M/s Shilpa Cartons, Solan V. ITO, W-1, Solan

ITA 1155/CHANDI/2017

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 4886 (ITAT-CHANDIGARH)
• Duration Of Justice: 8 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-04-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 18-07-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DAVINDER SINGH KALYAN
• Assessee Lawyers: AMITOZ SINGH KAMBOZ
• Keywords: Non compliance

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, B CHANDIGARH BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND DR. B.R.R. KUMAR, ACCOUNTANT MEMBER ITA NO. 1155/CHD/2017 ASSESSMENT YEAR : 2011-12 M/S SHILPA CARTONS, VS. THE ITO, WARD-1, PLOT NO.489, SOLAN VILLAGAE KOUNDI, DHELA NALAGAR, DISTT. GOLAN PAN NO.ABCFS9101P (APPELLANT) (RESPONDENT) APPELLANT BY : SH. AMITOZ SINGH KAMBOZ, CA RESPONDENT BY : SH. DAVINDER SINGH KALYAN, C IT DR DATE OF HEARING : 09.04.2018 DATE OF PRONOUNCEMENT: 09.04.2018 ORDER PER SANJAY GARG, JUDICIAL MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSESS EE AGAINST THE ORDER DATED 30.11.2016 OF THE COMMISSIONER OF I NCOME TAX [HEREINAFTER REFERRED TO AS CIT(A)], SHIMLA. 2. THE ASSESSEE HAS TAKEN THE FOLLOWING GROUNDS OF APPEAL:- 1. THE ID. CIT(A) HAVE ERRED IN LAWS AND ON THE FACTS OF THE CASE BY DISALLOWING THE DEDUCTION U/S 80IC AMOUNTIN G TO RS. 82,66,027/- BY APPLYING THE PROVISIONS OF SECTI ON 80AC ON THE GROUND THAT THE FILING OF INCOME TAX RETURN IN THE CASE OF ASSESSEE WAS DELAYED BY ONE DAY, HOWEVER IGNORIN G THE FACT THAT ASSESSEE HAD FULFILLED ALL THE REQUISITE CONDITIONS WHICH ARE ESSENTIAL FOR CLAIMING DEDUCTION U/S 80IC WHICH THE ID. AO HAVE ALSO DULY ACCEPTED. ITA NO.1155/CHD/2017- SHILPA CARTONS, SOLAN 2 2. THE ID. CIT(A) IS WRONG IN DISALLOWING THE DEDUCTIO N U/S 80IC TO THE TUNE OF RS. 13,71,388/- ON ACCOUNT OF S ALE OF SCRAP BY STATING THAT IT DOES NOT HAVE ANY FIRST DE GREE NEXUS WITH THE MANUFACTURING OF INDUSTRIAL UNDERTAKING. 3. GROUND NO.1 IS RELATING TO THE NON-ALLOWANCE OF DEDUCTION U/S 80IC OF THE INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT ') BECAUSE OF THE NON COMPLIANCE OF THE PROVISIONS OF SECTION 80IC OF THE ACT AS THE RETURN FOR THE ASSESSMENT YEAR UNDER CONSIDERATION WAS FILED BEYOND THE LAST DATE OF FILING OF THE INCOME TAX RETURN. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS OF THE PARTI ES. THE PLEA OF THE LD. COUNSEL FOR THE ASSESSEE IS THAT IN FACT TH ERE WAS NO DELIBERATE ACT OF DELAY ON THE PART OF THE ASSESSEE IN FILING THE RETURN LATE. THAT THE SAID RETURN HAS TO BE UPLOADED ON TH E WEBSITE OF THE INCOME TAX DEPARTMENT. THAT DUE TO SOME TECHNICAL E RROR, THE RETURN COULD NOT BE UPLOADED ON 30.9.2011. THE CONCERNED C .A. OF THE ASSESSEE WAS ABLE TO UPLOAD THE SAME ONLY ON THE NE XT DAY. THE LD. AR HAS ALSO RELIED ON THE DECISION OF THE COORDINAT E BENCH OF THE TRIBUNAL IN THE CASE OF M/S SYMBIOSIA PHARMACEUTIC ALS P. LTD VS. DCIT ITA NO. 501/CHD/2017 VIDE ORDER DATED 4.10.20 17, WHEREIN, THE TRIBUNAL HAS DISCUSSED THIS ISSUE IN PARA 6.3 O NWARDS. IN THAT CASE, THE TRIBUNAL DELIBERATED UPON THE REASONS BEY OND THE CONTROL OF THE ASSESSEE IN FILING THE RETURN BY DUE DATE OF FI LING AS PROVIDED U/S 139(1) OF THE ACT. THE FACTS OF THE CASE WERE THAT THE RETURN WAS FILED IN THE EXTENDED PERIOD U/S 139(4) OF THE ACT THAT T OO ON THE LAST DAY I.E. 31ST MARCH OF THE YEAR. THE TRIBUNAL CONSIDERE D THE REASONS EXPLAINED BY THE ASSESSEE AND HAVE ALSO TAKEN INTO CONSIDERATION THE ITA NO.1155/CHD/2017- SHILPA CARTONS, SOLAN 3 VARIOUS OTHER DECISIONS OF THE COORDINATE BENCHES O F THE TRIBUNAL AS DISCUSSED IN PARA 6.6 OF THE SAID ORDER AND HELD TH AT THE CLAIM OF THE ASSESSEE WAS NOT OUSTED ON THE FACT THAT THE RETURN WAS FILED WITHIN THE EXTENDED PERIOD U/S 139(4) OF THE ACT. THE FACT S OF THE CASE OF THE ASSESSEE WHEN COMPARED TO THE AFORESAID DECISION OF THE TRIBUNAL SEEM TO BE ON BETTER FOOTING. THERE IS ONLY ONE DAY S DELAY IN THIS CASE. THE CASE IN HAND PERTAINS TO ASSESSMENT YEAR 2011-12 FOR WHICH DUE DATE OF FILING OF THE RETURN U/S 139(1) OF THE ACT WAS 30.9.2011. THE RETURN WAS UPLOADED ON 1.10.2011. IT IS ALSO A COMMONLY FACT THAT THE RETURN IS REQUIRED TO BE UPLOADED ON THE W EBSITE OF THE DEPARTMENT AND SOMETIMES TECHNICAL GLITCH / ERRORS DO OCCUR. THE OTHER FACT WHICH CAN ALSO BE TAKEN NOTE OF IS THAT NOT EACH AND EVERY PERSON IS SO TECHNICALLY CONVERSANT WITH THE KNOWHO W OF UPLOADING THE RETURN AND SOMETIMES SOME ERRORS DO OCCUR. 5. IN VIEW OF THIS, WE FIND FORCE IN THE CONTENTION OF THE LD. COUNSEL FOR THE ASSESSEE THAT DUE TO AFORESAID UNAV OIDABLE REASONS BEYOND THE CONTROL OF THE ASSESSEE, THE FILING OF T HE RETURN WAS DELAYED FOR ONE DAY. IN THE LIGHT OF THE DECISION O F THE COORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF M/S SYMBIOSIA PHARMACEUTICALS P. LTD VS. DCIT (SUPRA) AND OTHER DECISIONS RELIED UPON THEREIN, WE HOLD THAT THE DENIAL OF THE CLAIM OF THE ASSESSEE FOR THE AFORESAID REASONS IS NOT JUSTIFIED. IN VIEW OF THIS, WE ALLOW GROUND NO.1 OF THE APPEAL AND DIRECT THE LOWER AUTHORITIES TO ALLOW TH E CLAIM OF THE ASSESSEE, IF OTHERWISE ADMISSIBLE. 6. GROUND NOS. 2 IS RELATING TO DISALLOWANCE OF DED UCTION U/S 80IC OF THE ACT TO THE TUNE OF RS. 13.71 LCAS ON ACCOUNT OF SALE OF SCRAP. ITA NO.1155/CHD/2017- SHILPA CARTONS, SOLAN 4 THE LOWER AUTHORITIES HELD THAT THE INCOME FROM SAL E OF SCRAP WAS NOT LINKED TO THE MANUFACTURING ACTIVITY OF THE UNI T. 7. THE LD. COUNSEL FOR THE ASSESSEE HAS EXPLAINED T HAT THE AFORESAID SCARP WAS GENERATED OUT OF THE MANUFACTUR ING ACTIVITY OF THE ASSESSEE. HE EXPLAINED THAT THE ASSESSEE IS ENG AGED IN THE MANUFACTURING OF CORRUGATED BOXES AND CARTONS AND C ARD BOARDS ETC. THAT THE GENERATION OF SCARP WAS ESSENTIALLY LINKED TO THE MANUFACTURING ACTIVITY OF THE ASSESSEE. THAT THE SC ARP WAS GENERATED OUT OF THE REMNANTS OF THE MATERIAL USED FOR MANUFA CTURING OF CORRUGATED BOXES. THAT THE GENERATION OF SCRAP WAS SO INTRINSICALLY LINKED WITH THE MANUFACTURING ACTIVITY OF THE ASSES SEE THAT IF THE MANUFACTURING IS STOPPED, THE GENERATION OF SCRAP W ILL AUTOMATICALLY STOP. WE FIND FORCE IN THE AFORESAID CONTENTION OF THE LD. COUNSEL FOR THE ASSESSEE. SINCE THE GENERATION OF SCRAP WAS INT RINSICALLY LINKED WITH THE MANUFACTURING ACTIVITY OF THE ASSESSEE AND GENERATION OF THE FINISHED GOODS AS WELL AS SCRAP GO SIDE BY SIDE AND ARE DEPENDENT TO EACH OTHER, HENCE, THE INCOME FROM SALE OF SUCH SC RAP CAN BE SAFELY SAID TO BE RELATED TO THE MANUFACTURING ACTIVITY OF THE UNIT OF THE ASSESSEE. IN VIEW OF THIS, WE DIRECT THE ASSESSING OFFICER TO ALLOW THE CLAIM ON INCOME FROM SALE OF SCARP AS PER THE RELEV ANT PROVISIONS OF SECTION 80IC OF THE ACT. IN VIEW OF THIS, THE APPEA L OF THE ASSESSEE IS HEREBY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (B.R.R.KUMAR) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 09.04.2018 RKK ITA NO.1155/CHD/2017- SHILPA CARTONS, SOLAN 5 COPY TO: THE APPELLANT THE RESPONDENT THE CIT THE CIT(A) THE DR