M/s. Tecnotree Convergence Ltd., Bengalore V. ACIT, New Delhi

ITA 2007/DEL/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 6855 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 6 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-10-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 18-07-2016
• Assessment Year: 2004-2005
• Appeal Filed On: 04-04-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S AGARWAL ADV SH F R MEENA
• Keywords: Depreciation; Opportunity of being heard; Unabsorbed depreciation
• Section: 143(3); 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: D NEW DELHI BEFORE SMT DIVA SINGH, JUDICIAL MEMBER AND SH.L.P.SAHU, ACCOUNTANT MEMBER I.T.A .NO.-200 7/DEL/2014 (ASSESSMENT YEAR- 2004-05) TECNOTREE CONVERGENCE LTD., #65/2, B BLOCK, 6 TH FLOOR, LELVE 7, BAGMANE TRIDIB, BAGMANE TECH PARK, C.V.RAMAN NAGAR, BYRASANDRA, BENGALORE-560093. PAN-AAACL7245L (APPELLANT) VS ACIT, CIRCLE-16(1), NEW DELHI. (RESPONDENT) APPELLANT BY SH.S.AGARWAL, ADV. RESPONDENT BY SH.F.R.MEENA, SR.DR ORDER THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE A SSAILING THE CORRECTNESS OF THE ORDER DATED 27.11.2013 OF CIT(A)-19, NEW DEL HI PERTAINING TO 2004-05 ASSESSMENT YEAR ON VARIOUS GROUNDS INCLUDING GROUND NO.1.5 WHICH READS AS UNDER:- 1.5. ON FACTS AND IN LAW, THE CIT(A) ERRED IN UPHO LDING THE ORDER OF THE ASSESSING OFFICER LEVYING PENALTY OF RS.2,79,233/- U/S 271(1)(C) OF THE ACT IN LIGHT OF THE FACT THAT THE HONBLE ITAT HAS QUAS HED THE ADDITION IN THE QUANTUM APPEAL VIDE ORDER DATED 30.03.2012 WHICH HA S FURTHER BEEN UPHELD BY THE HONBLE DELHI HIGH COURT VIDE ORDER D ATED10.07.2013. 2. LD.AR INVITING ATTENTION TO THE CONSOLIDATED ORD ER OF THE ITAT DATED 30.03.2012 IN ITA NO.5697 & 5698/DEL/2010 PERTAININ G TO 2003-04 & 2004-05 AYS SUBMITTED THAT THE APPEAL OF THE ASSESSEE DESE RVES TO BE ALLOWED AS THE PENALTY BECOMES INFRUCTUOUS. RELIANCE WAS PLACED U PON THE DECISION OF THE HONBLE HIGH COURT DATED 10.07.2013 IN ITA NO.302/2 013 THE HONBLE HIGH COURT WAS PLEASED TO DISMISS THE APPEAL OF THE REVENUE HO LDING AS UNDER:- DATE OF HEARING 19.07.2016 DATE OF PRONOUNCEMENT 18.10.2016 I.T.A .NO.-2007/DEL/2014 PAGE 2 OF 3 THE RESPONDENT-ASSESSEE HAD CLAIMED AND ALLOWED BE NEFIT UNDER SECTION 10A OF THE INCOME TAX ACT. THE ISSUE RAISED IS THAT WHETHER THE SAID BENEFIT S HOULD BE COMPUTED WITHOUT TAKING INTO CONSIDERATION UNABSORB ED DEPRECIATION. THE TRIBUNAL BY THE IMPUGNED ORDER HAS FOLLOWED THE DEC ISION OF KARNATAKA HIGH COURT VS ACIT V.YOKOGAVA INDIA LIMITED, (2012 ) 341 ITR 385 (KARNATAKA). BOMBAY HIGH COURT HAS ALSO REACHED TH E SAME CONCLUSION THOUGH FOR DIFFERENT REASONS IN HINDUSTAN LEVER LIM ITED V. DEPUTY COMMISSIONER OF INCOME TAX AND ANR., (2010) 325 ITR 102 (BOMBAY). THESE TWO DECISIONS WERE NOTICED AND THEIR FINAL FI NDING APPROVED BY THIS COURT IN COMMISSIONER OF INCOME TAX V.TEI TECHNOLOG IES PRIVATE LIMITED IN ITA NOS.347/2011 AND 2067/2010 DECIDED ON 27.08. 2012. IN VIEW OF THE AFORESAID POSITION, NO SUBSTANTIAL Q UESTION OF LAW ARISES FOR CONSIDERATION AND THE APPEAL OF THE REVE NUE IS DISMISSED. 3. LD.SR.DR INVITING ATTENTION TO THE IMPUGNED ORDE R SUBMITTED THAT THE EX- PARTE ORDER HAS BEEN PASSED BY THE CIT(A) AS THESE FACTS HAD NEVER BEEN BROUGHT TO THE NOTICE OF THE SAID AUTHORITY. 4. A PERUSAL OF THE RECORD SHOWS THAT THE ORIGINAL ASSESSMENT WAS COMPLETED U/S 143(3) VIDE ORDER DATED 10.01.2006 AT AN INCOME OF RS.25,209/- UNDER NORMAL PROVISIONS AND RS.9,57,987/- UNDER SPECIAL P ROVISION U/S 115JB. THE ASSESSMENT SO FRAMED WAS RE-OPENED U/S 147 OF THE I NCOME TAX ACT, 1961 AFTER RECORDING THE FOLLOWING REASONS:- THE ASSESSMENT WAS COMPLETED IN SCRUTINY ON AN INC OME OF RS.25,209/- UNDER NORMAL PROVISION AND RS.9,57,987/- UNDER SPEC IAL PROVISION. ON EXAMINATION OF THE RECORDS, IT IS FOUND THAT THE AS SESSEE HAD UNABSORBED DEPRECIATION OF RS.4,44,952/- ONLY TO BE SET OFF, I NSTEAD OF RS.17,35,684/- WHICH WAS SET OFF. THUS, A SUM OF RS.12,90,732/- H AS BEEN SENT OFF IN EXCESS. IN VIEW OF THE ABOVE, I HAVE REASONS TO BELIEVE THA T THE INCOME OF RS.12,90,732/- CHARGEABLE TO TAX HAS ESCAPED ASSESS MENT WITHIN THE MEANING OF SECTION 147/148. 5. AFTER OBTAINING THE NECESSARY APPROVALS AND DISP OSING THE OBJECTIONS OF THE ASSESSEE THE AO AFTER HEARING THE ASSESSEE HELD THA T THE EXEMPTION U/S 10A WOULD BE ALLOWED TO THE ASSESSEE ONLY AFTER SETTING OF BROUGHT FORWARD LOSSES OF RS.4,44,952/-. AS A RESULT THEREOF VIDE ORDER DATE D 28.03.2012, PENALTY PROCEEDINGS FOR FILING INACCURATE PARTICULARS WERE INITIATED AND AFTER SHOW-CAUSING THE ASSESSEE AND CONSIDERING THE REPLY, PENALTY OF RS.2,79,233/- WAS IMPOSED. IN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY, NONE A PPEARED IN RESPONSE TO NOTICE ISSUED. CONSIDERING THE FACTS THAT THE LD.AR RELYI NG UPON THE ORDER OF THE ITAT IN I.T.A .NO.-2007/DEL/2014 PAGE 3 OF 3 THE QUANTUM PROCEEDINGS WHICH HAS BEEN UPHELD BY TH E HONBLE HIGH COURT HAS MADE OUT A PLEA THAT THE PENALTY ORDER BECOMES INFR UCTUOUS, WE FIND THAT ACCEPTING THE DEPARTMENTAL STAND THAT NO SUCH PLEA WAS RAISED BEFORE THE CIT(A) AND THE ASSESSEE INFACT REMAINED UNREPRESENTED. WE FIND THAT IN THESE PECULIAR FACTS AND CIRCUMSTANCES, IT WOULD BE APPROPRIATE TO SET ASIDE THE IMPUGNED ORDER. IT IS SEEN THAT THOUGH THE ORDER OF THE ITAT IS DA TED 30.03.2012 THE SAME WAS NOT BROUGHT TO THE NOTICE OF THE CIT(A) WHO HAS PASSED THE ORDER ON 22.11.2013 AFTER GIVING VARIOUS OPPORTUNITIES TO THE ASSESSEE AS PER RECORD. WHEN AN APPELLATE FORUM STATUTORILY IS AVAILABLE TO THE ASSESSEE, WE FIND NO GOOD REASON WHY THE ASSESSEE SHOULD FAIL TO APPEAR BEFORE IT AND NOT AV AIL AN OPPORTUNITY. THE ISSUE IS ACCORDINGLY RESTORED BACK TO THE CIT(A) WITH A DIRE CTION TO PASS A SPEAKING ORDER IN ACCORDANCE WITH LAW AFTER GIVING THE ASSESSEE A REASONABLE OPPORTUNITY OF BEING HEARD TAKING INTO CONSIDERATION THE ORDERS PASSED I N THE QUANTUM PROCEEDINGS BY THE ITAT AND THE HONBLE HIGH COURT. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES.. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 18 TH OCTOBER, 2016. SD/- SD/- (L.P.SAHU) (DIVA SING H) ACCOUNTANT MEMBER JUDICIAL MEMBER *AMIT KUMAR* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSI STANT REGISTRAR ITAT NEW DELHI