The DCIT, Circle-12, Ahmedabad V. M/s. Param Exports, Ahmedabad

ITA 1816/AHD/2009

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 6899 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 10 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-04-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 05-04-2011
• Assessment Year: 2000-2001
• Appeal Filed On: 29-05-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: U S BHATI
• Section: 143(3); 80HHC; 147; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL : B BENCH : AHMEDABAD (BEFORE HONBLE SHRI T.K. SHARMA, J.M. & HON' BLE SHRI N.S.SAINI, A.M . ) I.T.A. NO. 1816/AHD./2009 D.C.I.T., CIRCLE-12, AHMEDABAD -VS- M/S. PARAM EXPORTS, AHMEDABAD (PAN: AADFP 8404A) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI K. MADHUSUDAN, SR. D.R RESPONDENT BY : SHRI U.S. BHATI, A.R. O R D E R PER SHRI N.S.SAINI, ACCOUNTANT MEMBER : THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX-XX, AHMEDABAD DATED 30.03.2009. 2. THE REVENUE HAS TAKEN FIVE GROUNDS OF APPEAL AND THE SOLE ISSUE INVOLVED IN ALL THE GROUNDS OF APPEAL IS THAT THE LD. CIT(A) HAS ERRED IN LAW AND FACTS IN CANCELLING THE ORDER UNDER SECTION 154 PASSED BY THE ASSESSING OFFICER O N 16.01.2009 AND DIRECTING HIM TO GRANT DEDUCTION UNDER SECTION 80HHC AS ORIGINALLY ALLOWED VIDE ORDER UNDER SECTION 154 DATED 31.03.2008. 3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND MATERIALS AVAILABLE ON RECORD. IN THE INSTANT C ASE, THE ASSESSMENT WAS ORIGINALLY COMPLETED UNDER SECTION 143(3) READ WITH SECTION 14 7 ON 21.02.2002 DETERMINING TAXABLE INCOME AT RS.5,51,465/-, AFTER ALLOWING DEDUCTION U NDER SECTION 80HHC AT RS.1,06,90,435/-. 4. THE ASSESSING OFFICER, THEREAFTER, RECTIFIED THE ABOVE ORDER VIDE ORDER DATED 31.03.2008 PASSED UNDER SECTION 154 OF THE ACT AND SUCH RECTIFIED INCOME AMOUNTED TO RS.61,270/- ON THE BASIS OF PETITION FILED BY THE A SSESSEE WHEREIN IT WAS POINTED OUT THAT CORRECT DEDUCTION ADMISSIBLE UNDER SECTION 80HHC AM OUNTS TO RS.1,11,80,626/- AND DUE TO A CALCULATION ERROR IN THE ORIGINAL ASSESSMENT, SUCH DEDUCTION WAS ALLOWED AT RS.1,06,90,435/-. 2 ITA NO. 1816-AHD-2009 IT WAS OBSERVED BY THE ASSESSING OFFICER THAT IN TH E ORIGINAL ORDER OF ASSESSMENT, WHILE CALCULATING DEDUCTION ALLOWABLE UNDER SECTION 80HHC , ONLY 10% OF DEPB WAS TAKEN INTO CONSIDERATION WHEREAS, AS PER LAW, THE SAME SHOULD HAVE BEEN TAKEN AT 90% OF DEPB. 5. THEREAFTER, THE ASSESSING OFFICER AGAIN PASSED A N ORDER ON 16.01.2009 UNDER SECTION 154 OF THE ACT WHEREBY THE ASSESSING OFFICER ALLOWE D DEDUCTION UNDER SECTION 80HHC AT RS.1,06,90,435/- ONLY IN PLACE OF RS.1,11,80,626/- ALLOWED IN THE EARLIER 154 ORDER. THIS SECOND 154 ORDER PASSED BY THE ASSESSING OFFICER IS THE SUBJECT MATTER OF THE PRESENT APPEAL. 6. THE ASSESSING OFFICER ALLOWED DEDUCTION UNDER SE CTION 80HHC AT RS.1,06,90,435/- IN PLACE OF RS.1,11,80,626/- IN THIS ORDER ON THE GROU ND THAT DEDUCTION UNDER SECTION 80HHC CANNOT BE ALLOWED AT A HIGHER FIGURE THAN THE FIGUR E AT WHICH IT WAS CLAIMED BY THE ASSESSEE IN ITS RETURN OF INCOME. 7. IN THE INSTANT CASE, THE ASSESSEE IN ITS RETURN OF INCOME CLAIMED DEDUCTION UNDER SECTION 80HHC AT RS.1,06,90,435/- WHICH WAS FULLY A LLOWED AS DEDUCTION IN THE ORDER PASSED UNDER SECTION 143(3) OF THE ACT. THEREFORE, IN THE OPINION OF THE ASSESSING OFFICER (SUCCESSOR IN OFFICE), THE ALLOWANCE OF DEDUCTION UNDER SECTIO N 80HHC AT A HIGHER AMOUNT OF RS.1,11,80,626/- IN THE ORDER PASSED UNDER SECTION 154 ON 31.03.2008 BY THE PREDECESSOR ASSESSING OFFICER WAS A MISTAKE APPARENT FROM THE R ECORD, WHICH, HE RECTIFIED BY EXERCISING POWER WHICH WAS PURPORTEDLY AVAILABLE TO HIM UNDER SECTION 154 OF THE ACT. 8. ON APPEAL, THE LEARNED COMMISSIONER OF INCOME TA X(APPEALS) CANCELLED THE ORDER UNDER SECTION 154 DATED 16.01.2009 PASSED BY THE SU CCESSOR ASSESSING OFFICER BY FOLLOWING THE DECISION IN THE CASE OF CIT-VS- K. N. OIL INDUS TRIES REPORTED IN 142 ITR 13 (MP) WHEREIN IT WAS HELD THAT THE ASSESSING OFFICER IS SUPPOSED TO GRANT A DEDUCTION OF CORRECT AMOUNT, PROVIDED THE REQUIRED DETAILS FOR CALCULATING THE D EDUCTION ARE AVAILABLE ON RECORD. 9. BEFORE US, THE LD. D.R. SUBMITTED THAT THE ALLOW ANCE OF CLAIM AT A FIGURE MORE THAN THE AMOUNT AT WHICH IT WAS CLAIMED BY THE ASSESSEE IN T HE RETURN OF INCOME IS NOT LEGALLY PERMISSIBLE AND THEREFORE THERE WAS AN APPARENT ERR OR IN THE ORDER DATED 31.03.2008 PASSED 3 ITA NO. 1816-AHD-2009 UNDER SECTION 154 WHICH THE ASSESSING OFFICER JUSTI FIABLY RECTIFIED VIDE ORDER DATED 16.01.2009 PASSED UNDER SECTION 154 OF THE ACT. IN THE ABOVE SUBMISSION, HE PLACED RELIANCE ON THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF CIT-VS- SHELLY PRODUCTS (2003) 261 ITR 367 (SC) AND THE DECISION OF THE HON'BLE SU PREME COURT IN THE CASE OF GOETZE (INDIA) LTD. VS- CIT (2006) 284 ITR 323 (SC). 10. ON THE OTHER HAND, THE LD. A.R. SUPPORTED THE O RDER OF THE LD. CIT(A) AND SUBMITTED THAT THE ASSESSEE DULY CLAIMED DEDUCTION UNDER SECT ION 80HHC OF THE ACT IN THE RETURN OF INCOME AND ONLY A CALCULATION ERROR WHICH WAS EVIDE NT ON THE BASIS OF THE MATERIALS AVAILABLE ON RECORD WAS RECTIFIED BY THE ASSESSING OFFICER IN THE EARLIER 154 ORDER WHICH CANNOT BE SAID TO BE A MISTAKE OF FACT OR LAW, WHICH CAN BE RECTIF IED UNDER SECTION 154 OF THE ACT. 11. WE FIND THAT SECTION 154 EMPOWERS AN ASSESSING OFFICER TO RECTIFY AN APPARENT MISTAKE IN ANY ORDER PASSED BY HIM. THUS, THE ONLY CONDITION PRECEDENT FOR EXERCISING SUCH POWER IS EXISTENCE OF AN APPARENT ERROR AND IT IS I RRELEVANT WHETHER THE ERROR OR MISTAKE IS OF FACT OR OF LAW OR IS DUE TO ASSESSING OR DUE TO ANY OTHER REASON. FURTHER, WE DO NOT FIND ANY FORCE IN THE ARGUMENTS OF THE LD. D.R. THAT A CLAIM WHICH IS THOUGH ALLOWABLE TO THE ASSESSEE AS PER THE MANDATE OF LAW AT A HIGHER AMOUNT SHOULD BE OR CAN BE ALLOWED AT A LESSER FIGURE ONLY BECAUSE DUE TO SOME MISTAKE OR ERROR, THE ASSE SSEE HAS CLAIMED SUCH ALLOWABLE DEDUCTION AT A LESSER FIGURE. 12. IN OUR CONSIDERED VIEW, THE ASSESSING OFFICER H AS TO CALCULATE OR COMPUTE THE TOTAL INCOME OF THE ASSESSEE, AS PER THE PROVISIONS OF IN COME-TAX ACT AND IF ON THE BASIS OF MATERIALS AVAILABLE BEFORE THE ASSESSING OFFICER, T HE ASSESSEE IS ELIGIBLE FOR CERTAIN DEDUCTIONS AT A HIGHER FIGURE THAN THE FIGURE AT WH ICH THE ASSESSEE CLAIMED IN THE RETURN OF INCOME, THEN THE ASSESSING OFFICER IS DUTY-BOUND AN D OBLIGED BY THE LAW TO COMPUTE TOTAL INCOME CORRECTLY BY ALLOWING DEDUCTION ON THE CORRE CT FIGURE AT WHICH THE LAW PERMITS. 13. IN THE INSTANT CASE, IT IS NOT IN DISPUTE THAT ON THE BASIS OF MATERIALS AVAILABLE ON RECORD, THE ASSESSEE WAS ELIGIBLE FOR DEDUCTION UND ER SECTION 80HHC AT RS.1,11,80,626/- BUT FOR THE CLAIM OF LESSER FIGURE IN THE RETURN OF INC OME. ACCORDING TO ASSESSING OFFICER, SUCH 4 ITA NO. 1816-AHD-2009 LESSER AMOUNT CAN ONLY BE ALLOWED AS DEDUCTION TO T HE ASSESSEE. IN OUR CONSIDERED VIEW, THE ABOVE APPROACH OF THE ASSESSING OFFICER IS NOT TENA BLE. THE LD. D.R. RELIED UPON THE ORDER OF THE HON'BLE SUPREME COURT IN THE CASE OF SHELLY PRO DUCTS ( SUPRA ) WHEREIN IT WAS HELD AS UNDER: HOWEVER, FAILURE OR INABILITY OF THE REVENUE TO F RAME A FRESH ASSESSMENT SHOULD NOT PLACE THE ASSESSEE IN A MORE DIS-ADVANTAGEOUS POSI TION THAN HE WOULD HAVE BEEN IN IF A FRESH ASSESSMENT WERE MADE. IN A CASE WHERE THE ASSESSEE CHOOSES TO DEPOSIT, BY WAY OF ABUNDANT CAUTION, ADVANCE TAX OR TAX ON SEL F-ASSESSMENT WHICH IS IN EXCESS OF HIS LIABILITY ON THE BASIS OF THE RETURN FURNISHED OR, IF THERE IS AN ARITHMETICAL ERROR OR INACCURACY, IT IS OPEN TO THE ASSESSEE TO CLAIM RE FUND OF THE EXCESS TAX PAID IN THE COURSE OF THE ASSESSMENT PROCEEDINGS. HE CAN CERTA INLY MAKE SUCH A CLAIM BEFORE THE CONCERNED AUTHORITY CALCULATING THE REFUND. SIMILA RLY, IF THE ASSESSEE HAS, BY MISTAKE OR INADVERTENCE OR ON ACCOUNT OF IGNORANCE, INCLUD ED IN HIS INCOME ANY AMOUNT WHICH IS EXEMPTED FROM PAYMENT OF INCOME-TAX, OR IS NOT INCOME WITHIN THE CONTEMPLATION OF LAW, HE MAY LIKEWISE BRING THIS TO THE NOTICE OF T HE ASSESSING AUTHORITY, WHICH, IF SATISFIED, MAY GRANT HIM RELIEF AND REFUND THE TAX PAID IN EXCESS, IF ANY. SUCH MATTERS CAN BE BROUGHT TO THE NOTICE OF THE CONCERNED AUTH ORITY IN A CASE WHERE A REFUND IS DUE AND PAYABLE, AND THE AUTHORITY CONCERNED, ON B EING SATISFIED, SHALL GRANT APPROPRIATE RELIEF. IN CASES GOVERNED BY SECTION 2 40 OF THE ACT, AN OBLIGATION IS CAST UPON THE REVENUE TO REFUND THE AMOUNT TO THE ASSES SEE WITHOUT HAVING TO MAKE ANY CLAIM IN THAT BEHALF. IN APPROPRIATE CASES, THEREF ORE, IT IS OPEN TO THE ASSESSEE TO BRING THE FACTS TO THE NOTICE OF THE CONCERNED AUTHORITY ON THE BASIS OF THE RETURN FURNISHED, WHICH MAY HAVE A BEARING ON THE QUANTUM OF REFUND. AND THE CONCERNED AUTHORITY, FOR THE LIMITED PURPOSE OF CALCULATING THE AMOUNT OF R EFUND UNDER SECTION 240, MAY TAKE ALL SUCH FACTS INTO CONSIDERATION AND CALCULATE TH E AMOUNT TO BE REFUNDED. SINCE THIS IS THE POSITION UNDER SECTION 240 EVEN BEFORE PROVISO (B) WAS ADDED, PROVISO (B), ADDED WITH EFFECT FROM APRIL 1, 1989, IS ONLY DECLARATORY AND IS RETROSPECTIVE. 14. THUS, WE FIND THAT THE ABOVE DECISION DOES NOT SUPPORT THE CASE OF THE LD. D.R., RATHER IT SUPPORTS THE ORDER PASSED BY THE LEARNED COMMISS IONER OF INCOME TAX(APPEALS). 15. FURTHER THE LD. D.R. RELIED UPON YET ANOTHER DE CISION OF THE HON'BLE SUPREME COURT IN THE CASE OF GOETZE (INDIA) LTD. ( SUPRA ) IS ALSO NOT APPLICABLE IN THE INSTANT CASE AS IT WAS AN ADMITTED FACT THAT DEDUCTION UNDER SECTION 80HHC WA S CLAIMED BY THE ASSESSEE IN ITS RETURN OF INCOME AND IT IS NOT A CASE WHERE FOR THE FIRST TIME DEDUCTION UNDER SECTION 80HHC WAS CLAIMED BY THE ASSESSEE, IN THE COURSE OF ASSESSMEN T PROCEEDINGS, BY WAY OF A LETTER, WITHOUT 5 ITA NO. 1816-AHD-2009 AMENDMENT IN THE RETURN OF INCOME. THEREFORE, THE A BOVE DECISION IS NOT APPLICABLE FOR DECIDING THE ISSUE IN QUESTION. 16. MOREOVER, WE FIND THE ACTION OF THE ASSESSING O FFICER IN PASSING THE IMPUGNED ORDER DATED 16.01.2009 UNDER SECTION 154 TANTAMOUNTS TO R EVIEW OF THE EARLIER DECISION TAKEN BY THE PREDECESSOR ASSESSING OFFICER IN THE ORDER DATE D 31.03.2008. IT IS AN ESTABLISHED POSITION OF LAW THAT POWER OF REVIEW IS NOT AVAILABLE TO AN ASSESSING OFFICER AND THE SAME CANNOT BE EXERCISED IN THE GARB OF RECTIFICATION. WE, THEREFO RE, DO NOT FIND ANY MERIT IN THE APPEAL OF THE REVENUE. HENCE, THE SAME IS DISMISSED. THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) IS CONFIRMED. 17. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. THE ORDER SIGNED AND PRONOUNCED IN THE COURT ON 08.04.2011. SD/- SD/- (T.K. SHARMA) (N.S.SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 08/04/2011 COPY OF THE ORDER IS FORWARDED TO : 1) THE ASSESSEE 2) THE DEPARTMENT. 3) CIT(A.) CONCERNED, 4) CIT CONCERNED, 5) D.R., ITAT, AHMEDABAD. TRUE COPY BY ORDER DEPUTY REGISTRAR, I TAT, AHMEDABAD TALUKDAR/SR.P.S. 6 ITA NO. 1816-AHD-2009