M/s Shree Ganesh Concast Group of Industries, Kangra V. DCIT, Circle, Shimla

ITA 1716/CHANDI/2017

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 7564 (ITAT-CHANDIGARH)
• Duration Of Justice: 6 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-07-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 29-12-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANU MALIK
• Assessee Lawyers: AASHRE SARNA
• Keywords: Question of law
• Section: 10AA; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH B, CHANDIGARH BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND SHRI B.R.R.KUMAR, ACCOUNTANT MEMBER ITA NOS.1716 & 1717/CHD/2017 (ASSESSMENT YEARS : 2012-13 & 2013-14) M/S SHREE GANESH CONCAST GROUP VS. THE D.C.I.T., OF INDUSTRIES, INDUSTRIAL AREA CIRCLE SHIMLA. SANSARPUR TERRACE, DISTT. KANGRA(H.P.) PAN: ABGFS0856H (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI AASHRE SARNA RESPONDENT BY : SHRI MANU MALIK, CIT DR DATE OF HEARING :06.06.2018 DATE OF PRONOUNCEMENT :10.07.2018 ORDER PER SANJAY GARG, JUDICIAL MEMBER : BOTH THE ABOVE CAPTIONED APPEALS HAVE BEEN PREFERR ED BY THE ASSESSEE AGAINST THE SEPARATE ORDERS OF LD. COMMISSIONER OF INCOME TAX (APPEALS), PALAMPUR (HEREINAFTER REFERRED TO AS (LD.CIT(APPEALS) BOTH DATED 28.9.2017 PASSED U/S 250(6) OF THE INCOME TAX ACT , 1961 (IN SHORT THE ACT) IN APPEAL NOS. CIT(A) PALAMPUR/10127/15-16 AND CIT(A) PALAMPUR/10059/16-1 7 RELATING TO ASSESSMENT YEARS 2012-13 AND 2013-14 RESPECTIVELY. 2. SINCE IDENTICAL ISSUES HAVE BEEN RAISED IN BOTH THE APPEALS, THE SAME WERE HEARD TOGETHER AND ARE BEING DISPOSED OFF BY THIS CONSOLIDATED ORDER. 3. THE ASSESSEE IS AGGRIEVED WITH THE ACTION OF THE CIT(APPEALS) IN REJECTING THE APPLICATION MOVED BY THE ITA NOS.1716 & 1717/CHD/2017 AYS: 2012-13 & 2013-14 2 ASSESSEE FOR ADMITTING ADDITIONAL GROUND AND FURTHE R DENIAL OF CLAIM OF DEDUCTION TO THE ASSESSEE U/S 80IC OF T HE ACT. 4. AT THE OUTSET, THE LD. COUNSEL FOR ASSESSEE HAS INVITED OUR ATTENTION TO THE ASSESSMENT ORDER OF THE ASSESS ING OFFICER FOR THE YEAR UNDER CONSIDERATION AND HAS SU BMITTED THAT THE SAID ORDER OF THE ASSESSING OFFICER IS AN EX-PARTE ORDER PASSED U/S 144 OF THE ACT, WHEREIN THE ASSESS ING OFFICER HAS DENIED THE CLAIM OF EXEMPTION U/S 10AA OF THE ACT. THE LD. COUNSEL FOR ASSESSEE HAS FURTHER SUBMI TTED THAT IN FACT THE ASSESSEE WAS ENTITLED TO DEDUCTION UNDER THE PROVISIONS OF SECTION 80IC OF THE ACT. HOWEVER, THE ASSESSEE MISTAKENLY HAD CLAIMED EXEMPTION U/S 10AA OF THE ACT. THE LD. COUNSEL FOR ASSESSEE HAS FURTHER SUBMI TTED THAT THE ASSESSEE FIRM WAS RUNNING INTO HEAVY LOSSE S AND THE BANK HAD TAKEN POSSESSION OF THE ASSETS OF THE ASSESSEE AND THE PARTNERS OF THE ASSESSEE FIRM WERE IN A STA TE OF SHCK/DEPRESSION AND HENCE COULD NOT APPEAR BEFORE T HE ASSESSING OFFICER. FURTHER, THE JURISDICTION OF THE ASSESSING OFFICER WAS CHANGED WITHOUT NOTICE TO THE ASSESSEE. HENCE THE ASSESSEE COULD NOT APPEAR BEFORE THE ASSESSING OFFICER DURING THE ASSESSMENT PROCEEDINGS. FURTHER, INVITING OUR ATTENTION TO THE IMPUGNED OR DER OF THE CIT(APPEALS), THE LD. COUNSEL FOR ASSESSEE S UBMITTED THAT THE ASSESSEE HAD RAISED THE ABOVE PLEA THAT TH E ASSESSEE WAS ENTITLED TO THE DEDUCTION U/S 80IC OF THE ACT AND FURTHER THAT THE COPY OF FORM 3CB/10CCB WAS ALS O FILED BEFORE THE LD.CIT(APPEALS) AS AN ADDITIONAL E VIDENCE. ITA NOS.1716 & 1717/CHD/2017 AYS: 2012-13 & 2013-14 3 HOWEVER, THE LD.CIT(APPEALS) REJECTED THE ADDITIONA L EVIDENCE FILED BY THE ASSESSEE OBSERVING THAT THE A SSESSEE HAD NOT FILED THE AUDIT REPORT OR FORM 10CCB ONLINE/THROUGH INTERNET. THE LD. COUNSEL FOR ASSES SEE HAS FURTHER SUBMITTED THAT THE ASSESSEE HAS FULLY COMPL IED WITH ALL THE REQUIREMENTS. THAT NON-FILING OF THE AUDIT REPORT OR FORM 10CCB, BEFORE THE ASSESSING OFFICER, WAS NOT D UE TO ANY INTENTIONAL DEFAULT BUT WAS DUE TO AN INADVERTE NT MISTAKE. THE ASSESSEE HAS EXPLAINED THAT BECAUSE IT HAS MISTAKENLY CLAIMED DEDUCTION U/S 10AA OF THE ACT, H ENCE THE REQUIRED DOCUMENTS FOR CLAIMING THE SAID DEDUCT ION U//S 10AA OF THE ACT WERE FILED. THE LD. COUNSEL FO R ASSESSEE HAS SUBMITTED THAT THE ASSESSEE HAS ALREAD Y FILED THE REQUISITE DOCUMENTS REQUIRED U/S 80IC OF THE AC T. HE HAS FURTHER SUBMITTED THAT DUE TO DELAY IN FILING O F FORM 10CCB, WHICH WAS NOT INTENTIONAL BUT DUE TO ABOVE N OTED FACTS, THE LEGITIMATE CLAIM OF DEDUCTION OF THE ASS ESSEE SHOULD NOT BE DENIED TO THE ASSESSEE. 5. THE LD. DR, ON THE OTHER HAND, HAS CONTENDED THA T THERE IS CONSIDERABLE DELAY IN FILING FORM 10CCB AN D THAT THE CLAIM OF THE ASSESSEE AT THIS STAGE CANNOT BE ENTERTAINED. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. THE ASSESSEE IN THIS CASE, HAS EXPLAINED THE REASONS FO R NON- FILING OF FORM 10CCB AS HE HAD MISTAKENLY CLAIMED DEDUCTION U/D 10AA INSTEAD OF SECTION 80IC OF THE A CT. HOWEVER, THE ASSESSEE HAD FILED THE REQUISITE DOCUM ENTS ITA NOS.1716 & 1717/CHD/2017 AYS: 2012-13 & 2013-14 4 BEFORE THE LD.CIT(APPEALS) UNDER RULE 46A OF THE IN COME TAX RULES. IT HAS BEEN TIME AND AGAIN HELD THAT THE REVENUE AUTHORITIES SHOULD CHARGE LEGITIMATE TAX FROM THE T AX PAYEES. IF THE ASSESSEE IS, OTHERWISE, ENTITLED TO DEDUCTION UNDER ANOTHER PROVISIONS BUT HAD CLAIMED DEDUCTION UNDER THE WRONG PROVISION, A DUTY IS ALSO CAST UPON THE A SSESSING AUTHORITIES TO APPLY THE RELEVANT PROVISION WHILE C OMPUTING THE INCOME. EVEN THE LD.CIT(APPEALS), IN OUR VIEW, HAS FAILED TO EXERCISE HIS APPELLATE JURISDICTION U/S 2 50 OF THE ACT. AS PER THE PROVISIONS, A DUTY IS ALSO CAST UP ON THE LD. CIT(A) TO ADMIT AND CONSIDER THOSE EVIDENCES WHICH ARE RELEVANT FOR THE JUST AND PROPER DECISION OF THE CA SE AND GO TO THE ROOT OF THE CASE. THE HON'BLE BOMBAY HIGH CO URT IN THE CASE OF 'SMT. PRABHAVATI S.SHAH V. CIT' [(1998) 231 ITR 1 (BOM.)] HAS HELD THAT THE POWERS CONFERRED ON THE FIRST APPELLATE AUTHORITY UNDER SUB-SECTION (4) OF SECTIO N 250 OF THE ACT, BEING A QUASI-JUDICIAL POWER, IT IS INCUMB ENT ON HIM TO EXERCISE THE SAME, IF THE FACTS AND CIRCUMST ANCES JUSTIFY. EVEN OTHERWISE UNDER RULE 46A(4) OF THE INCOME TAX RULES, THE LD. CIT(APPEALS) HAS BEEN GIVEN POWER TO CALL FOR PRODUCTION OF ANY DOCUMENT OR THE EXAMINATION OF AN Y WITNESSES TO ENABLE HIM TO DISPOSE OF THE APPEAL. T HERE IS NO DOUBT ABOUT THE LEGAL POSITION THAT IF ANY DOCUM ENT FURNISHED BY THE ASSESSEE BEFORE THE LD. CIT(APPEAL S) IS IN THE NATURE OF CLINCHING EVIDENCE WHICH GOES TO THE ROOT OF ITA NOS.1716 & 1717/CHD/2017 AYS: 2012-13 & 2013-14 5 THE CASE THEN IN THE INTEREST OF JUSTICE SUCH TYPES OF EVIDENCE SHOULD NOT BE REJECTED. 7. FURTHER THE HON'BLE SUPREME COURT IN THE CASE OF NATIONAL THERMAL POWER CO. LTD. VS. CIT, 229 ITR 38 3 HAS HELD THAT THE TRIBUNAL IS NOT PREVENTED FROM CONSID ERING THE QUESTION OF LAW ARISING IN ASSESSMENT PROCEEDINGS T HOUGH NOT REACHED EARLIER. THE HON'BLE SUPREME COURT HEL D THAT THE TRIBUNAL HAS JURISDICTION TO EXAMINE A QUESTION OF LAW WHICH ARISES FROM THE FACTS AS FOUND BY THE AUTHORI TIES BELOW AND HAVING A BEARING ON THE TAX LIABILITY OF THE ASSESSEE. THE FULL BENCH OF THE HON'BLE BOMBAY HIGH COURT IN THE CASES OF 'AHMEDABAD ELECTRICITY COMPANY LTD. VS . CIT' AND 'GODAVARI SUGAR MILLS LTD. VS. CIT' BY WAY OF A COMMON ORDER DATED 30.04.1992 (1993) 199 ITR 351 HAS OBSER VED THAT THE BASIC PURPOSE OF AN APPEAL PROCEDURE IN AN INCOME TAX MATTER IS TO ASCERTAIN THE CORRECT TAX LIABILIT Y OF THE ASSESSEE IN ACCORDANCE WITH LAW. THEREFORE, AT BOTH THE STAGES, EITHER BY THE APPELLATE ASSISTANT COMMISSIO NER OR BEFORE THE APPELLATE TRIBUNAL, THE APPELLATE AUTHOR ITY CAN CONSIDER THE PROCEEDINGS BEFORE IT AND THE MATERIAL ON RECORD BEFORE IT FOR THE PURPOSE OF DETERMINING THE CORRECT TAX LIABILITY OF THE ASSESSEE. THE APPELLATE AUTHOR ITIES, OF COURSE, CANNOT TRAVEL BEYOND THE PROCEEDINGS AND EX AMINE NEW SOURCE OF INCOME, FOR THAT PURPOSE OTHER SEPARA TE REMEDIES ARE PROVIDED TO THE DEPARTMENT UNDER THE I NCOME TAX ACT. THE HON'BLE FULL BENCH OF THE BOMBAY HIGH COURT ITA NOS.1716 & 1717/CHD/2017 AYS: 2012-13 & 2013-14 6 OBSERVED THAT APART FROM THE ABOVE, THERE WAS NOTHI NG IN SECTION 254 OR SECTION 251, WHICH WOULD INDICATE TH AT THE APPELLATE AUTHORITIES ARE CONFINED TO CONSIDERING O NLY THE OBJECTIONS RAISED BEFORE THEM OR ALLOWED TO BE RAIS ED BEFORE THEM EITHER BY THE ASSESSEE OR BY THE DEPARTMENT, A S THE CASE MAY BE. THEY CAN CONSIDER THE ENTIRE PROCEEDIN GS TO DETERMINE THE TAX LIABILITY OF THE ASSESSEE. 8. THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF 'CI T VS. PRUTHVI BROKERS AND SHAREHOLDERS PVT. LTD.' (2012) 349 ITR 336 (BOM.) HAS OBSERVED THAT THE ASSESSEE IS ENTITL ED TO RAISE NOT MERELY ADDITIONAL LEGAL SUBMISSIONS BEFOR E THE APPELLATE AUTHORITIES, BUT IS ALSO ENTITLED TO RAIS E ADDITIONAL CLAMS BEFORE THEM. THE APPELLATE AUTHORITIES HAVE JURISDICTION TO DEAL NOT MERELY WITH ADDITIONAL GRO UNDS, WHICH BECAME AVAILABLE ON ACCOUNT OF CHANGE OF CIRCUMSTANCES OR LAW, BUT WITH ADDITIONAL GROUNDS W HICH WERE AVAILABLE WHEN THE RETURN WAS FILED. THE WORDS 'COULD NOT HAVE BEEN RAISED' MUST BE CONSTRUED LIBERALLY A ND NOT STRICTLY. THERE MAY BE SEVERAL FACTORS JUSTIFYING T HE RAISING OF A NEW PLEA IN AN APPEAL AND EACH CASE MUST BE CONSIDERED ON ITS OWN FACTS. 9. IN VIEW OF THE ABOVE DISCUSSION, WE SET ASIDE TH E ASSESSMENT ORDER AND THE ORDER OF THE CIT(APPEALS) AND RESTORE THE MATTER BACK TO THE FILE OF THE ASSESSIN G OFFICER FOR DE-NOVO ASSESSMENT INCLUDING CONSIDERATION OF C LAIM OF THE ASSESSEE FOR DEDUCTION U/S 80IC OF THE ACT. IT IS MADE CLEAR THAT THE DELAY IN FILING OF AUDIT REPORT/FORM ITA NOS.1716 & 1717/CHD/2017 AYS: 2012-13 & 2013-14 7 3CD/10CCB, ETC. WILL NOT BE A GROUND TO DENY THE DE DUCTION TO THE ASSESSEE. NEEDLESS TO SAY THAT THE ASSESSEE WILL PARTICIPATE IN THE ASSESSMENT PROCEEDINGS AND FURNI SH THE REQUISITE DETAILS TO THE ASSESSING OFFICER AND THE ASSESSING OFFICER WILL GIVE PROPER OPPORTUNITY OF HEARING/PRE SENTATION OF HIS CASE TO THE ASSESSEE. 10. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON SD/- SD/- (B.R.R. KUMAR) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 10 TH JULY, 2018 *RATI* COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. THE CIT 5. THE DR ASSISTANT REGISTRAR, ITAT, CHANDIGARH