DEPUTY COMMISSIONER OF INCOME TAX, JAIPUR V. M/S BHAGWATI HOTELS & RESORTS LTD., JAIPUR

ITA 174/JPR/2018

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 6203 (ITAT-JAIPUR)
• Duration Of Justice: 1 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-04-2018
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2014-2015
• Appeal Filed On: 07-02-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SEEMA MEENA
• Assessee Lawyers: P C PARWAL CA DHK

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH FOT; IKY JKO] U;KF;D LNL; ,OA JH FOE FLAG ;KN O] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM AND SHRI VIKRAM SIN GH YADAV, AM VK;DJ VIHY LA-@ ITA NO. 174/JP/2018 FU/KZKJ.K O'K Z@ ASSESSMENT YEARS : 2014-15 DY. COMMISSIONER OF INCOME TAX, CIRCLE-4, JAIPUR. CUKE VS. M/S BHAGWATI HOTELS & RESORTS LTD., F-214, ROAD NO. 10, VKI AREA, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AABCB 9972 G VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT JKTLO DH VKSJ LS@ REVENUE BY : SMT. SEEMA MEENA (JCIT) FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI P.C. PARWAL (CA) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 04.04.2018. ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 05/04/2018. VKNS'K@ ORDER PER: VIKRAM SINGH YADAV, AM THE APPEAL IS FILED BY THE REVENUE AGAINST THE ORD ER OF LD. CIT(A)-2, JAIPUR DATED 29.11.2017 FOR THE A.Y. 2014-15 WHEREI N THE REVENUE HAS CHALLENGED THE ACTION OF THE LD. CIT(A) IN DELETING THE DISALLOWANCE OF DEDUCTION U/S 80IA IGNORING THE PROVISION OF SECTIO N 80AC AND 80IA(7) WHEREIN THE ASSESSEE WAS MANDATORY REQUIRED TO FILE THE AUDIT REPORT IN FORM NO. 10CCB ELECTRONICALLY ON OR BEFORE THE DUE DATE OF FILING THE RETURN OF INCOME. 2. BRIEFLY, THE FACTS OF THE CASE ARE THAT THE ASSE SSEE COMPANY WAS ENGAGED IN THE ACTIVITY OF POWER GENERATION AND DIS TRIBUTION AND ITS PROJECT 2 ITA NO. 174/JP/2018. M/S BHAGWATI HOTELS & RESORTS LTD., JAIPUR. WAS RUNNING AT SODAMADA, JAISALMER FROM THE FINANCI AL YEAR 2003-04 AND DURING THE YEAR UNDER CONSIDERATION, DEDUCTION U/S 80-IA(4)(IV) HAS BEEN CLAIMED FOR THE FIRST TIME AMOUNTING TO RS. 56,74,5 56/-. THE ASSESSING OFFICER OBSERVED THAT IN TERMS OF PROVISION OF SECTION 80IA (7) READ WITH SUB RULE (2) OF RULE 12 OF THE INCOME TAX RULES, THE ASSESSEE CO MPANY WAS REQUIRED TO FURNISH THE AUDIT REPORT IN FORM NO. 10CCB ELECTRON ICALLY ALONG WITH THE RETURN OF INCOME AND GIVEN THAT THE ASSESSEE HAS NOT COMPL IED WITH THE SAME, THE DEDUCTION CLAIM U/S 80IA AMOUNTING TO RS. 56,74,556 /- WAS DENIED TO THE ASSESSEE COMPANY. 3. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD. CIT(A) AND IT WAS SUBMITTED THAT THE ONLY DEFAU LT ON THE PART OF THE ASSESSEE IS THAT IT HAS NOT FILED THE AUDIT REPORT ELECTRONICALLY BUT THERE IS NO DISPUTE AS TO THE FACT THAT THE ASSESSEE HAS OBTAIN ED THE AUDIT REPORT BEFORE THE DUE DATE AND FILED THE AUDIT REPORT MANUALLY B EFORE THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND IT IS THUS ELIGIBLE TO CLAIM DEDUCTION UNDER SECTION 80IA OF THE ACT. IT WAS FU RTHER SUBMITTED THAT THIS BEING THE FIRST YEAR FOR CLAIM OF DEDUCTION U/S 80I A AND FURNISHING THE AUDIT REPORT IN FORM 10CCB, THE AMENDMENT RELATING TO FIL ING OF THE AUDIT REPORT ELECTRONICALLY HAS MISSED THE ATTENTION OF THE ASSE SSEE COMPANY. 3 ITA NO. 174/JP/2018. M/S BHAGWATI HOTELS & RESORTS LTD., JAIPUR. 4. THE LD. CIT(A) REFERRED TO DECISION OF THE CO-OR DINATE BENCH IN CASE OF KHETAN TILES PVT. LTD. ITA NO. 353 & 505/JP/2017 DA TED 09.08.2017 WHEREIN IT WAS HELD THAT WHILE FILING OF THE AUDIT REPORT IS M ANDATORY, THE FURTHER CONDITION THAT IT SHOULD BE FILED WITH THE RETURN O F INCOME IS DIRECTORY IN NATURE AND SO LONG AS THE AUDIT REPORT HAS BEEN FILED DURI NG THE COURSE OF ASSESSMENT PROCEEDINGS, SUBSTANTIAL COMPLIANCE HAS BEEN MADE BY THE ASSESSEE COMPANY. DRAWING SUPPORT FROM THE SAID DEC ISION AND SUBMISSIONS FILED BY THE ASSESSEE COMPANY, THE LD. CIT(A) HAS A LLOWED THE CLAIM OF DEDUCTION U/S 80IA OF THE ACT. 5. DURING THE COURSE OF HEARING, THE LD. AR REITERA TED THE SUBMISSIONS AS MADE BEFORE THE LD. CIT(A) AND ALSO RELIED ON THE D ECISION OF THE CO-ORDINATE BENCH IN THE CASE OF KHETAN TILES PVT. LTD (SUPRA). PER CONTRA, LD. D/R RELIED ON THE PROVISION OF SECTION 80IA(7) READ WITH RULE 12(2) AND SUBMITTED THAT THE ASSESSEE COMPANY WAS MANDATORY REQUIRED TO FILE THE AUDIT REPORT ELECTRONICALLY BEFORE THE SPECIFIED DUE DATE OF FIL E OF THE RETURN OF INCOME AND SINCE IT HAS FAILED TO COMPLY WITH THE SAME, THE AO HAS RIGHTLY DENIED THE CLAIM OF DEDUCTION U/S 80IA OF THE ACT. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PURSUED THE MATERIAL AVAILABLE ON RECORD. IT IS NOTED THAT THIS IS THE FIRST YEAR OF CLAIM OF DEDUCTION UNDER SECTION 80IA BY THE ASSESSEE COMPANY AND THE AO HAS STATED IN THE 4 ITA NO. 174/JP/2018. M/S BHAGWATI HOTELS & RESORTS LTD., JAIPUR. ASSESSMENT ORDER THAT DESPITE THE ASSESSEE CLAIMING DEDUCTION U/S 80IA, COPY OF THE AUDIT REPORT REQUIRED UNDER SECTION 80IA(7) WAS NOT FILED ALONG WITH THE REPLY DATED 8.9.2015. THE AO THEREAFTER REFERS TO THE PROVISION OF SECTION 80IA(7) AND RULE 12(2), AND HELD THAT THE ASSESSEE HAS NOT COMPLIED WITH THE RELEVANT PROVISIONS OF INCOME TAX AND HAS NOT FILED THE AUDIT REPORT IN FORM 10CCB ELECTRONICALLY ALONG WITH THE RETURN OF INCOM E AND NO EXPLANATION IN THIS REGARD HAS BEEN FILED INSPITE OF ASSESSEE BEIN G ASKED TO CLARIFY DURING THE COURSE OF ASSESSMENT PROCEEDINGS. THE AO THEREAFTE R HELD THAT THE ASSESSEE HAS MADE FALSE DEDUCTION U/S 80IA WITHOUT FILING AN Y AUDIT REPORT IN FORM 10CCB. IN LIGHT OF THE SAID FINDINGS OF THE AO, IT IS CLEAR THAT THE ASSESSEE HAS NOT FILED THE AUDIT REPORT ELECTRONICALLY. HOWEVER , IT IS NOT CLEAR AS TO WHETHER THE ASSESSEE HAS FILED THE AUDIT REPORT IN FORM 10C CB EVEN MANUALLY DURING THE COURSE OF ASSESSMENT PROCEEDINGS BASED ON WHAT THE AO HAS STATED INITIALLY IN THE ASSESSMENT ORDER. THOUGH THE ASSE SSEE HAS STATED BEFORE THE LD CIT(A) THAT AUDIT REPORT HAS BEEN FILED MANUALLY DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THERE IS NO FINDING OF THE LD CIT(A) IN THIS REGARD. BEFORE US, THE LD AR HAS AGAIN REITERATED THE SAID CONTENTIONS, HOWEVER, THERE IS NOTHING ON RECORD TO SUPPORT THE SAID CONTENTION S IN TERMS OF FILING OF THE AUDIT REPORT MANUALLY BEFORE THE AO. FURTHER, WE F IND THAT THE AO HAS STATED THAT THE ASSESSEE HAS CLAIMED FALSE DEDUCTION UNDER SECTION 80IA WITHOUT FILING THE AUDIT REPORT, IT SEEMS THAT IN ABSENCE O F SUCH A REPORT, THE AO HAS HAD NO OCCASION TO EXAMINE THE SATISFACTION OF OTHE R CONDITIONS FOR CLAIM OF 5 ITA NO. 174/JP/2018. M/S BHAGWATI HOTELS & RESORTS LTD., JAIPUR. DEDUCTION UNDER SECTION 80IA, BEING THE FIRST YEAR OF CLAIM OF SUCH DEDUCTION. THE LD AR HAS STATED AT THE BAR THAT THERE IS NO DI SPUTE THAT THE ASSESSEE IS ELIGIBLE TO CLAIM SUCH DEDUCTION AND IN THE SUBSEQU ENT YEARS, THE REVENUE HAS ACCEPTED THE SAID CLAIM OF THE ASSESSEE COMPANY AND HAS ALLOWED THE DEDUCTION SO CLAIMED BY THE ASSESSEE COMPANY. WE T HEREFORE DEEM IT APPROPRIATE TO REMAND THE MATTER TO THE FILE OF THE AO. WHERE THE AO DETERMINES THAT THE AUDIT REPORT IN FORM 10CCB HAS BEEN FILED MANUALLY DURING THE COURSE OF ASSESSMENT PROCEEDINGS, NON-FI LING OF SUCH A REPORT ELECTRONICALLY IS ONLY A TECHNICAL BREACH AND THE S AME ON A STANDALONE BASIS CANNOT BE A BASIS FOR DENIAL OF DEDUCTION UNDER SEC TION 80IA OF THE ACT. FURTHER, REGARDING OTHER CONDITIONS OF ELIGIBILITY FOR CLAIM OF DEDUCTION UNDER SECTION 80IA, WHERE THE AO DETERMINES THAT THE ASSE SSEE HAS BEEN ALLOWED THE CLAIM OF SUCH DEDUCTION IN THE SUBSEQUENT YEARS AFTER DUE EXAMINATION, THE AO SHALL ALLOW THE SAME FOR THE IMPUNGED ASSESS MENT YEAR. OTHERWISE, THE AO SHALL EXAMINE THE ELIGIBILITY CONDITIONS AND FULFILLMENT THEREOF BY THE ASSESSEE AND DETERMINE THE CLAIM OF DEDUCTION AS PE R LAW. WITH THE ABOVE DIRECTIONS, THE MATTER IS SET-ASIDE TO THE FILE OF THE AO. THE GROUND OF APPEAL IS THUS ALLOWED FOR STATISTICAL PURPOSES. THE APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICA L PURPOSES. 6 ITA NO. 174/JP/2018. M/S BHAGWATI HOTELS & RESORTS LTD., JAIPUR. ORDER PRONOUNCED IN THE OPEN COURT ON 05/04/2018. SD/- SD/- ( JH FOT; IKY JKO ) ( FOE FLAG ;KNO ( VIJAY PAL RAO) (VIKRAM SINGH YADAV) U;KF;D LNL; / JUDICIAL MEMBER YS[KK LNL; /ACCOUNTANT MEMBER JAIPUR DATED:- 05/04/2018. POOJA/ VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT- DY. COMMISSIONER OF INCOME-TAX, C IRCLE-4, JAIPUR. 2. THE RESPONDENT M/S BHAGWATI HOTELS & RESORTS L TD., JAIPUR. 3. THE CIT. 4. THE CIT (4), 5. THE DR, ITAT, JAIPUR 6. GUARD FILE (ITA NO. 174/JP/2018) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR