ACIT, CHENNAI V. M/s. Polyhose India Pvt. Ltd., CHENNAI

ITA 122/CHNY/2011

• Counselvise Citation: [2011] 119 COUNSELVISE.COM (IT) 6515 (ITAT-CHENNAI)
• Duration Of Justice: 5 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2011
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: D
• Next Hearing Date: 30-06-2011
• Assessment Year: 2008-2009
• Appeal Filed On: 27-01-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ANIRUDH RAI
• Assessee Lawyers: SANJIV KUMAR SHAH
• Keywords: Opportunity of being heard; Reasonable cause
• Section: 10B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, CHENNAI BEFORE SHRI N. S. SAINI, ACCOUNTANT MEMBER AND SHRI GEORGE MATHAN, JUDICIAL MEMBER .. I.T.A. NO. 122/MDS/2011 ASSESSMENT YEAR :2008-09 THE ASSISTANT COMMISSIONER OF INCOME-TAX, COMPANY CIRCLE-V(2), CHENNAI. V. M/S. POLYHOSE INDIA PVT. LTD., B-1, BASEMENT ALSA TOWER COMPLEX, NO. 185/187, POONAMALLEE HIGH ROAD, KILPAUK, CHENNAI-600 010. (PAN : AAACP6469R) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI ANIRUDH RAI RESPONDENT BY : SHRI SANJIV KUMAR SHAH O R D E R PER GEORGE MATHAN, JUDICIAL MEMBER : THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF THE LEARNED CIT(APPEALS)-V, CHENNAI IN ITA NO. 81/10-11 DATED 0 2-11-2010 FOR THE ASSESSMENT YEAR 2008-09. 2. SHRI ANIRUDH RAI, LEARNED CIT-DR REPRESENTED ON BEHALF OF THE REVENUE AND SHRI SANJIV KUMAR SHAH, CA REPRESENTED ON BEHALF OF THE ASSESSEE. 3. IN THE REVENUES APPEAL, THE REVENUE HAS RAISED THE FOLLOWING GROUNDS : I.T.A. NO.122/MDS/2011 2 1. THE ORDER OF THE LEARNED CIT(A) IS CONTRARY TO LAW AND FACTS OF THE CASE. 2.1 THE LEARNED CIT(A) HAS ERRED IN ALLOWING THE C LAIM OF THE ASSESSEE AGAINST THE AOS ACTION IN DISALLOWANCE OF THE CLAIM OF ` 14,31,64,909/- EXEMPTION U/S 10B FOR NOT HAVING FIL ED THE RETURN OF INCOME BEFORE THE DUE DATE STIPULATED U/S 139(1) OF THE IT ACT, 1961. 2.2 THE LEARNED CIT(A) HAS FAILED TO APPRECIATE THA T THE AO HAS RIGHTLY DISALLOWED THE CLAIM OF DEDUCTION U/S 1 0B OF THE ACT AS PER 4 TH PROVISO TO SUB SEC.1 OF SEC.10B OF THE INCOME TAX ACT, IT WAS CATEGORICALLY STATED THAT NO DEDUCTION UNDER TH IS SECTION SHALL BE ALLOWED TO THE ASSESSEE WHO DOES NOT FURNISH RET URN OF INCOME ON OR BEFORE THE DUE DATE SPECIFIED U/S 139(1) OF T HE INCOME TAX ACT, 1961. 2.3 IT IS SUBMITTED THAT CIT(A) RELIED ON THE DECIS ION OF THE HON'BLE ITAT, DELHI BENCH B ITA NO. 2317/DEL/2010 IN THE CASE OF ACIT VS. DHIR GLOBAL INDUSTRIAL PVT. LTD. AND HO LD THAT THE DELAY IN FILING WAS NOT WITHOUT REASONABLE CAUSE AND AS S UCH DIRECT THAT THE DEDUCTION U/S 10B SHOULD BE ALLOWED TO THE APPE LLANT. THIS IS NOT ACCEPTABLE SINCE THE ASSESSEE HAS NOT ANY REASO NABLE CAUSE FOR DELAY IN FILING OF RETURN OF INCOME. 3. FOR THESE AND OTHER GROUNDS THAT MAY BE ADDUCED AT THE TIME OF HEARING, IT IS PRAYED THAT THE ORDER OF THE LEARNED CIT(A) MAY BE SET ASIDE AND THAT OF THE ASSESSING OFFICER RESTORED. 4. IT WAS SUBMITTED BY THE LEARNED DR THAT THE ASSE SSEE IS A COMPANY WHICH IS DOING THE BUSINESS OF MANUFACTURING AND TRADING OF HOSES. IT WAS THE SUBMISSION THAT THE ASSESSEE HAD FILED ITS RETURN OF INCOME ON 06-10-2008 FOR THE RELEVANT ASSESSMENT YEAR AND HAD CLAIMED EXEMPTION U/S 10B O F THE INCOME TAX ACT, 1961 (THE ACT FOR SHORT). IT WAS THE SUBMISSION THAT THE ASSESSING OFFICER IN THE COURSE OF ASSESSMENT HAD DISALLOWED THE CLAIM OF DE DUCTION U/S 10B ON THE GROUND THAT THE RETURN OF INCOME FILED ON 06-10-200 8 WAS BEYOND THE TIME LIMIT PRESCRIBED UNDER SECTION 139(1) OF THE ACT. IT WAS THE SUBMISSION THAT THE I.T.A. NO.122/MDS/2011 3 LEARNED CIT(A) HAD ALLOWED THE ASSESSEES APPEAL BY FOLLOWING THE DECISION OF THE ITAT, DELHI BENCH B IN THE CASE OF M/S. DHIR GLOB AL INDUSTRIES P. LTD. IN ITA NO. 2317/DEL/2010 DATED 30-07-2010. IT WAS THE SUBMISS ION THAT THE ORDER OF THE DELHI BENCH B IN THE CASE OF M/S. DHIR GLOBAL IND USTRIES P. LTD. WAS EXTRACTED IN FULL BY THE LEARNED CIT(A) IN HIS ORDER. IT WAS TH E SUBMISSION THAT IN THE SAID DECISION OF THE TRIBUNAL THOUGH HELD THAT THE PROVI SO TO SECTION 10B(1) WAS ONLY DIRECTORY IN NATURE AND NOT MANDATORY, THE TRIBUNAL HAD RESTORED THE ISSUE TO THE FILE OF THE ASSESSING OFFICER TO EXAMINE THE MERITS OF THE ASSESSEES CLAIM OF EXEMPTION U/S 10B. IT WAS THE SUBMISSION THAT THE LEARNED CIT(A) HAD ALLOWED THE CLAIM OF DEDUCTION U/S 10B WHICH WAS NOT PERMIS SIBLE. IT WAS THE SUBMISSION THAT HE HAD NO OBJECTION IF THE ISSUE IS RESTORED T O THE FILE OF THE ASSESSING OFFICER TO EXAMINE THE MERITS OF THE ASSESSEES CLAIM OF EX EMPTION U/S 10B OF THE ACT. 5. IN REPLY, THE LEARNED AUTHORISED REPRESENTATIVE SUBMITTED THAT HE HAD NO OBJECTION IF THE ISSUE IS BEING RESTORED TO THE FIL E OF THE ASSESSING OFFICER FOR EXAMINATION OF THE CLAIM OF THE ASSESSEE ON MERITS SUBJECT TO THE CONDITION THAT THE ISSUE OF DELAY IN FILING THE RETURN OF INCOME W AS NOT SENT BACK FOR RE- CONSIDERATION. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. AS IT IS NOTICED THAT THE LEARNED CIT(A) HAS DECIDED THE ISSUE BY FOLLOWING THE DECIS ION OF THE CO-ORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF M/S. DHIR GLOBAL INDUS TRIES P. LTD., REFERRED TO SUPRA, WE ARE OF THE VIEW THAT THE ISSUE OF REJECTING THE ASSESSEES CLAIM FOR DEDUCTION I.T.A. NO.122/MDS/2011 4 U/S 10B IS LIABLE TO BE HELD IN FAVOUR OF THE ASSES SEE IN REGARD TO THE ISSUE OF THE DELAY IN FILING THE RETURN OF INCOME. HOWEVER, AS IT IS NOTICED THAT THE ASSESSING OFFICER HAS NOT GONE INTO THE MERITS OF THE CLAIM O F DEDUCTION U/S 10B OF THE ACT MADE BY THE ASSESSEE, THIS ISSUE IS RESTORED TO THE FILE OF THE ASSESSING OFFICER FOR RE-ADJUDICATION AFTER GRANTING THE ASSESSEE ADEQUAT E OPPORTUNITY OF BEING HEARD. HERE WE MAY SPECIFICALLY MAKE IT CLEAR THAT RESPECT FULLY FOLLOWING THE DECISION OF THE CO-ORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF M/S. DHIR GLOBAL INDUSTRIES P. LTD., REFERRED TO SUPRA, THE ISSUE REGARDING THE DE LAY IN FILING THE RETURN OF INCOME IN RESPECT OF THE CLAIM OF DEDUCTION UNDER SECTION 10B IS HELD IN FAVOUR OF THE ASSESSEE AND THE SAME SHALL NOT AGAIN FORM PART OF THE ADJUDICATION BEFORE THE ASSESSING OFFICER. IN THE CIRCUMSTANCES, THE APPEA L OF THE REVENUE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. 7. THE ORDER WAS PRONOUNCED IN THE COURT ON 30/06/2 011. SD/- SD/- (N. S. SAINI) (GEORGE MATHAN) ACCOUNTANT MEMBER JUDICIAL MEMBER CHENNAI, DATED THE 30 TH JUNE, 2011. H. COPY TO: ASSESSEE/AO/CIT (A)/CIT/D.R./GUARD FILE