JCIT, Noida V. M/s. Colwell & Salmon Communication (India) Ltd., Gautam Budh Nagar

ITA 1118/DEL/2012

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 2553 (ITAT-DELHI)
• Duration Of Justice: 8 year(s) 8 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-11-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 07-12-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 05-03-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Set aside

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH B NEW DELHI BEFORE SHRI G.S. PANNU, VICE PRESIDENT AND SHRI AMIT SHUKLA, JUDICIAL MEMBER (THROUGH VIDEO CONFERENCING) IT A NO. 1118 /DEL/20 1 2 ASSESSMENT YEAR: 2007 - 08 JOINT COMMISSIONER OF INCOME TAX, RANGE-1, NOIDA V. M/S. COLWELL & SALMON COMMUNICATION (INDIA) LTD., CX-39, SECTOR-58, NOIDA. TAN/PAN: AACCC0322Q (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI UMESH TAKYAR, SR.D.R. RESPONDENT BY: SHRI NEERAJ JAIN, ADV. DATE OF HEARING: 18 11 2020 DATE OF PRONOUNCEMENT: 27 11 2020 O R D E R PER AMIT SHUKLA, JUDICIAL MEMBER: THE AFORESAID APPEAL HAS BEEN FILED BY THE REVENUE AGAINST THE IMPUGNED ORDER DATED 19.12.2011 PASSED BY LD. CIT(A), GHAZIABAD FOR THE QUANTUM OF ASSESSMENT PAS SED U/S.143(3) FOR THE ASSESSMENT YEAR 2007-08. IN THE GROUNDS OF APPEAL, THE REVENUE HAS RAISED FOLLOWING GROUNDS :- (1) THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS B Y ALLOWING EXEMPTION U/S 10A WITHOUT CONSIDERING THE FACT THAT ASSESSEE HAS NOT CLAIMED THE EXEMPTION U/S 10A OF I NCOME TAX ACT, 1961 IN ITS RETURN F INCOME FILED IN THE I NCOME TAX DEPARTMENT. (2) THAT THE LEARNED CIT(A) HAS ERRED IN LAW AND O N FACTS ITA NO.1118/DEL/2012 2 BY ALLOWING EXEMPTION U/S 10A WITHOUT CONSIDERING T HE FACT THAT THE ASSESSEE FAILED TO FURNISH THE AUDIT REPOR T IN FORM 56F AS REQUIRED UNDER THE PROVISION OF SECTION 10A(5) O F THE INCOME TAX ACT, 1961 READ WITH RULE 16D OF THE INCOME TAX RULES, 1962. (3) THAT THE LEARNED CIT (A) HAS ERRED IN LAW AND ON FACTS BY ALLOWING EXEMPTION U/S 10A WITHOUT APPRECIATING THE FACT THAT ASSESSEE HAS TO PRODUCE ALL THE EVIDENCE ON WH ICH IT RELIES IN RESPECT OF INCOME DECLARED IN THE RETURN DURING THE ASSESSMENT PROCEEDINGS. (4) THAT THE APPELLANT CRAVES TO LEAVE, ADD, ALTER AND AMEND ANY OF THE GROUNDS OF APPEAL ON OR BEFORE HEA RING. (5) THAT THE ORDER OF THE LD. CIT (APPEALS) BEING ERRONEOUS IN LAW AND ON FACTS DESERVES TO BE SET ASIDE/CANCEL LED AND THE ORDER OF THE ASSESSING OFFICER (AO) BE RESTORED. 2. THE FACTS IN BRIEF ARE THAT THE ASSESSEE-COMPANY IS ENGAGED IN THE BUSINESS OF IT ENABLED SERVICES WHER EIN THE ASSESSEE PROVIDES ITS CLIENT WITH, IN-BOUND AND OUT -BOUND TELE SERVICES, MARKET RESEARCH, WEB-BASED COMMUNICA TION AND COMPLETE BPO SOLUTION. THE ASSESSEE HAD SHOWN G ROSS RECEIPT OF RS.31,50,83,000/- WHICH INCLUDED INCOME FROM EXPORT SERVICES OF RS.31,32,67,000/-. THE ASSESSING OFFICER NOTED THAT ASSESSEE HAS SET OFF INCOME OF RS.3,13,2 4,937/- AGAINST THE BROUGHT FORWARD LOSSES OF EARLIER YEARS . HOWEVER, HE OBSERVED THAT IN THE PRECEDING YEAR, THE LOSS OF RS.75,44,540/- WAS ONLY ALLOWED TO BE CARRY FORWARD AFTER THE ASSESSMENTS AND HENCE, ASSESSEE HAS WRONGLY SET OFF THE ITA NO.1118/DEL/2012 3 INCOME OF RS. 2,37,80,397/-, WHICH HAS BEEN ADDED B Y THE ASSESSING OFFICER TO THE INCOME OF THE ASSESSEE. HE HAS FURTHER DISALLOWED THE CLAIM OF DEDUCTION U/S.10A O N THE GROUND THAT ASSESSEE-COMPANY HAS NOT FURNISHED THE PRESCRIBED REPORT IN FORM NO.56 ALONG WITH RETURN O F INCOME. 3. BEFORE THE LD. CIT (A), THE ASSESSEE REGARD ING CLAIM OF DEDUCTION U/S.10A SUBMITTED THAT THE ASSESSEE HAD F ILED RETURN OF INCOME AT NIL AFTER SETTING OFF THE PAST YEAR LOSSES AND HENCE THERE WAS NO OCCASION FOR THE ASSESSEE TO CLAIM THE DEDUCTION U/S.10A. OTHERWISE, ASSESSEE HAD ALREADY CLAIMED THE DEDUCTION U/S.10A BY SUBMITTING BOTH STP APPROV AL AND ASSESSING OFFICER HAS DENIED THE BENEFIT OF DEDUCTI ON U/S.10A WITHOUT GIVING OPPORTUNITY TO SUBMIT THE CERTIFICAT E IN FORM NO. 56F. IT WAS FURTHER SUBMITTED THAT THE APPEALS OF THE ASSESSMENTS FOR THE ASSESSMENT YEARS 2005-06 AND 20 06-07 WERE STILL PENDING AND APPLICANT HAS CLAIMED LOSSES , BECAUSE IT HAS CONTESTED THE ADDITIONS AND THEREFORE, THE R ETURN WAS FILED AT A NIL INCOME. LD. CIT (A) OBSERVED THAT AS PER THE CBDT NOTIFICATION NO.169 DATED 14 TH MAY, 2007, WHEREVER THE RETURN OF INCOME HAS BEEN FILED ELECTRONICALLY THEN ASSESSEES WERE NOT REQUIRE TO FILE VARIOUS DOCUMENTS INCLUDIN G ANY FORM OR AUDIT REPORT WHICH WOULD OTHERWISE HAVE BEEN REQ UIRED TO BE FILED. THUS, HE HELD THAT THERE WAS NO FAULT ON THE PART OF THE ASSESSEE TO FILE FORM NO.56F FOR THE CLAIM OF D EDUCTION U/S.10A. LD. CIT (A) ALLOWED THE DEDUCTION CLAIM U/ S.10A HOLDING THAT IN VIEW OF THE JUDGMENT OF HONBLE JUR ISDICTIONAL HIGH COURT IN THE FOLLOWING CASES:- CIT VS. AXIS COMPUTER INDIA ITA NO.1118/DEL/2012 4 PVT. LTD., 178 TAXMAN 143, (DEL); AND CIT VS. MANTE C CONSULTANTS PVT. LTD., 178 TAXMAN 429, (DEL)., W HEREIN IT HAS BEEN HELD THAT EVEN IF THE ASSESSEE FAILS TO CLAIM DEDUCTION U/S.1 0A IN THE ORIGINAL RETURN AND FILES FORM NO.56F FOR THE FIRST TIME BEFORE THE LD. CIT(A) THEN ALSO SAME CAN BE CONSIDERED. AC CORDINGLY, AFTER TAKING CONSIDERATION INTO FORM NO.56F, HE ALL OWED THE CLAIM OF DEDUCTION U/S.10A. 4. BEFORE US, AT THE OUTSET, LD. COUNSEL SUBMITTED THAT NOW THE ITAT IN THE APPEALS FOR THE ASSESSMENT YEARS 20 04-05 AND 2005-06 HAVE BEEN PASSED AND MATTER HAS BEEN DE CIDED IN FAVOUR OF THE ASSESSEE, AND THEREFORE, THE LOSSE S CARRIED FORWARD WHICH WAS DENIED BY THE ASSESSING OFFICER W ILL NOW BE ALLOWED TO BE SET OFF. HOWEVER, HE SUBMITTED THA T APPEAL FOR THE ASSESSMENT YEAR 2006-07 IS STILL PENDING BE FORE THE ITAT. EVEN WITHOUT PREJUDICE TO THE AFORESAID, HE SU BMITTED THAT ONCE ASSESSEE HAS FILED FORM 56F AND IS OTHERW ISE AVAILABLE FOR CLAIM OF DEDUCTION U/S.10A, THEN NO A DDITION CAN BE MADE, BECAUSE ASSESSEE WOULD BE ELIGIBLE FOR DEDUCTION OF THE INCOME. 5. LD. DR HAS STRONGLY RELIED UPON THE ORDER OF THE ASSESSING OFFICER. 6. AFTER CONSIDERING THE RELEVANT FINDINGS GIVEN IN THE IMPUGNED ORDERS, WE FIND THAT IT IS AN UNDISPUTED F ACT THAT THE ASSESSEE IS OTHERWISE ELIGIBLE FOR CLAIM OF DED UCTION U/S.10A, WHICH ASSESSEE HAD NOT CLAIMED AT THE TIME OF FILING OF RETURN, BECAUSE SAME WAS FILED AT NIL INCOME A FTER SETTING ITA NO.1118/DEL/2012 5 OF CARRIED FORWARD LOSSES OF RS.3,13,24,937/-. THE ASSESSING OFFICER HAD DENIED THE PART OF CARRY FORWARD LOSSES TO BE SET OFF IN THE CURRENT YEAR ON THE GROUND ONLY AMOUNT O F RS.75,44,540/- WAS AVAILABLE FOR CARRY FORWARD AFTE R THE ASSESSMENTS OF THE EARLIER YEARS AND HAS COMPLETED THE ASSESSMENT AT AN AMOUNT OF RS.2,37,80,400/-. EVEN T HOUGH THE TRIBUNAL IN THE ASSESSMENT YEARS 2004-05 AND 20 05-06, HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE, IT WILL ONLY GO TO ENHANCE THE LOSSES TO BE CARRIED FORWARD AND CON SEQUENTLY THE INCOME OF THE ASSESSEE WILL REDUCE TO NIL. BUT BE AS IT MAY, ONCE ASSESSEES INCOME IS LIABLE FOR DEDUCTION U/S.10A FOR WHICH ASSESSEE IS OTHERWISE ELIGIBLE AND ALSO H AS MADE DUE COMPLIANCE BY FILING FORM NO.56F AND RELEVANT A UDIT REPORT. IF THAT IS SO, THEN CLAIM OF DEDUCTION U/S. 10A IS TO BE ALLOWED AND WE DO NOT FIND ANY LEGAL INFIRMITY IN T HE ORDER OF THE LD. CIT (A) IN ALLOWING THE DEDUCTION U/S.10A I N THE LIGHT OF FORM NO.56F. IN THAT CASE, THE ASSESSMENT MADE B Y THE ASSESSING OFFICER WILL BE SUBJECTED TO 100% DEDUCTI ON U/S.10A AND THE ASSESSED INCOME WOULD BE NIL. ACC ORDINGLY, THE ORDER OF THE LD. CIT (A) IS AFFIRMED AND THE GR OUNDS RAISED BY THE REVENUE ARE DISMISSED. 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 27 TH NOVEMBER, 2020 SD/- SD/- [G.S. PANNU] [AMIT SHUKLA] VICE PRESIDENT JUDICIAL MEMBER DATED: 27 TH NOVEMBER, 2020 PKK