STRAPPING SOLUTIONS P.LTD, MUMBAI V. ITO 9(3)(2), MUMBAI

ITA 1926/MUM/2012

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 4324 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 9 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-01-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 18-11-2015
• Assessment Year: 2003-2004
• Appeal Filed On: 22-03-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SACHIDANAND DUBEYDR
• Assessee Lawyers: VIMAL PUNMIYAAR
• Keywords: Revised return
• Section: 80IB

Judgement Text

, INCOME TAX APPELLATE TRIBUNAL,MUMBAI E BENCH BEFORE S/SH. RAJENDRA,ACCOUNTANT MEMBER & SANDEEP GOSAIN,JUDICIAL MEMBER /.ITA NO. 1926/MUM/2012, /ASSESSMENT YEAR-2003-04 /.ITA NO. 1927/MUM/2012, /ASSESSMENT YEAR-2004-05 STRAPPING SOLUTIONS PVT. LTD. 703, AUTUMN GROVE, LOKHANDWALA TOWNSHIP, KANDIVALI -EAST MUMBAI-400 101 PAN: AAFCS 5628 C VS INCOME TAX OFFICER-9(3)(2) AAYAKAR BHAVAN MUMBAI-20. ( / APPELLANT) ( / RESPONDENT) /ASSESSEE BY : SHRI VIMAL PUNMIYA-AR / REVENUE BY : SHRI SACHIDANAND DUBEY-DR / DATE OF HEARING : 18.11. 2015 / DATE OF PRONOUNCEMENT : 01.01.2016 , 1961 1961 1961 1961 254 254 254 254( (( (1 11 1) )) ) ORDER U/S.254(1)OF THE INCOME-TAX ACT,1961(ACT) PER RAJENDRA, AM - CHALLENGING THE ORDERS DT.10.01.2012 OF CIT(A)-20,M UMBAI,THE ASSESSEE HAS FILED THE PRESENT APPEALS.EFFECTIVE GROUNDS OF APPEAL FOR BOTH THE YE ARS IS CONFIRMATION OF PENALTY ORDER LEVIED BY THE AO U/S.271(1)(C) OF THE ACT. FACTS OF THE CASE: ASSESSEE-COMPANY IS ENGAGED IN THE BUSINESS OF DEAL ING IN CONTAINER LASHING AND STRAPPINGS. WHILE COMPLETING THE ASSESSMENTS FOR THE ABOVE MENT IONED TWO ASSESSMENT YEARS(AY.S.), THE AO HAD HELD THAT IT WAS NOT ENTITLED TO CLAIM DEDUC TION U/S.80IB OF THE ACT.THE FIRST APPELLATE AUTHORITY(FAA)CONFIRMED THE ORDERS OF THE AO AND TH E ASSESSEE CHALLENGED HIS ORDERS BEFORE THE TRIBUNAL.IN THE MEANWHILE,THE AO INITIATED PENALTY PROCEEDINGS AGAINST THE ASSESSEE FOR FILING INACCURATE PARTICULARS.AS PER THE AO,THE ASSESSEE D ID NOT FILE ANY REPLY IN RESPONSE TO THE PENALTY NOTICES ISSUED TO IT.HE LEVIED PENALTY OF RS.87,921 /- AND RS.4,51,211/- FOR THE AY.S 03-04 AND 04-05 RESPECTIVELY. 2. AGGRIEVED BY THE PENALTY ORDER OF THE AO,THE ASSESS EE PREFERRED AN APPEAL BEFORE THE FAA.AFTER CONSIDERING THE SUBMISSION OF THE ASSESSE E AND THE ASSESSMENTT ORDER,HE STATED THAT THE ISSUE BEFORE HIM WAS RECURRING,THAT THE AO HAD DISALLOWED THE CLAIM MADE BY THE ASSESSEE U/S. 80IB, THAT THE THEN FAA HAD UPHELD THE ORDERS OF THE AO, THAT WHILE DECIDING THE APPEAL FOR AY.2005-06 A DETAILED ORDER WAS PASSED AND THAT PE NALTY WAS CONFIRMED.FINALLY,HE UPHELD THE ORDER OF THE AO LEVYING PENALTY FOR FURNISHING INAC CURATE PARTICULARS. 3. BEFORE US,THE AUTHORISED REPRESENTATIVE(AR) STATED THAT THE TRIBUNAL,WHILE DECIDING THE APPEAL FOR ABOVE MENTIONED AY.S (ITA NO.3516-17/MUM /2010 DT.21.10.2015),HAD DELETED THE ADDITION IN QUANTUM PROCEEDINGS,THAT PENALTY ORDERS WOULD NOT SURVIVE.DEPARTMENTAL REPRESENTATIVE(DR)LEFT THE ISSUE TO THE DISCRETION OF THE BENCH. ITA/1926-27/M/12-STAPPING SOLUTIONS ,AY.03 04 & 04-05 2 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL BEFORE US.WE FIND THAT THE TRIBUNAL IN ITS ORDER DATED 21.10.15 (SUPRA), HAD H ELD AS UNDER: 8. WE HAVE CONSIDERED THE RIVAL CONTENTIONS. SO FA R AS THE ERROR IN WRITING THE CORRECTION SECTION WHILE MAKING THE CLAIM IN THE RETURN OF INCOME IS C ONCERNED, THE ASSESSEE DURING THE ASSESSMENT PROCEEDINGS ITSELF HAD MADE THE SUBMISSIONS BEFORE THE AO THAT THERE WAS AN INADVERTENT ERROR IN MAKING THE CLAIM UNDER SECTION 10A INSTEAD OF UNDER SECTION 80IB. THE ASSESSEE SUBMITTED TO THE AO THAT THIS CLAIM BE CONSIDERED UNDER SECTION 80IB . HE ALSO FILED A REVISED RETURN IN THIS RESPECT. HOWEVER, THE AO REJECTED THE CLAIM OF THE ASSESSEE. IT HAS BEEN TIME AND AGAIN HELD THAT THE TAXING AUTHORITIES SHOULD TAX THE REAL INCOME OF THE ASSES SEE AND IF A CLAIM IS ALLOWABLE TO AN ASSESSEE UNDER THE RELEVANT PROVISIONS THEY SHOULD THEMSELVE S CONSIDER THE SAME AND GIVE APPROPRIATE RELIEF. THEY ARE NOT SUPPOSED TO PENALISE THE ASSESSEE FOR THEIR INADVERTENT ERRORS. A DUTY IS ALSO CAST UPON THE AO NOT ONLY TO DISALLOW THE CLAIM WHICH AS PER THE PROVISIONS OF LAW IS NOT TENABLE BUT ALSO TO ALLOW THE CLAIM TO WHICH THE ASSESSEE IS ENTITLED A S PER PROVISIONS OF THE LAW AND WHICH HAS BEEN BROUGHT TO THE KNOWLEDGE OF THE AO DURING THE ASSES SMENT PROCEEDINGS. EVEN A DUTY HAS BEEN ALSO CAST UPON THE FIRST APPELLATE AUTHORITY I.E. CIT(A) WHOSE POWERS ARE COTERMINOUS WITH THAT OF THE AO TO CONSIDER THE CLAIM PUT FORWARD BY THE ASSESSE E AND DECIDE THE SAME AS PER PROVISIONS OF LAW. THE CASE LAWS RELIED UPON BY THE ASSESSEE ARE SQUAR ELY APPLICABLE ON THE FACTS AND CIRCUMSTANCES OF THE CASE OF THE ASSESSEE. 9. SO FAR AS THE EMPLOYMENT OF 10 OR MORE THAN 10 P ERSONS DURING THE YEAR IS CONCERNED, THE ASSESSEE HAS EXPLAINED THAT MORE THAN 10 PERSONS HA D BEEN EMPLOYED IN THE MANUFACTURING ACTIVITY. AS PER THE CASE LAWS CITED BY THE ASSESSEE, IT IS N OT NECESSARY THAT THE ASSESSEE MUST EMPLOYEE 10 OR MORE THAN 10 EMPLOYEES DURING THE ENTIRE FINANCIAL YEAR. IF THE ASSESSEE EMPLOYS 10 OR MORE THAN 10 EMPLOYEES FOR SUBSTANTIAL PART OF WORKING PERIOD OF FACTORY CARRYING ON MANUFACTURING PROCESS THEN, IN THAT EVENT IT SHALL BE PRESUMED THAT THE A SSESSEE HAS COMPLIED WITH THE PROVISIONS OF SECTION 80IB(2)(IV). THE ABOVE STATED CASE LAWS ARE SQUAREL Y APPLICABLE TO THE CASE OF THE ASSESSEE. 10. IN VIEW OF THE ABOVE, WE FIND MERIT IN THE APPE AL OF THE ASSESSEE AND THE SAME IS HEREBY ALLOWED. THE AO IS DIRECTED TO ALLOW THE DEDUCTION TO THE ASSESSEE FOR THE ASSESSMENT YEARS UNDER APPEAL UNDER SECTION 80IB. 11. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE HEREBY ALLOWED. AS THE ADDITIONS MADE BY THE AO HAVE BEEN DELETED I N THE QUANTUM PROCEEDINGS,THEREFORE, THE PENALTY LEVIED BY THE AO, IN OUR OPINION, WOULD NOT SURVIVE.REVERSING THE ORDER OF THE FAA,FOR BOTH THE AY.S,WE DECIDE THE EFFECTIVE GROUND IN FAV OUR OF THE ASSESSEE. AS A RESULT, APPEALS FILED BY THE ASSESSEE FOR BOTH THE AY.S STAND ALLOWED. . . . ORDER PRONOUNCED IN THE OPEN COURT ON 1 ST JANUARY, 2016. 01 , 2016 SD/- SD/- ( /SANDEEP GOSAIN) ( / RAJENDRA) / JUDICIAL MEMBER / ACCOUNTANT MEMBER /MUMBAI, /DATE: 01.01.2016 . . . .. . JV.SR.PS. ITA/1926-27/M/12-STAPPING SOLUTIONS ,AY.03 04 & 04-05 3 / COPY OF THE ORDER FORWARDED TO : 1. APPELLANT / 2. RESPONDENT / 3. THE CONCERNED CIT(A)/ , 4. THE CONCERNED CIT / 5. DR E BENCH, ITAT, MUMBAI / , , . . . 6. GUARD FILE/ //TRUE COPY// / BY ORDER, / DY./ASST. REGISTRAR , /ITAT, MUMBAI.