M/s. Stanco Traders, Sivakasi V. ACIT, Virudhunagar

ITA 183/CHNY/2009

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 64588 (ITAT-CHENNAI)
• Duration Of Justice: 3 year(s) 9 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-11-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 06-11-2012
• Assessment Year: 2000-2001
• Appeal Filed On: 17-02-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANIRUDH RAI
• Assessee Lawyers: S SRIDHAR
• Keywords: Business income
• Section: 80HHC; 263; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, CHENNAI BEFORE SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER AND SHRI V. DURGA RAO, JUDICIAL MEMBER I.T.A. NO. 183/MDS/2009 (ASSESSMENT YEAR : 2000-01) M/S STANCO TRADERS, 132, PATTI STREET, SIVAKASI. PAN : AADFS3682F (APPELLANT) V. THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE I, VIRUDHUNAGAR. (RESPONDENT) APPELLANT BY : SHRI S. SRIDHAR, ADVOCATE RESPONDENT BY : SHRI ANIRUDH RAI, CIT-DR DATE OF HEARING : 6.11.2012 DATE OF PRONOUNCEMENT : 22.11.2012 O R D E R PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER : IN THIS APPEAL FILED BY THE ASSESSEE, IT ASSAILS AN ORDER DATED 28.2.2008 OF COMMISSIONER OF INCOME TAX-II, MADURAI , PASSED UNDER SECTION 263 OF INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT'). AS PER THE ASSESSEE, RE-COMPUTATION OF DEDUCTION UNDER SECTION 80HHC OF THE ACT, ATTEMPTED BY THE CIT, THROUGH THE PROCEEDINGS INITIATED UNDER I.T.A. NO. 183/MDS/09 2 SECTION 263 OF THE ACT, WAS NOT WARRANTED SINCE ASS ESSING OFFICER HAD IN THE ORIGINAL ORDER ITSELF COMPUTED DEDUCTION UNDER SECTION 80HHC CORRECTLY. 2. APPEAL HAS BEEN FILED WITH A DELAY OF 293 DAYS F OR WHICH A CONDONATION PETITION HAS BEEN FILED. LEARNED A.R. APPEARING FOR THE ASSESSEE SUBMITTED THAT THE DELAY IN FILING THE APP EAL WAS NEITHER WILLFUL NOR DELIBERATE. ACCORDING TO HIM, ASSESSEE , UPON RECEIVING ORDER OF CIT(APPEALS), HAD HANDED OVER THE SAME TO ITS CHARTERED ACCOUNTANT FOR ADVICE ON FURTHER ACTION. NEVERTHEL ESS, IT WAS ONLY AT THE TIME OF MEETING WITH HIM, THAT THE ASSESSEE CAM E TO BE INFORMED ABOUT THE REQUIREMENT OF FILING AN APPEAL AGAINST O RDER UNDER SECTION 263 OF THE ACT. AS PER LEARNED A.R., IMMEDIATELY, ON POINTING OUT THIS, ASSESSEE HAD GIVEN INSTRUCTION FOR FILING AN APPEAL AND THIS WAS DULY DONE. RELYING ON THE DECISION OF HONBLE APEX COUR T IN THE CASE OF COLLECTOR, LAND ACQUISITION V. KATIJI (167 ITR 471) , LEARNED A.R. SUBMITTED THAT A LIBERAL APPROACH HAD TO BE ADOPTED AND ON CONSIDERING THE REQUIREMENT OF RENDERING SUBSTANTIA L JUSTICE, DELAY HAD TO BE CONDONED. I.T.A. NO. 183/MDS/09 3 3. PER CONTRA, LEARNED D.R., STRONGLY OPPOSING THE PETITION FOR CONDONATION OF DELAY, SUBMITTED THAT ASSESSEE COULD NOT GIVE ANY EXPLANATION WHICH WAS REASONABLE. AS PER THE LEARN ED D.R., ASSESSEE HAD NOT STATED ON WHICH DATE IT HAD HANDED OVER THE ORDER OF THE CIT TO ITS CHARTERED ACCOUNTANT, NOR HAD GIV EN DATE ON WHICH ASSESSEE HAD ARRANGED A MEETING WITH THE PRESENT CO UNSEL. ACCORDING TO HIM, HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF MADHU DADHA V. ACIT (317 ITR 458) HAD HELD THAT WHE RE ASSESSEE HAD NOT GIVEN PARTICULARS OR DETAILS REGARDING THE DATES ON WHICH THE PAPERS WERE HANDED OVER TO THE COUNSEL FOR PREPARIN G THE APPEAL, DELAY HAD TO BE CONSIDERED AS DELIBERATE AND ASSESS EE COULD BE CONSIDERED GUILTY OF CULPABLE NEGLIGENCE. ACCORDIN G TO HIM, FACTS OF THE PRESENT CASE WERE ON ALL FOUR SQUARES WITH THE FACTS IN THE CASE OF MADHU DADHA (SUPRA). THEREFORE, HE SUBMITTED THAT THE DELAY WAS NOT TO BE CONDONED. 4. WE HAVE PERUSED THE PETITION FOR CONDONATION AN D HEARD THE COUNSELS. ASSESSEE HAS CLEARLY MENTIONED THAT ON R ECEIPT OF ORDER OF CIT, IT HAD HANDED OVER SUCH ORDER TO ITS CHARTERED ACCOUNTANT FOR ADVICE AND ALSO FOR FURTHER ACTION. LEARNED A.R. H AS ALSO MENTIONED THAT FIRST MEETING HE HAD WITH ASSESSEE WAS ARRANGE D IN FEBRUARY, I.T.A. NO. 183/MDS/09 4 2009, WHEREUPON HE HAD ADVISED THE ASSESSEE TO FILE AN APPEAL. ACCORDINGLY, APPEAL WAS FILED BY THE ASSESSEE. NO DOUBT, THERE IS A DELAY OF 293 DAYS, BUT IN OUR OPINION, AS HELD BY H ONBLE APEX COURT, A PRAGMATIC APPROACH HAS TO BE TAKEN WHEN CONSIDERI NG THE PRINCIPLE REQUIRING EXPLANATION FOR EVERYDAYS DELAY. THIS P RINCIPLE HAS TO BE APPLIED RATIONALLY. WE CANNOT SAY THAT THE CIRCUMS TANCES EXPLAINED BY THE LEARNED A.R. MENTIONED BEFORE US, WERE SUCH THAT IT COULD BE CONSIDERED DELIBERATE ON THE PART OF THE ASSESSEE O R A CULPABLE NEGLIGENCE COULD BE IMPUTED. THERE IS NO REASON TO DISBELIEVE THE STATEMENT MADE BY THE LEARNED A.R. THAT HE HAD ADVI SED THE ASSESSEE TO FILE AN APPEAL IN THE MEETING WITH HIM IN THE FIRST WEEK OF FEBRUARY, 2009, AND THERE WAS NO DELAY THEREAFTER. THEREFORE, WE ARE OF THE OPINION THAT WE CANNOT SAY THAT THE ASSE SSEE WAS GUILTY OF CULPABLE NEGLIGENCE WHICH WAS THERE IN THE CASE OF MADHU DADHA (SUPRA) BEFORE HONBLE JURISDICTIONAL HIGH COURT. WE, THEREFORE, CONDONE THE DELAY AND ADMIT THE APPEAL. 5. LEARNED A.R. ON THE MERITS OF THE ISSUE SUBMITTE D THAT IT WAS COVERED BY THE DECISION OF HONBLE APEX COURT IN TH E CASE OF ACG ASSOCIATES CAPSULES PVT. LTD. V. CIT (343 ITR 89). I.T.A. NO. 183/MDS/09 5 6. LEARNED D.R. FAIRLY ADMITTED THAT THE QUESTION R EGARDING APPLICATION OF EXPLANATION (BAA) TO SECTION 80HHC T O INTEREST, THAT IS WHETHER ON THE GROSS AMOUNT OR NET AMOUNT, ON MERIT S, WAS COVERED BY THE HONBLE APEX COURT MENTIONED SUPRA. 7. WE HAVE PERUSED THE ORDERS AND HEARD THE SUBMIS SIONS. ASSESSING OFFICER, DURING THE COURSE ORIGINAL ASSES SMENT WHILE COMPUTING DEDUCTION UNDER SECTION 80HHC OF THE ACT, CONSIDERED THE NET INTEREST RECEIPTS WHICH WERE TAKEN AS A PART OF THE BUSINESS INCOME WHILE EXCLUDING 90% UNDER EXPLANATION (BAA) TO SECTION 80HHC OF THE ACT. CIT WAS OF THE OPINION THAT GROS S INTEREST ALONE HAD TO BE CONSIDERED. INVOCATION OF REVISIONARY PO WERS UNDER SECTION 263 WAS FOR THIS PURPOSE. ISSUE WHETHER GR OSS INTEREST OR NET INTEREST WAS TO BE CONSIDERED FOR APPLICATION OF EX PLANATION (BAA) TO SECTION 80HHC STANDS DECIDED IN FAVOUR OF THE ASSES SEE BY VIRTUE OF THE DECISION OF HONBLE APEX COURT IN THE CASE OF A CG ASSOCIATES CAPSULES PVT. LTD. (SUPRA). THEREFORE, WE ARE OF TH E OPINION THAT THERE WAS NO ERROR IN THE ORDER OF THE A.O. WHICH WARRANT ED INVOCATION OF SECTION 263 OF THE ACT. WE HAVE NO HESITATION TO Q UASH THE ORDER OF THE CIT UNDER SECTION 263 OF THE ACT. I.T.A. NO. 183/MDS/09 6 8. IN THE RESULT, APPEAL FILED BY THE ASSESSEE STAN DS ALLOWED. THE ORDER WAS PRONOUNCED IN THE COURT ON THURSDAY, THE 22 ND OF NOVEMBER, 2012, AT CHENNAI. SD/- SD/- (V.DURGA RAO) (ABRAHAM P. GEORGE) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED THE 22 ND NOVEMBER, 2012. KRI. COPY TO: (1) APPELLANT (2) RESPONDENT (3) CIT-II, MADURAI (4) D.R. (5) GUARD FILE