Padma Challa , Hyderabad V. Income Tax Officer, Ward-11(4), Hyderabad

ITA 1046/Hyd/2019

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 3262 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 7 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-02-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 16-02-2021
• Assessment Year: 2015-2016
• Appeal Filed On: 25-06-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KANIKA AGARWAL
• Keywords: Principle of natural justice
• Section: 80C; 143(3); 80IC; 80IC; 22

Judgement Text

ITA NO 1046 OF 2019 PADMA CHALLA HYDERABAD PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD SMC BENCH, HYDERABAD (THROUGH VIDEO CONFERENCING) BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER ITA NO.1046/HYD/2019 ASSESSMENT YEAR: 2015-16 SMT. PADMA CHALLA HYDERABAD PAN:AHFPC8360D VS. INCOME TAX OFFICER WARD 11(4) HYDERABAD (APPELLANT) (RESPONDENT) ASSESSEE BY: SRI MOHD. AFZAL REVENUE BY : SMT. KANIKA AGARWAL, DR DATE OF HEARING: 16/02/2021 DATE OF PRONOUNCEMENT: 22/02/2021 ORDER THIS IS ASSESSEES APPEAL FOR THE A.Y 2015-16 AGAIN ST THE ORDER OF THE CIT (A)-1, HYDERABAD, DATED 15.01. 2018. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IN DIVIDUAL RUNNING TWO BUSINESS UNITS I.E. (1) VISHNU POLYMERS IN UTTARAKHAND AND (2) M/S PADMA INDUSTRIES IN HYDERAB AD, FILED HER RETURN OF INCOME FOR THE A.Y 2015-16 ON 15.8.20 15 ADMITTING AN INCOME OF RS.4,85,450/-. THE ASSESSEE ADMITTED G ROSS TOTAL INCOME AT RS.15,37,416/- AND AFTER CLAIMING CHAPTER VI A DEDUCTION IN RESPECT OF VISHNU POLYMERS TO THE TUNE OF RS.9,59,971/- U/S 80IC AND RS.92,000/- OF LIC PREMI UM U/S 80C OF THE ACT I.E. A TOTAL OF RS.10,51,971/-, THE ASSESSEE ADMITTED NET TAXABLE INCOME AT RS.4,85,450/-. 3. DURING THE ASSESSMENT PROCEEDINGS U/S 143(3) OF THE ACT, PURSUANT TO THE SELECTION OF THE RETURN OF INC OME FOR LIMITED ITA NO 1046 OF 2019 PADMA CHALLA HYDERABAD PAGE 2 OF 4 SCRUTINY UNDER CASS, THE AO OBSERVED THAT THE ASSES SEE HAD CLAIMED DEDUCTION U/S 80IC OF THE ACT IN RESPECT OF ONE OF HER UNIT I.E. VISHNU POLYMERS IS SITUATED IN RUDRAPUR, UTTARAKHAND WHICH IS SITUATED IN THE AREAS MENTIONED IN SECTIO N 80IC OF THE ACT. THE AO OBSERVED THAT, ONE OF THE CONDITIONS WH ICH IS REQUIRED TO BE FULFILLED FOR CLAIMING DEDUCTION U/S 80IC IS THAT THE BOOKS OF ACCOUNT SHOULD BE AUDITED AND THE AUDIT REPORT IN F ORM 10CCB SHOULD BE SUBMITTED ALONG WITH THE RETURN OF INCOME . HE OBSERVED THAT THE ASSESSEE HAD NOT FILED FORM 10CCB ALONG WI TH THE RETURN OF INCOME BUT HAS UPLOADED THE SAME ELECTRONICALLY SUBSEQUENTLY. HE ALSO OBSERVED THAT THE ASSESSEE HAS FAILED TO SU BMIT P&L A/C AND BALANCE SHEET FOR THE RELEVANT A.Y IN RESPECT O F THE ELIGIBLE UNDERTAKING. THEREFORE, HE HELD THAT THE ASSESSEE H AS NOT FULFILLED THE CONDITIONS FOR ALLOWING THE DEDUCTION U/S 80IC OF THE ACT. HE ACCORDINGLY DISALLOWED THE SAME AND BROUGHT IT TO T AX. 4. AGGRIEVED, THE ASSESSEE PREFERRED AN APPEAL BEFO RE THE CIT (A) WHICH WAS DISMISSED FOR NON-APPEARANCE OF T HE ASSESSEE BEFORE THE CIT (A). THE ASSESSEE IS IN SECOND APPEA L BEFORE THE TRIBUNAL BY RAISING THE FOLLOWING GROUNDS OF APPEAL : 1.) THE APPEAL DISMISSED BY THE LEARNED COMMISSION ER OF INCOME TAX (APPEALS)-1 IS NOT JUSTIFIED IN LAW OR I N FACTS OR IN BOTH, FOR THE ADDITIONS MADE BY THE BY THE LEARN ED ITO OF WARD 11 (4) TO THE EXTENT OF RS.1 0,51,971/- BE DEL ETED. 2.) WITHOUT PREJUDICE TO THE ABOVE CONTENTION YOUR HUMBLE PETITIONER FURTHER SUBMITS THAT THE COMMISSIONER OF INCOME TAX (APPEALS)-1 HAS ERRED IN DISMISSING THE APPEAL. HE DID NOT OBSERVE THE PRINCIPLES OF THE NATURAL JUSTICE. HE HAS NOT OBSERVED OUR CONTENTIONS AGAINST THE DISALLOWANCE M ADE BY THE LEARNED ITO OF WARD 11 (4) WHILE COMPLETING ASS ESSMENT OF INCOME OF THE PETITIONER UNDER 143(3) OF INCOME TAX ACT. 3.) WE HAVE CLEARLY EXPLAINED THE REASONS FOR NON F ILING OF REPORT IN FORM NO.10CCB WHICH IS TO BE FILED AS MEN TIONED IN SECTION 80LC OF THE ACT AND THE SAME WAS PRODUCE D BEFORE THE LEARNED OFFICE AT THE ASSESSMENT OF THE INCOME FOR THE ASSESSMENT YEAR 2015-16. THE DEDUCTION U/S 80LC WAS ITA NO 1046 OF 2019 PADMA CHALLA HYDERABAD PAGE 3 OF 4 DISALLOWED FOR AN AMOUNT OF RS.9,59,971/- WITHOUT CONSIDERING OUR EXPLANATION INFORMATION FURNISHED B EFORE THE LEARNED ITO AND EVEN AFTER PRODUCING BEFORE THE REQUISITE REPORT BEFORE HIM DURING THE ASSESSMENT PROCEEDINGS DISALLOWED. DURING THE APPEALS PROCEEDI NGS WE HAVE OPTED E-PROCEEDINGS AND SUBMITTED ALL THE INFO RMATION AND EXPLANATION VIA ONLINE BEFORE THE LEANED COMMIS SIONER. EVEN THEN THE CIT APPEALS UPHELD THE ADDITIONS MADE BY THE ASSESSING OFFICER ON STATING THAT EVEN THERE IS MERIT ALSO SIMPLY BECAUSE OF NON APPEARANCE BEFORE HIM. THE AC TION OF CIT APPEALS IS UNLAWFUL. 4.) YOUR PETITIONER SUBMITS TO ADD OR TO ALTER OR T O AMEND OR TO DELETE ANY OF THE ABOVE SAID GROUNDS FACTS AT OR BEFORE THE DATE OF HEARING. 5. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED T HAT THOUGH FORM 10CCB COULD NOT BE FILED ALONG WITH THE RETURN OF INCOME, THE ASSESSEE HAD FILED THE SAME DURING THE ASSESSMENT PROCEEDINGS AND THEREFORE, IT CANNOT BE STATED THAT THE ASSESSEE HAS NOT FULFILLED THE CONDITIOSN U/S 80IC OF THE AC T. HE ALSO SUBMITTED THAT THE ASSESSEE HAS FILED THE SEPARATE P&L A/C AND BALANCE SHEET FOR THE ELIGIBLE UNIT, BUT THE AO HAS ERRONEOUSLY RECORDED THAT THE ASSESSEE HAS NOT FILED THE SAME. IN SUPPORT OF THIS CONTENTION THAT THE RELEVANT DETAILS WHICH WER E TO BE FILED ALONG WITH THE RETURN OF INCOME CAN ALSO BE FILED D URING THE COURSE OF HEARING AND THAT THE SAME SHOULD BE CONSI DERED IF THEY ARE SO FILED, THE LEARNED COUNSEL FOR THE ASSESSEE RELIED UPON THE DECISION OF THE HON'BLE SUPREME COURT OF INDIA IN T HE CASE OF CIT VS G.M. KNITTING INDUSTRIES PVT. LTD REPORTED I N 376 ITR 456 (S.C). 6. THE LEARNED DR, ON THE OTHER HAND, SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW AND SUBMITTED THAT THE ASSESSEE OUGHT TO HAVE FILED THE AUDITED ACCOUNTS IN FORM 10 CCB ALONG WITH THE RETURN OF INCOME AND SINCE THEY HAVE NOT B EEN SO FILED, THE CLAIM OF DEDUCTION U/S 80IC COULD NOT BE ENTERT AINED. SHE ITA NO 1046 OF 2019 PADMA CHALLA HYDERABAD PAGE 4 OF 4 FURTHER SUBMITTED THAT THE ASSESSEE IS REQUIRED TO MAINTAIN SEPARATE BOOKS OF ACCOUNT FOR THE ELIGIBLE UNIT AND SINCE THE ASSESSEE HAS NOT FILED SUCH SEPARATE BOOKS BEFORE T HE AO, THE AO WAS CONSTRAINED TO DISALLOW THE CLAIM U/S 80IC OF T HE ACT. 7. HAVING REGARD TO THE RIVAL CONTENTIONS AND THE M ATERIAL ON RECORD AND THE DECISION OF THE HON'BLE SUPREME C OURT IN THE CASE OF CIT VS G.M. KNITTING INDUSTRIES PVT. LTD (S UPRA), I FIND THAT THE ASSESSEE HAS FILED FORM 10CCB AND THE BOOKS OF ACCOUNT DURING THE COURSE OF ASSESSMENT PROCEEDINGS. THEREF ORE, THE AO OUGHT TO HAVE CONSIDERED THE SAME BEFORE DISALLOWIN G THE CLAIM OF DEDUCTION U/S 80IC OF THE ACT. THE ORDER OF THE CIT (A) IS EX-PARTE, AND THE ASSESSEES APPEAL WAS NOT CONSIDERED ON MER ITS. IN VIEW OF THE SAME, I DEEM IT FIT AND PROPER TO REMAND THE IS SUE TO THE FILE OF THE AO FOR VERIFICATION AND RECONSIDERATION OF THE ISSUE. 8. IN THE RESULT, ASSESSEES APPEAL IS TREATED AS A LLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 22 ND FEBRUARY, 2021. SD/- (P. MADHAVI DEVI) JUDICIAL MEMBER HYDERABAD, DATED 22 ND FEBRUARY, 2021. VINODAN/SPS COPY TO: 1 SMT. PADMA CHALLA, H.NO.8-3-676/A, FRIBZI DATTASAI TOWERS, SUSHEELA HOSPITAL, YELLA REDDY GUDA, HYDERABAD 5000 71 2 ITO WARD 11(4) HYDERABAD 3 CIT (A)-1 HYDERABAD 4 PR. CIT 5 HYDERABAD 5 THE DR, ITAT HYDERABAD 6 GUARD FILE BY ORDER