Sh. Pankaj Nagalia, Dehradun V. CIT, Dehradun

ITA 2450/DEL/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 61633 (ITAT-DELHI)
• Duration Of Justice: 11 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-04-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: F
• Next Hearing Date: 12-03-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 12-05-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Section: 143(3); 142(1); 263; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH F NEW DELHI) BEFORE SHRI RAJPAL YADAV AND SHRI T.S. KAPOOR ITA NO. 2450/DEL/2011 ASSESSMENT YEAR: 2006-07 SHRI PANKAJ NAGALIA, VS. COMMISSIONER OF INCOME-T AX, 13-B, NEW SURVEY ROAD, DEHRADUN. DEHRADUN. (PAN: AAVPN2861M) (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI ANIL JAIN , ADV. RESPONDENT BY: SHRI SUDESH GARG, CIT(DR) DATE OF HEARING : 12.03.2012 DATE OF PRONOUNCEMENT : 20.04.2012 ORDER PER RAJPAL YADAV: JUDICIAL MEMBER THE PRESENT APPEAL IS DIRECTED AT THE INSTANCE OF ASSESSEE AGAINST THE ORDER OF LEARNED COMMISSIONER DATED 29.03.2011 PASS ED UNDER SECTION 263 OF THE INCOME-TAX ACT, 1961 FOR ASSESSMENT YEAR 200 6-07. THE SOLITARY GRIEVANCE OF THE ASSESSEE IS THAT LEARNED COMMISSIO NER HAS ERRED IN TAKING COGNIZANCE UNDER SECTION 263 OF THE ACT AND THEREBY SETTING ASIDE THE ASSESSMENT ORDER DATED 16.12.2008 PASSED UNDER SECT ION 143(3) OF THE ACT AND DIRECTING HIM TO PASS A FRESH ASSESSMENT ORDER. 2 2, THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESS EE IS AN INDIVIDUAL. HE DERIVES INCOME FROM M/S. NAGALIA HOTELS (PACIFIC HO TEL ) AND ALSO M/S. PREMIER CALL CHEMICALS. HE HAS FILED HIS RETURN OF INCOME ON 30.10.2006 DECLARING LOSS OF RS.12,10,580. HE HAS SHOWN LOSS O F RS.12,10,580 FROM M/S. PREMIER CALL CHEMICALS. THE CASE OF THE ASSESS EE WAS SELECTED FOR SCRUTINY ASSESSMENT AND A NOTICE UNDER SEC. 143(2) OF THE ACT ISSUED AND SERVED UPON THE ASSESSEE. ON AN ANALYSIS OF THE REC ORD, IT REVEALED TO THE ASSESSING OFFICER THAT ASSESSEE HAS CLAIMED DEDUCTI ON UNDER SEC. 80-IC(2) OF RS.94,64,805. ASSESSING OFFICER AFTER REQUISITION O F NECESSARY DETAILS AND THEIR ANALYSIS FRAMED THE ASSESSMENT ORDER ON 16.12 .2008 UNDER SECTION 143(3) OF THE ACT. HE COMPUTED THE LOSS OF ASSESSEE AS UNDER:- AFTER DISCUSSION INCOME IS COMPUTED AS UNDER: NET PROFIT FROM NAGALIA HOTELS RS.94,64,805 NET LOSS FROM PREMIER CALL CHEMICALS RS.1,21,1 0,579 LESS: DEDUCTION U/S. 80IC(2) RS.82,54,226 RS.94,64,805 LOSS RS.1,21,10,579 OR RS.1,21,10,580 ASSESSMENT IS COMPLETED ON A TOTAL LOSS OF RS.1,21 ,10,580. ISSUE N/D CHALLAN. 3 3. LEARNED COMMISSIONER ON AN EXAMINATION OF THE AS SESSMENT RECORD, FORMED AN OPINION THAT ASSESSMENT ORDER IS ERRONEOU S AND PREJUDICIAL TO THE INTEREST OF REVENUE. ACCORDINGLY, LEARNED COMMISSIO NER HAS ISSUED A SHOW- CAUSE NOTICE UNDER SECTION 263 OF THE INCOME-TAX AC T, 1961 ON 3.11.2010. IN THE SHOW-CAUSE NOTICE, LEARNED COMMISSIONER HAS STA TED THAT DEDUCTION UNDER SEC. 80IC(2) OF THE ACT HAS TO BE COMPUTED BY TAKING INTO CONSIDERATION THE PROVISIONS OF SEC. 80A(2) READ WI TH SEC. 80B(5) OF THE INCOME-TAX ACT, 1961. ASSESSING OFFICER HAS GRANTED THE DEDUCTION AT RS.94,64,805 WHICH IS IN EXCESS TO THE GROSS TOTAL INCOME OF THE ASSESSEE. ACCORDING TO THE LEARNED COMMISSIONER, THE DEDUCTIO N OUGHT TO BE RESTRICTED TO RS.82,54,226 BECAUSE ASSESSING OFFICE R HAS TO FIRST REDUCE THE LOSS CLAIMED BY THE ASSESSEE IN THIS ASSESSMENT YEA R AGAINST THE INCOME AND THEREAFTER HE HAS TO COMPUTE THE DEDUCTION ADMISSIB LE UNDER SEC. 80-IC(2) OF THE ACT. THUS, IT RESULTED EXCESS ALLOWANCE OF DEDU CTION OF RS.12,09,579. LEARNED COMMISSIONER FURTHER OBSERVED THAT ASSESSIN G OFFICER HAS GRANTED DEDUCTION WITHOUT MAKING PROPER INQUIRIES ABOUT THE ADMISSIBILITY OF DEDUCTION TO THE ASSESSEE. ACCORDING TO THE LEARNED COMMISSIONER, THE ASSESSEE HAS NOT CLAIMED THE DEDUCTION IN ACCORDANC E WITH PART-C OF SCHEDULE 14 OF THE INCOME-TAX ACT, 1961 RATHER HE H AS CLAIMED THE DEDUCTION ON THE GROUND THAT ITS HOTEL IS SITUATED IN KHASRA NO. 19/4-6, 4 SUBHASH ROAD, DEHRADUN BUT THIS KHASRA NUMBER HAS N OT BEEN NOTIFIED BY THE CBDT AND, THEREFORE, THE DEDUCTION IS NOT ADMIS SIBLE. IN RESPONSE TO THE QUERY OF LEARNED COMMISSIONER, IT WAS CONTENDED BY THE ASSESSEE THAT ASSESSING OFFICER HAS CONDUCTED A PROPER INQUIRY. H E HAS ISSUED A SHOW- CAUSE NOTICE TO THE ASSESSEE ON 24.11.2008. ASSESSE E HAS SUBMITTED A DETAILED REPLY AND AFTER CONSIDERING THAT REPLY, LE ARNED ASSESSING OFFICER HAS GRANTED THE DEDUCTION. 4. LEARNED COMMISSIONER WAS NOT SATISFIED WITH THE SUBMISSIONS OF ASSESSEE. HE OBSERVED THAT EXCESS DEDUCTION OF RS.1 2,09,579 HAS BEEN GRANTED TO THE ASSESSEE. HE FURTHER OBSERVED THAT A SSESSEE HAS NOT MADE ANY CLAIM THAT HIS CASE FALLS WITHIN THE AMBIT OF SCHED ULE-14 IN FORM NO. 10CCB. THE CLAIM OF THE ASSESSEE IS UNDER SEC. 80-I C(2)(A) ON THE GROUND THAT HIS HOTEL IS LOCATED ON KHASRA NO. 19/4-6, SUB HASH ROAD, DEHRADUN WHICH, IN FACT, HAS NOT BEEN NOTIFIED IN THE CBDT N OTIFICATION NO. 177/2004. THE ASSESSEE TOOK A PLEA BEFORE THE LEARNED COMMISS IONER THAT HIS HOTEL IS A THRUST INDUSTRY AND IT CAN BE ESTABLISHED AT ANY PL ACE IN THE ENTIRE STATE OF UTTRAKHAND WITHOUT ANY AREA RESTRICTION. LEARNED CO MMISSIONER WITH REGARD TO THIS SUBMISSIONS OBSERVED THAT THIS PLEA HAS BEE N RAISED BY THE ASSESSEE AFTER ISSUANCE OF A NOTICE UNDER SEC. 263 OF THE AC T. ACCORDING TO THE 5 LEARNED COMMISSIONER, THE ASSESSEES CONTENTION IS THAT HIS HOTEL IS COVERED BY ITEM NO. 15 OF PART-C OF SCHEDULE-14, HAS NOT BE EN EXAMINED BY THE ASSESSING OFFICER. HE ACCORDINGLY, SET ASIDE THE AS SESSMENT ORDER AND DIRECTED THE ASSESSING OFFICER TO MAKE A FRESH ASSE SSMENT ORDER AFTER CONDUCTING PROPER INQUIRY. 5. THE LEARNED COUNSEL FOR THE ASSESSEE WHILE IMPUG NING THE ORDER OF LEARNED COMMISSIONER CONTENDED THAT THE ASSESSING O FFICER HAS CONDUCTED PROPER INQUIRY AND ISSUED A SHOW-CAUSE NOTICE UNDER SEC. 142(2) OF THE ACT AND CALLED FOR A NUMBER OF INFORMATION. HE TOOK US THROUGH THE SHOW-CAUSE NOTICE AVAILABLE ON PAGE 11 OF THE PAPER BOOK. THE ASSESSEE HAS SUBMITTED ALL THESE DETAILS BEFORE THE ASSESSING OFFICER. THE LEARNED COUNSEL FOR THE ASSESSEE FURTHER SUBMITTED THAT THE CASE OF THE ASS ESSEE FALLS AT SR. NO.15 OF PART-C OF SCHEDULE 14 ISSUED BY THE MINISTRY OF FIN ANCE UNDER SEC. 80-IC(2) OF THE ACT, WHICH RELATES TO INVESTMENT CEILING IN CASE OF SMALL SCALE INDUSTRIAL UNDERTAKING. HE PLACED ON RECORD COPY OF THIS SCHEDULE ON PAGE NOS. 22 TO 24 OF THE PAPER BOOK. HE ALSO PLACED ON RECORD COPY OF THE NEW INDUSTRIAL POLICY AND OTHER CONCESSIONS FOR THE STA TE OF UTTRAKHAND AND THE STATE OF HIMACHAL PRADESH NOTIFIED BY THE MINISTRY OF COMMERCE & INDUSTRIES ON 7.1.2003, ON PAGE NOS. 25 TO 29 OF TH E PAPER BOOK. ON THE 6 STRENGTH OF ALL THESE DETAILS, HE CONTENDED THAT TH E ASSESSING OFFICER HAS GONE THROUGH ALL THESE ASPECTS AND THEREAFTER ALLOW ED THE DEDUCTION. LEARNED DR ON THE OTHER HAND, TOOK US THROUGH FORM NO. 10CC B AND SUBMITTED THAT IN ORDER TO CLAIM DEDUCTION UNDER SEC. 80-IC, THE A SSESSEE HAS TO SUBMIT THIS FORM. HE MADE A REFERENCE TO SR. NO. 25 OF THIS FOR M AND SUBMITTED THAT IN THE FORM ASSESSEE HAS CLAIMED THE DEDUCTION ON THE GROUND THAT ITS HOTEL IS SITUATED AT KHASRA NO. 19/4-6, SUBHASH ROAD, DEHRAD UN AND IT IS NOTIFIED BY THE CBDT FOR AVAILING BENEFIT UNDER SEC. 80-IC(2) O F THE ACT. BUT THIS KHASRA NUMBER DOES NOT FIND PLACE IN THE NOTIFICATION OF T HE CBDT. THEREFORE, THERE IS AN INHERENT DEFECT IN THE CLAIM OF THE ASSESSEE, MEANING THEREBY, ASSESSING OFFICER HAS NOT APPLIED HIS MIND TO THE C LAIM OF THE ASSESSEE. ON THE STRENGTH OF HON'BLE DELHI HIGH COURTS DECISION IN THE CASE OF GEE VEE ENTERPRISES REPORTED IN 19 ITR 373, HE SUBMITTED TH AT IF ASSESSING OFFICER HAS NOT CONDUCTED THE PROPER INQUIRY THEN HIS ORDER DESERVES TO BE SET ASIDE. 6. WE HAVE DULY CONSIDERED THE RIVAL CONTENTIONS AN D GONE THROUGH THE RECORD CAREFULLY. THE ITAT IN THE CASE OF MRS. KHA TIZA S. OOMERBHOY VS. ITO,MUMBAI, 101 TTJ 1095, HAS ANALYZED IN DETAIL VARIOUS AUTHORITATIVE PRONOUNCEMENTS INCLUDING THE DECISION OF HONBLE SU PREME COURT IN THE CASE OF MALABAR INDUSTRIES 243 ITR 83 AS WELL AS H ONBLE BOMBAY HIGH 7 COURT RENDERED IN THE CASE OF GABRIEL INDIA LTD. RE PORTED IN 203 ITR 108 AND HAS PROPOUNDED THE FOLLOWING BROADER PRINCIPLE TO JUDGE THE ACTION OF CIT TAKEN UNDER SECTION 263. (I) THE CIT MUST RECORD SATISFACTION THAT THE ORDE R OF THE A.O IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. BO TH THE CONDITIONS MUST BE FULFILLED. (II) SEC. 263 CANNOT BE INVOKED TO CORRECT EACH AN D EVERY TYPE OF MISTAKE OR ERROR COMMITTED BY THE A,O AND IT WAS ONLY WHEN AN ORDER IS ERRONEOUS THAT THE SECTION WILL BE ATTRACTED. (III) AN INCORRECT ASSUMPTION OF FACTS OR AN INCOR RECT APPLICATION OF LAW WILL SUFFICE THE REQUIREMENT OF ORDER BEING ERRONEOUS. (IV) IF THE ORDER IS PASSED WITHOUT APPLICATION O F MIND, SUCH ORDER WILL FALL UNDER THE CATEGORY OF ERRONEOUS ORDER. (V) EVERY LOSS OF REVENUE CANNOT BE TREATED AS PRE JUDICIAL TO THE INTERESTS OF THE REVENUE AND IF THE A.O HAS ADOPTED ONE OF TH E COURSES PERMISSIBLE UNDER LAW OR WHERE TWO VIEWS ARE POSSIBLE AND THE A.O HAS TAKEN ONE VIEW WITH WHICH THE CIT DOES NOT AGREE, IT CANNOT B E TREATED AS AN ERRONEOUS ORDER, UNLESS THE VIEW TAKEN BY THE A.O I S UNSUSTAINABLE UNDER LAW. (VI) IF WHILE MAKING THE ASSESSMENT, THE A.O EXAMI NES THE ACCOUNTS, MAKES ENQUIRIES, APPLIES HIS MIND TO THE FACTS AND CIRCUMSTANCES OF THE CASE AND DETERMINE THE INCOME, THE CIT, WHILE EXERC ISING HIS POWER UNDER S. 263 IS NOT PERMITTED TO SUBSTITUTE HIS ESTIMATE OF INCOME IN PLACE OF THE INCOME ESTIMATED BY THE A.O. (VII) THE A.O EXERCISES QUASI-JUDICIAL POWER VEST ED IN HIS AND IF HE EXERCISES SUCH POWER IN ACCORDANCE WITH LAW AND ARR IVES AT A CONCLUSION, SUCH CONCLUSION CANNOT BE TERMED TO BE ERRONEOUS SI MPLY BECAUSE THE CIT DOES NOT FEEL SATISFIED WITH THE CONCLUSION. (VIII) THE CIT, BEFORE EXERCISING HIS JURISDICTION UNDER S. 263 MUST HAVE MATERIAL ON RECORD TO ARRIVE AT A SATISFACTION. (IX) IF THE A.O HAS MADE ENQUIRIES DURING THE COUR SE OF ASSESSMENT PROCEEDINGS ON THE RELEVANT ISSUES AND THE ASSESSEE HAS GIVEN DETAILED EXPLANATION BY A LETTER IN WRITING AND THE A.O ALLOWS THE CLAIM ON BEING SATISFIED WITH THE 8 EXPLANATION OF THE ASSESSEE, THE DECISION OF THE A. O CANNOT BE HELD TO BE ERRONEOUS SIMPLY BECAUSE IN HIS ORDER HE DOES NOT M AKE AN ELABORATE DISCUSSION IN THAT REGARD. 7. BEFORE EMBARKING UPON AN INQUIRY ABOUT THE FACTS OF THE PRESENT CASE AND HOW THOSE FACTS HAVE BEEN CONSIDERED BY THE LEA RNED REVENUE AUTHORITIES BELOW, WE DEEM IT APPROPRIATE TO MAKE A REFERENCE OF THE OBSERVATIONS OF THE HON'BLE DELHI HIGH COURT IN THE CASE OF VEE GEE ENTERPRISES REPORTED IN 99 ITR 373 WHEREIN HON'BLE HI GH COURT HAS EXPOUNDED THE APPROACH OF THE ASSESSING OFFICER WHI LE PASSING ASSESSMENT ORDER. THE OBSERVATIONS OF THE HON'BLE HIGH COURT RE AD AS UNDER:- IT IS NOT NECESSARY FOR THE COMMISSIONER TO MAKE FURTHER INQUIRIES BEFORE CANCELING THE ASSESSMENT ORDER OF THE INCOME-TAX OF FICER. THE COMMISSIONER CAN REGARD THE ORDER AS ERRONEOUS ON THE GROUND THAT IN THE CIRCUMSTANCES OF THE CASE THE INCOME-TAX OFFICER SHOULD HAVE MADE FURTHER INQ UIRIES BEFORE ACCEPTING THE STATEMENTS MADE BY THE ASSESSEE IN HIS RETURN. THE REASON IS OBVIOUS. THE POSITION AND FUNCTION OF THE INCOME-TAX OFFICER IS VERY DIFF ERENT FROM THAT OF A CIVIL COURT. THE STATEMENT MADE IN A PLEADING PROVED BY THE MINI MUM AMOUNT OF EVIDENCE MAY BE ADOPTED BY A CIVIL COURT IN THE ABSENCE OF A NY REBUTTAL. THE CIVIL COURT IS NEUTRAL. IT SIMPLY GIVES DECISION ON THE BASIS OF T HE PLEADING AND EVIDENCE WHICH COMES BEFORE IT. THE INCOME-TAX OFFICER IS NOT ONLY AN ADJUDICATOR BUT ALSO AN INVESTIGATOR. HE CANNOT REMAIN PASSIVE IN THE FACE OF THE RETURN WHICH IS APPARENTLY IN ORDER BUT CALLS FOR FURTHER INQUIRY. IT IS HIS DUTY TO ASCERTAIN THE TRUTH OF THE FACTS STATED IN THE RETURN WHEN THE CIRCUMST ANCES OF THE CASE ARE SUCH AS TO PROVOKE AN INQUIRY. IT IS BECAUSE IT IS INCUMBENT O N THE ITO TO FURTHER INVESTIGATE THE FACTS STATED IN THE RETURN WHEN CIRCUMSTANCES W OULD MADE SUCH AN INQUIRY 9 PRUDENT THAT THE WORD ERRONEOUS IN SECTION 263 IN CLUDES THE FAILURE TO MAKE SUCH AN ENQUIRY. THE ORDER BECOMES ERRONEOUS BECAUSE SUC H AN INQUIRY HAS NOT BEEN MADE AND NOT BECAUSE THERE IS ANYTHING WRONG WITH T HE ORDER IF ALL THE FACTS STATED THEREIN ARE ASSUMED TO BE CORRECT. 8. IN THE LIGHT OF THE ABOVE TESTS, LET US EXAMINE THE FACTS OF THE PRESENT CASE. WITH THE ASSISTANCE OF LEARNED REPRESENTATIVE S, WE HAVE GONE THROUGH SECTION 80IC OF THE ACT. ACCORDING TO THIS SECTION, WHERE THE GROSS TOTAL INCOME OF AN ASSESSEE INCLUDES ANY PROFITS AND GAIN S DERIVED BY AN UNDERTAKING OR AN ENTERPRISES FROM ANY BUSINESS REF ERRED TO IN SUB- SECTION(21), THERE SHALL, IN ACCORDANCE WITH AND SU BJECT TO THE PROVISIONS OF THIS SECTION, BE ALLOWED, IN COMPUTING THE TOTAL IN COME OF THE ASSESSEE, A DEDUCTION FROM SUCH PROFITS AND GAINS AS SPECIFIED IN SUB-SECTION (3). READING OF SUB-SECTION (2) AND SUB-CLAUSES, NAMELY, (A) AND (B) WOULD INDICATE THAT WHERE AN ASSESSEE HAS BEGAN OR BEGUNS TO MANUFACTURE OR PRODUCE ANY ARTICLE OR THING, WHICH SHOULD NOT BE A N ARTICLE OR THING SPECIFIED IN SCHEDULE 13 ATTACHED WITH THE ACT AND SUCH MANUF ACTURING ACTIVITIES IS BEING CARRIED OUT IN AN INDUSTRIAL ESTATE, INDUSTRI AL PARK ETC. WHICH IS NOTIFIED BY THE BOARD IN ACCORDANCE WITH THE SCHEME FRAMED A ND NOTIFIED BY THE CENTRAL GOVERNMENT SUB-CLAUSE (B) PROVIDES THAT ASS ESSEE HAS BEGAN OR BEGUNS TO MANUFACTURE OR PRODUCE ANY ARTICLE MENTIO NED IN SCHEDULE XIV. THUS, SUB-CLAUSE (A) CONTEMPLATES AREA RESTRICTION MEANING THEREBY THE 10 MANUFACTURING ACTIVITY OUGHT TO BE STARTED BETWEEN 7 TH DAY OF JANUARY 2003 AND BEFORE IST DAY OF APRIL 2012 IN A SPECIFIED ARE A NOTIFIED BY THE BOARD, WHEREAS SUB-CLAUSE (B) PROVIDES STARTING OF THAT AC TIVITY IN BETWEEN SPECIFIED DATES BUT THE ACTIVITIES SHOULD BE NOTIFIED IN SCHE DULE-XIV. IT DOES NOT PUT ANY AREA RESTRICTION. IT SPECIFIES THE ACTIVITIES. ACCORDING TO THE LEARNED COMMISSIONER, THE PERUSAL OF FORM NO. 10CCB SUGGEST S THAT ASSESSEE HAS CLAIMED DEDUCTION UNDER SEC. 80IC(A) BECAUSE IT MEN TIONED KHASRA NUMBER WHERE ITS HOTEL IS SITUATED. THIS KHASRA NUMBER DOE S NOT FALL IN THE SPECIFIED AREA NOTIFIED BY THE BOARD. ON THE STRENGTH OF THES E FACTS, LEARNED COMMISSIONER CONCLUDED THAT ASSESSING OFFICER DID N OT CONDUCT PROPER INQUIRY AND, THEREFORE, HIS ORDER IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. 9. ON THE OTHER HAND, CASE OF THE ASSESSEE IS THAT ASSESSING OFFICER HAD ISSUED A DETAILED SHOW-CAUSE NOTICE WHICH IS AVAILA BLE ON PAGE 11 OF THE PAPER BOOK AND READS AS UNDER: TO PANKAJ NAGALIA 13-B,NEW SURVEY ROAD, DEHRADUN. SUB: NOTICE U/S. 142(1) OF IT ACT, 1961 FOR THE A .Y. 2006-07- REGARDING. 11 PLEASE REFER TO THE ABOVE AND YOUR CLAIM OF DEDUCTI ON U/S. 80-IC OF THE IT ACT, 1961 UNDER THE CATEGORY OF ECO TOURISM. YOU ARE REQUIRED TO FURNISH THE FOLLOWING IN SUPPOR T OF YOUR CLAIM OF DEDUCTION:- 1. WHETHER YOUR PROJECT/INSTITUTION/ORGANIZATION IS A PART OF ANY ECO TOURISM DEVELOPMENT PROJECT OF THE STATE GOVT.? 2. PLEASE FURNISH THE ENVIRONMENT IMPACT ASSESSMENT (E IA) REPORT FOR YOUR PROJECT. 3. PLEASE SUBSTANTIATE YOUR CLAIM BY LISTING THE STEPS YOU HAVE UNDERTAKEN TO MINIMIZE THE NEGATIVE ASPECTS OF CONV ENTIONAL TOURISM ON THE ENVIRONMENT. 4. FURNISH DETAILS AS TO HOW YOUR PROJECT HAS ENHANCED THE CULTURAL AND ECONOMIC SECURITY AND INTEGRITY OF THE LOCAL PE OPLE. 5. FURNISH COMPLETE DETAILS OF STEPS UNDERTAKEN WITH R ESPECT TO:- I) RECYCLING II) ENERGY EFFICIENCY III) WATER CONSERVATION IV) CREATION OF ECONOMIC OPPORTUNITIES FOR THE LOCAL COMMUNITIES 6. HOW YOUR PROJECT SATISFIES THE CONDITION OF AFFOR DABILITY AND LACK OF WASTE IN THE FORM OF LUXURY? 7. PLEASE LIST THE STEPS UNDERTAKEN TO PROMOTE SUSTAIN ABLE USE OF BIO DIVERSITY AND CONSERVATION OF CULTURAL DIVERSIT Y. THE DATE FIXED FOR COMPLIANCE IN THE OFFICE OF THE UNDERSIGNED AT 13-A, SUBHHASH ROAD, DEHRADUN IS 01.12.2008 AT 3 .30 PM SD/- (PARAMITA M. BISWAS) ADDL. COMMISSIONER OF INCOME-TAX RANGE-I, DERHRADUN. 12 10. WE HAVE GONE THROUGH THE SHOW-CAUSE NOTICE AND THE DETAILS SUBMITTED BY THE ASSESSEE IN RESPONSE TO THE SHOW-C AUSE NOTICE. ASSESSING OFFICER HAS NOT ELABORATELY DISCUSSED THE ISSUE IN THE ASSESSMENT ORDER BUT WE FIND THAT ASSESSEE HAS PLACED ON RECORD ALL THE DETAILS EXHIBITING THAT HIS HOTEL IS A ECO-TOURISM HOTEL WHICH FULFILLS ALL THE CONDITIONS OF THE NOTIFICATION TREATING SUCH TYPE OF INDUSTRIES AS A THRUST INDUSTRY. AT SR. NO. 15 OF PART-C OF SCHEDULE XIV, THE BOARD HAS NOTIFI ED AN INDUSTRY WHICH IS ECO-TOURISM INCLUDING HOTEL RESORT, SPA, ENTERTAINM ENT/AMUSEMENT PARK AND ROPEWAY. THUS, ACCORDING TO THE ASSESSEE, HIS C ASE FALLS IN 80-IC SUB- SECTION (2) SUB-CLAUSE (B) OF THE ACT. LEARNED DR A T THE TIME OF HEARING, DREW OUR ATTENTION TO THE NARRATIONS AVAILABLE AT S R. NO.25 OF FORM NO. 10CCB WHICH SUGGEST THAT DEDUCTION WAS CLAIMED UNDE R SEC. 80 IC(2) OF THE ACT. BUT BEFORE THE LEARNED COMMISSIONER, THE ASSES SEE HAS POINTED OUT THE COMPLETE FACTS CONSIDERED BY THE ASSESSING OFFICER AND HOW HE HAS DEMONSTRATED HIS CLAIM UNDER SEC. 80-IC(2)(B) OF TH E ACT. LEARNED COMMISSIONER OUGHT TO HAVE NOT REJECTED THE PLEA OF ASSESSEE ABOUT THE ADMISSIBILITY OF DEDUCTION BY MERELY SAYING THAT TH IS PLEA HAS BEEN HARBORED BY THE ASSESSEE AFTER THE NOTICE ISSUED UNDER SEC. 263 OF THE ACT. TO OUR MIND, LEARNED COMMISSIONER OUGHT TO HAVE LOOKED INT O THE ASPECT, IF SOME IRREGULARITY IS THERE IN FORM NO.10CCB THEN IT IS A CURABLE IRREGULARITY. SUCH 13 IRREGULARITY COULD NOT AUTHORIZE THE REVENUE TO SHU T THE DOOR AGAINST THE ASSESSEE IN RESPECT OF ANY DEDUCTION ADMISSIBLE TO HIM OTHERWISE IN LAW. THE FACTS SHOULD HAVE BEEN VIEWED IN TOTALITY AND NOT I N A MECHANICAL WAY. THE QUASI-JUDICIAL AUTHORITIES ARE BEING RESPECTED NOT ON ACCOUNT OF THEIR POWERS TO LEGALIZE THE INJUSTICE ON TECHNICAL GROUN DS BUT BECAUSE THEY ARE CAPABLE OF REMOVING THE INJUSTICE AND IS EXPECTED T O DO SO. THUS, BEFORE THE LEARNED ASSESSING OFFICER, ASSESSEE HAS ESTABLISHED HIS CLAIM FOR GRANT OF DEDUCTION U/S. 80-IC(2)(B) OF THE ACT. LEARNED COMM ISSIONER HAS NOT RECORDED ANY CONCLUSIVE FINDING ABOUT ITS INADMISSI BILITY. 11. AS FAR AS THE COMPUTATION OF EXCESS DEDUCTION I S CONCERNED, IT CAN BE RECTIFIED BY THE ASSESSING OFFICER BY EXERCISING PO WERS UNDER SEC. 154 OF THE ACT. FOR SUCH AN EXERCISE, IT IS NOT NECESSARY TO T AKE ACTION U/S. 263 AND PUT AN ASSESSEE TO UNDERGO SECOND ROUND OF ASSESSMENT P ROCEEDINGS. IN VIEW OF THE ABOVE DISCUSSION, WE PARTLY ALLOW THE APPEAL OF THE ASSESSEE, ORDER OF THE LEARNED COMMISSIONER IS SET ASIDE BY MODIFYING TO T HE EXTENT IT AUTHORIZE THE ASSESSING OFFICER TO REINVESTIGATE THE ISSUE AB OUT ADMISSIBILITY OF DEDUCTION UNDER SECTION 80-IC OF THE ACT. THE ORDER IS QUASHED TO THIS EXTENT, HOWEVER, THE ORDER IS UPHELD TO THE EXTENT THAT ASSESSING OFFICER SHALL REVERIFY THE COMPUTATION OF DEDUCTION ADMISSIBLE UN DER SEC. 80-IC OF THE 14 ACT. THE EXCESS DEDUCTION, IF ANY, ALLOWED TO THE A SSESSEE BE RECTIFIED AFTER PROVIDING AN OPPORTUNITY OF HEARING TO THE ASSESSEE . DECISION PRONOUNCED IN THE OPEN COURT ON 20.04.201 2 SD/- SD/- ( T.S. KAPOOR ) ( RAJPAL YADAV ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 20/04/2012 MOHAN LAL COPY FORWARDED TO: 1) APPELLANT 2) RESPONDENT 3) CIT 4) CIT(APPEALS) 5) DR:ITAT ASSISTANT REGISTRAR