D.C.I.T Cir - 2,kolata, Kolkata V. M/s IKF Technologies Ltd., Kolkata

ITA 2273/KOL/2013

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 4527 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-09-2016
• Appeal Filed By: Department
• Bench Allotted: B
• Next Hearing Date: 28-07-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 16-08-2013
• Court: TRIBUNAL
• Department Lawyers: P K CHAKRABORTY JCIT SRDR
• Assessee Lawyers: K K GOSWAMI; ANKIT JALAN
• Keywords: Additional evidence; Question of law; Revised return
• Section: 143(3); 142(1); 80HHC

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH B KOLKATA BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER AND SHRI S.S.VISWANETHRA RAVI, JUDICIAL MEMBER ITA NO.2273/KOL/2013 ASSESSMENT YEARS:2009-10 DCIT, CIRCLE-2, AAYAKAR BHAWAN, 7 TH FLOOR P-7, CHOWRIGHEE SQUARE, KOLKATA-700 069 / V/S . M/S IKF TECHNOLOGIES LTD., PLOT NO.-IX-16, BLOCK-EP & GP, SECTOR-V, KOLKATA-700 091 [ PAN NO.AAACI 8167 K ] /APPELLANT .. /RESPONDENT /BY APPELLANT SHRI P.K. CHAKRABORTY, JCIT-SR-DR /BY RESPONDENT SHRI K.K.GOSWAMI, ADVOCATE & SHRI ANKIT JALAN, /DATE OF HEARING 28-07-2016 /DATE OF PRONOUNCEMENT 07-09-2016 /O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER:- THIS APPEAL BY THE REVENUE IS AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-I, KOLKATA DATED 21.05.2013. ASSESSME NT WAS FRAMED BY DCIT, CIRCLE- 2, KOLKATA U/S 143(3) OF THE INCOME TAX ACT, 1961 ( HEREINAFTER REFERRED TO AS THE ACT) VIDE HIS ORDER DATED 30.12.2011 FOR ASSESSMEN T YEAR 2009-10. SHRI P.K.CHAKRABORTY, LD. SR. DEPARTMENTAL REPRESEN TATIVE REPRESENTED ON BEHALF OF REVENUE AND SHRI K.K. GOSWAMI AND SRI ANKIT JALAN, LD. ADVOCATES APPEARED ON BEHALF OF ASSESSEE. ITA NO.2273/KOL/2013 A.Y. 2009-10 DCIT. CIR-2, KOL. VS. M/S IKF TECHNOLO GIES LTD. PAGE 2 2. SOLITARY INTER-CONNECTED ISSUE RAISED BY REVENUE IS THAT LD. CIT(A) ERRED IN DELETING THE ADDITION OF 2,26,00,486/- U/S 80IC OF THE ACT. 3. FACTS AS HAVE BEEN BROUGHT ON RECORD ARE THAT AS SESSEE IN THE PRESENT CASE IS A LIMITED COMPANY AND ENGAGED IN BPO AND IT SERVICES. THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION HAS FILED ITS RETURN INCOME SHO WING TOTAL INCOME OF 2,87,51,498/- . THEREAFTER THE CASE WAS SELECTED FOR SCRUTINY UND ER CASS MODULE AND SUBSEQUENTLY NOTICES U/S. 143(2) R.W.S. 142(1) OF THE ACT WAS IS SUED. THE ASSESSEE IN ITS RETURN INCOME CLAIMED DEDUCTION U/S. 80IC OF THE ACT FOR A N AMOUNT OF 2,26,00,486/- IN RESPECT OF ITS UNIT LOCATED AT MEGHALAYA. THE ASSES SING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS OBSERVED THAT ASSESSEE ENGAG ED IN THE BUSINESS OF CALL CENTERS OPERATION SUCH AS TELEMARKETING, COMPLAINT AND GRIE VANCES REDRESSAL OF CORPORATE HOUSE. AS PER THE AO THERE WAS NO MANUFACTURING ACT IVITY OF ANY ARTICLE OR THING AS MANDATORILY REQUIRED UNDER SECTION 80IC OF THE ACT. ACCORDINGLY, AO OPINED THAT DEDUCTION U/S. 80IC WILL NOT BE ALLOWED AS ASSESSEE IS NOT ENGAGED ANYTHING MANUFACTURING ACTIVITY. THE AO DISALLOWED THE DEDUC TION CLAIMED BY ASSESSEE U/S. 80IC OF THE ACT FOR AN AMOUNT OF 2,26,00,486/- AND ADDED TO THE TOTAL INCOME OF ASSESSEE. 4. AGGRIEVED, ASSESSEE PREFERRED AN APPEAL BEFORE L D. CIT(A) WHEREAS ASSESSEE SUBMITTED THAT DEDUCTION SHOULD HAVE BEEN ALLOWED T O ASSESSEE U/S 80IE OF THE ACT IN PLACE OF SEC. 80IC OF THE ACT. FURTHER ASSESSEE SUB MITTED WHILE FILING IT RETURN THERE WAS A SINGLE COLUMN FOR CLAIMING DEDUCTION U/S. 8IC AND 80IE OF THE ACT, THE ASSESSING OFFICER HAS MISUNDERSTOOD THE FACT BY OBS ERVING AS IF THE ASSESSEE HAS CLAIMED DEDUCTION U/S 80IC OF THE ACT THOUGH THE AS SESSEE CLAIMED ITS DEDUCTION CORRECTLY U/S. 80IE OF THE ACT. CONSIDERING THE SUB MISSION OF ASSESSEE LD. CIT(A) DELETED THE ADDITION MADE BY AO BY OBSERVING AS UND ER:- AFTER CAREFUL CONSIDERATION OF ASSESSMENT ORDER AN D WRITTEN SUBMISSION FILED BY THE APPELLANT, IT IS NOTICED THAT THE APPELLANT FILED RETURN OF INCOME E-FILED ON 30.09.2009 FOR INCOME OF RS.2,87,51,498/- AND CLAIM ED A DEDUCTION OF RS.2,26,00,487/- UNDER CHAPTER-VIA. THE ASSESSEE AL SO FURNISHED REPORT DTD. 27.06.2009 OF CHARTERED ACCOUNTANT IN FORM NO. 10CC B READ WITH RULE 18BBB CLAIMING DEDUCTION OF RS.2,26,00,487/- FOR ITS UNIT LOCATED IN SHILLONG, ITA NO.2273/KOL/2013 A.Y. 2009-10 DCIT. CIR-2, KOL. VS. M/S IKF TECHNOLO GIES LTD. PAGE 3 MEGHALAYA WHERE ASSESSEE WAS RUNNING AN INFORMATION TECHNOLOGY TRAINING CENTRE WITH ANNUAL RECEIPTS OF RS.5,00,74,805/-. TH E AO DISALLOWED THE ABOVE CLAIM U/S. 80IC SINCE THE DEDUCTION U/S. 80IC COULD ONLY BE ALLOWABLE TO UNDERTAKINGS ENGAGED IN MANUFACTURING ACTIVITY IN T HE NORTH-EAST REGION AND ASSESSEE HAD NOT PAID ANY EXCISE DUTY ON ITS PRODUC TS AS PER ITS ANNUAL ACCOUNTS. THE ASSESSEE HAD FURNISHED THE 10CCB REPORT ALONG W ITH THE P&L A/C OF THE UNDERTAKING DOING COMPUTER TRAINING BUSINESS FOR TH E FINANCIAL YEAR 2008-09 IN FORM OF A MONTH-WISE SUMMARY-CHART BEFORE THE AO. D URING THE APPELLATE PROCEEDINGS THE APPELLANT SUBMITTED A MODIFIED GROU ND OF APPEAL CLAIMING DEDUCTION U/S//S 80IE AND NOT U/S 80IC OF THE IT AC T AS THE APPELLANT WAS A SERVICE SECTOR UNDERTAKING AND WAS NOT ENGAGED IN T HE BUSINESS OF MANUFACTURING OR PRODUCTION. THE ASSESSEE ALSO FILE D MODIFIED REPORT DTD. 24.12.2012 IN FORM 10CCB FOR CLAIM OF DEDUCTION U/S . 80IE. THE AO WAS CONFRONTED WITH COPY OF THIS REPORT AND MODIFIED GR OUND OF THE APPEAL. THE MODIFIED GROUND OF APPEAL IS ADMITTED AS 10CCB REPO RT SUBMITTED ON 27.06.2009 AND THE MODIFIED REPORT DTD 24.12.2012 A RE SUBSTANTIALLY SAME. IN ITS PAPER BOOK THE A/R REFERRED TO THE RELEVANT PRO VISION SECTION 80IE. SECTION 80IE(2)(III) ALLOWS DEDUCTION TO ANY UNDERT AKING IN NORTH-EAST STATES WHICH CARRY ON ANY ELIGIBLE BUSINESS. SECTION 80IE( 7)(V) DEFINES ELIGIBLE BUSINESS AS UNDER: A) B) F) RUNNING INFORMATION TECHNOLOGY RELATED TRAIN ING CENTRE. SECTION 80IE(6) REFERS TO SUB-SECTION (5) AND SUB-SECTION ( 7) TO (12) OF SECTION 80IA WHICH SHALL APPLY TO ELIGIBLE UNDERTAKING UND ER THE SECTION 80IE. IN COMPLIANCE TO SECTION 80IE(6) THE APPELLANT HAD FILED A REPORT OF CHARTERED ACCOUNTANT FOR CLAIM OF 80IE AS ASSESSEE WAS CARRYING ON ELIGIBLE BUSINESS S OF COMPUTER RELATED TRAINING CE NTRE. AFTER CAREFULLY CONSIDERING THE ABOVE REFER PROVISI ONS OF SECTION 80IE IT IS NOTICED THAT ASSESSEE WAS ENGAGED IN THE BUSINESS O F COMPUTER RELATED TRAINING BUSINESS WITH ANNUAL RECEIPTS OF RS.5,00,74,805/- I N THE STATE OF MEGHALAYA AND HAD FURNISHED 10CCB REPORT OF A CHARTERED ACCOUNTAN T REGARDING THE ELIGIBILITY OF DEDUCTION 80IE CLAIMING DEDUCTION OF RS.2,26,00, 486/- FROM THIS UNDERTAKING AND ACCORDINGLY DEDUCTION U/S. 80IE IS ALLOWED TO A SSESSEE AS BUSINESS OF COMPUTER TRAINING WAS ELIGIBLE BUSINESS IN TERMS OF 80IE(7)(V)(F) OF INCOME TAX ACT, 1961. AGGRIEVED BY THE ORDER OF LD. CIT(A), REVENUE IS IN APPEAL BEFORE US. 5. BEFORE US LD. DR SUBMITTED THAT ASSESSEE IS ENGA GED IN SERVICE ACTIVITY AND THEREFORE NOT ELIGIBLE FOR DEDUCTION U/S. 80IC OF T HE ACT. FOR CLAIMING THE DEDUCTION ITA NO.2273/KOL/2013 A.Y. 2009-10 DCIT. CIR-2, KOL. VS. M/S IKF TECHNOLO GIES LTD. PAGE 4 THE FORM NO. 10CCB DULY CERTIFIED BY CHARTERED ACCO UNTANT WAS NOT FURNISHED AT THE TIME OF ASSESSMENT PROCEEDINGS BUT LD. CIT(A) HAS G RANTED THE RELIEF TO ASSESSEE ON THE BASIS OF ADDITIONAL EVIDENCE, THE CERTIFICATE I SSUED BY CA IN THE FORM OF 10CCB WAS SUBMITTED AFTER DUE DATE OF THE BALANCE-SHEET. ON THE OTHER HAND, LD. AR SUBMITTED THAT THERE IS N O SPECIFIC COLUMN FOR FURNISHING THE DEDUCTION U/S. 80IC/80IE OF THE ACT WHILE FURNI SHING THE ITR ONLINE. THERE WAS ONLY SINGLE COLUMN IN THE INCOME TAX RETURN FOR BOT H THE DEDUCTION UNDER SECTION 80IE/80IC OF THE ACT. SO THE AO HAS MISUNDERSTOOD A S IF THE ASSESSEE HAS CLAIMED THE DEDUCTION UNDER SECTION 80IC OF THE ACT. THERE WAS NO REQUIREMENT TO FURNISH FORM NO. 10CCB WHILE FILING IT RETURN. REGARDING THE ALL EGATION OF LD. DR THAT RELIEF HAS BEEN GRANTED ON THE BASIS OF ADDITIONAL EVIDENCE TH E ASSESSEE SUBMITTED THAT AO WAS VERY MUCH SATISFIED AT THE TIME OF APPELLATE PROCEE DINGS BEFORE LD. CIT(A) AND RELIEF WAS GRANTED AFTER CONFRONTING THE DOCUMENTS FROM TH E AO. LD. AR REQUESTED THE BENCH TO CONFIRM THE ORDER OF LD. CIT(A). 6. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. FROM THE FOREGOING DISCUSSION, WE FIND THAT THE DED UCTION CLAIMED BY ASSESSEE WAS DISALLOWED BY AO ON THE GROUND THAT ASSESSEE WAS NO T ENGAGED IN ANY MANUFACTURING ACTIVITY. HOWEVER ASSESSEE BEFORE LD. CIT(A) CLARIF IED THAT DEDUCTION WAS CLAIMED U/S. 80IE OF THE ACT AND IN SUPPORT OF ITS CLAIM HA VE PRODUCED THE NECESSARY DOCUMENTS. CONSIDERING THE SAME, LD. CIT(A) GIVEN R ELIEF TO ASSESSEE. NOW THE ISSUE BEFORE US ARISE SO AS TO WHETHER DEDUCTION CLAIMED BY ASSESSEE U/S. 80IE OF THE ACT ON THE BASIS OF CERTIFICATE ISSUED IN THE FORM OF 10CC B WHICH IS DULY CERTIFIED BY CA. THE ALLEGATION OF THE LD. DR WAS BASE LESS AS THE A O IN THE INSTANT CASE ATTENDED THE HEARING BEFORE THE LD. CIT(A). THE RELIEF WAS GRANT ED TO THE ASSESSEE IN THE OTHER ASSESSMENT YEARS. THE LD. DR FAILED TO BRING ANYTHI NG CONTRARY TO THE FINDINGS OF THE LD. CIT(A). IN THE IDENTICAL FACTS AND CIRCUMSTANCE S, SEVERAL COURTS HAVE DECIDED THIS ISSUE IN FAVOR OF ASSESSEE. THE HONBLE COURT OF PU NJAB & HARYANA IN THE CASE OF CIT VS. RAMCO INTERNATIONAL 332 ITR 306 HAS OBSERVED AS UNDER : ITA NO.2273/KOL/2013 A.Y. 2009-10 DCIT. CIR-2, KOL. VS. M/S IKF TECHNOLO GIES LTD. PAGE 5 DEDUCTION UNDER S. 80-IBALLOWABILITYCLAIM NOT MA DE IN RETURNASSESSEE HAVING DULY FURNISHED THE DOCUMENTS AND SUBMITTED F ORM NO. 10CCB DURING ASSESSMENT PROCEEDINGS, CLAIM FOR DEDUCTION UNDER S . 80-IB BY WAY OF AN APPLICATION WAS ADMISSIBLETHERE WAS NO REQUIREMENT FOR FILING ANY REVISED RETURNNO SUBSTANTIAL QUESTION OF LAW ARISESGOETZE (INDIA) LTD. VS. CIT (2006) 204 CTR (SC) 182 : (2006) 284 ITR 323 (SC) DISTINGU ISHED ASSESSEE HAVING DULY FURNISHED THE DOCUMENTS AND SU BMITTED FORM NO. 10CCB DURING ASSESSMENT PROCEEDINGS, CLAIMING DEDUCTION U NDER S. 80-IB WHICH WAS NOT CLAIMED IN THE RETURN, DEDUCTION IS ADMISSIBLE EVEN IN THE ABSENCE OF A REVISED RETURN. SIMILARLY, THE HONBLE ITAT, COCHIN BENCH IN THE CA SE OF THOMSA KURIAN VS. ACIT 106 ITD 158 HAS DECIDED THE ISSUE AS UNDER : DEDUCTION UNDER S. 80HHCALLOWABILITYCLAIM MADE F OR THE FIRST TIME BEFORE CIT(A)ISSUE RAISED BEFORE THE FIRST APPELLATE AUTH ORITY FOR DEDUCTION UNDER S. 80HHC, BEING A LEGAL ISSUE COUPLED WITH THE FACTS A LREADY AVAILABLE ON RECORD, AS RECORDED IN THE ASSESSMENT ORDER, THE FIRST APPELLA TE AUTHORITY SHOULD HAVE CONSIDERED THIS CLAIM AND DECIDED THE ISSUE IN ACCO RDANCE WITH LAWFURTHER, AO BEING A QUASI-JUDICIAL AUTHORITY, ONCE HAVING NOTED IN THE ASSESSMENT ORDER THAT ASSESSEE HAD EXPORT TURNOVER, WAS DUTY-BOUND TO ASK THE ASSESSEE AS TO WHY HE HAD NOT CLAIMED DEDUCTION UNDER S. 80HHCMATTER REM ANDED TO AO TO DECIDE ASSESSEES CLAIM FOR DEDUCTION UNDER S. 80HHC. THE TAXING AUTHORITIES SHOULD EXERCISE QUASI-JUDICI AL POWERS, IN DOING SO THEY MUST ACT IN A FAIR AND NOT IN A PARTISAN MANNER. BE ING A QUASI-JUDICIAL AUTHORITY, THE AO IS DUTY-BOUND TO DETERMINE THE CORRECT TAX P AYABLE BY THE ASSESSEE. IN ARRIVING AT SUCH CORRECT TAX, THE AO IS DUTY-BOUND TO ALLOW THE DEDUCTIONS AND EXEMPTIONS AVAILABLE TO THE ASSESSEE IN ACCORDANCE WITH LAW AND DISALLOW THE CLAIMS, WHICH ARE NOT ELIGIBLE AS PER LAW. IT IS NO T FAIR AND PROPER TO ARGUE AND PRESUME THAT THE ASSESSEE SHOULD BE AWARE OF ALL TH E PROVISIONS OF THE COMPLEX NATURE OF THE IT ACT. WHEN THE FACTS ARE AVAILABLE ON RECORD BEFORE THE AO AND PARTICULARLY WHEN HE HAS ALSO OBSERVED THAT THE ASS ESSEE IS IN THE EXPORT BUSINESS OF SEA FOODS AND ALSO NOTED THE TURNOVER AND NET PR OFIT FROM SUCH BUSINESS, THE AO IS DUTY-BOUND TO HAVE ASKED THE ASSESSEE AT LEAS T WHY HE HAD NOT CLAIMED THE DEDUCTION UNDER S. 80HHC, TO WHICH THE ASSESSEE IS ELIGIBLE IN ACCORDANCE WITH LAW. HAD THE AO PUT THIS MINIMUM QUESTION TO THE AS SESSEE, THE ASSESSEE WOULD HAVE DEFINITELY CLAIMED THE DEDUCTION UNDER S. 80HH C BEFORE THE AO. IN SUCH CIRCUMSTANCES JUST BECAUSE THE ASSESSEE HAD FAILED TO CLAIM DEDUCTION UNDER S. 80HHC BEFORE THE AO, THE AO ALSO CANNOT BE SILENT W HEN HE IS SUPPOSED TO ACT AS A QUASI-JUDICIAL OFFICER. IN SUCH CIRCUMSTANCES, TH ERE IS NO REASONABLENESS IN THE ORDER OF THE CIT(A) FOR NOT ADMITTING THE CLAIM OF DEDUCTION UNDER S. 80HHC MADE FOR THE FIRST TIME BEFORE HIM. MAY BE, HE WAS NOT H AVING THE POWER FOR RESTORING THE MATTER BACK TO THE FILE OF THE AO AT THE RELEVA NT POINT OF TIME, BUT AT LEAST HE SHOULD HAVE ADMITTED THE CLAIM, CALLED FOR A REMAND REPORT AND THEN DECIDED ACCORDING TO LAW INSTEAD OF REJECTING AL-TOGETHER T HE CLAIM OF THE ASSESSEE, MORE PARTICULARLY WHEN THE FACTS OF EXPORT BUSINESS AND RELEVANT TURNOVER AND PROFIT WERE GLARINGLY AVAILABLE IN THE ASSESSMENT ORDER IT SELF. THE ISSUE RAISED BEFORE THE FIRST APPELLATE AUTHORITY FOR DEDUCTION UNDER S. 80 HHC, BEING A LEGAL ISSUE COUPLED WITH THE FACTS ALREADY AVAILABLE ON RECORD, AS RECO RDED IN THE ASSESSMENT ORDER, THE FIRST APPELLATE AUTHORITY SHOULD HAVE CONSIDERE D THIS CLAIM AND DECIDED THE ISSUE IN ACCORDANCE WITH LAW. HOWEVER, CONSIDERING THE ENTIRE FACTS AND CIRCUMSTANCES OF THE CASE AND THE SUBMISSIONS MADE BY BOTH THE SIDES, THIS IS A FIT AND PROPER CASE FOR RESTORING THE ISSUE BACK TO THE FILE OF THE AO WITH A ITA NO.2273/KOL/2013 A.Y. 2009-10 DCIT. CIR-2, KOL. VS. M/S IKF TECHNOLO GIES LTD. PAGE 6 DIRECTION TO DECIDE THE ISSUE OF CLAIM OF DEDUCTION UNDER S. 80HHC WHICH WAS RAISED BEFORE THE CIT(A) FOR THE FIRST TIME BY THE ASSESSEE, IN ACCORDANCE WITH LAW, OF-COURSE, AFTER GIVING EFFECTIVE OPPORTUNITY OF HEARING TO THE ASSESSEE. AO HAVING NOTED IN THE ASSESSMENT ORDER ITSELF THAT ASSESSEE HAD EXPORT TURNOVER, CLAIM FOR DEDUCTION UNDER S. 80HHC MADE F OR THE FIRST TIME BEFORE CIT(A) COULD NOT BE REJECTED SIMPLY BECAUSE THE SAM E WAS NOT MADE BEFORE THE AO. IN VIEW OF THE AFORESAID FACTS AND RESPECTFULLY FOL LOWING THE AFORESAID JUDICIAL PRECEDENTS RELIED UPON HEREINABOVE, WE FIND NO INFI RMITY IN THE ORDER PASSED BY THE LD. CIT(A) AND ACCORDINGLY, THE GROUND RAISED BY RE VENUE IS DISMISSED. 7. IN THE RESULT, REVENUES APPEAL STANDS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 07 /09/2016 SD/- SD/- (S.S.VISWANETHRA RAVI) (WASEEM AHMED) JUDICIAL MEMBER ACCOUNTANT MEMBER *DKP - 07 /09/2016 / KOLKATA / COPY OF ORDER FORWARDED TO:- 1. /APPELLANT-DCIT, CIRCLE-2, AAYAKAR BHAWAN, 7 TH FLOOR P-7, CHOWRINGHEE SQUARE, KOLKATA-700 069 2. /RESPONDENT-M/S IKF TECHNOLOGIES LTD., PLOT NO.IX-1 6, BLOCK-EP & GP, SECTOR-V, K OLKATA-700 091 3. ' % / CONCERNED CIT 4. % - / CIT (A) 5. & ))' , ' / DR, ITAT, KOLKATA 6. + / GUARD FILE. BY ORDER/ , / ', ITA NO.2273/KOL/2013 A.Y. 2009-10 DCIT. CIR-2, KOL. VS. M/S IKF TECHNOLO GIES LTD. PAGE 7