RETURN U/S 139(1) OF THE ACT. (2) THE CIT(A) HAS NOT GIVEN ITS REASON WHY AND WHAT BA SIS IT IS CONDONING THE DELAY OF FILING THE RETURN OF INCOME BY THE RESPONDENT. (3) THE CIT(A) ERRED IN RELYING ON CASE LAWS OF CHENNAI AND HYDERABAD TRIBUNALS WHICH WERE CLEARLY DISTINGUISHE D ON FACTS BY THE CIT(A) IN HIS DETAILED ORDER. (4) THE CIT(A) FAILED IN ITS DUTY IN NOT FOLLOWING THE SUPREME COURT JUDGMENT IN THE CASE OF ORISSA STATE WAREHOUS ING CORPORATION VS. CIT REPORTED IN 103 TAXMAN 623(SC) RELIE D BY THE DEPARTMENT. (5) THE CIT(A) ALSO FAILED TO CONSIDER THAT THE E-FILIN G ACCEPTS THE RETURN EVEN WITHOUT PAYMENT OF SELF ASSESSMENT TAX AND WHEN THE RESPONDENT HAD NOT ESTABLISHED ANY VALID R EASON FOR BELATED FILING OF RETURN OF INCOME. 4. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS MANUFACTURING AND EXPORTING GHERKINS. THE ASSESSEE FILED ITS RETURN OF INCOME ON 27.03.2008 ADMITTING A TOTAL IN COME OF ` 11,65,820/-. THE RETURN WAS PROCESSED UNDER SECTIO N 143(1) OF THE INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT'). THE ASSESSING OFFICER HAVING REASON TO BELIEVE THAT INCOME ESCAPED ASSESS MENT, INITIATED NOTICE UNDER SECTION 148 OF THE ACT. IN RESPONSE T O THE NOTICE, THE LD. AR OF THE ASSESSEE APPEARED BEFORE THE ASSESSIN G OFFICER. 3 I.T.A. NO.485/MDS/15 C.O. NO.41/MDS/15 THE ASSESSING OFFICER, ON VERIFICATION OF THE ASSES SMENT RECORDS, FOUND THAT THE ASSESSEE-COMPANY HAS CLAIMED DEDUCTI ON UNDER SECTION 10B OF THE ACT IN RESPECT OF EXPORTS AND AS PER THE CONDITIONS LAID DOWN FOR CLAIMING OF DEDUCTION UNDE R FOURTH PROVISO TO SECTION 10B OF THE ACT, THE ASSESSEE HAS TO FILE RETURN OF INCOME WITHIN THE DUE DATE PRESCRIBED UNDER SECTION 139(1) OF THE ACT. BUT, THE ASSESSEE HAS FILED E-RETURN BELATEDLY UNDER SEC TION 139(4) OF THE ACT ON 27.03.2008, WHICH IS BEYOND THE DUE DATE SPECIFIED FOR THE COMPANY. THE A.O. WAS OF THE VIEW THAT SINCE I T IS MANDATORY TO FILE RETURN OF INCOME BEFORE THE DUE DATE, THE BELA TED RETURN CANNOT BE TREATED AS VALID RETURN FOR THE PURPOSE OF ALLOW ING DEDUCTION UNDER SECTION 10B OF THE ACT. THE ASSESSEE HAS ALS O CHALLENGED THE VALIDITY OF ISSUE OF NOTICE FOR REASSESSMENT AN D PRAYED FOR DROPPING THE REASSESSMENT PROCEEDING. BUT, THE ASS ESSING OFFICER BASED ON THE INFORMATION AND THE PROVISIONS OF THE ACT, HAS CONSIDERED THE FACTS SUBMITTED IN THE ASSESSMENT PR OCEEDING AND IN THE RETURN FILED BELATEDLY AND THE LD. A.O. HELD TH AT INFORMATION SUBMITTED CANNOT BE ACCEPTED AS THERE IS A MANDATOR Y REQUIREMENT APPLICABLE TO THE ASSESSEE FROM THE ASSESSMENT YEAR 2007-08 TO FILE THE RETURN OF INCOME WITHIN THE TIME ALLOWED UNDER SECTION 139(1) OF THE ACT. WITH THIS FINDING, THE ASSESSMENT WAS COM PLETED AND AN 4 I.T.A. NO.485/MDS/15 C.O. NO.41/MDS/15 AMOUNT OF ` 3,14,32,640/- CLAIMED BY THE ASSESSEE AS DEDUCTION UNDER SECTION 10B OF THE ACT WAS DISALLOWED ALONG W ITH ADDITION UNDER INCOME FROM OTHER SOURCES AND ASSESSED THE TO TAL INCOME TO ` 3,25,98,460/- AND PASSED ORDER UNDER SECTION 143(3) R.W.S. 147 OF THE ACT ON 28.03.2013. AGGRIEVED BY THE ORDER OF T HE ASSESSING OFFICER, THE ASSESSEE HAS FILED AN APPEAL BEFORE TH E CIT(APPEALS). 5. IN THE APPELLATE PROCEEDING, THE LD. AR ARGUED T HE GROUNDS AND SUBMITTED THE FACTS AND REASONS FOR FILING THE RETURN OF INCOME BEYOND THE DUE DATE PRESCRIBED UNDER SECTION 139(1) OF THE ACT. THE CONTENTION OF THE ASSESSEE THAT THE REASSESSMEN T PROCEEDINGS ARE NOT VALID BUT THE LD. CIT(APPEALS) CONFIRMED TH E REASSESSMENT PROCEEDING AS VALID RELYING ON THE JUDICIAL DECISIO NS. IN RESPECT OF ALLOWANCE OF DEDUCTION UNDER SECTION 10B OF THE ACT , THE LD. CIT(APPEALS) HAS MADE A CATEGORICAL FINDING THAT TH OUGH THERE IS A SPECIFIED CONDITION UNDER SECTION 10B OF THE ACT TO FILE RETURN OF INCOME WITHIN THE TIME ALLOWED UNDER SECTION 139(1) OF THE ACT, SINCE THE ASSESSMENT YEAR 2007-08 BEING THE FIRST Y EAR AFTER THE AMENDMENT, THEREFORE, THE PROVISO HAS TO BE INTERPR ETED LIBERALLY AND SINCE THE E-FILING OF RETURN WAS INTRODUCED REC ENTLY DURING THAT PERIOD AND THERE WAS SOFTWARE AND OTHER TECHNICAL P ROBLEMS WHICH 5 I.T.A. NO.485/MDS/15 C.O. NO.41/MDS/15 ARE FACED BY THE ASSESSEE. THE LD. CIT(APPEALS) CO NSIDERED THE JUDICIAL DECISIONS RELIED ON BY THE ASSESSEE AND FI NALLY RELIED ON THE DECISION IN THE ASSESSEE'S OWN CASE FOR THE ASSESSM ENT YEAR 2008- 09 PASSED BY THE TRIBUNAL IN I.T.A. NO.774/MDS/2012 DATED 19.09.2012 WHERE THE TRIBUNAL HELD THAT DUE DATE FO R FILING OF RETURN OF INCOME UNDER SECTION 139(1) OF THE ACT IS DIRECT ORY IN NATURE AND NOT MANDATORY AND THE DELAY ALONE CANNOT BE A REASO N FOR DENYING THE EXEMPTION IF THERE ARE OTHER SUBSTANTIVE CONDIT IONS NECESSITATING FOR CLAIMING DEDUCTION. WITH THESE OBSERVATIONS, T HE LD. CIT(APPEALS) HAS DIRECTED THE ASSESSING OFFICER TO ALLOW DEDUCTION UNDER SECTION 10B OF THE ACT. AGGRIEVED BY THE ORD ER OF THE CIT(APPEALS). REVENUE HAS FILED THE APPEAL. 6. THE LD. DEPARTMENTAL REPRESENTATIVES CONTENTION IS THAT THE CIT(APPEALS) HAS ERRED IN CONDONING THE DELAY WHEN THE ASSESSEE HAS NOT FILED RETURN OF INCOME UNDER SECTION 139(1) OF THE ACT WHICH IS MANDATORY REQUISITE FOR CLAIMING DEDUCTION UNDER SECTION 10B OF THE ACT. THE LD. D.R. SUBMITTED THAT THERE IS NO C LARITY AS TO ON WHAT BASIS THE DELAY WAS CONDONED FOR FILING THE RE TURN OF INCOME. THE CIT(APPEALS) HAS NOT RELIED ON THE DECISION OF SUPREME COURT. FURTHER, THE ASSESSEES REASONS ARE NOT SATISFACTOR ILY SUPPORTED WITH 6 I.T.A. NO.485/MDS/15 C.O. NO.41/MDS/15 ANY EVIDENCE. THE LD. D.R. PRAYED FOR SETTING ASID E THE ORDER OF THE CIT(APPEALS). 7. CONTRA, THE LD. AR OF THE ASSESSEE RELIED ON THE ORDER OF THE CIT(APPEALS) AND SUBMITTED THAT THE ASSESSEE-COMPAN Y HAS MADE AN APPLICATION TO THE CENTRAL BOARD OF DIRECT TAXES UNDER THE PROVISIONS OF SECTION 119(2)(B) OF THE ACT PRAYING FOR RELAXATION OF FOURTH PROVISO TO SECTION 10B OF THE ACT AND OPPOSE D TO THE GROUNDS RAISED BY THE REVENUE. 8. WE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATE RIAL AVAILABLE ON RECORD AND JUDICIAL DECISIONS CITED. THE SOLE CRUX OF THE ISSUE ENVISAGED BY THE LD. DEPARTMENTAL REPRESENTAT IVE IS THAT THE ORDER OF THE CIT(APPEALS) IS BAD IN LAW AS THE PROV ISIONS OF SECTION 10B OF THE ACT MANDATORILY REQUIRE TO FILE RETURN O F INCOME WITHIN THE TIME ALLOWED UNDER SECTION 139(1) OF THE ACT WHICH, ACCORDING TO THE LD. D.R., THE LD. CIT(APPEALS) HAS OVERLOOKED. WHE N THE SAME ISSUE CAME BEFORE THIS TRIBUNAL, IN THE ASSESSEE'S OWN CASE, IT WAS HELD THAT THE DELAY CANNOT BE TECHNICALLY CONSIDERE D FOR ALLOWING EXEMPTION. WHEREAS, IN THE PRESENT CASE, THE ASSES SEE HAS FILED AN APPLICATION BEFORE THE CBDT UNDER SECTION 119(2) (B) OF THE ACT FOR CONDONING THE DELAY FOR RELAXATION OF FILING TH E RETURN OF INCOME 7 I.T.A. NO.485/MDS/15 C.O. NO.41/MDS/15 BELATEDLY. WE PERUSED THE PETITION MADE UNDER SECT ION 119(2)(B) OF THE ACT BY THE ASSESSEE DATED 20.07.2015 WHERE IT W AS PRAYED THAT THE FOUR PROVISO TO SECTION 10B OF THE ACT MAY BE R ELAXED IN THE ASSESSEES CASE. THE FOURTH PROVISO TO SECTION 10B OF THE ACT WAS INSERTED BY FINANCE ACT, 2006 WITH EFFECT FROM 01.0 4.2006, FOR THE ASSESSMENT YEAR 2007-08, IS AS UNDER:- PROVIDED ALSO THAT NO DEDUCTION UNDER THIS SECTION SHALL BE ALLOWED TO AN ASSESSEE WHO DOES NOT FURNISH A RETUR N OF HIS INCOME ON OR BEFORE THE DUE DATE SPECIFIED UNDER SU B- SECTION (1) OF SECTION 139 9. FURTHER, THE LD. AR OF THE ASSESSEE DREW OUR ATT ENTION TO THE PETITION AND ALSO SUPPORTED HIS ARGUMENT WITH THE D ECISION OF CO- ORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF CHEL LA SOFTWARE PVT. LTD. V. ACIT IN I.T.A. NO. 2081/MDS/2015 DATED 03.0 3.2016, WHERE A SIMILAR ISSUE WAS DEALT AND ALSO THE APPLICATION WA S PENDING BEFORE THE CBDT FOR CONDONING THE DELAY IN FILING THE RETU RN OF INCOME. WE PERUSED THE ORDER OF THE CO-ORDINATE BENCH OF THIS TRIBUNAL AND CONCURRED THAT THE FACTS ARE SIMILAR TO THE PRESENT CASE WHICH HAS HELD AT PARA 7 PAGE 9 AS UNDER:- 7. WE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD, JUDICIAL DECISIONS CITED. THE LD. AUTHORISED REPRESENTATIVE EMPHASIZED THAT RETURN CO ULD NOT FILED WITHIN DUE DATE AND FILED SUBMISSIONS IN 8 I.T.A. NO.485/MDS/15 C.O. NO.41/MDS/15 ASSESSMENT PROCEEDINGS AND APPELLATE PROCEEDINGS RE LYING ON THE DECISION OF CO-ORDINATE BENCH OF THE TRIBUNAL. BU T THE LD. COMMISSIONER OF INCOME TAX (APPEALS) WITHOUT GOI NG INTO THE MERITS, CONSIDERED THE DECISION OF SPECIAL BENCH IN THE CASE SAFFIRE GARMENTS(SUPRA) AND OVER RULED THE ASSESSEES OBJECTIONS AND OBSERVED FILING RETURN OF INCOME U/S .139(1) OF THE ACT IS MANDATORY. THE LD. AUTHORISED REPRES ENTATIVE DREW ATTENTION TO THE DECISION OF HYDERABAD BENCH, TRIBUNAL IN THE CASE OF S. VENKATAIAH (SUPRA) WHERE SIMILAR ISSUE WAS DEALT AND DELAY WAS CONDONED DUE TO TECHN ICALITIES. SUBSEQUENTLY, ON APPEAL BY REVENUE U/S.260A OF THE ACT THE HONBLE ANDHRA PRADESH HIGH COURT HAS CONFIRMED THE ORDER OF THE TRIBUNAL IN I.T.T.A NO.114 OF 2013, DATED 26.06.2013. THE ANDHRA PRADESH HIGH COURT CONSIDERED THE TECHNICALITIES AND CIRCUMSTANCES WERE THE ASSESSEE COULD NOT FILE THE RETURN. THE ASSESSEE COMPANY HAS MADE A APPLICATION WITH CBDT FOR CONDONOTION OF DELAY BY LE TTER DATED 4.12.2014. THE ASSESSEE DEMONSTRATED THE SUBMISSIONS MADE TO CBDT. WE CONSIDERING THE FACTUAL ASPECTS, EVIDENCES, PROVISIONS OF LAWS AND DECISION OF HIGH COURTS AND TRIBUNAL RELIED BY THE ASSESSEE, ARE INC LINED TO REMIT THE ISSUE IN DISPUTE TO THE FILE OF ASSESSING OFFICER AS THE APPLICATION FILED IS PENDING WITH THE CBDT U/S.119(2)(A) OF THE ACT. THE ASSESSING OFFICER HAS TO PASS THE ORDER BASED ON THE SATISFACTORY DIRECTIONS FROM CBDT AFTER PROVIDING ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 10. WE FIND IN THE PRESENT CASE THAT THE ASSESSEE H AS MADE AN APPLICATION TO THE CBDT FOR CONDONATION OF DELAY BY LETTER DATED 20.07.2015. WE RELY ON THE TRIBUNALS DECISION AND REMIT THE DISPUTED ISSUE TO THE FILE OF THE ASSESSING OFFICER AS THE APPLICATION IS PENDING WITH THE CBDT UNDER SECTION 119(2)(B) OF THE ACT. FURTHER, THE ASSESSING OFFICER SHALL PASS THE ORDER BASED ON THE 9 I.T.A. NO.485/MDS/15 C.O. NO.41/MDS/15 DIRECTIONS OF THE CBDT. THE A.O. SHALL PROVIDE ADE QUATE OPPORTUNITY TO THE ASSESSEE BEFORE PASSING THE ORDE R. THE APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. 11. IN THE RESULT, THE APPEAL OF THE REVENUE IS ALL OWED FOR STATISTICAL PURPOSES AND THE CROSS-OBJECTION OF THE ASSESSEE IS DISMISSED AS NOT PRESSED. ORDER PRONOUNCED ON 18 TH OCTOBER, 2015 AT CHENNAI. SD/- SD/- ( ) ( . ! # $) (CHANDRA POOJARI) (G. PAVAN KUMAR) / ACCOUNTANT MEMBER % /JUDICIAL MEMBER /CHENNAI, 5 /DATED, THE 18 TH OCTOBER, 2015. KRI. 6 - /%178 98)1 /COPY TO: 1. +, /APPELLANT 2. /0+, /RESPONDENT 3. # :1 () /CIT(A)-1, MADURAI 4. # :1 /CIT, CENTRAL-II, MADURAI 5. 8!;< /%1% /DR 6. <( = /GF.