M/s. Gemini Communication Ltd., CHENNAI V. ACIT, CHENNAI

ITA 1252/CHNY/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 64217 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-08-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 28-08-2012
• Assessment Year: 2008-2009
• Appeal Filed On: 06-06-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANIRUDH RAI IRS
• Assessee Lawyers: M NARAYANAN
• Keywords: Principle of natural justice

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, CHENNAI BEFORE DR. O.K. NARAYANAN, VICE-PRESIDENT AND SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER I.T.A.NO. 1252/MDS/2012 ASSESSMENT YEAR : 2008-09 M/S. GEMINI COMMUNICATION LTD., NO.1, DR. RANGA ROAD, ALWARPET, CHENNAI 600018. PAN AAACG 2531K. VS. THE ASSISTANT COMMISSIONER OF INCOME-TAX, COMPANY CIRCLE-II(2), CHENNAI-34. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI M. NARAYANAN RESPONDENT BY : SHRI ANIRUDH RAI, IRS, CI T DATE OF HEARING : 28 TH AUGUST , 2012 DATE OF PRONOUNCEMENT : 28 TH AUGUST , 2012 O R D E R PER DR. O.K. NARAYANAN, VICE-PRESIDENT THIS APPEAL IS FILED BY THE ASSESSEE. THE RELEVANT ASSESSMENT YEAR IS 2008-09. THE APPEAL IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX(APPEALS)-II I AT CHENNAI ITA 1252/12 :- 2 -: DATED 19.3.2012 AND ARISES OUT OF THE ASSESSMENT CO MPLETED UNDER SEC.143(3) OF THE INCOME-TAX ACT, 1961. 2. THE ASSESSEE, IN THIS CASE HAS FILED ITS RETURN OF INCOME BY TAPAL ON 30.9.2008. THEREAFTER THE ASSESSEE AGAI N FILED THE RETURN ELECTRONICALLY ON 6.11.2008. A TAXABLE INCO ME OF ` 13,69,59,409/- WAS DECLARED. 3. INITIALLY, THE RETURN WAS PROCESSED UNDER SEC.14 3(1) ON 19.3.2010. THEREAFTER THE ASSESSMENT WAS SELECTED FOR SCRUTINY AND THE ASSESSMENT WAS COMPLETED UNDER SEC.143(3) O N 31.12.2010. 4. IN COMPUTING ITS TOTAL INCOME, THE ASSESSEE HAD CLAIMED DEDUCTION UNDER SEC.80IC AMOUNTING TO ` 6,29,60,111/-. THIS CLAIM OF DEDUCTION MADE BY THE ASSESSEE WAS DISALLO WED BY THE ASSESSING OFFICER ON THE GROUND THAT THE RETURN FIL ED BY THE ASSESSEE BY TAPAL BEFORE DUE DATE OF FILING OF RETURN COULD NOT BE ACCEPTED AS A VALID RETURN. THE ONLY RETURN ENTITLED TO BE RECOGNIZED FOR THE ASSESSMENT IS THE RETURN ELECTR ONICALLY FILED BY THE ASSESSEE BUT BEYOND THE DUE DATE. ON THAT GROU ND THE ASSESSING OFFICER HELD THAT THE RETURN WAS NOT FILE D WITHIN THE TIME AND THEREFORE, THE DEDUCTION CLAIMED BY THE ASSESSE E COULD NOT ITA 1252/12 :- 3 -: BE ALLOWED. THIS VIEW OF THE ASSESSING OFFICER HAS BEEN UPHELD BY THE COMMISSIONER OF INCOME-TAX(APPEALS). THE AS SESSEE IS AGGRIEVED AND THEREFORE, THE SECOND APPEAL BEFORE U S. 5. THE GROUNDS RAISED BY THE ASSESSEE IN THE PRESE NT APPEAL READ AS BELOW : 1. THE ORDER OF THE COMMISSIONER OF INCOME TAX(APP EALS) IN DISMISSING THE CLAIM OF THE APPELLANT U/S 80IC VIDE JURISDICTIONAL GROUNDS IS AGAINST THE PROVISIONS OF LAW AND CONTRARY TO FACTS AND CIRCUMSTANCES OF THE CASE. 2. THE CIT(APPEALS) ERRED IN OBSERVING THAT THE RE TURN FILED IN THE TAPAL ON 30.09.2008 AND THE RETURN FILED ELEC TRONICALLY ON 06.11.2008 IS ONE AND THE SAME. THE AO WHO PASS ED THE ORDER U/S143(3) NOT DENIED THE ABOVE MENTIONED RETURNS FILED BY THE APPELLANT; ALSO THE PRESENT AO WHO SEN D THE REMAND REPORT TOO CONFIRMED THE SAME. APART FROM THE ABOVE, WHEN THE MATTER CAME UP BEFOR E THE MADRAS HIGH COURT, THE COUNCIL WHO REPRESENTED THE DEPARTMENT ALSO CONFIRMED THE FILING OF BOTH THE RE TURNS BY THE APPELLANT. BUT IN A LATER POINT OF TIME THE CI T(A) RAISED THE DOUBT ABOUT FILING AND JURISDICTIONAL VALIDITY IS DENIAL OF NATURAL JUSTICE. ITA 1252/12 :- 4 -: 3. THE CIT(APPEALS) ALSO NOT TAKEN INTO CONSIDERATI ON THAT THE DISALLOWANCE OF CLAIM U/S 80IC MADE BY THE AO U/S 1 43(1) IS NOT FALLING WITHIN THE PURVIEW OF PRIMA FACIE ADJUS TMENT AND ONLY ADJUSTMENT OF ARITHMETICAL ERROR IN THE RETURN IS PERMITTED. 4. THE CIT(APPEALS) WENT WRONG IN SHIFTING THE BUN DLE OF MISTAKES DONE BY THE DEPARTMENT IN THE COURSE OF RE CORDING OF RETURN REGISTER ETC., ON THE HEADS OF THE APPELL ANT AND BLAMING THE APPELLANT THAT IT IS A SIMPLE CASE OF N ON FILING OF THE RETURN ON 30.09.2008 IS CLEAR CASE OF IN-EQUITO US IN NATURE. 6. WE HEARD SHRI M. NARAYANAN, THE LEARNED COUNSEL APPEARING FOR THE ASSESSEE. THE LEARNED COUNSEL EX PLAINED THAT SEC.139(1) SPEAKS OF FILING OF A RETURN IN THE PRES CRIBED FORM AND VERIFIED IN THE PRESCRIBED MANNER AND SETTING FORTH SUCH OTHER PARTICULARS AS MAY BE PRESCRIBED. THE PRESCRIPTION AUTHORIZED IN THIS SECTION IS ONLY WITH REGARD TO THE FORM, VERIF ICATION AND SUCH OTHER PARTICULARS AND NOT THE MODE OF DELIVERY, EIT HER MANUALLY OR ELECTRONICALLY. THE LEARNED COUNSEL CONTINUED TO A RGUE THAT THE SCHEME OF THE RULES PRESCRIBES VARIOUS FORMS, WHICH SPELL OUT VARIOUS COLUMNS OF DETAILS REQUIRED TO BE FURNISHED , AND THIS IS WHAT IS MEANT BY FORM, FOR EXAMPLE LIKE FORM ITR-1, ITR-2, SARAL ITA 1252/12 :- 5 -: ETC. AND NOT THE MODE OF FURNISHING THIS FORM MANUA LLY OR ELECTRONICALLY. THE PRESCRIPTION THAT THE RETURN H AS TO BE FILED ELECTRONICALLY AS IMPOSED BY THE CBDT IS BEYOND ITS DELEGATED LEGISLATIVE POWERS WHICH DEFEATS THE BENEFIT AVAILA BLE TO THE ASSESSEE UNDER SEC.80-IC BY CURTAILING IT BY OPERAT ING SEC.80-AC. THIS IS AN UNAUTHORIZED CONDITION WHICH IS ULTRA VI RES OF THE ACT. THE RELEVANT MEANING OF FORM FOR THE PRESENT DISCUS SION IS A LEGAL DOCUMENT WITH BLANK SPACES TO BE FILLED IN. 7. THE LEARNED COUNSEL FURTHER CONTENDED THAT WHEN IT COMES TO THE NOTICE OF THE TRIBUNAL OR THE REFERENCE COUR T THAT AN AUTHORITY PURPORTING TO ACT IN TERMS OF THE STATUTE HAS ACTED BEYOND THE TERMS OF THE PROVISION BY WHICH POWER IS CONFERRED ON THE AUTHORITY, IT IS PERMISSIBLE TO THE ADJUDICATO RY FORUM TO REFRAIN FROM GIVING EFFECT TO SUCH PATENTLY ULTRA VIRES ACT OF THE SUBORDINATE AUTHORITY PURPORTING TO ACT IN TERMS OF A STATUTE THOUGH IN FACT IT IS INCONSISTENT WITH THE STATUTE. THE L EARNED COUNSEL HAS PLACED RELIANCE ON THE DECISION OF THE HONBLE MADR AS HIGH COURT IN THE CASES OF SECOND ITO V. M.C.T. TRUST AND OTHE RS (102 ITR 138) AND CIT V. ELGI EQUIPMENTS LTD. (242 ITR 460) . ITA 1252/12 :- 6 -: 8. THE LEARNED COUNSEL FURTHER ARGUED THAT AS PER S EC.292B, THE RETURN FILED BY THE ASSESSEE MANUALLY ON 30.9.2 008 IN ITR-6 CONTAINS THE SAME DETAILS THAT ARE REQUIRED TO BE F ILED ELECTRONICALLY. AS THE RETURN IS FILED IN ACCORDAN CE WITH THE SECTION AND THE RULE IS MADE BEYOND THE COMPETENCE OF THE B OARD, THE RULE THAT RETURN HAS TO BE FILED ELECTRONICALLY ALO NE IS ULTRA VIRES THE ACT. IT CANNOT MAKE THE RETURN AS INVALID. FU RTHER, SEC.292B ALSO DOES NOT MAKE THE RETURN FILED MANUALLY AS INV ALID. THEREFORE, AS A CONSEQUENCE, SEC.80AC DOES NOT APPL Y. 9. SHRI ANIRUDH RAI, THE LEARNED COMMISSIONER OF IN COME-TAX, APPEARING FOR THE REVENUE ARGUED AT LENGTH AND SUPP ORTED THE ORDERS PASSED BY THE LOWER AUTHORITIES. 10. IN THE PRESENT CASE, THE CLAIM OF THE ASSESSEE FOR DEDUCTION MADE UNDER SEC.80IC HAS BEEN DISALLOWED BY THE ASSE SSING AUTHORITY BY TAKING RECOURSE TO SEC.80AC. SEC.80AC PROVIDES THAT WHERE THE ASSESSEE HAS CLAIMED DEDUCTION UNDER SEC.80IC ETC. SUCH DEDUCTION SHALL NOT BE ALLOWED UNLESS THE ASSESSEE FURNISHES A RETURN ON OR BEFORE THE DUE DATE SPECIF IED UNDER SEC.139(1). ITA 1252/12 :- 7 -: 11. IN THE PRESENT CASE, THE ASSESSEE HAS FILED THE RETURN MANUALLY BEFORE THE DUE DATE PRESCRIBED UNDER SEC.1 39(1). THE ELECTRONIC RETURN ALONE WAS FILED AFTER THE DUE DAT E. THE CBDT HAS PRESCRIBED TO FILE THE RETURNS ELECTRONICALLY. THEREFORE, THE ASSESSING OFFICER HELD THAT THE ELECTRONICALLY FILE D RETURN ALONE CAN BE CONSIDERED AS A LAWFUL RETURN AND AS THE SAME WA S FILED BEYOND THE DUE DATE FOR FILING THE RETURN UNDER SEC .139(1), THE ASSESSEE IS NOT ENTITLED FOR DEDUCTION UNDER SEC.80 IC BY VIRTUE OF THE PROVISION CONTAINED IN SEC.80AC. THE ASSESSING OFFICER HELD THAT THE MANUAL RETURN FILED BY THE ASSESSEE BEFORE THE DUE DATE, CANNOT BE TAKEN COGNIZANCE OF. THIS VIEW HAS BEEN UPHELD BY THE COMMISSIONER OF INCOME-TAX(APPEALS). 12. BUT WE ARE NOT IN A POSITION TO AGREE WITH THE VIEW TAKEN BY THE LOWER AUTHORITIES. AS ARGUED BY THE LEARNED CO UNSEL APPEARING FOR THE ASSESSEE, THE STATUTE CONSISTING OF ACT AND RULES SPEAK OF FILING OF RETURN BEFORE DUE DATE AND CONTENTS OF THAT MUST BE FURNISHED IN THAT RETURN. THE FORMAT HAS BEEN PRESCRIBED BY THE RULES AND ALSO THE CONTENTS HAVE BEEN PRESCRIBED BY THE RULES. FILING OF THE RETURN ALSO HAS BEEN PRESCRIBED BY THE ACT. NOWHERE IN THE ACT OR RULES , THERE IS A MANDATORY PROVISION THAT THE RETURN MUST BE FILED O NLY ITA 1252/12 :- 8 -: ELECTRONICALLY. THIS COMPULSION HAS BEEN MADE AS A RESULT OF THE DIRECTION ISSUED BY THE CBDT. AS RIGHTLY ARGUED BY THE LEARNED COUNSEL, THE DIRECTION OF THE CBDT CANNOT GO BEYOND THE ACT AND RULES. IT CANNOT OVERTAKE THE APPARENT WORDS OF TH E STATUTE. THEREFORE, WHAT WE CAN HOLD IS THAT FILING OF RETUR N ELECTRONICALLY IS A DIRECTORY PROVISION AND IF THE RETURN IS FILED MA NUALLY ON OR BEFORE DUE DATE, SUCH RETURN CANNOT BE IGNORED. TH E MAXIMUM THE ASSESSING OFFICER CAN ASK THE ASSESSEE IS TO FI LE THE RETURN AGAIN ELECTRONICALLY, SO THAT THE TECHNICALITY OF P ROCESSING IS SATISFIED. THIS IS ONLY FOR THE ADMINISTRATIVE CON VENIENCE OF THE INCOME-TAX DEPARTMENT. 13. THEREFORE, THE ASSESSING OFFICER IS NOT JUSTIFI ED IN IGNORING THE MANUAL RETURN FILED BY THE ASSESSEE BEFORE THE DUE DATE OF FILING OF RETURN. FOR THE PURPOSE OF SEC.139(1), THE ASSESSEE HAS FILED ITS RETURN BEFORE THE DUE DATE. THAT RETURN IS ABSOLUTELY VALID IN LAW. THEREFORE, THE CLAIM OF THE ASSESSEE FOR D EDUCTION UNDER SEC.80IC CANNOT BE DENIED ON THE GROUND OF LAW STAT ED IN SEC.80AC. ON THIS POINT, WE ACCEPT THE CONTENTION OF THE ASSESSEE AND SET ASIDE THE ORDERS OF THE LOWER AUTH ORITIES. WE DIRECT THE ASSESSING OFFICER TO ACCEPT THE MANUAL R ETURN FILED BY THE ASSESSEE AS A VALID RETURN FOR ALL PURPOSES OF INCOME-TAX ACT. ITA 1252/12 :- 9 -: 14. NOW, THE QUESTION IS WHETHER THE ASSESSEE IS EN TITLED FOR DEDUCTION UNDER SEC.80IC AND IF SO, TO WHAT EXTENT, ETC. THIS GROUND WAS NOT EXAMINED ON MERIT BY THE LOWER AUTHO RITIES. 15. THEREFORE, THIS ISSUE ON MERIT IS REMITTED BACK TO THE ASSESSING OFFICER WITH A DIRECTION TO EXAMINE THE C LAIM OF THE ASSESSEE MADE UNDER SEC.80IC FOR DEDUCTION. THE AS SESSING OFFICER SHALL EXAMINE ALL THE RELEVANT MATERIALS, P ARTICULARS AND DETAILS AND HEAR THE ASSESSEE AND THEREAFTER WILL C OME TO A LAWFUL CONCLUSION ON THIS SUBJECT. 16. IN RESULT, THIS APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF H EARING ON TUESDAY, THE 28 TH OF AUGUST, 2012 AT CHENNAI. SD/- SD/- (CHALLA NAGENDRA PRASAD) (DR.O.K.NARA YANAN) JUDICIAL MEMBER VICE-PRESIDENT CHENNAI, DATED THE 28 TH AUGUST , 2012 MPO* COPY TO: 1. ASSESSEE 2. DEPARTMENT 3. CIT 4. CIT(A) 5. DR