ACIT, Panipat V. M/s. Sheena Industries, Panipat

ITA 1305/DEL/2015

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 3914 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 10 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-01-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Assessment Year: 2000-2001
• Appeal Filed On: 05-03-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Assessment record
• Section: 143(3); 80HHC; 263; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES: BENCH D NEW DELHI BEFORE SRI G.D.AGRAWAL, HON BLE PRESIDENT AND SMT. BEENA A PILLAI, JM ITA NO.1 305 /DEL/2015 A.Y. 20 00 - 01 ACIT, CIRCLE:PANIPAT VS. M/S SHEENA INDUSTRIES PANIPAT UJHA ROAD, PANIPAT (APPELLANT) (RESPONDENT) APPELLANT BY: SRI AMIT JAIN, SR.D.R. RESPONDENT BY: NONE DATE OF HEARING : 16.01.2018 DATE OF PRONOUNCEMENT : ORDER PER BEENA A PILLAI, JUDICIAL MEMBER THE PRESENT APPEAL HAS BEEN FILED BY THE REVENUE AGAINST ORDER DATED 31/12/14 PASSED BY LD. CIT (A) - 3 FOR ASSESSMENT YEAR 2000 - 01 ON THE FOLLOWING GROUNDS OF APPEAL: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD.CIT(A) HAS ERRED IN LAW BY 'NOT GOING INTO MERITS OF CASE AND BY RELYING ONLY ON THE JUDGEMENT OF HON'BLE ITAT CANCELLING THE ORDER U/S 263 OF THE I T ACT AND IGNORING THE FACTS THAT THE ASSESSEE IS A SUPPORTING MANUFACTURER AND DEDUCTION U/S 80HHC IS TO BE ALLOWED IN THE SAME ITA NO. 1305/DEL/2015 A.Y:2000 - 01 ACIT VS. SHEENA INDUSTRIES, PANIPAT 2 MANNER AS IN THE CASE OF DIRECT EXPORTER, AS PER THE PROVISIONS OF SECTION 80HHC(3A) OF THE I T ACT READ WITH CLAUSE (BAA) OF EXPL ANATION GIVEN BELOW SECTION 80HHC(4C) OF THE I T ACT. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT (A) HAS ERRED IN LAW BY NOT GOING INTO MERITS OF CASE AND BY RELYING ONLY ON THE JUDGEMENT OF HON'BLE ITAT CANCELLING THE ORDER U/S 263 OF THE I T ACT AND BY HOLDING THAT THE CON SEQUENTIAL ORDER U/S 154 IS NOT SUSTAINABL E, WHEN THE RELEVANT ORDER U/S 143(3 ) GIVING EFFECT TO THE REVISIONARY ORDER U/S 263 STOOD QUASHED AND THEREFORE, THE AO ERRED IN RECTIFYING THE SAID ORDER U/S 143(3). 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT (A) HAS ERRED IN LAW BY HOLDING THAT THE SAID ORDER U/S 154 IS VOID, WHEN THE DEPARTMENT'S APPEAL AGAINST THE ORDER OF CIT(A) QUASHING THE ORDER U/S 143(3) WHICH WAS RECTIFIED BY THE SAID ORDE R U/S 154, IS PENDING BEFORE THE HON'BLE ITAT . 4. THE APPELLANT CRAVES LEAVE TO ADD OR AMEND THE GROUNDS OF APPEAL BEFORE THE APPEAL IS HEARD OR DISPOSED OFF. 2. BRIEF FACTS OF THE CASE ARE AS UNDER . A SSESSEE FILED ITS RETURN OF INCOME DECLARING T OTAL INCOME OF RS. NIL ON 30/10/ 20 00. SUBSEQUENTLY THE CASE WAS SELECTED FOR SCRUTINY AND ASSESSED UNDER SECTION 143 (3) READ WITH 148 OF THE ACT ON 31/12/07 WHERE THE NET TAXABLE INCOME WAS AGAIN DETERMINED AT NIL. WHILE COMPUTING THE DEDUCTION UNDER ORIG INAL ASSESSMENT PROCEEDINGS, ASSESSING OFFICER HAD ALLOWED DEDUCTION CLAIMED BY ASSESSEE UNDER SECTION 80 HHC. LATER ON THE ITA NO. 1305/DEL/2015 A.Y:2000 - 01 ACIT VS. SHEENA INDUSTRIES, PANIPAT 3 ASSESSMENT WAS SET ASIDE V IDE ORDER UNDER SECTION 263 DATED 31/03/10 PASSED BY LD.CIT, LUDHIANA ON THE ISSUE OF DETERMINATION OF DED UCTION UNDER SECTION 80HHC. LD.CIT ACCORDINGLY DIRECTED LD.AO TO REFRAME THE ASSESSMENT IN ACCORDANCE WITH THE PROVISIONS OF THE A CT. ACCORDINGLY THE CASE OF THE ASSESSEE WAS AGAIN ASSESSED UNDER SECTION 143 (3) OF THE A CT V IDE ORDER DATED 24/12/10 AT TOTA L INCOME OF RS. 4 , 02 , 4 8,221/ - . LD. AO WHILE COMPUTING THE DEDUCTION OBSERV ED AS UNDER: FROM THE PERUSAL OF THE ASSESSMENT RECORD OF THE ASSESSEE, IT IS NOTICED THAT: - 'AS PER PROVISION OF SECTION 80IB(13) READ WITH SECTION 80 IA (9) OF INCOME TAX ACT , WHERE AN AMOUNT OF PROFITS AND GAINS OF AN INDUSTRIAL UNDERTAKING IS CLAIMED AND ALLOWED AS DEDUCTION U/S 80 IB , THE PROFIT OF THAT EXTENT SHALL NOT QUALIFY FOR DEDUCTION UNDER ANY OTHER PROVISION OF CHAPTER VI A AND IN NO CASE SHALL EXCEED THE ELIGIBLE P ROFIT OF INDUSTRIAL UNDERTAKING AS THE CASE MAY BE. IN THIS CASE INCOME U/S 143(3) WAS ASSESSED AT RS. 4,02,48,221/ - ON 24.12.2010 AND ELIGIBLE PROFIT FOR DEDUCTION U/S 80 IB AT RS. 2,07,21,574/ - AFTER REDUCING THE AMOUNT OF EXPORT INCENTIVE RS. 1,95,26,6 47/ - . DEDUCTION U/S 80 IB WAS ALLOWED FOR RS. 51,80,393 ( @ 25% ON ELIGIBLE PROFIT OFRS. 2,07,21,574 / - ). KEEPING IN VIEW OF SAID CALCULATION, PROFIT OF RS. 1,74,73,846 (40,24,822 - 1,75,93,982 (90% OF RS. 1,95,26,447 EXPORT INCENTIVE) ( - ) 51,80,393 DEDUCTION U/S 80 IB) WAS LEFT FOR DEDUCTION U/S 80 HHC TO AVERT THE DOUBLE DEDUCTION AS PER PROVISION U/S CHAPTE R VI A WHERE ITA NO. 1305/DEL/2015 A.Y:2000 - 01 ACIT VS. SHEENA INDUSTRIES, PANIPAT 4 AS DEDUCTION U/S 80HHC @ 100% WAS ALLOWED FOR RS. 2,26,74,239/ - (4,02,48,522 ( - ) 1,75,93,982 (90% OF RS. 1,95,26,447 EXPORT INCENTIVE) WITHOUT REDUCING THE AMOUNT OF RS. 51,80,393 / - BEING DEDUCTION ALLOWED U/S 80 I B. IN THIS WAY DOUBLE DEDUCTI ON OF RS. 51,80,393 / - WAS ALLOWED U/S 80HHC AS WELL AS U/S 80 IB . THIS I S UNDER ASSESSMENT OF RS. 51,80,393 / - ON WHICH TAX EFFEC T WILL BE RS. 48,41,526 / - . ' 2.1. SUBSEQUENTLY LD.AO WAS OF THE OPINION THAT THERE IS A MISTAKE APPARENT ON RECORD AND THE NOTICE UNDER SECTION 154 WAS ISSUED. LD. AO ACCORDINGLY CALLED FOR REPLY AND AFTER CONSIDERING THE SAME , WAS OF THE OPINION THERE IS A MISTAKE APPARENT ON RECORD. ACCORDINGLY, HE DISALLOWED DEDUCTION WHICH WAS ALLOWED UNDER SECTION 80 HHC AS WELL AS 80 IB. 2.2 . AGGRIEVED BY THE ASSESSMENT ORDER PASSED UNDER SECTION 154, ASSESSEE PREFERRED APPEAL BEFORE THE LD.CIT(A). LD. CIT(A) DECIDED THE ISSUE BY OBSERVING AS UNDER: I HAVE CONSIDERED THE ASSESSEE'S SUBMISSION AS WELL AS THE IMPUGNED OR DER. IT EMER GES THAT THE CASE WAS SUBJECTED TO REVISIONARY PROCEEDINGS AND THAT THE ORDER U/S 263 DATED 31.3.2010 WAS QUASHED BY THE HON'BLE ITAT DELHI BENCH 'G' IN ORDER DATED 11.11.2010 VIDE ITA NO. 2492/DELJ2010. IN OTHER WORDS, THE ASSESSMENT ORDER PAS SED U /S 143(3) DATED 24.12.2010 GIVING EFFECT TO THE REVISIONARY ORDER - NO LONGER EXISTED AND SO THE AO ERRED IN RECTIFYING SAID ORDER U/S 143(3) VIDE THIS IMPUGNED ORDER U/S 154. IN ITA NO. 1305/DEL/2015 A.Y:2000 - 01 ACIT VS. SHEENA INDUSTRIES, PANIPAT 5 FACT THE ASSESSMENT ORDER PASSED U/S 143(3) DATED 24.12.2010 WAS TREATED VOID VIDE APPELLATE ORDER DATED 24.4.2012 IN APPEAL NO: 48K/6/LDH/CIT(A)(C)/GGN/2010 - 11. TO PUT THE MATTER TO REST, THE RELEVANT PORTION OF THE ORDER OF THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH 'G' NEW DELHI IN ITA NO. 2492/DELJ2010 AY 2000 - 01 DATED 22.10.2010, IS REPRODUCED BELOW. 6. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. 7. IN THE PRESENT CASE, IT IS AN ADMITTED POSITION THAT THE ASSESSING OFFICER HAS MADE THE ASSESSMENT IN ACCORDANCE WITH THE DECISION OF THE HON'BLE PUNJAB & HARYANA HIGH COURT IN THE ASSESSEE'S OWN CASE ON THE ISSUE INVOLVED PERTAINING TO THE ASSESSMENT YEAR 2001 - 02. IT IS ALSO NOT IN DISPUTE THAT IDENTICAL ISSUE WAS DECIDED IN FAVOUR OF THE ASSESSEE BY THE HON'BLE PUNJAB AND HARYANA HIGH COURT IN AY 1999 - 2000 AND ALSO IN ASSESSMENT YEAR 2002 - 03. WE ARE CONCERNED HEREWITH THE ASSESSMENT YEAR 2000 - 01 IN RESPECT OF WHICH ASSESSMENT UNDER SECTION 143(3)/147 OF THE ACT WAS MADE BY THE ASSESSING OFFICER ON 31.12.2007. THE COMMISSIONER OF INCOME TAX IN HIS ORDER UNDER SECTION 263 OF THE ACT, HAS ADMITTED THE POSITION THAT THE A O HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE AFTER FOLLOWING THE DECISION OF THE JURISDICTIONAL HIGH COURT OF PUNJAB & HARYANA AND HE HAS EXERCISED HIS POWER UNDER SECTION 263 MERELY ON THE GROUND THAT A SLP HAS BEEN FILED BY THE DEPARTMENT AGAINST THE DECISION OF THE HON'BLE PUNJAB AND HARYANA HIGH COURT. HE HAS ALSO MENTIONED THAT BY THE TIME HE PASSED THE ORDER UNDER SECTION 263, SLP WAS NOT ADMITTED AND WAS LISTED ON 07.04.2 010. THIS MAKES IT CLEAR THAT THE ITA NO. 1305/DEL/2015 A.Y:2000 - 01 ACIT VS. SHEENA INDUSTRIES, PANIPAT 6 DECISION OF HON'BLE PUNJAB & HARYANA HIGH COURT WAS NEITHER SET ASIDE BY THE HON'BLE SUPREME COURT NOR THE SPECIAL LEAVE PETITION WAS ADMITTED. MERE FILING OF SLP CANNOT BE CONSIDERED TO BE A VALID APPEAL PENDING FOR DECIS ION UNLESS THE SAME IS ADMITTED BY THE HON'BLE SUPREME COURT. IN THE PRESENT CASE, THE AO PASSED THE ORDER AS PER THE POSITION OF LAW DECIDED BY THE HON'BLE PUNJAB & HARYANA HIGH COURT WHICH DECISION WAS ENFORCEABLE ON THE DATE WHEN THE AO PASSED THE ORDER . IN OTHER WORDS, THE AO ADOPTED THE VIEW, WHICH WAS PERMISSIBLE IN LAW AS PER THE DECISION OF HON'BLE PUNJAB & HARYANA HIGH COURT, WHICH WAS AT THAT POINT OF TIME BINDING UPON THE A O . WE THEREFORE, HOLD THE ASSESSI NG OFFICER'S ORDER PASSED IN LINE OF DECI SION OF HON'BLE PUNJAB & HARYANA HIGH COURT WHICH WAS IN FORCE AT THAT POINT OF TIME, CANNOT BE HELD TO BE ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF THE REVENUE. IN THIS CONNECTION, A REFERENCE MAY BE MADE TO THE DECISION OF HON'BLE SUPREME COURT, IN T HE CASE OF C I T VS MAX INDIA LTD., 295 ITR 282 (SC). IN THAT CASE, IT WAS HELD THAT WHEN THE INCOME TAX OFFICER ADOPTS ONE OF THE COURSES PERMISSIBLE IN LAW AND IT RESULTS IN LOSS OF REVENUE, THEN IT CANNOT BE CONSIDERED AS AN ERRONEOUS ORDER PREJUDICIAL TO THE INTERESTS OF THE REVENUE. WE THEREFORE, CANCEL T HE ORDER PASSED UNDER SECTION 263 BY THE COMMISSIONER OF INCOME TAX. HOWEVER, AT THIS STAGE, IT IS PERTINENT TO NOTE THAT THE A O HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE AFTER FOLLOWING THE DECISI ON OF HON'BLE PUNJAB & HARYANA HIGH COURT IN OTHER YEARS IS SUBSEQUENTLY MODIFIED OR SET ASIDE OR OTHERWISE AMENDED, THAT INVARIABLY WILL APPLY TO THE PRESENT ASSESSMENT YEAR ALSO AND IN THAT SITUATION, THE A O SHALL BE AT LIBERTY ITA NO. 1305/DEL/2015 A.Y:2000 - 01 ACIT VS. SHEENA INDUSTRIES, PANIPAT 7 TO GIVE EFF ECT TO THAT ORD ER TO THIS ASSESSMENT YEAR ALSO. WE ORDER ACCORD INGLY. 3 . AGGRIEVED BY THE ORDER OF LD.CIT(A), REVENUE IS IN APPEAL BEFORE US NOW. 3.1. IT IS AN UNDISPUTED FACT THAT ORDER U/S 154 HAS BEEN MADE IN RESPECT OF ASSESSMENT ORDER DATED 24/12/10 PASSED BY LD. AO UNDER SECTION 143 (3) READ WITH 263 OF THE A CT. FURTHER FROM THE RECORDINGS OF LD.CIT (A) IT IS OBSERVED THAT THIS T RIBUNAL V IDE ORDER DATED 11/11/10 IN ITA NO. 2492/DEL/2010 HAS QUASHED THE ORDER DATED 31/03/10 PASSED BY LD. CIT UNDER SECTION 263 OF T HE A CT. 3. 2 . IN OUR CONSIDERED OPINION LD. AO HAS PROCEEDED TO RECTIFY AN ORDER WHICH HAS BEEN QUASHED BY THIS TRIBUNAL, AND THEREFORE THE APPEAL FILED BY REVENUE BECOMES INFRUCTUOUS. 4 . IN THE RESULT THE APPEAL FILED BY REVENUE STANDS DISMISSED AS INFRUCTUOUS. ORDER PRONOUNCED IN THE OPEN COURT ON 1 9 T H JANUARY, 2018. S D / - S D / - (G.D.AGRAWAL) (BEENA A PILLAI) PRESIDENT JUDICIAL MEMBER DT. 1 9 T H JANUARY, 2018 *MV ITA NO. 1305/DEL/2015 A.Y:2000 - 01 ACIT VS. SHEENA INDUSTRIES, PANIPAT 8 COPY FORWARDED TO: - 1 . APPELLANT 2 . RESPONDENT 3 . CIT 4 . CIT(A) 5 . DR, ITAT - TRUE COPY - BY ORDER, ASSISTANT REGISTRAR ITAT DELHI BENCHES S.NO. DETAILS DATE INITIALS DESIGNATION 1 DRAFT DICTATED ON DRAGON 1 6 .01.2018 SR. PS/PS 2 DRAFT PLACED BEFORE AUTHOR 1 7 .01.2018 SR. PS/PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER AM/AM 5 APPROVED DRAFT COMES TO THE SR. PS/PS SR. PS/PS 6 KEPT FOR PRONOUNCEMENT 1 9 . 0 1 . 1 8 SR. PS/PS 7 FILE SENT TO BENCH CLERK SR. PS/PS 8 DATE ON WHICH THE FILE GOES TO HEAD CLERK 9 DATE ON WHICH FILE GOES TO A.R. 10 DATE OF DISPATCH OF ORDER