INCOME TAX OFFICER, JAIPUR V. M/S MARATHON INDIA LTD., JAIPUR

ITA 287/JPR/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 3682 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 2 month(s)
• Appeal Type: Income Tax (International Taxation) Appeal
• Pronouncement Date: 29-04-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2014-2015
• Appeal Filed On: 28-02-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SEEMA MEENA
• Assessee Lawyers: B L AGARWAL
• Keywords: Question of law
• Section: 80IB; 205; 68

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH FOT; IKY JKO] U;KF;D LNL; ,OA JH HKKXPAN] YS[KK L NL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI BHAGCHAND, A M VK;DJ VIHY LA- @ ITA NO. 287/JP/2018 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2014-15 THE ITO, WARD-3(2), JAIPUR. CUKE VS. M/S MARATHON INDIA LTD., D-248, BIHARI MARG, BANIPARK, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AABCM 1858 J VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SHRI B. L. AGARWAL (C.A.) JKTLO DH VKSJ LS @ REVENUE BY : SMT. SEEMA MEENA (JCIT) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 21/06/2018 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT: 27/06/2018 VKNS'K@ ORDER PER: VIJAY PAL RAO, J.M. THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF DATED 05.12.2017 OF LD. CIT(A), JAIPUR FOR A.Y. 2014-15. THE REVENUE HAS RAISED THE FOLLOWING GROUND AS UNDER:- 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE AND IN LAW THE LD. CIT(A) IS JUSTIFIED IN ALLOWING THE DEDUCTION U/S 80IE ON THE GROUND THAT TAX AUDIT REPORT ALONGWITH FORM NO. 10CCB WERE FILED BEFORE THE AO AT THE TIME OF ASSES SMENT PROCEEDINGS WITH A CERTIFICATE THAT THE ABOVE SAID FORMS HAD BEEN ITA NO. 287/JP/2018 ITO VS. M/S MARATHON INDIA LTD. 2 SIGNED BY THE CHARTERED ACCOUNTANT ON 27.06.2014 WH EREAS IT IS MANDATED BY INCOME TAX ACT RULES TO FILE RELEVANT T AX AUDIT REPORT AND FORM 10CCB ELECTRONICALLY? 2. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF MANUF ACTURING OF BATTERIES AND DEACTIVATOR. THE ASSESSEE FILED ITS R ETURN OF INCOME ON 26.08.2014 DECLARING TOTAL INCOME OF RS. 1,82,230/- AFTER CLAIMING DEDUCTION U/S 80IE OF RS. 73,21,215/-. THE AO DISAL LOWED THE CLAIM OF DEDUCTION U/S 80IE OF THE ACT ON THE GROUND THAT TH E ASSESSEE DID NOT FILE AUDIT REPORT IN FORM NO. 10CCB ELECTRONICALLY ALONG WITH THE RETURN OF INCOME. ON APPEAL, THE LD. CIT(A) HAS ALLOWED TH E CLAIM OF THE ASSESSEE BY CONSIDERING THE FACT THAT THE ASSESSEE HAS FILED THE TAX AUDIT REPORT ALONGWITH FORM NO. 10CCB DURING THE CO URSE OF ASSESSMENT PROCEEDINGS AND THEREFORE, FOLLOWING THE DECISIONS ON THE POINT OF LD. CIT(A) DIRECTED THE AO TO ALLOW THE CL AIM U/S 80IE OF THE ACT. 3. BEFORE US, THE LD. DR HAS SUBMITTED THAT AS PER THE PROVISIONS OF SECTION 80IE(6) R.W.S. 80IA(7) OF THE IT ACT THE AS SESSEE SHALL FILE AUDITED ACCOUNTS ALONGWITH AUDIT REPORT IN THE PRES CRIBED FORM AND DULY SIGNED BY THE CHARTERED ACCOUNTANT ELECTRONICALLY W ITH THE RETURN OF INCOME. THE LD. DR HAS ALSO REFERRED TO RULE 12(2) OF THE INCOME TAX RULES AND SUBMITTED THAT THE AUDIT REPORT IN FORM N O. 10CCB SHALL BE ITA NO. 287/JP/2018 ITO VS. M/S MARATHON INDIA LTD. 3 FILED ELECTRONICALLY. THUS, THE LD. DR HAS SUBMITTE D THAT WHEN THE ASSESSEE FAILED TO COMPLY WITH THE PROVISIONS OF SE CTION 80IE(6) AS WELL AS SECTION 80IA(7) OF THE ACT THEN, THE CLAIM OF DE DUCTION IS NOT ADMISSIBLE. SHE HAS RELIED UPON THE ORDERS OF THE A SSESSING OFFICER. 4. ON THE OTHER HAND, THE LD. AR HAS SUBMITTED THAT THE ASSESSEE FILED TAX AUDIT REPORT ALONG WITH FORM NO. 10CCB DU RING THE COURSE OF ASSESSMENT PROCEEDINGS AND CLAIMED DEDUCTION U/S 80 IE OF THE ACT. THEREFORE, MERELY BECAUSE TAX AUDIT REPORT WAS NOT FILED ALONGWITH RETURN OF INCOME THE CLAIM OF THE ASSESSEE CANNOT B E DENIED ON TECHNICAL REASONS. IN SUPPORT OF HIS CONTENTION, H E HAS RELIED UPON THE DECISION OF THE HONBLE SUPREME COURT IN CASE OF CIT VS. G.M. KNITTING INDUSTRIES (P.) LTD. 376 ITR 456 AND SUBMITTED THAT THE HONBLE SUPREME COURT HAS UPHELD THE ORDER OF THE H ONBLE HIGH COURT ALLOWING THE CLAIM OF DEDUCTION U/S 80IB OF THE IT ACT AND OBSERVED THAT EVEN THOUGH NECESSARY CERTIFICATE IN FORM 10CC B ALONGWITH RETURN OF INCOME HAD NOT BEEN FILED BUT SAME WAS FILED BEF ORE FINAL ORDER OF ASSESSMENT WAS MADE. THUS IT WAS HELD THAT THE ASSE SSEE WAS ENTITLED TO CLAIM DEDUCTION U/S 80IB OF THE ACT. THE LD. AR HAS ALSO RELIED UPON THE DECISION OF THE HONBLE ALLAHABAD HIGH COURT IN CASE OF CIT VS. FORTUNA FOUNDATION ENGINEERS & CONSULTANTS (P.) LTD . 81 ITA NO. 287/JP/2018 ITO VS. M/S MARATHON INDIA LTD. 4 TAXMANN.COM 189 AND SUBMITTED THAT THE HONBLE HIGH COURT HAS HELD THAT THE FILING OF AUDIT REPORT IN FORM NO. 10 CCB ALONGWITH RETURN OF INCOME IS NOT MANDATORY AND ONLY DIRECTORY AND A SSESSEE CANNOT BE DENIED THE CLAIM OF DEDUCTION IF IT FILED AUDIT REP ORT IN FORM NO. 10CCB IN THE COURSE OF ASSESSMENT PROCEEDINGS. THE LD. AR OF THE ASSESSEE HAS SUPPORTED THE IMPUGNED ORDER OF THE LD. CIT(A). 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS THE RELEVANT MATERIALS ON RECORD. THE AO HAS NOT DISPUTED THE EL IGIBILITY OF THE ASSESSEE FOR DEDUCTION U/S 80IE OF THE ACT BEING NA TURE OF BUSINESS AND UNDERTAKING OF THE ASSESSEE ENGAGED IN THE MANUFACT URING OF GOODS OR ARTICLES. ONLY REASONS FOR DISALLOWANCE OF CLAIM OF DEDUCTION U/S 80IE OF THE ACT BY THE AO IS NOT FILING OF THE AUDIT REPORT IN FORM NO. 10CCB ALONG WITH THE RETURN OF INCOME. IT IS ALSO NOT IN DISPUTED THAT THE ASSESSEE FILED THE REQUISITE TAX AUDIT REPORT IN FO RM NO. 10CCB DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND BEFORE THE ASSESSMENT ORDER WAS PASSED BY THE AO. THE HONBLE MADRAS HIGH COURT IN CASE OF CIT VS. AKS ALLOY PVT. LTD. 205 TAXMAN 11 WHILE CONSIDERING AN IDENTICAL ISSUE OF NOT FILING OF AUDIT REPORT IN FO RM 10CCB ALONG WITH RETURN OF INCOME BUT FILED THE SAME BEFORE THE ASSE SSMENT WAS COMPLETED HAS HELD IN PARAS 5 TO 13 AS UNDER:- ITA NO. 287/JP/2018 ITO VS. M/S MARATHON INDIA LTD. 5 5. IN SO FAR AS IT RELATES TO THE SUBSTANTIAL QUES TION OF LAW (1) IS CONCERNED, NAMELY, WHETHER THE FILING OF AUDIT REPO RT IN FORM 10CCB IS MANDATORY, IT IS WELL SETTLED BY A NUMBER OF JUDICIAL PRECEDENTS THAT BEFORE THE ASSESSMENT IS COMPLETED, THE DECLARATION COULD BE FILED. IN FACT, THE SAID ISSUE CAME TO BE DECIDED BY THE KARNATAKA HIGH COURT IN THE CASE IN CIT V. ACE MULTITAXES SYSTEMS (P.) LTD. [2009] 317 ITR 207 (KAR.), WHEREIN IT WAS HELD THAT WHEN A RELIEF IS SOUGHT FOR UNDER SECTION 80IB OF THE ACT, THERE IS NO OBLIGATION ON THE PART OF THE ASSESSEE TO FILE RETURN ACCOMPANIED BY THE AUDIT REPORT, THEREBY, HO LDING THAT THE SAME IS NOT MANDATORY. THEREFORE, IT IS CLEAR THAT BEFORE THE ASSESSMENT IS COMPLETED IF SUCH REPORT IS FILED, NO FAULT COULD BE FOUND AGAINST THE ASSESSEE. THAT WAS ALSO THE VIEW OF THE DELHI HIGH COURT IN THE CASE IN CIT V. CONTIMETERS ELECTR ICALS (P.) LTD. [2009] 317 ITR 249/ 178 TAXMAN 422 (DELHI), WHEREIN THE DELHI HIGH COURT, BY FOLLOWING THE JUDGEMENTS OF THE MADR AS HIGH COURT IN CIT V. A.N. ARUNACHALAM [1994] 208 ITR 481 / 75 TAXMAN 529 AND IN CIT V. JAYANT PATEL [2001] 248 ITR 199/117 TAXMAN 707 (MAD.) HELD THAT THE FILING OF AUDIT REP ORT ALONG WITH THE RETURN WAS NOT MANDATORY BUT DIRECTORY AND THAT IF THE AUDIT REPORT WAS FILED AT ANY TIME BEFORE THE FRAMING OF THE ASSESSMENT, THE REQUIREMENT OF THE PROVISIONS OF TH E ACT SHOULD BE HELD TO HAVE BEEN MET. 6. THAT IS ALSO THE CONSISTENT VIEW OF THE OTHER HI GH COURTS, INCLUDING THE HIGH COURT OF BOMBAY IN CIT V. SHIVAN AND ELECTRONICS [1994] 209 ITR 63 / 75 TAXMAN 93 (BOM.), APART FROM GUJARAT HIGH COURT IN ZENITH PROCESSING MILLS V. CI T [1996] 219 ITR 721 (GUJ.) AND PUNJAB AND HARYANA HIGH COURT IN CIT V. MAHALAXMI RICE FACTORY [2007] 294 ITR 631/ 163 TAXMAN 565 (PUNJ. & HAR). 7. THE CALCUTTA HIGH COURT IN THE CASE IN THE CIT V . BERGER PAINTS (INDIA) LTD. [2002] 254 ITR 503/[2003] 126 TAXMAN 435 (CAL.) ITA NO. 287/JP/2018 ITO VS. M/S MARATHON INDIA LTD. 6 HAS ALSO CONCURRED WITH THE SAID VIEW WHICH WAS FOL LOWED BY THE TRIBUNAL IN THIS CASE. 8. MR. T. RAVIKUMAR, THE LEARNED COUNSEL FOR THE AP PELLANT IS NOT ABLE TO PRODUCE ANY OTHER JUDGEMENT CONTRARY TO THE ABOVE SAID VIEWS CONSISTENTLY TAKEN. 9. IN THE LIGHT OF THE ABOVE, BY VIRTUE OF HIERARCH Y OF JUDGEMENTS WHICH ARE AGAINST THE REVENUE, THE SUBSTANTIAL QUES TION OF LAW (1) WOULD NOT ARISE AT ALL FOR CONSIDERATION. 10. IN SO FAR AS THE SUBSTANTIAL QUESTION OF LAW (2 ) IS CONCERNED, IT RELATES TO THE DELETION OF ADDITION OF RS. 1,20,00, 000/- MADE UNDER SECTION 68 OF THE ACT BY THE ASSESSING OFFICE R AS UNEXPLAINED SHARE APPLICATION MONEY, AND THE ISSUE HAS BEEN COVERED BY THE JUDGEMENT OF THE MADRAS HIGH COURT I N THE CASE IN CIT V. GOBI TEXTILES LTD. [2007] 294 ITR 663/[20 08] 170 TAXMAN 142 (MAD.) HOLDING AGAINST THE REVENUE. 11. IN SUCH VIEW OF THE MATTER, THE SUBSTANTIAL QUE STION OF LAW (2) ALSO DOES NOT MERIT CONSIDERATION. 12. IN FACT, TO ARRIVE AT SUCH CONCLUSION, THE MADR AS HIGH COURT HAS RELIED ON THE JUDGEMENT OF THE DELHI HIGH COURT IN CIT V. STELLAR INVESTMENT LTD. [1991] 192 ITR 287/ 59 TAXMAN 568 (DELHI), WHICH JUDGEMENT HAS BEEN CONFIRMED BY THE HONOURABLE APEX COURT AND THE SAME WAS REPORTED IN CIT V. STELLER INVESTMENT LTD. [2001] 115 TAXMAN 99 / 251 ITR 263 (SC). 13. IN THE LIGHT OF THE ABOVE, NO QUESTION OF LAW M UCH LESS SUBSTANTIAL QUESTION OF LAW WOULD ARISE FOR CONSIDE RATION. ACCORDINGLY, THE TAX CASE APPEAL STANDS DISMISSED. CONNECTED MISCELLANEOUS PETITION IS CLOSED. HOWEVER, THERE IS NO ORDER AS TO COSTS. ITA NO. 287/JP/2018 ITO VS. M/S MARATHON INDIA LTD. 7 THE ORDER OF HONBLE MADRAS HIGH COURT HAS BEEN AFF IRMED BY THE HONBLE SUPREME COURT IN CASE OF CIT VS. G.M. KNITT ING INDUSTRIES (P.) LTD.(SUPRA). ACCORDINGLY, IN VIEW OF THE VARIOUS BI NDING PRECEDENT AS RELIED UPON BY THE LD. CIT(A) WHILE ALLOWING THE CL AIM OF THE ASSESSEE, WE DO NOT FIND ANY ERROR OR ILLEGALITY IN THE IMPUG NED ORDER OF THE LD. CIT(A). HENCE, WE UPHOLD THE IMPUGNED ORDER OF THE LD. CIT(A). IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMIS SED. ORDER PRONOUNCED IN THE OPEN COURT ON 27/06/2018. SD/- SD/- HKKXPAN FOT; IKY JKO (BHAGCHAND) (VIJAY PAL RAO) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 27/06/2018. * SANTOSH. VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- THE ITO, WARD-3(2), JAIPUR. 2. IZR;FKHZ@ THE RESPONDENT- M/S MARATHON INDIA LTD., JAIPUR. 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR. 6. XKMZ QKBZY@ GUARD FILE {ITA NO. 287/JP/2018} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR