ITO, CHENNAI V. M/s. Malind Laboratories P. Ltd., CHENNAI

ITA 1553/CHNY/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 51713 (ITAT-CHENNAI)
• Duration Of Justice: 10 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-08-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 03-08-2011
• Assessment Year: 2007-2008
• Appeal Filed On: 17-09-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S SRIDHAR
• Section: 115JB; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BENCH C CHENNAI (BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI N.S. SAINI, ACCOUNTANT MEMBER) .. I.T.A. NO. 1553/MDS/2010 ASSESSMENT YEAR : 2007-08 THE INCOME TAX OFFICER, COMPANY WARD IV(1), CHENNAI 600 034. (APPELLANT) V. M/S MALIND LABORATORIES P. LTD, [SINCE AMALGAMATED WITH M/S CAPLIN POINT LABORATORIES LTD.] NO. 3, LAKSHMANAN STREET, T. NAGAR, CHENNAI 600 034. PAN : AACCM 7929 D (RESPONDENT) CO NO. 172/MDS/2010 A/O I.T.A. NO. 1553/MDS/2010 ASSESSMENT YEAR : 2007-08 M/S MALIND LABORATORIES P. LTD, VS. TH E INCOME-TAX OFFICER [SINCE AMALGAMATED WITH WARD IV(I) M/S CAPLIN POINT LABORATORIES LTD.] C HENNAI 600 034. NO. 3, LAKSHMANAN STREET, T. NAGAR, CHENNAI 600 034. PAN : AACCM 7929 D [APPELLANT] (RESPONDENT) ASSESSEE BY : SHRI S. SRIDHAR DEPARTMENT BY : DR. D. VIJAYAKUMAR, CIT, DR I.T.A. NO. 1553/MDS/10 2 O R D E R PER N.S. SAINI, ACCOUNTANT MEMBER : THIS APPEAL FILED BY THE REVENUE AND CROSS OBJECTIO N FILED BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDER PASSED BY THE CIT(A)-V, CHENNAI DATED 30.06.2010 FOR ASSESSMENT YEAR 2007-0 8. 2. THE SOLE ISSUE INVOLVED IN THE APPEAL OF THE REV ENUE IS THAT THE LD. CIT(A) ERRED IN DIRECTING THE ASSESSING OFF ICER TO ALLOW THE DEDUCTION U/S 80IC OF THE INCOME-TAX ACT, 1961 [IN SHORT, THE ACT] OF RS. 1,56,48,973/- WHEN THE ASSESSEE HAS NOT MAD E A CLAIM FOR DEDUCTION U/S 80IC OF THE ACT IN THE RETURN OF INCO ME. 3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND THE MATERIAL AVAILABLE ON RECORD. IN THE INSTANT CASE, THE LD. CIT(A) ALLOWED THE APPEAL OF THE ASSESSEE AND DIRECTED THE ASSESSING OFFICER TO ALLOW DEDUCTION O F RS. 1,56,48,973/- U/S 80IC OF THE ACT BY OBSERVING AS U NDER: I.T.A. NO. 1553/MDS/10 3 17. I HAVE GONE THROUGH THE REVISION ORDER AND THE WRITTEN SUBMISSIONS FILED BY THE AUTHORIZED REPRESENTATIVE OF THE APPELLANT. IT IS A FACT THAT THE APPELLANT COMPANY IS MANUFACTURING PHARMA PRODUCTS IN ITS UNITS LOCATED I N BADDI INDUSRIAL AREA, SOLAN DISTRICT IN THE STATE OF HIMAC HAL PRADESH, WHICH IS A NOTIFIED AREA AS PER ITEM 12 OF SCHEDULE 14 OF PART-C OF THE ACT. SIMILAR CLAIM UNDER SECTIO N 80-IC MADE BY THE APPELLANT ON THE SAME UNIT VIDE ORDER DA TED 15.12.2008 FOR THE EARLIER ASST. YEAR 2006-07 WAS A LLOWED BY THE ASSESSING OFFICER ON THE BASIS OF THE BOARD NOT IFICATION NO273/2003/F.NO.142/24/2003-TPL DATED 04.11.2003. CONSIDERING THE ABOVE FACTS, I AM OF THE OPINION TH AT THE APPELLANT COMPANY IS ELIGIBLE FOR THE CLAIM DEDUCTIO N UNDER SECTION 80-IC OF THE ACT FOR THE ASST. YEAR 2007-08 ALSO. ACCORDINGLY, THE ASSESSING OFFICER IS HEREBY DIRECT ED TO ALLOW THE CLAIM OF DEDUCTION U/S 80-IC TO THE EXTENT OF RS.1,56,48,973/- . I.T.A. NO. 1553/MDS/10 4 4. THE LD. D.R. SUBMITTED THAT AS THE ASSESSEE OMIT TED TO MAKE CLAIM OF DEDUCTION U/S 80IC OF THE ACT IN ITS RETUR N OF INCOME FILED ON 30.10.2007 IN VIEW OF THE DECISION OF THE HON'BL E SUPREME COURT IN THE CASE OF GOETZE [INDIA] LTD. VS. CIT 284 ITR 323 [SC], THE LD. CIT(A) WAS NOT JUSTIFIED IN ALLOWING DEDUCTION U/S 80IC TO THE ASSESSEE. 5. ON THE OTHER HAND, THE LD. A.R. OF THE ASSESSEE SUBMITTED THAT THE DECISION OF THE HON'BLE SUPREME COURT IN THE CA SE OF GOETZE [INDIA] LTD. [SUPRA] ITSELF STATES THAT THE SAME DO ES NOT CURTAIL THE JURISDICTION OF THE APPELLATE AUTHORITY AND THE SAM E IS NOT APPLICABLE ON APPELLATE AUTHORITY. 6. WE FIND THAT IN THE INSTANT CASE, THE ASSESSEE F ILED RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION ELECTRONICA LLY ON 30.10.2007 I.E. WITHIN THE DUE TIME PRESCRIBED U/S 139(1) OF THE ACT AND AS PER THE SAID RETURN, THE ASSESSEE CLAIMED TH AT IT WAS LIABLE TO PAY TAX ON ITS BOOK PROFIT U/S 115JB OF THE ACT AND ACCORDINGLY PAID TAX. I.T.A. NO. 1553/MDS/10 5 7. THE LD. CIT(A) FOUND THAT THE INTIMATION U/S 143 (1) OF THE ACT WAS SERVED UPON THE ASSESSEE ON 15.4.2009 WHEREIN A DEMAND OF RS. 50,67,731/- WAS RAISED AGAINST THE ASSESSEE. WE FI ND THAT THE SECOND PROVISO TO SECTION 143(1) READS AS UNDER: NO INTIMATION UNDER THIS SUB-SECTION SHALL BE SENT A FTER THE EXPIRY OF ONE YEAR FROM THE END OF THE FINANCIAL YE AR IN WHICH THE RETURN IS MADE. 8. THUS, IN OUR CONSIDERED OPINION, AN INTIMATION W HICH WAS SENT TO THE ASSESSEE AFTER 31.3.2009 WAS TIME BARED AND BAD IN LAW. IN VIEW OF THE ABOVE, WE DO NOT FIND ANY GOOD REASON T O INTERFERE WITH THE CONCLUSION OF THE LD. CIT(A). 9. FURTHER, WE ALSO OBSERVE THAT THE REVENUE HAS NO T DISPUTED THE FINDING OF THE LD. CIT(A) THAT THE ASSESSEE WAS ELIGIBLE FOR DEDUCTION U/S 80IC OF THE ACT. NO MATERIAL WAS BRO UGHT BEFORE US I.T.A. NO. 1553/MDS/10 6 TO SHOW THAT THE ASSESSEE WAS NOT ELIGIBLE FOR DEDU CTION U/S 80IC OF THE ACT. 10. WE ARE REMINDED OF THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF RAM LAL VS. REVA COAL FIELD LTD. AIR [1962] [SC] 361 WHEREIN IT WAS HELD THAT THE STATE AUTHORITIES SHOU LD NOT RAISE TECHNICAL PLEAS IF THE CITIZENS HAVE A LAWFUL RIGHT AND THE LAWFUL RIGHT IS BEING DENIED TO THEM MERELY ON TECHNICAL G ROUNDS. THE STATE AUTHORITIES CANNOT ADOPT THE ATTITUDE WHICH P RIVATE LITIGANTS MIGHT ADOPT. THE HON'BLE CBDT HAS ALSO OPINED IN C IRCULAR NO. 14 OF 1955 DATED APRIL 11, 1965 THAT IF AN ASSESSEE, U NDER A MISTAKE, MISCONCEPTION OR NOT BEING PROPERLY INSTRUCTED IS O VER ASSESSED, THE AUTHORITIES UNDER THE ACT ARE REQUIRED TO ASSIST HI M AND ENSURE THAT ONLY LEGITIMATE TAXES DUE ARE COLLECTED. 11. IN VIEW OF THE ABOVE, WE DO NOT FIND ANY GOOD R EASON TO INTERFERE WITH THE ORDER OF THE LD. CIT(A). IT IS CONFIRMED. THE GROUND OF APPEAL OF THE REVENUE IS DISMISSED. I.T.A. NO. 1553/MDS/10 7 12. THE ASSESSEE HAS FILED CROSS OBJECTIONS WHEREIN THE FOLLOWING GROUNDS ARE TAKEN: 1. THE APPEAL FILED BY THE INCOME TAX OFFICER, COMPANY WARD IV(1), CHENNAI IN I.T.A. NO. 1553/2010 BEFORE THE INCOME TAX APPELLATE TRIBUNAL, CHENNAI C BENCH FOR THE ABOVE MENTIONED ASSESSMENT YEAR IS CONTRARY TO LAW, FACTS AND IN THE CIRCUMSTANCES OF T HE CASE. 2. THE ITO ERRED IN RAISING THE GROUND NO.2.1 FORMING PART OF STATUTORY FORM NO.36 BEFORE THE BENC H ALLEGING THE ABSENCE OF THE CLAIM OF DEDUCTION U/S 80 IC OF THE ACT IN THE RETURN OF INCOME WITHOUT ASSIGNING PROPER REASONS AND JUSTIFICATION. 3. THE ITO FAILED TO APPRECIATE THAT THE MISTAKE IN UPLOADING THE ELECTRONIC RETURN IN THE SAID ASSESSME NT YEAR COUPLED WITH THE COMPUTATION OF TAXABLE TOTAL INCOME AS PER THE PRESCRIPTION OF SECTION 115JB OF THE ACT WERE TAKEN NOTE OF BY THE FIRST APPELLATE AUTHOR ITY IN ACCEPTING THE CLAIM MADE BEFORE HIM. I.T.A. NO. 1553/MDS/10 8 4. THE ITO FAILED TO APPRECIATE THAT THE POWER OF T HE FIRST APPELLATE AUTHORITY WAS CO-TERMINUS WITH THE POWER OF THE ASSESSING OFFICER AND HENCE OUGHT TO H AVE APPRECIATED THAT FRESH CLAIM IN THE COMPUTATION OF TAXABLE TOTAL INCOME COULD BE MADE IN THE SAID PROCEEDINGS BEFORE HIM WHICH IN FACT WAS MADE AND ENTERTAINED BY HIM IN THE PASSING OF THE IMPUGNED ORDER. 5. THE ITO FAILED TO APPRECIATE THAT THE DECISION CITED IN GROUND NO.2.4 FORMING PART OF STATUTORY F ORM NO.36 FILED BEFORE THE BENCH HAD NO APPLICATION OF THE FACTS OF THE CASE INASMUCH AS NEW CLAIM COULD BE MADE IN THE FIRST APPELLATE PROCEEDINGS IN ANY EVENT. 6. THE ITO FAILED TO APPRECIATE THAT HAVING NOTICED THE ACCEPTANCE OF THE CLAIM OF DEDUCTION U/S 80 IC OF THE ACT IN THE IMMEDIATELY PRECEDING ASSESSMENT YEA R ON THE SCRUTINY OF THE RETURN OF INCOME, THERE WAS NOTHING WRONG IN ENTERTAINING THE NEW CLAIM BEFORE HIM IN CONTINUATION OF THE ACCEPTANCE OF SUCH CLAIM IN TH E SAID IMMEDIATELY PRECEDING ASSESSMENT YEAR. 7. THE ITO FAILED TO APPRECIATE THAT THE PRESCRIPT ION OF MAKING THE CLAIM IN THE RETURN OF INCOME AS I.T.A. NO. 1553/MDS/10 9 BROUGHT OUT IN GROUND NO. 2.3 FORMED PART OF THE STATUTORY FORM NO. 36 FILED BEFORE THE BENCH WAS APPLICABLE TO THE ASSESSMENT PROCEEDINGS AND NOT TO THE APPELLATE PROCEEDINGS WHERE THE APPELLATE AUTHORITY WAS VESTED WITH THE POWERS TO DETERMINE THE CORRECT TAXABLE TOTAL INCOME ON THE CONSIDERATION OF NEW CLAIM(S). 8. THE CIT(APPEALS) IN ANY EVENT ERRED IN NOT CONSIDERING THE ISSUE OF THE VALIDITY OF THE ORDER O F RECTIFICATION PASSED IN TERMS OF SECTION 154 OF THE ACT AND HAVING NOTICED THE SAID ISSUE IN PARA 13 OF THE IMPUGNED ORDER, THE FAILURE TO RENDER DECISION ON TH E SAID LEGAL ISSUE WOULD VITIATE THE SAID ORDER PASSED BY HIM. 9. THE CIT(APPEALS) FAILED TO APPRECIATE THAT IN T HE LIGHT OF THE PROVISIONS OF SECTION 154(8) OF THE AC T, THE ORDER OF RECTIFICATION DATED 28.1.2010 WAS PASSED O UT OF TIME, INVALID, PASSED WITHOUT JURISDICTION AND NOT SUSTAINABLE BOTH ON FACTS AND IN LAW. I.T.A. NO. 1553/MDS/10 10 13. IN VIEW OF OUR DECISION IN THE APPEAL OF THE RE VENUE, THE CROSS OBJECTION OF THE ASSESSEE HAS BECOME MERELY ACADEMI C IN NATURE AND THEREFORE, REQUIRES NO ADJUDICATION BY US. 14. IN THE RESULT, THE APPEAL OF THE REVENUE AS WEL L AS THE CROSS OBJECTION OF THE ASSESSEE BOTH ARE DISMISSED. THE ORDER WAS PRONOUNCED IN THE COURT ON 12 TH AUGUST, 2011. SD/- SD/- (HARI OM MARATHA) (N.S. SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED THE 12 TH AUGUST, 2011. VL COPY TO: (1) APPELLANT (2) RESPONDENT (3) CIT(A)-V, CHENNAI-34 (4) CIT, CHENNAI-34 (5) D.R. (6) GUARD FILE