Sawaria Pipes Private Limited, Hyderabad V. Income Tax Officer, Ward-3(1), Hyderabad

ITA 1598/Hyd/2017

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 9840 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 6 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-04-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-A
• Next Hearing Date: 27-03-2019
• Assessment Year: 2009-2010
• Appeal Filed On: 14-09-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KIRAN KATTA
• Assessee Lawyers: S RAMA RAO
• Keywords: Bonafide mistake; Set aside
• Section: 142(1); 80IB; 143(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES A, HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER I.T.A. NO. 1598/HYD/2017 ASSESSMENT YEAR: 2009-10 M/S. SAWARIA PIPES PVT. LTD., HYDERABAD [PAN: AAFCS3155C] VS INCOME TAX OFFICER, WARD-3(1), HYDERABAD (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI S. RAMA RAO, AR FOR REVENUE : SHRI KIRAN KATTA, DR DATE OF HEARING : 27-03-2019 DATE OF PRONOUNCEMENT : 03-04-2019 O R D E R PER S. RIFAUR RAHMAN, A.M. : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINS T THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)12 , HYDERABAD, DATED 24-07-2017, FOR THE AY. 2009-10. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE, A PRI VATE LIMITED COMPANY, ENGAGED IN MANUFACTURING AND SALE OF HR STRIPS, MS PIPES ETC., AND ERECTION OF MS & GI TOWERS, E-FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR UNDER CONSIDERATION ON 30-09-2009, ADMITTING A TOTAL INCOME OF RS. 88,78,678/-. THE RETURN WAS PROCESSED U/S. 143(1) OF THE OF THE INCOME TAX ACT [ACT]. SUBSEQUENTLY, THE CASE WAS S ELECTED FOR SCRUTINY AND ACCORDINGLY, A NOTICE U/S. 143(2) OF THE ACT ITA NO. 1598/HYD/2017 :- 2 -: WAS ISSUED TO THE ASSESSEE ON 18-08-2010. NOTICES U/S . 142(1) WERE ALSO ISSUED CALLING FOR INFORMATION. 2.1. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AR OF THE ASSESSEE FILED A LETTER ON 07/12/2011 BEFORE THE AO REQUESTING FOR ALLOWING DEDUCTION U/S 26,63,603/- U/S 80IB OF THE ACT, AR ALSO FILED FORM NO. 10CCB AND A REVISED COMPUTATION OF TOTAL INCOME ALONG WITH THE LETTER. IT WAS STATED THAT THE CLAIM WAS OMITTED TO BE MADE IN THE RETURN OF INC OME FILED DUE TO BONAFIDE MISTAKE ON THE PART OF THE ACCOUNTA NT LOOKING AFTER THE INCOME-TAX MATTERS. 2.2. THE AO DID NOT ACCEPT THE CONTENTION OF THE ASSESS EE AND HELD THAT THE ASSESSEE SHOULD SATISFY THE ELIGIBILITY C ONDITIONS FOR BEING A SSI FOR EACH OF THE ASSESSMENT YEARS SO A TO BE ELIGIBLE TO CLAIM THE BENEFIT OF DEDUCTION U/S 80IB OF THE ACT. FURTHER, HE HELD THAT IN AY 2008-09 SIMILAR ISSUE OF ALLOWABILITY OF DEDUCTION U/S 80IB WAS DISCUSSED AT LENGTH AND REJECTED THE CLAIM OF THE ASSESSEE. FOLLOWING THE DECI SION IN 2008-09, THE AO DISALLOWED THE ASSESSEES CLAIM. 3. AGGRIEVED, ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A), WHO CONFIRMED THE ORDER OF ASSESSING OFFICER FOLLOWING THE DECISION OF THE CIT(A) 4, HYDERABAD FOR AY 200 8-09 IN ASSESSEES OWN CASE. 4. AGGRIEVED, ASSESSEE PREFERRED AN APPEAL BEFORE U S RAISING THE FOLLOWING GROUNDS OF APPEAL: ITA NO. 1598/HYD/2017 :- 3 -: 1. THE ORDER OF LEARNED CIT APPEALS-12 CONFIRMING THE ORDER OF THE ASSESSING OFFICER PASSED U/S.143(3) DENYING THE 80LB DEDUCTION IS AGAINST THE FACTS OF THE CASE AND PROV ISIONS OF LAW. 2. THE CIT-APPEALS AND ASSESSING OFFICER ERRED IN D ENYING THE CLAIM OF APPELLANT OF DEDUCTION U/S.8IB OF RS. 71,9 3,135/- ON THE SAME GROUND THAT THE APPELLANT IS NOT AN SSI (S MALL SCALE INDUSTRY). IN FACT THE APPELLANT NEED NOT BE AN SSI DURING THE IMPUGNED YEAR. 3. THE ASSESSING OFFICER AS WELL AS CIT APPEALS ERR ED ON RELYING ON THE ASSESSMENT OF PRECEDING YEAR IN WHIC H THE DEDUCTION U/S.80IB WAS DISALLOWED. HOWEVER THE APPE LLANT WENT IN APPEAL AGAINST THE ASSESSMENT ORDER OF THE SAID PRECEDING YEAR AND HON'BLE JURISDICTIONAL OF HIGH C OURT HAS ALLOWED THE APPEAL OF THE APPELLANT AND AS SUCH THE CLAIM OF DEDUCTION WAS ALLOWED. AS A COROLLARY, THE DEDUCTIO N CLAIMED FOR THIS ASSESSMENT YEAR OUGHT ALSO TO BE ALLOWED . 4. THE APPELLANT THEREFORE PRAYS FOR THE ALLOWANCE OF DEDUCTION CLAIMED U/S.80IB OF RS.71,93,135/- 5. CONSIDERED THE RIVAL SUBMISSIONS AND MATERIAL ON RECORD. WE FIND THAT THE ISSUE IN DISPUTE IS SQUARELY COVERED B Y THE DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT IN ASSESSEES OWN CASE IN ITTA MP NO. 223 OF 2014 IN ITTA NO. 389 OF 2013, DT. 02-08-2017, WHEREIN THE HONBLE COURT HELD AS U NDER: 19. THEREFORE, THE FAILURE OF THE LAW MAKERS TO WO RD SECTION 80IB(2) (III) OR 80IB (3) (II) IN THE SAME MANNER A S HAS BEEN DONE IN SECTION 80HHA (3), WOULD GO TO SHOW THAT THERE I S NO CONTINUED REQUIREMENT FOR AN ASSESSEE TO MAINTAIN T HE STATUS OF A SMALL SCALE INDUSTRIAL UNDERTAKING DURING THE ENTIRE PERIOD OF TEN YEARS. A CONDITION, WHICH IS NOT PRESCRIBED BY STATUTE, CANNOT BE READ IN TO IT BY THE ASSESSING OFFICER. U NFORTUNATELY, THE ASSESSING OFFICER READ THE DEFINITION OF THE EX PRESSION 'SMALL SCALE INDUSTRIAL UNDERTAKING' FOUND IN CLAUS E (G) OF SUB- SECTION (14) OF SECTION 80IB IN TO SECTION 80IB (2) , WHICH WAS NOT WARRANTED. AS WE HAVE POINTED OUT, SECTION 80IB (2) (III) HAS APPLICATION TO A SMALL SCALE INDUSTRIAL UNDERTA KING, ONLY IF IT MANUFACTURES ANY ITEM LISTED IN THE ELEVENTH SCH EDULE, OTHER THAN SUCH A PRESCRIPTION UNDER THE PROVISO, THE CON DITION DOES ITA NO. 1598/HYD/2017 :- 4 -: NOT EXTEND TO ANYTHING ELSE. THEREFORE, THE ASSESSE E IS ENTITLED TO SUCCEED. 5.1. RESPECTFULLY FOLLOWING THE SAID ORDER OF THE HON' BLE JURISDICTIONAL HIGH COURT, WE SET ASIDE THE ORDERS O F REVENUE AUTHORITIES AND DIRECT THE AO TO ALLOW THE ASSESSEES C LAIM OF DEDUCTION U/S 80IB OF RS. 26,63,603/- (WRONGLY MENTIO NED AS RS. 71,93,135/- IN THE GROUNDS OF APPEAL, THE AMOUNT O F WHICH PERTAINING TO AY 2008-09. ACCORDINGLY, THE GROUNDS RAI SED BY THE ASSESSEE ON THIS COUNT ARE ALLOWED. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 3 RD APRIL, 2019 SD/- SD/- (P. MADHAVI DEVI) (S. RIF AUR RAHMAN) JUDICIAL MEMBER ACCOUNTANT M EMBER HYDERABAD, DATED 3 RD APRIL, 2019 TNMM ITA NO. 1598/HYD/2017 :- 5 -: COPY TO : 1. M/S. SAWARIA PIPES PVT. LTD., HYDERABAD. C/O. R. JASRAJ & CO., ADVOCATES, 15-1-91/4/A/1, 2 ND FLOOR, PAPALAL PLAZA, OLD FEELKHANA, HYDERABAD. 2. THE INCOME TAX OFFICER, WARD-3(1), HYDERABAD. 3. CIT(APPEALS)-12, HYDERABAD. 4. PR.CIT-3, HYDERABAD. 5. D.R. ITAT, HYDERABAD. 6. GUARD FILE.