Clevus Lifesciences , Parwanoo V. DCIT, Circle, Parwanoo

ITA 19/CHANDI/2018

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 4973 (ITAT-CHANDIGARH)
• Duration Of Justice: 4 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-05-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 02-05-2018
• Assessment Year: 2013-2014
• Appeal Filed On: 05-01-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Condonation of delay; Bonafide mistake
• Section: 10B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH A, CHANDIGARH BEFORE MS. DIVA SINGH, JUDICIAL MEMBER AND MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA NO. 19/CHD/201 8 ASSESSMENT YEAR: 2013-14 M/S CLEVUS LIFESCIENCES, VS. THE DCIT, KHASRA NO. 501, VILL. KAMLI, CIRCLE, SECTOR-6, PARWANOO, DISTT-SOLAN(HP). PARWANOO. PAN NO. : AAFFC4920L (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SURINDER BABBAR, CA RESPONDENT BY : SMT. CHANDERKANTA, ADDL. CIT DATE OF HEARING : 02.05.2018 DATE OF PRONOUNCEMENT : 09.05.2018 ORDER PER DIVA SINGH THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE A SSAILING THE CORRECTNESS OF THE ORDER DATED 25.04.2017 OF CIT-(A) SH IMLA PERTAINING TO 2013-14 ASSESSMENT YEAR. 2. HOWEVER, BEFORE ADDRESSING THE ISSUE RAISED BY THE AS SESSEE IN THE PRESENT APPEAL, IT IS APPROPRIATE TO NOTE THAT REGISTRY H AS POINTED OUT A DELAY OF 189 DAYS IN THE FILING OF THE PRESENT APPEAL. 2.1 ADDRESSING THE DELAY LD. AR INVITING ATTENTION TO THE A PPLICATION FOR CONDONATION OF DELAY AVAILABLE ON RECORD SUPPORTED BY AN AFFIDAVIT FILED BY THE LD. AR HIMSELF SUBMITTED THAT THE DELAY HAS OCCURR ED ON ACCOUNT OF THE FACT THAT THOUGH HE HAD RECEIVED A DULY SIGNED A PPEAL FROM THE ASSESSEE, HIS OFFICE PUT IT IN HIS FOLDER. THE COUNSEL REMAINED UNDER THE MISTAKEN IMPRESSION THAT IT HAD BEEN FILED AND ONLY WHEN T HE FOLDER WAS BEING SORTED ON A LATER DATE, IT WAS NOTICED THAT THE S IGNED APPEAL HAD REMAINED THEREIN. THE DELAY, IT WAS STATED HAS OCCURRED ON ACCOUNT OF THIS INADVERTENT MISTAKEN AT HIS LEVEL BY HIS OFFICE. THESE S UBMISSIONS IN THE APPLICATION AND ALSO IN THE AFFIDAVIT WERE HEAVILY RELIED UPON. ACCORDINGLY, IT WAS HIS PRAYER THAT DELAY MAY BE CONDONED. 2.2. THE LD. SR.DR CONSIDERING THE CONDONATION OF DELAY APPLICA TION AND THE AFFIDAVIT STATED THAT SHE HAS NO OBJECTION IF THE DELAY IS CONDONED. ITA 53/CHD/2018 A.Y. 2014-15 2 2.3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IT IS SEEN THAT THE LD. AR HAS PLA CED THE FOLLOWING AFFIDAVIT ON RECORD : 1. THAT I AM A PRACTICING CHARTERED ACCOUNTANT AT P ARWANOO AND ALL THE ACCOUNTS AND OTHER INCOME TAX MATTERS INCLUDING THE INCOME TAX APPEALS OF M/S CLEVUS LIFESCIENCES SITUATED AT PARWANOO, ARE HANDLED BY ME. 2. THAT INCOME TAX APPEAL IN RESPECT OF THE AFORE MENTIONED ASSESSEE FOR THE ASSESSMENT YEAR 2013-14 AGAINST THE ORDER OF LEARNED CIT(A), SHIMLA WAS PREPARED AND SENT FOR THE SIGNATURES OF ONE OF THE PARTNERS OF THE FIRM ON 22.06.2017 3. THAT I, THE ABOVE NAMED DEPONENT, RECEIVED BAC K THE DULY SIGNED APPEAL AND ONE OF MY STAFF MEMBER (MR. ANIL KUMAR TOMAR) PUT THE APPEAL PAPERS IN THE FOLDER OF THE ASSESSEE AND I WAS UNDER THE IMPRESSION THAT THE SAME HAS SINCE BEEN F ILED/DISPATCHED BEFORE THE HON'BLE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH. 4. THAT NOW, I CHECKED THE FOLDER OF THE ASSESSE E FOR SOME OTHER WORK AND FOUND THAT THE APPEAL DOCUMENTS ARE LYING IN THE SAME AND HAVE NOT BEEN F ILED BEFORE THIS HON'BLE COURT. 5. THAT WHATEVER DELAY HAS OCCURRED, IT IS DUE TO M ISTAKE ON THE PART OF THE UNDERSIGNED STAFF. THEREFORE, IT IS PRAYED THAT WHATEVER PREJUD ICE HAS BEEN CAUSED TO THE APPELLANT M/S CLEVUS LIFESCIENCES, IS DUE TO THE BONAFLDE MISTAKE OF THE UNDERSIGNED FOR WHICH THE APPELLANT SHOULD NOT SUFFER AND CONDONING THE DELAY IN FILING THE APPEAL WILL NOT CAUSE ANY PREJUDICE TO THE 'REVENUE' AND FURTHER WILL SERVE THE CAUSE OF JUSTICE AND MEET TH E ENDS OF JUSTICE, BECAUSE AS ON DATE THE ISSUE OF SUBSTANTIAL EXPANSION I.E. THE ISSUE UNDER APPEAL H AS BEEN DECIDED BY THE HON'BLE HIMACHAL PRADESH HIGH COURT, SHIMLA IN THE FAVOUR OF THE APP ELLANT ASSESSEE IN THE LEAD CASE OF 'STOVEKRAFT INDIA VS. CIT, ITA NO. 20 OF 2015 DATED 28.11.2017. 2.3.1 ON CONSIDERATION OF THE PECULIAR FACTS AND CIRCUMSTANC ES OF THE CASE WHICH HAVE BEEN ARGUED AND SET OUT IN THE ABOVE AFFIDAVIT WHEREIN THE MISTAKE ADMITTEDLY HAS OCCURRED AT THE OFFICE OF THE COUNSEL, WE SEE NO GOOD REASON WHY THE ASSESSEE IN THE PECULIAR FACTS S HOULD SUFFER ON ACCOUNT OF THE MISTAKE OF THE COUNSEL OR HIS OFFICE STAFF. WE FURTHER TAKE NOTE OF THE FACT THAT BY LATE FILING OF THE PRESENT APPEAL, NO ADVANTAGE HAS BEEN DERIVED BY THE ASSESSEE OR CONVERSELY NOR HAS T HE REVENUE BEEN PUT TO ANY DISADVANTAGE BY THE LATE FILING OF THE APPEAL BY T HE ASSESSEE. WE ALSO NOTE THAT IT CANNOT ALSO BE SAID THAT ON ACCOUNT O F LATE FILING OF THE APPEAL BY THE ASSESSEE EVEN IF INADVERTANTLY ANY VESTE D RIGHT STOOD CREATED IN FAVOUR OF THE REVENUE WHICH WOULD STAND DISTUR BED IF THE DELAY IS CONDONED. ACCORDINGLY, BEING SATISFIED BY THE GENU INENESS OF THE CLAIM AND THE BONAFIDE MISTAKE OF THE COUNSEL, THE DELAY IS C ONDONED. ORDERED ACCORDINGLY. SAID ORDER WAS PRONOUNCED IN THE O PEN COURT BEFORE THE PARTIES AT THE TIME OF HEARING ITSELF AND THE P ARTIES CONSEQUENTLY WERE DIRECTED TO ARGUE THEREAFTER THE APPEAL O N MERITS. 3. IT WAS A COMMON STAND OF THE PARTIES BEFORE THE B ENCH THAT THE POINT AT ISSUE RAISED BY THE ASSESSEE IN THE PRESENT PROCEEDINGS IS FULLY COVERED BY THE DECISION DATED 28.11.2017 OF THE HONBLE HIGH COURT DATED 28/11/2017 IN THE CASE OF M/S STOVE CRAFT INDIA VERSUS CIT- V AND OTHERS IN ITA 20 TO 24/2015. THE SPECIFIC GROUNDS READ AS UNDER : ITA 53/CHD/2018 A.Y. 2014-15 3 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CAS E, THE ORDER PASSED BY THE LD. A.O. AND THE LD. CIT (A) IN CONCURRENCE WITH THAT OF THE LD. A.O. IS WRONG, AGAINST FACTS AND LAW. 2. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE , LD. COMMISSIONER OF INCOME-TAX (APPEALS), SHIMLA, HAS IN CONCURRENCE WITH THE LD. A.O., GROSSLY ERRED IN NOT ALLOWING 100% DEDUCTION UNDER S. 80IC AFTER THE FIRST SUBSTANTIAL EXPANSION UNDERTAKEN BY THE A SSESSEE BY TREATING THE YEAR UNDER CONSIDERATION AS THE 6 TH YEAR OF SUCH CLAIM AND ALLOWING 25% DEDUCTION ON T HE PROFITS DERIVED FROM THE INDUSTRIAL UNDERTAKING RESULTING IN A DISALLOWANCE OF' 1,42,38,250/-. 3. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE , LD. COMMISSIONER OF INCOME-TAX (APPEALS), SHIMLA, HAS GROSSLY ERRED IN CONCURRENCE WITH THE LD. A.O. IN I NTERPRETING THE PROVISIONS OF SUBSTANTIAL EXPANSION AND DEFINING THE INITIAL ASSESSMENT YEAR UNDER S. 80IC OF THE INCOME-TAX ACT, 1961. 4. WE HAVE HEARD THE SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE RELEVANT FACTS OF THE CASE ARE THE AS SESSEE COMPANY WAS ENGAGED IN THE MANUFACTURING OF THE MEDICINES I.E. TA BLETS, CAPSULES AND DRY SYRUP. THE ASSESSEE STARTED ITS MANUFACTURING ACTIV ITY ON 24.09.2007. HUNDRED PERCENT DEDUCTION UNDER SECTION 80-IC OF TH E ELIGIBLE PROFITS FOR 5 YEARS STARTING FROM 2008-09 TO 2012-13 ASSESSMENT YEARS HAD ALREADY BEEN CLAIMED BY THE ASSESSEE. THE CLAIM OF 100% DE DUCTION OF ELIGIBLE PROFITS ON THE PLEA THAT THE ASSESSEE HAD CARRIED O UT SUBSTANTIAL EXPANSION IN THE YEAR UNDER CONSIDERATION WAS NOT ALLOWED BY THE AO. HE RESTRICTED THE CLAIM TO 25% AS THE YEAR BEING THE 6 TH YEAR OF PRODUCTION. THE ORDER OF THE AO WAS UPHELD BY THE CIT(A) RELYING UP ORDER OF THE ITAT IN THE CASE OF M/S HYCRON ELECTRONICS VS ITO, BADDI ITA NO. 326/CHD/2 015. IT IS SEEN THAT THE JURISDICTIONAL HIGH COURT IN THE AFORESAID DE CISION HAS CONSIDERED THE FACTS OF THE SPECIFIC CASE IN PARA 5 1 AND CONSIDERING THE SAME CAME TO THE FOLLOWING CONCLUSION:- 55. THUS, IN VIEW OF THE ABOVE DISCUSSION, THESE AP PEALS ARE ALLOWED AND ORDERS PASSED BY THE ASSESSMENT OFFICER AS WELL AS THE APP ELLATE AUTHORITY AND THE TRIBUNAL IN THE CASE OF EACH ONE OF THE ASSESSEES, ARE QUASHED AND SET ASIDE, HOLDING AS UNDER: (A) SUCH OF THOSE UNDERTAKINGS OR ENTERPRISES WHICH WER E ESTABLISHED, BECAME OPERATIONAL AND FUNCTIONAL PRIOR TO 07/01/20 03 AND HAVE UNDERTAKEN SUBSTANTIAL EXPANSION BETWEEN 07/01/2003 UPTO 01/04 /2012, SHOULD BE ENTITLED TO BENEFIT OF SECTION 80-IC OF THE ACT, FO R THE PERIOD FOR WHICH THEY WERE NOT ENTITLED TO THE BENEFIT OF DEDUCTION UNDER SECTION 80-IB. (B) SUCH OF THOSE UNITS WHICH HAVE COMMENCED PRODUCTION AFTER 07/01/2003 AND CARRIED OUT SUBSTANTIAL EXPANSION PRIOR TO 01/0 4/2012, WOULD ALSO BE ENTITLED TO BENEFIT OF DEDUCTION AT DIFFERENT RATES OF PERCENTAGE STIPULATED UNDER SECTION 80-IC. (C) SUBSTANTIAL EXPANSION CANNOT BE CONFINED TO ONE EXP ANSION. AS LONG AS REQUIREMENT OF SECTION 80-IC (8) (IX) IS MET, TH ERE CAN BE NUMBER OF MULTIPLE SUBSTANTIAL EXPANSIONS. (D) CORRESPONDINGLY, THERE CAN BE MORE THAN ONE INITIAL ASSESSMENT YEARS. (E) WITHIN THE WINDOW PERIOD OF 07/01/2013 UPTO 01/04/2 012, AN UNDERTAKING OR AN ENTERPRISE CAN BE ENTITLED TO DEDUCTION @100% FOR A PERIOD OF MORE THAN FIVE YEARS. (F) ALL THIS, OF COURSE, IS SUBJECT TO A CAP OF TEN YEARS. [SECTION 80-IC(6)]. ITA 53/CHD/2018 A.Y. 2014-15 4 (G) UNITS CLAIMING DEDUCTION UNDER SECTION 80-IC SHALL NOT BE ENTITLED TO DEDUCTION UNDER ANY OTHER SECTION, CONT AINED IN CHAPTER VI-A OR SECTION 10A OR 10B OF THE ACT [SECTION 80-IB(5)]. 4.1 ACCORDINGLY, CONSIDERING THE FACTS AND THE SUBMISSIONS OF THE PARTIES, THE ISSUE IS REMANDED BACK TO THE AO WITH THE D IRECTION TO GRANT NECESSARY RELIEF IN TERMS OF THE AFORESAID DECISION OF THE HO N'BLE HIGH COURT AFTER VERIFICATIION. NEEDLESS TO SAY THAT THE ASSESSE E SHALL BE GRANTED A REASONABLE OPPORTUNITY OF BEING HEARD. 5. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLO WED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 07.05.2018. SD/- SD/- (ANNAPURNA GUPTA) (DIVA SIN GH) ACCOUNTANT MEMBER JUDICIAL MEMBER POONAM COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR ASSTT. REGISTRAR ITAT CHANDIGARH