M/s Recorders and Medicare System Pvt. Ltd., Chandigarh V. CIT I, Chandigarh

ITA 285/CHANDI/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 86148 (ITAT-CHANDIGARH)
• Duration Of Justice: 10 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-02-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 02-02-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 20-03-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: DR AMA RVEER SINGH
• Keywords: Assessment record
• Section: 143(3); 80IB; 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH B CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI T.R.SOOD, ACCOUNTANT MEMBER ITA NO.285/CHD/2014 ASSESSMENT YEAR: 2009-10 RECORDERS & MEDICARE V THE CIT-1, SYSTEM P.LTD, CHANDIGARH. PLOT NO. 18/15 INDUSTRIAL AREA, PHASE-1, CHANDIGARH. PAN: AACCR6241B (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI TEJ MOHAN SI NGH RESPONDENT BY : DR. AMARVEER SINGH DATE OF HEARING : 02.02.2015 DATE OF PRONOUNCEMENT : 05.02.2015 O R D E R PER BHAVNESH SAINI,JM THIS APPEAL BY ASSESSEE IS DIRECTED AGAINST THE ORD ER OF LD. LD. COMMISSIONER OF INCOME TAX-I, CHANDIGARH DATED FEBRUARY, 2014 FOR ASSESSMENT YEAR 2009-10 UNDER SECTION 263 OF THE INCOME TAX ACT. 2. BRIEFLY THE FACTS OF THE CASE ARE THAT THE ASSES SEE FILED RETURN OF ITS INCOME ON 09.11.2009 DECLARING INCOME OF RS. 60,62,096/-. THE ASSESSEE IS ENGAGED IN THE MANUFA CTURING OF ELECTRONIC MEDICAL DIAGNOSTIC EQUIPMENTS. THE ASSE SSMENT UNDER SECTION 143(3) OF THE ACT WAS COMPLETED ON 30 .12.2011 AT A TOTAL INCOME OF RS. 63,06,820/- BY THE ADDL. CIT, RANGE-II CHANDIGARH. 2 3. WHILE EXAMINING THE ASSESSMENT RECORDS, IT WAS N OTICED THAT ASSESSING OFFICER DID NOT EXAMINE THE ISSUE OF APPLICABILITY OF CLAIM OF DEDUCTION UNDER SECTION 80IC OF THE ACT TO THE TUNE OF RS.2.29 CR. THE RETURN OF INCOME FILED BY THE A SSESSEE WAS NOT IN TIME AND WAS, THEREFORE, HIT BY THE MANDATOR Y PROVISIONS OF SECTION 80AC OF THE ACT. THE ASSESSING OFFICER HAS ALLOWED THE CLAIM OF ASSESSEE BY NOT APPLYING THE PROVISION S OF LAW AND WITHOUT EXAMINING THE FACTS OF THE CASE. IT WAS, T HEREFORE, FOUND THAT THE ASSESSMENT ORDER IS ERRONEOUS AS WELL AS P REJUDICIAL TO THE INTEREST OF REVENUE. THE SHOW CAUSE NOTICE WAS ISSUED TO THE ASSESSEE FOR EXPLANATION IN WHICH THE ASSESSEE STATED THAT RETURN WAS FILED LATE BUT TAXES HAVE BEEN PAID. BU T IT WAS BEYOND THE CONTROL OF THE ASSESSEE COMPANY BECAUSE THE BALANCE SHEET AND TAX AUDIT REPORT WERE OBTAINED ON 30.09.2 009, WHICH WAS WITHIN TIME. THE LD. COMMISSIONER OF INCOME TAX , HOWEVER, CONSIDERING THE RETURN TO BE LATE, SET ASIDE THE IM PUGNED ORDER AND DIRECTED THE ASSESSING OFFICER TO PASS FRESH AS SESSMENT ORDER IN ACCORDANCE WITH LAW. THE FINDINGS OF LD. COMMISSIONER OF INCOME TAX IN PARAS 4 TO 12 OF THE IMPUGNED ORDE R ARE REPRODUCED AS UNDER : 4. I HAVE CAREFULLY CONSIDERED THE SUBMISSION S OF THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE AND THE F ACTS OF THE CASE. BEFORE DISCUSSING THE ARGUMENTS OF THE ASSESSEE, IT NEEDS TO BE EMPHASIZED THAT THE PROVISIONS OF THE LAW AS CONTAI NED IN SECTION 80AC ARE CATEGORICAL IN MAKING IT MANDATORY FOR EVERY PERSON CLAIMING DEDUCTION UNDER THE VARIOUS SECTIONS STATED THEREIN, TO FILE THE RETURN OF INCOME WITHIN THE STIPULATED DUE DATE . ACCORDING TO THE PROVISIONS OF SECTION 80AC, IT IS INCUMBENT UPON EVE RY PERSON TO FURNISH ITS RETURN OF INCOME, ON OR BEFORE THE DUE DA TE SPECIFIED UNDER SUB-SECTION (1) OF SECTION 139. IT IS PERTINENT TO REVISIT THE PROVISIONS OF SECTION 80AC WHICH READS AS UNDER: 'WHERE IN COMPUTING THE TOTAL INCOME OF THE AN ASSESSEE OF THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR COMMENCING ON THE 1 ST DAY OF APRIL, 2009 OR ANY SUBSEQUENT YEAR, ANY DEDUCTION 3 IS ADMISSIBLE UNDER SECTION 80-IA OR SECTION 80-IAB OR SECTION 80-IB OR SECTION 80-IC (OR SECTION 80-ID OR SECTION 80-IE], NO SUCH DEDUCTION SHALL BE ALLOWED TO HIM UNLESS HE FURNISHES A RETURN OF HIS INCOME FOR SUCH ASSESSMENT YEAR ON OR BEFORE THE DUE DATE SPECIFIED UNDER SUB-SECTION (1) OF SECTION 139.' 5. A BARE PERUSAL OF SECTION 80AC REVEALS THAT IT NOT ONLY CONTAINS THE TIME LIMIT OF MAKING THE CLAIM FOR DED UCTION U/S 80IC I.E. THE TIME WITHIN WHICH THE RETURN IS REQUIRED TO BE FILED, BUT ALSO THE CONSEQUENCES THAT WOU LD FOLLOW IF THE RETURN OF INCOME CONTAINING SUCH CLAIM/DEDUCTION IS NOT FILED BEFORE THE EXPIRY OF DUE DATE SPECIFIED U/S 139( 1) OF THE ACT. THUS SECTION 80AC OF THE ACT PROVIDES FOR THE CON SEQUENCES THAT WOULD FOLLOW IF THE RETURN OF INCOME CONTA INING CLAIM U/S 80IC IS NOT FURNISHED BEFORE THE DUE DATE SPECIFIED IN SECTION 139(1). THE LANGUAGE OF SECTION 80AC IN TH IS BEHALF IS ABSOLUTELY CLEAR. IT IS A WELL SETTLED PRINCIPLE OF CONSTRUCTION THAT THE STATUTORY ENACTMENT MUST OBVIOUSLY BE CONS TRUED ACCORDING TO THE PLAIN MEANING AND THAT THE SCOPE O F THE LEGISLATION OR THE INTENTION OF THE LEGISLATION CAN NOT BE ENLARGED WHEN THE LANGUAGE OF THE PROVISIONS IS PLAIN AND UN AMBIGUOUS. THE LANGUAGE OF SECTION80AC IS UNEQUIVOCAL IN SPECI FICALLY PROVIDING FOR THE CONSEQUENCE THAT WOULD FOLLOW IF THE RETURN OF INCOME CONTAINING CLAIM FOR DEDUCTION U/S 80IC IS N OT FURNISHED BEFORE THE DUE DATE SPECIFIED IN SECTION 139(1) OF THE ACT. THERE ARE NO CIRCUMSTANTIAL PROVISIONS OR ANY EXCEPTIONS C ONTAINED IN OR APPLICABLE TO THIS SECTION OF THE ACT. THERE ARE NO IF S OR BUTS TO BE APPLIED BEFORE THE LEGAL CONSEQUENCE, OF THE VIOLATI ON OF THE CONDITION LAID DOWN BY THIS SECTION, FOLLOWS. 6. IF THE CLAIM FOR DEDUCTION U/S 80IC IS NOT MADE AS IN THE MANNER AND AS PER TIME LIMIT SPECIFIED IN SECTION 80AC, THE CLAIM FOR DEDUCTION U/S 80IC GETS TIME BARRED. IT I S WELL SETTLED THAT AN ACT MUST BE DONE STRICTLY IN THE MA NNER PROVIDED BY LAW. IF THE LAW REQUIRES, AS U/S 80AC, THAT DEDUCTION U/S 80IC CANNOT BE AVAILABLE UNLESS THE R ETURN IS FURNISHED BEFORE THE DUE DATE SPECIFIED IN SECTION 8 0AC, THE CLAIM OF THE ASSESSEE FOR DEDUCTION CANNOT BE ENTERTAINED IN CONTRAVENTION OF THE PROVISIONS OF SECTION 80AC. 7. THEREFORE, IT IS WELL SETTLED BY THE LEGISLATU RE, THAT IF THE ASSESSEE WANTS TO AVAIL DEDUCTION U/S 80IC, HE HAS TO NECESSARILY FURNISH HIS RETURN OF INCOME CONTAINING SUCH CLAIM BEFORE THE DUE DATE SPECIFIED IN SECTION 139(1). T HE LANGUAGE OF SECTION 80AC IS NEGATIVELY WORDED IN AS MUCH AS IT PROVIDES IN CLEAR TERMS THAT DEDUCTION U/S 80IC SHA LL NOT BE ALLOWED IF THE RETURN OF INCOME CONTAINING SUCH CLAIM IS NOT FURNISHED BY THE DUE DATE SPECIFIED IN SECTION 139(1). IN THE FACE OF SUCH CLEAR LANGUAGE OF SECTION 80AC, THERE CAN BE NO HESITATION IN HOLDING THAT THE PROVISIONS OF SECTIO N 80AC ARE MANDATORY IN NATURE AND THEREFORE FAILURE TO FURNIS H THE RETURN OF INCOME FILED IN DUE DATE SPECIFIED IN SECTION 13 9(1) WOULD DIS- ENTITLE THE ASSESSEE FROM THE CLAIM OF DEDUCTION U/ S 80IC. 4 8. IN THIS LIGHT, THE SUBMISSIONS OF THE ASSESSEE ARE IRRELEVANT AND DEVIATED FROM THE ISSUE AT HAND. IT IS AN UNDIS PUTED FACT THAT THE ASSESSEE HAS FURNISHED ITS RETURN OF IN COME AFTER THE DUE DATE OF FILING U/S 139(1). HENCE, THE ASSESSE E'S CASE IS CLEARLY COVERED UNDER THE PROHIBITORY PROVISIONS OF SECTION 80AC OF THE INCOME-TAX ACT, 1961. SINCE, AS CLEARLY BROUGHT OUT ABOVE, THE LAW DOES NOT PROVIDE FOR ANY EXCEPTION TO THE AP PLICATION OF SECTION 80AC, THERE IS NO POINT IN SUBMITTING THAT TH E ASSESSEE WAS PREVENTED BY A CAUSE, REASONABLE OR OTHERWISE, FROM FILING THE RETURN IN TIME AND WHETHER OR NOT THE AUDITED A CCOUNTS WERE FINALIZED BEFORE THE DUE DATE. IF, BY THE ASSE SSEE'S OWN ADMISSION, THAT IT WAS UNDER LEGAL OBLIGATION TO GET I TS ACCOUNTS AUDITED, THEN IT WAS ALSO UNDER AN EQUALLY LAWFUL O BLIGATION TO SUBMIT THE CLAIM U/S 80IC THROUGH A VALID RETURN WI THIN THE STIPULATED TIME. HAVING FAILED TO DO SO, THE ASSESS EE GETS LEGALLY DEPRIVED OF THE BENEFIT U/S 80IC FOR THE RELEVANT ASSE SSMENT YEAR. 9. NO AUTHORITY UNDER THE INCOME TAX ACT, IS EM POWERED TO CONDONE THE DELAY IN MEETING THIS REQUIREMENT U/ S 80AC, UNDER ANY CONDITION WHATSOEVER. THE ARGUMENT THAT T HE ASSESSEE WAS PREVENTED BY SUFFICIENT OR REASONABLE C AUSE FROM COMPLYING WITH THE CONDITIONS LAID DOWN BY SECTION 80 AC, THOUGH IN ITSELF A MATTER OF VERIFICATION, CARRIES NO WEIGHT BEFORE THE VERY UNMISTAKABLE STIPULATION OF THE LAW AS CONTAINED THE REIN. 10. FURTHER, THE CASE LAW QUOTED BY THE ASSESSEE IN SUP PORT OF ITS CLAIM IS DISTINGUISHABLE ON FACTS. THE ISSUE AT HAND PERTAINS TO A POSITIVE CLAIM OF A BENEFIT AVAILABLE UNDER THE LAW FOR WHICH CERTAIN CONDITIONS INCLUDING THAT U/S 80AC HAVE BEEN STRICTLY LAID DOWN. IT IS THE GENERAL POSITION OF THE LAW THAT FOR ANY RIGHT OR BENEFIT TO BE CLAIMED, THE CLAIMANT HA S TO MEET CERTAIN MANDATORY CONDITIONS. THE CASE LAW REFERRED TO, APPLIES TO SECTION 80 OF THE ACT WHICH DEALS WITH CARRY FORWA RD OF LOSSES. THE SUBJECT MATTER OF THESE TWO PROVISIONS OF THE L AW IS ENTIRELY DIFFERENT AND ANY FURTHER DISCUSSION ON THIS ASPECT SHALL BE A FUTILE DIGRESSION. 11. IN FACT, ONE OF THE RELEVANT CASE PRECEDENTS IS AVA ILABLE IN THE ORDER OF THE HON. ITAT AMRITSAR BENCH IN BAL KR ISHAN DHAWAN HUF PROP. M/S B.K.D ENTERPRISES, AMRITSAR IT A NO. 235- 236/ASR/2011. IN THIS ORDER, THE TRIBUNAL HAS CLEAR LY HELD THAT THE BENEFIT U/S 80IB (READ 80IC FOR THE PRESENT CASE ) IS NOT ALLOWABLE IF THE CONDITION LAID DOWN BY SECTION 80AC I S NOT COMPLIED WITH BY AN ASSESSEE. 12. THEREFORE, IN VIEW OF THE FACTS AND THE LEGAL P OSITION STATED ABOVE, IT IS APPARENT THAT THE SUBJECT ORDER OF ASSESSMENT DATED 31.12.2011 IS NOT ONLY ERRONEOUS BU T IS ALSO PREJUDICIAL TO THE INTEREST OF REVENUE. CONSEQUENTLY, I N EXERCISE OF THE JURISDICTION CONFERRED BY SECTION 263 OF THE AC T, THE SAID ORDER OF ASSESSMENT DATED 31.12.2011 IS SET ASIDE. THE AS SESSING OFFICER IS DIRECTED TO PASS A FRESH ASSESSMENT ORDE R AND RE- COMPUTE THE ASSESSEE'S INCOME AFTER MAKING FURTHER ENQUIRIES AS ABOVE AND BY APPLYING THE PROVISIONS OF THE LAW CORREC TLY, AFTER AFFORDING DUE OPPORTUNITY TO THE ASSESSEE TO PRESEN T ITS CASE. AS A RESULT, THE ASSESSMENT MADE IN THE CASE BY ORD ER U/S 143(3) DATED 31.12.2011 IS HEREBY CANCELLED. 5 4. WE HAVE HEARD LD. REPRESENTATIVES OF BOTH THE PA RTIES AND PERUSED MATERIAL ON RECORD. THE LD. COUNSEL FOR T HE ASSESSEE VEHEMENTLY ARGUED ON BEHALF OF THE ASSESSEE THAT O RDER UNDER SECTION 263 OF THE ACT IS NOT IN ACCORDANCE WITH LA W. HOWEVER, LD. DR SUBMITTED THAT THE ISSUE IS COVERED AGAINST THE ASSESSEE BY ORDER OF ITAT SPECIAL BENCH, RAJKOT IN THE CASE OF SAFFIRE GARMENTS VS ITO, GANDHIDHAM 140 ITD 6 IN WHICH IT W AS HELD THAT THE PROVISION OF PROVISO TO SECTION 10A(1A) IS MANDATORY. CONSIDERING THE ABOVE FACTS IN THE LIGHT OF THE FIN DINGS OF THE LD. COMMISSIONER OF INCOME TAX, WE DO NOT FIND ANY MERI T IN THE APPEAL OF THE ASSESSEE. HON'BLE CALCUTTA HIGH COUR T IN THE CASE OF CIT VS SHELCON :PROPERTIES (P) LTD. 110 DTR 37 HELD AS UNDER : CONCLUSION : REQUIREMENT OF S. 80AC IS MANDATORY A ND, THEREFORE, BENEFIT OF S. 80IB(10) CAN BE AVAILED BY THE ASSESSEE ONLY IF IT HAS FILED THE RETURN ON OR BEFO RE THE PRESCRIBED DATE AND NOT OTHERWISE. 5. THE AFORESAID JUDGEMENT IS DIRECTLY APPLICABLE T O THE FACTS OF THE CASE. IT IS ADMITTED FACT THAT RETURN OF INC OME FILED BY ASSESSEE WAS LATE. THEREFORE, THE ASSESSING OFFICE R SHOULD HAVE EXAMINED THIS ASPECT AT THE STAGE OF ASSESSMENT WHI LE GRANTING DEDUCTION TO THE ASSESSEE. SINCE THE ASSESSING OFF ICER HAS NOT EXAMINED THIS ASPECT OF LATE RETURN FILED BY THE AS SESSEE, THEREFORE, LD. COMMISSIONER OF INCOME TAX WAS JUSTI FIED IN INVOKING JURISDICTION UNDER SECTION 263 OF THE ACT AND WAS JUSTIFIED IN HOLDING THAT THE ASSESSMENT ORDER IS E RRONEOUS AS WELL AS PREJUDICIAL TO THE INTEREST OF REVENUE. TH E LD. COMMISSIONER OF INCOME TAX, THEREFORE, RIGHTLY DIRE CTED THE ASSESSING OFFICER TO PASS FRESH ASSESSMENT ORDER IN ACCORDANCE 6 WITH LAW. THE APPEAL OF THE ACT HAS NO MERIT AND T HE SAME IS ACCORDINGLY, DISMISSED. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISS ED. ORDER PRONOUNCED IN THE OPEN COURT ON 05 TH FEBRUARY,2015. SD/- SD/- (T.R.SOOD) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 5 TH FEBRUARY,2015. POONAM COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT(A), THE CIT, DR ASSISTANT REGISTRAR, ITAT CHANDIGARH