M/s. Rebar Design & Detail Pvt. ltd., CHENNAI V. DCIT, CHENNAI

ITA 2906/CHNY/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 4691 (ITAT-CHENNAI)
• Duration Of Justice: 6 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-05-2017
• Appeal Filed By: Assessee
• Bench Allotted: B
• Next Hearing Date: 05-04-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 10-10-2016
• Court: TRIBUNAL
• Department Lawyers: SUPRIYO PAL
• Assessee Lawyers: T BANUSEKAR
• Section: 143(3); 142(1); 10B

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI , . , # $ BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI G. PAVAN KUMAR, JUDICIAL MEMBER ./ I.T.A. NO. 2906/MDS/2016 / ASSESSMENT YEAR : 2012-13 M/S. REBAR DESIGN & DETAIL PVT. LTD., NO. 45, CHAMIERS ROAD, R.A. PURAM, CHENNAI 600 028. [PAN: AAECR 2348K] VS . DEPUTY COMMISSIONER OF INCOME TAX, CORPORATE RANGE -5, AAYAKAR BHAVAN, 121, MAHATMA GANDHI ROAD, CHENNAI 600 034. ( / APPELLANT) ( /RESPONDENT) & ' / APPELLANT BY : SHRI T. BANUSEKAR, CA *+& ' / RESPONDENT BY : SHRI SUPRIYO PAL, JCIT ' /DATE OF HEARING : 05.04.2017 ' /DATE OF PRONOUNCEMENT : 02.05.2017 /O R D E R PER G. PAVAN KUMAR, JUDICIAL MEMBER: THE ASSESSEE HAS FILED AN APPEAL IN THE ORDER OF CO MMISSIONER OF INCOME TAX (APPEALS) -3, CHENNAI IN ITA NO. 69/2013-14/CIT (A)-3, DATED 30.06.2016 PASSED U/S. 143(3) OF THE INCOME TAX ACT. :-2-: I.T.A. NO.2907/MDS/2016 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS: B) THE COMMISSIONER OF INCOME TAX (APPEALS) ERRED I N CONFIRMING THE DENIAL OF CLAIM OF EXEMPTION U/S. 10A OF THE INCOME TAX ACT. THE DEDUCTION OUGHT TO HAVE BEEN ALLOWED IN FULL IN LAW . C) THE COMMISSIONER OF INCOME TAX (APPEALS) OUGHT T O HAVE ACCEPTED THE CLAIM OF THE APPELLANT THAT IT IS ENTI TLED TO RELIEF U/S. 10A OF THE ACT IN SO FAR AS IT IS FULLY SUPPORTED BY AL L THE PARAMETERS LAID DOWN BY STATUTE. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E COMPANY IS IN THE BUSINESS OF DESIGNING AND DETAILING AND FILED THE RETURN OF INC OME FOR THE ASSESSMENT YEAR 2011-12 ON 29.09.2011 WITH NIL INCOME. SUBSEQUENTLY , THE CASE WAS SELECTED FOR SCRUTINY AND NOTICE U/S. 143(2) AND 142(1) OF THE A CT ARE ISSUED. IN COMPLIANCE TO NOTICE, LD. AR APPEARED FROM TIME TO TIME AND FI LED THE INFORMATION AND THE CASE WAS DISCUSSED. THE LD. AO, ON PERUSAL OF THE F INANCIAL STATEMENTS, FOUND THAT THE ASSESSEE COMPANY HAS CLAIMED EXEMPTION U/S . 10B OF THE ACT RS. 56,38,847/- AND THE LD. AO CALLED THE ASSESSEE TO S UBMIT THE CERTIFICATE FROM CHARTERED ACCOUNTANT AND COPY OF BOARD APPROVAL REQ UIRED AS PER SECTION 10B OF THE ACT. THE ASSESSEE PRODUCED REPORT U/S. 10A OF T HE ACT IN FORM NO. 56F ON 30.12.2013 AND THE ASSESSING OFFICER IS OF THE OPIN ION THAT THE ASSESSEE COULD NOT SUBSTANTIATE HIS SUBMISSIONS WITH PROOF OF CLAI MING EXEMPTION U/S. 10B OF THE ACT. FURTHER, THE ASSESSEE COMPANY FILED LETTER DAT ED 13.01.2014 EXPLAINING THAT THE ASSESSEE COMPANY HAS FILED RETURN OF INCOME AND CLAIMED EXEMPTION U/S. 10B AS 100% EXPORT ORIENTED UNIT BY INADVERTENT MIS TAKE AND THE LD. AO CONSIDERED THE ASSESSEE SUBMISSIONS AT PAGE 2 OF TH E ORDER AND MADE A :-3-: I.T.A. NO.2907/MDS/2016 DISTINCTION OF SECTION 10A AND 10B AND JUDICIAL DEC ISIONS RELIED BY THE ASSESSEE AND CAME TO A UNILATERAL CONCLUSION THAT THE ASSESS EE COMPANY IS UNABLE TO PROVE ITS ELIGIBILITY FOR CLAIM AND THE PROVISIONS OF SECTION 10B OF THE ACT AND CONDITIONS ARE NOT COMPLIED. WITH THESE OBSERVATION S, THE LD. AO DISALLOWED THE CLAIM AND ASSESSED THE TOTAL INCOME OF RS. 56,38,85 0/- AND PASSED ORDER U/S. 143(1) OF THE ACT DATED 22.01.2014. 4. AGGRIEVED BY THE ORDER, THE ASSESSEE FILED AN AP PEAL WITH THE CIT(A). IN THE APPELLATE PROCEEDINGS, THE LD. AR ARGUED THE GROUND S AND EXPLAINED THAT THE ASSESSING OFFICER HAS NOT CONSIDERED THE FACTS AND SUBMISSIONS IN THE ASSESSMENT PROCEEDINGS IN SUPPORT OF CLAIM OF EXEMPTION U/S. 1 0A OF THE ACT. THE APPELLANT IS A REGISTERED UNIT UNDER THE STPI AND SATISFIED A LL THE CONDITIONS AND OBTAINED AUDIT REPORT IN FORM 56F FOR CLAIMING BENEFIT U/S. 10A OF THE ACT. THE LD. CIT(A) CONSIDERED THESE SUBMISSIONS AND FINDINGS OF THE AS SESSING OFFICER IS OF THE OPINION THAT THE ASSESSEE COULD NOT SUBSTANTIATE IT S CLAIM OF EXEMPTION U/S. 10A AND CONFIRMED THE ACTION OF THE ASSESSING OFFICER A ND DISMISSED THE APPEAL. 5. AGGRIEVED BY THE CIT(A) ORDER, THE ASSESSEE HAS FILED AN APPEAL WITH THE TRIBUNAL. BEFORE US, THE LD. AR ARGUED THAT THE LD. CIT(A) ERRED IN CONFIRMING THE DENIAL OF CLAIM OF EXEMPTION U/S. 10A OF THE AC T. THE LD. CIT(A) ACCEPTED THAT THE ASSESSEE IS ENTITLED FOR RELIEF U/S. 10A O F THE ACT BUT RELIED ON THE FINDINGS OF THE ASSESSING OFFICER IRRESPECTIVE OF T HE FACT THAT THE ASSESSEE HAS FILED THE PAPER BOOK WITH SUPPORTING DOCUMENTS AND JUDICIAL DECISIONS AND :-4-: I.T.A. NO.2907/MDS/2016 PRAYED FOR ALLOWING THE APPEAL. CONTRA, THE LD. DR RELIED ON THE ORDERS OF THE CIT(A) AND LOWER AUTHORITIES AND SUBMITTED THAT THE ASSESSEE HAS NOT COMPLIED THE CONDITIONS AS REQUIRED U/S. 10B OF THE ACT. THE REFORE, THE CIT(A) WAS CORRECT IN JUSTIFYING THE ACTION OF THE ASSESSING OFFICER 6. WE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MAT ERIAL ON RECORD AND JUDICIAL DECISIONS. THE SOLE CRUX OF THE ISSUE BEIN G THE CLAIM OF DEDUCTION U/S. 10A OF THE ACT BY THE ASSESSEE. THE LD. AR SUBMITTE D THAT THE ASSESSEE COMPANY HAS BEEN CLAIMING THE DEDUCTION U/S. 10A OF THE ACT FROM THE EARLIER YEARS AND DREW ATTENTION COMPUTATION OF INCOME AT PAGE 2 AND 3, WHERE THE ASSESSEE HAS INADVERTENTLY MADE CLAIM U/S. 10B OF THE ACT AND FU RTHER THE LD AR ALSO OUR ATTENTION TO THE PAGE 22 OF THE PAPER BOOKS DISCLOS ING THE COPY OF INCOME TAX RETURN FILED FOR THE ASSESSMENT YEAR 2011-12. THE A SSESSEE HAS CLAIMED THE DEDUCTION IN RESPECT OF SOFTWARE TECHNOLOGY AND THE LD. AR SUBMITTED THAT THE AUDITOR OF THE COMPANY HAS ISSUED REPORT U/S. 10A O F THE ACT ON 23.09.2011 BEFORE FILING THE RETURN OF INCOME SPECIFYING THE C LAIM OF EXEMPTION U/S. 10A RS. 56,83,849/-. WHEREAS, THE LD. AR SUBSTANTIATED HIS SUBMISSIONS AND ALSO SUPPORTED THE CLAIM OF EXEMPTION U/S. 10A OF THE AC T BUT BY MISTAKE IT WAS MENTIONED AS 10B. PRIMA FACIE, THE ASSESSEE IS ENTI TLED FOR THE DEDUCTION OF 10A OF THE ACT. WE RELY ON DECISION OF HYDERABAD BENCH TRIBUNAL OF M/S. VSN MAKRO TECHNOLOGIES (P) LTD. HYD VS. ACIT, (2011) (1) TMI 1275 HELD AT PARA 10 WHICH READ AS UNDER: :-5-: I.T.A. NO.2907/MDS/2016 '10. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIALS AVAILABLE ON RECORD. THE CONTENTION OF THE ASSESSEE 'S COUNSEL IS THAT THE ASSESSEE IS IO0% EOU ENTITLED FOR EXEMPTION U/S 10A AND WRONGLY CLAIMED THE DEDUCTION U/S 10B AND IT WAS A TECHNICA L MISTAKE IN CLAIMING DEDUCTION U/S 10B. THE ASSESSEE'S COUNSEL FURTHER ARGUED THAT THE ASSESSEE HAS FULFILLED ALL THE REQUIREMENT S OF PROVISIONS OF SECTION 10A. HOWEVER, THIS CLAIM OF THE ASSESSEE NO T EXAMINED BY THE LOWER AUTHORITIES AND THEY STICK TO ONE CONTENTION THAT THE ASSESSEE CLAIM U/S 10B IS NOT ALLOWABLE. WE ARE AGREEING WIT H THE DEPARTMENT THAT THE CONDITION FOR ALLOWANCE OF DEDUCTION U/S 1 0A AND 10B ARE STOOD ON DIFFERENT FOOTING. HOWEVER, THE DEPARTMENT CANNOT THRUST UPON THE ASSESSEE TO AVAIL DEDUCTION U/S 10B ONLY. IF THE ASSESSEE ENTITLED FOR DEDUCTION U/S 10A INSTEAD OF 10B THAT CLAIM REQUIRED TO BE EXAMINED BY THE ASSESSING OFFICER IN ALL FAIRNESS. THE ISSUE OF ALLOWANCE OF DEDUCTION U/S 10A THOUGH ASSESSEE MADE A CLAIM BEFORE THE LOWER AUTHORITIES HAS NOT EXAMINED BY THE ASSES SING OFFICER. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE OF THE CONSIDERED OPINION THAT IT SHALL BE IN THE INTEREST OF JUSTICE TO SET ASIDE THE ISSUE IN THE GROUNDS OF APPEAL OF THE ASSESSEE TO THE FIL E OF ASSESSING OFFICER WITH A DIRECTION TO DECIDE THE ISSUE IN ACC ORDANCE WITH LAW AFTER PROVIDING REASONABLE OPPORTUNITY TO THE ASSES SEE, AND ALSO TO GIVE A SPECIFIC FINDING WHETHER THE ASSESSEE IS ENT ITLED TO DEDUCTION U/S 10A OF THE ACT OR NOT. THE ASSESSEE MAY FILE AN Y EVIDENCE IN SUPPORT OF ITS CLAIM FOR DEDUCTION BEFORE THE ASSES SING OFFICER. WE MAKE IT CLEAR THAT OUR OBSERVATIONS HEREIN ABOVE SH ALL NOT HAVE ANY BEARING ON THE DECISION OF THE ASSESSING OFFICER WI TH REGARD TO THE MERITS OF THE CLAIM OF THE ASSESSEE FOR DEDUCTION U /S 10A OF THE ACT. WE DIRECT ACCORDINGLY. :-6-: I.T.A. NO.2907/MDS/2016 WE CONSIDERING THE APPARENT FACTS, PROVISIONS AND R ELY ON THE JUDICIAL DECISIONS ARE OF THE OPINION THAT THE ASSESSEE SHOULD BE PROV IDED AN OPPORTUNITY BEFORE THE ASSESSING OFFICER AS THE ASSESSEE COMPANY IS EN TITLED FOR DEDUCTION U/S. 10A OF THE ACT. IN THE INTEREST OF JUSTICE, WE REMIT TH E DISPUTED ISSUE TO THE FILE OF THE ASSESSING OFFICER WHO SHALL EXAMINE THE GENUINENESS OF CLAIM WITH THE MATERIAL FILED BEFORE US AND GRANT THE RELIEF. FURTHER, THE ASSESSEE SHALL BE PROVIDED ADEQUATE OPPORTUNITY BEFORE PASSING THE ORDER ON ME RITS. 7. IN THE RESULT, ASSESSEE APPEAL IS PARTLY ALLOWE D FOR STATISTICAL PURPOSE. ORDER PRONOUNCED ON TUESDAY, THE 2 ND DAY OF MAY, 2017 AT CHENNAI. SD/- ( ) (CHANDRA POOJARI) / ACCOUNTANT MEMBER SD/- ( . ) (G. PAVAN KUMAR) /JUDICIAL MEMBER /CHENNAI, 0 /DATED: 2 ND MAY, 2017. JPV ' *#23 43 /COPY TO: 1. &/ APPELLANT 2. *+& /RESPONDENT 3. 5 ( )/CIT(A) 4. 5 /CIT 5. 3 *## /DR 6. 9 /GF