Khaitan Electricals Limited, Secunderabad V. DCIT., Circle-2(1), Hyderabad, Hyderabad

ITA 1850/HYD/2014

• Counselvise Citation: 185022514 RSA 2014
• Duration Of Justice: 8 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-08-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 05-08-2015
• Assessment Year: 2011-2012
• Appeal Filed On: 04-12-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K J RAO
• Keywords: Revised return
• Section: 80G

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B, HYDERABAD BEFORE SHRI P.M. JAGTAP, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA NO. 1850/HYD/2014 ASSESSMENT YEAR: 2011-12 KHAITAN ELECTRICALS LTD., HYDERABAD. PAN AAACK 5587B VS. DY. COMMISSIONER OF INCOME- TAX, CIRCLE 2(1), HYDERABAD (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI K.C. DEVDAS REVENUE BY : SHRI K.J. RAO DATE OF HEARING : 05-08-2015 DATE OF PRONOUNCEMENT : 12-08-2015 O R D E R PER SAKTIJIT DEY, J.M.: THIS APPEAL BY ASSESSEE IS DIRECTED AGAINST THE OR DER DATED 10/10/2014 OF LD. CIT(A) III, HYDERABAD FOR THE A Y 2011-12. 2. THOUGH ASSESSEE HAS RAISED IN TOTAL ELEVEN GROUN DS, BUT, THE BASIC GRIEVANCE OF ASSESSEE IS CONFINED TO DISALLOW ANCE OF ITS CLAIM OF DEDUCTION U/S 35(1)(II) OF THE ACT. 3. BRIEFLY THE FACTS ARE, ASSESSEE A COMPANY IS ENG AGED IN THE BUSINESS OF MANUFACTURING AND TRADING OF ELECTRIC F ANS, MOTORS, PUMPS, HOME APPLIANCES, CFL AND OTHER ELECTRICAL IT EMS. FOR THE AY UNDER CONSIDERATION, ASSESSEE FILED ITS RETURN OF I NCOME ON 29/09/2011 DECLARING TOTAL INCOME OF RS. 9,17,45,80 9. DURING THE ASSESSMENT PROCEEDING, AO NOTICED THAT AS PER THE C OMPUTATION OF INCOME, ASSESSEE HAS CLAIMED DEDUCTION U/S 80G TOWA RDS DONATION 2 ITA NO. 1850 /HYD/2014 KHAITAN ELECTRICALS LTD. GIVEN TO M/S VISION RESEARCH FOUNDATION OF AN AMOUN T OF RS. 30,10,000. HOWEVER, BEFORE HIM ASSESSEE FILED A LET TER STATING THAT THE SAID INSTITUTION IS APPROVED U/S 35(1)(II) OF T HE ACT, HENCE, ASSESSEE IS ENTITLED FOR DEDUCTION OF 175% OF THE D ONATION AMOUNTING TO RS. 52,67,500 AS PER SECTION 35(1)(II) INSTEAD O F SECTION 80G. IN SUPPORT OF ITS CLAIM, ASSESSEE ALSO SUBMITTED COPIE S OF THE RECEIPT FOR DONATION MADE AND NOTIFICATION ISSUED U/S 35(1)(II) IN FAVOUR OF DONEE INSTITUTION. AO, THOUGH, DID NOT DISPUTE THE FACT T HAT ASSESSEE HAD MADE DONATION AND ALSO DONEE IS AN APPROVED INSTITU TION U/S 35(1)(II), HOWEVER, HE REFUSED TO ACCEPT ASSESSEES CLAIM ON T HE GROUND THAT ASSESSEE ORIGINALLY HAS NOT CLAIMED THE DEDUCTION U /S 35(1)(II) BUT, HAS CLAIMED IT U/S 80G. HE FURTHER OBSERVED THAT AS ASSESSEE HAS FAILED TO FILE ANY REVISED RETURN CLAIMING DEDUCTIO N U/S 35(1)(II) AND HAS ONLY MADE SUCH CLAIM THROUGH A LETTER, SUBMITTE D IN COURSE OF ASSESSMENT PROCEEDING, DEDUCTION CLAIMED CANNOT BE ALLOWED. IN THIS CONTEXT, AO RELIED UPON THE DECISION OF THE HONBL E SUPREME COURT IN CASE OF GOETZE INDIA LIMITED V/S. CIT (284 ITR 323). BEING AGGRIEVED OF SUCH DISALLOWANCE, ASSESSEE PREFERRED APPEAL BEFORE LD. CIT(A). HOWEVER, LD. CIT(A) ALSO CONFIRMED THE DISALLOWANCE. 4. LD. AR SUBMITTED BEFORE US, WHEN AO DOES NOT DIS PUTE THE FACT THAT ASSESSEE IS ELIGIBLE TO CLAIM DEDUCTION U /S 35(1)(II) AT 175% OF THE DONATION MADE TO AN APPROVED INSTITUTIO N ASSESSEES CLAIM SHOULD NOT BE DISALLOWED ON MERE TECHNICALITI ES. 5. LD. DR, ON THE OTHER HAND, RELIED UPON THE REASO NING OF THE AO AND LD. CIT(A). 6. WE HAVE CONSIDERED THE SUBMISSIONS OF THE PARTIE S AND PERUSED THE ORDERS OF REVENUE AUTHORITIES AS WELL A S OTHER MATERIALS ON RECORD. UNDISPUTEDLY, IN THE COMPUTATI ON OF INCOME FILED ALONG WITH THE RETURN OF INCOME, ASSESSEE HAS CLAIMED DEDUCTION OF 50% OF DONATION MADE TO M/S VISION RES EARCH FOUNDATION IN TERMS WITH SECTION 80G OF THE ACT. H OWEVER, IN COURSE OF ASSESSMENT PROCEEDING, ASSESSEE HAS CLAIM ED BEFORE AO 3 ITA NO. 1850 /HYD/2014 KHAITAN ELECTRICALS LTD. THAT AS M/S VISION RESEARCH FOUNDATION IS AN APPROV ED INSTITUTION U/S 35(1)(II) OF THE ACT, ASSESSEE IS ELIGIBLE TO C LAIM DEDUCTION OF 175% OF THE AMOUNT DONATED TO THE INSTITUTION. TO S UBSTANTIATE ITS CLAIM, ASSESSEE HAS ALSO SUBMITTED COPIES OF RECEIP T AND NOTIFICATION ISSUED U/S 35(1)(II) OF THE ACT IN FAV OUR OF THE DONEE INSTITUTION. IT IS FURTHER EVIDENT FROM RECORD THA T NEITHER AO NOR LD. CIT(A) HAVE DISPUTED THE AFORESAID FACTUAL POSI TION. THE ONLY REASON FOR WHICH AO HAS DENIED ASSESSEES CLAIM OF DEDUCTION U/S 35(1)(II) IS, ASSESSEE HAS NOT CLAIMED SUCH DEDUCTI ON THROUGH A REVISED RETURN. FOR COMING TO SUCH CONCLUSION, AO R ELIED UPON THE DECISION IN CASE OF GOETZE INDIA LTD. (SUPRA). LD. CIT(A) ALSO CONFIRMED THE VIEW OF AO. ON CAREFUL ANALYSIS OF TH E DECISION OF HONBLE SUPREME COURT IN CASE OF GOETZE INDIA LTD. (SUPRA), IT IS VERY MUCH CLEAR THAT THE OBSERVATIONS MADE BY THE H ONBLE SUPREME COURT IS ONLY IN RESPECT OF POWERS OF AO IN COURSE OF ASSESSMENT PROCEEDING. THE HONBLE SUPREME COURT HA S MADE IT CLEAR THAT SUCH OBSERVATION DOES NOT IMPINGE UPON THE POWER OF TRIBUNAL U/S 254 OF THE ACT. THAT BEING THE CASE AN D FURTHER WHEN THERE IS NO CONTROVERSY WITH REGARD TO THE FACT THA T THE INSTITUTION TO WHICH ASSESSEE HAS MADE DONATION IS APPROVED U/S 35(1)(II) OF THE ACT, IN OUR VIEW, ASSESSEES CLAIM OF DEDUCTIO N UNDER THE SAID PROVISION DESERVES TO BE EXAMINED. IN VIEW OF THE A FORESAID, WE ARE INCLINED TO SET ASIDE THE IMPUGNED ORDER OF LD. CIT(A) AND REMIT THE MATTER BACK TO THE FILE OF AO TO EXAMINE ASSESSEES CLAIM OF DEDUCTION U/S 35(1)(II) IN STEAD OF SECTION 80G, AFTER VERIFYING THE EVIDENCES BROUGHT ON RECORD BY ASSESSEE. NEEDLE SS TO MENTION, AO MUST AFFORD REASONABLE OPPORTUNITY OF BEING HEAR D TO ASSESSEE IN THE MATTER. 4 ITA NO. 1850 /HYD/2014 KHAITAN ELECTRICALS LTD. 7. IN THE RESULT, APPEAL OF ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 12 TH AUGUST, 2015. SD/- SD/- (P.M. JAGTAP) (SAKTIJIT DEY) ACCOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DATED: 12 TH AUGUST, 2015 KV COPY TO:- 1) KHAITAN ELECTRICALS LTD., C/O LUHARUKA & ASSOCIA TES, CAS., 5-4-187/3 & 4, SOHAM MANSION, 2 ND FLOOR, MG ROAD, SECUNDERABAD 500 003. 2) DCIT, CIRCLE 2(1), HYDERABAD 3) CIT(A) III, HYDERABAD 4) CIT-II, HYDERABAD 5) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDE RABAD.