Shri Pawan Aggarwal, Nahan V. ITO, Nahan

ITA 1141/CHANDI/2019

AI Insights

The case involves Shri Pawan Aggarwal, the proprietor of M/s Shree Prem Wire, who appealed against the order of the Commissioner of Income Tax (Appeals), Palampur, for the assessment year 2009-10. The primary issue was the denial of 100% deduction under section 80IC of the Income Tax Act, 1961, which the assessee claimed was due to a clerical error in the date of commencement of production reported in Form 10-CCB. The Assessing Officer had initially denied the deduction, but the CIT(A) acknowledged the manufacturing activity but restricted the deduction to 25% based on the report from the AO, which the assessee contested due to lack of opportunity to respond and the clerical error in the production date.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 127853 (ITAT-CHANDIGARH)
• Duration Of Justice: 3 year(s) 11 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-07-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 17-07-2023
• Assessment Year: 2009-2010
• Appeal Filed On: 15-08-2019
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Set aside
• Section: 80IC; 80IC

Judgement Text

आयकर अपील य अ धकरण,च डीगढ़ यायपीठ, च डीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, “A” CHANDIGARH BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND SHRI VIKRAM SINGH YADAV, ACCOUNTANT MEMBER आयकर अपील सं./ ITA No.1141/CHD/2019 नधा रण वष / Assessment Year : 2009-10 Shri Pawan Aggarwal, Prop. M/s Shree Prem Wire, Tirlokpur Road, Kala Amb, Nahan (HP). बनाम The ITO, Nahan. थायी लेखा सं./PAN NO: AGNPA6847J अपीलाथ /Appellant यथ /Respondent नधा रती क! ओर से/Assessee by : None राज व क! ओर से/ Revenue by : Shri Manveet Singh Sehgal, Sr.DR स ु नवाई क! तार&ख/Date of Hearing : 18.07.2023 उदघोषणा क! तार&ख/Date of Pronouncement : 21.07.2023 आदेश/ORDER Per Sanjay Garg, Judicial Member: The present appeal has been preferred by the assessee against the order dated 30.05.2019 of the Commissioner of Income Tax (Appeals), Palampur [in short ‘CIT(A)’] pertaining to 2009-10 assessment year. 2. The assessee in this appeal has taken the following grounds of appeal : 1. That the order under appeal is excessive, unjust, contrary to facts and is against law. ITA No.1141/CHD/2019 A.Y. 2009-10 Page 2 of 4 2. The impugned order is against the principles of natural justice as the Commissioner (Appeals) has not given any time to the appellants to file reply to the report of the Assessing Officer. The appellant had sought time to file reply to the report which was not given and the impugned order was passed. Thus the impugned order merits to be set aside. 3. The Commissioner (Appeals) ought to have considered that there was a clerical error in mentioning the date of production in the Form 10-CCB. The Chartered Accountant of the appellant had given a certificate to the effect that the date of commencement of commercial production under 10-CCB was inadvertently mentioned as 01.04.2004 whereas the actual date of commencement of production was 19.07.2004. The Chartered Accountant had given an amended 10-CCB clarifying the actual date of production. Further the copy of the certificate from the Industries Department showing that the date of production as 19.07.2004 is also available. Thus in view of the above the appellant was eligible for claim of 100% deduction in the said financial year and the benefit of said deduction merits to be allowed. 3. No one has put in appearance on behalf of the assessee despite notice. However, after going through the statements of facts and the grounds of appeal, we find that the issue is required to be restored to the file of the ld. CIT(A). 4. The brief facts of the case are that the assessee is engaged in the business of manufacturing of wire rods. The Assessing Officer ( in short ‘the AO’) denied the benefit of deduction u/s 80IC of the Income Tax Act, 1961 (in short ‘the Act) to the assessee holding that the assessee's activity was not a manufacturing activity. However, the ld. CIT(A) held that the activity of the assessee was manufacturing activity and hence the assessee was eligible for the benefit of deduction u/s 80IC of the Act. However, the ld. CIT(A) noted that during the proceedings before him, AO had filed a report stating that the assessment ITA No.1141/CHD/2019 A.Y. 2009-10 Page 3 of 4 year under consideration was the 6 th year of claim of deduction u/s 80IC of the Act and therefore, the assessee was entitled for deduction @ 25% of its profits as against @ 100% claimed by the assessee u/s 80IC of the Act. The ld. CIT(A), accordingly, restricted the deduction @ 25% for the year under consideration. 5. Before us, the assessee through grounds of appeal has contended that the ld. CIT(A) has not given proper opportunity to the assessee to rebut the alleged report sent by the AO to the ld. CIT(A). It has been further mentioned that there was a clerical error in mentioning the date of production in the form 10CCB, which was inadvertently mentioned as 01.04.2004 whereas, the actual date of commencement of production was 19.07.2004. That the Chartered Accountant of the assessee has given a certificate in this respect also. The assessee has further mentioned about the certificate from Industries Department regarding the date of commencement of production. 6. Considering the above facts of the assessee, in our view the matter is required to be restored to the file of the ld. CIT(A) for examination of the above pleadings/contentions raised by the assessee. In view of this, the impugned order of the ld. CIT(A) is set aside and the matter is restored to the file of the ld. CIT(A) with a direction to examine the aforesaid contention of the assessee regarding the date of commencement of production and ITA No.1141/CHD/2019 A.Y. 2009-10 Page 4 of 4 thereafter to pass a speaking order in accordance with law. Needless to say that the assessee will be given an adequate and proper opportunity to present his case. 7. The appeal of the assessee is treated as allowed for statistical purposes. Order pronounced in the Open Court on 21 st July, 2023. Sd/- Sd/- ( VIKRAM SINGH YADAV) लेखा सद य/ Accountant Member ( SANJAY GARG) या यक सद य/ Judicial Member “Poonam.” आदेशक! त,ल-पअ.े-षत/ Copy of the order forwarded to : 1. अपीलाथ / The Appellant 2. यथ / The Respondent 3. आयकरआय ु /त/ CIT 4. -वभागीय त न2ध, आयकर अपील&य आ2धकरण, च4डीगढ़/ DR, ITAT, CHANDIGARH 5. गाड फाईल/ Guard File आदेशान ु सार/ By order, सहायकपंजीकार/ Assistant Registrar