ITO, New Delhi V. Mr. Akshay Bhardwaj, New Delhi

ITA 3029/DEL/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 91054 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-05-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 24-04-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 15-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: T VASAN TAN
• Keywords: Bonafide belief; Question of law; Revised return
• Section: 10B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH A , NEW DELHI BEFORE SH. N. K. SAINI , AM AND SH. A. T. VARKEY , JM ITA NO. 3028 /DEL/201 3 : ASSTT. YEAR : 2005 - 06 ITA NO. 3029/DEL/201 3 : ASSTT. YEAR : 2006 - 07 ITA NO. 3030/DEL/2013 : ASSTT. YEAR : 2009 - 10 INCOME TAX OFFICER, WARD 37(2), NEW DELHI VS MR. AKSHAY BHARDWAJ E - 26, 3 RD FLOOR, GREATER KAILASH - I NEW DELHI - 11 0048 (APPELLANT) (RESPONDENT) PAN NO. AA HPB2681B ASSESSEE BY : SH . KAPIL GOEL, ADV. REVENUE BY : SH . T. VASANTAN , SR. DR DATE OF HEARIN G : 24 . 04 .2015 DATE O F PRONOUNCEMENT : 21 .05 .2015 ORDER PER N.K . SAINI , A.M. THESE THREE APPEALS BY THE DEPARTMENT ARE DIRECTED AGAINST THE SEPARATE ORDERS EACH DATED 18.02.2013 OF CIT - XXVIII, NEW DELHI. C OMMON ISSUES ARE INVOLVED IN THESE APPEALS WHICH WERE HEARD TOGETHER, SO THESE ARE BEING DISPOSED OF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE AND BREVITY. 2 . THE COMMON GROUNDS RAISED IN THESE APPEALS READ AS UNDER: 1. IN THE FACTS OF THE CASE, THE LD. CIT(A) ERRED IN DELETING THE ADDITIONS MADE BY THE AO ON ACCOUNT OF DISALLOWANCE OF EXEMPTION CLAIMED BY ASS ESSEE U/S I TA NOS. 3028 TO 3030 /DE L/201 3 AKSHAY BHARDWAJ 2 10B NOT APPRECIATING THE FACT THAT FOR CLAIMING EXEMPTION U/S 10A, THE ASSESSEE HAS NOT FULFILLED THE MANDATORY REQUIREMENT OF FILING THE REPORT OF AN ACCOUNTANT IN PRESCRIBED FORM NO. 56F OF I.T. RULES, 1962 ALONG WITH THE RETURN OF INCOME. 2. IN THE FACTS OF THE CASE, THE LD. CIT(A) ERRED IN DELETING THE ADDITIONS MADE BY THE AO ON ACCOUNT OF DISALLOWANCE OF EXEMPTION CLAIMED BY ASSESSEE U/S 10B NOT APPRECIATING THE FACT THAT ON MERE FILING OF FORM NO. 56F DURING THE COURSE OF ASSESSMENT PROCEE DINGS, THE ASSESSEE WAS NOT ELIGIBLE TO EXEMPTION U/S 10A RELYING ON JUDGMENT OF APEX COURT IN THE CASE OF GOETZ INDIA LIMITED WHERE IT WAS HELD THAT AS THE ASSESSEE HAS FAILED TO FOLLOW THE STATUTORY MECHANISM OF FILING THE REVISED RETURN FOR CLAIMING DED UCTION, THE SAME CANNOT BE ALLOWED THROUGH REVISED COMPUTATION DURING THE COURSE OF ASSESSMENT PROCEEDINGS. 3. THE APPELLANT CRAVE LEAVE TO ADD, AMEND OR MODIFY ANY/ALL THE GROUND OF APPEAL BEFORE OR DURING THE COURSE OF APPEAL. IT IS PRAYED THAT THE ORD ER OF CIT(A) IS CONTRARY TO THE FACTS ON RECORD AND SETTLED POSITION OF LAW; AND THE ORDER OF THE ASSESSING OFFICER DESERVES TO BE RESTORED. 3 . FACTS OF THE CASE IN BRIEF ARE THAT THE AO WAS DENIED THE CLAIM OF THE ASSESSEE FOR DEDUCTION U/S 10B OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) BY OBSERVING THAT THE ASSESSEE HAD NOT RECEIVED ANY CERTIFICATE I TA NOS. 3028 TO 3030 /DE L/201 3 AKSHAY BHARDWAJ 3 GIVING APPROVAL BY THE BOARD AS 100% EXPORT ORIENTED UNDERTAKING. 4 . BEING AGGRIEVED THE ASSESSEE CARRIED THE MATTER TO THE LD. CIT( A) WHO ALLOW ED THE CLAIM OF THE ASSESSEE BY OBSERVING IN PARAS 4.2 TO 4.3 OF THE IMPUGNED ORDER WHICH READ AS UNDER: 4.2 I HAVE CONSIDERED THE FACTS OF THE CASE, THE LEGAL POSITION OF THE CASE LAWS RELIED UPON BY THE APPELLANT. THE CASE LAW RELIED UPON BY THE ASSESSING OFFICER HAS ALSO BEEN CONSIDERED. THE ISSUE WAS REMANDED TO THE ASSESSING OFFICER FOR CONSIDERING THE APPELLANT'S CONTENTIONS. THE ASSESSING OFFICER HAS REITERATED THAT THE ASSESSEE IS NOT ENTITLED FOR THE CLAIM AND ALSO THAT AS PER RULE 1 6D, A REPORT IN FORM 56 - F IS REQUIRED TO BE FURNISHED ALONGWITH THE RETURN OF INCOME TO REVISE THE CLAIM U/S 10A. AND THE ASSESSEE HAS NOT FURNISHED THE SAID FORM NO. 56 - F WITH THE RETURN HENCE ACCORDING TO THE ASSESSING OFFICER AS PER THE DECISION IN THE CASE OF GOETZE INDIA LTD., THE ASSESSEE IS NOT ENTITLED FOR REVISING THE CLAIM. IN A REJOINDER TO THE ASSESSING OFFICER'S REPORT THE APPELLANT HAS RELIED UPON THE CASE OF EFEXTRA ESOLUTIONS PVT. LTD., STATING THAT THE FACTS OF THIS CASE ARE SQUARELY AND AB SOLUTELY APPLICABLE IN THE CASE OF THE APPELLANT. IN THE SAID CASE THE HON'BLE ITAT DELHI BENCH, DELHI BENCH - B WHILE DECIDING THE ITA NO. 313/DEL/20 12 FOR THE ASSESSMENT YEAR 2007 - 08 HAVE DISCUSSED THE APPLICATION OF THE SUPREME COURT JUDGMENT IN THE CASE OF GOETZE INDIA LTD. TO THE CITED CASE AND HAVE DRAWN CERTAIN CONCLUSIONS, WHICH ARE STATED HERE UNDER: - I TA NOS. 3028 TO 3030 /DE L/201 3 AKSHAY BHARDWAJ 4 'PARA 9 WE HAVE HEARD THE PARTIES AND HAVE PERUSED THE MATERIAL ON RECORD. THE ASSESSING OFFICER, IT IS SEEN, REJECTED THE CLAIM OF THE ASSESSEE, H OLDING THAT AS PER 'GOETZE (INDIA)' (SUPRA), SINCE THE ASSESSEE HAD MERELY MADE A REVISED CLAIM AFTER THE TIME FOR FILING A REVISED RETURN HAD ELAPSED, THE ASSESSEE WAS NOT ELIGIBLE FOR DEDUCTION U/S 10A OF THE ACT. THE LD. CIT (A), ON THE OTHER HAND, FOUN D IN FAVOUR OF THE ASSESSEE AND DIRECTED THE ASSESSING OFFICER TO CONSIDER THE REPORT IN FORM 56F AND TO ALLOW THE CLAIM, IF FOUND IN ACCORDAN CE WITH LAW, FOR DEDUCTION OF RS. 19,84,913/ - U/S 10A OF THE ACT. PARA 10. THE ISSUE BEFORE US IS AS TO WHETH ER THE AFORESAID ACTION OF THE LD. CIT (A) IS JUSTIFIED. NOW, IT IS SEEN THAT THE ASSESSEE, ON BEING POINTED OUT BY THE ASSESSING OFFICER THAT DEDUCTION U/S 10B WAS NOT AVAILABLE TO IT, CHANGED ITS CLAIM TO ONE U/S 10A OF THE ACT, BY WAY OF FILING A REPORT IN FORM NO.56F BEFORE THE ASSESSING OFFICER. 'GOETZE (INDIA)' (SUPRA), TO OUR MIND, IS NOT ATTRACTED TO THE FACTS OF THE PRESENT CASE, SINCE THEREIN, THE CLAIM MADE SUBSEQUENTLY WAS AN ALTOGETHER FRESH CLAIM, WHEREBY THE RETURNED INCOME GOT CHANGED. IT IS NOT SO HERE. UNDISPUTEDLY, IN THE PRESENT CASE, ON THE CHANGE OF THE CLAIM, NEITHER THE RETURNED INCOME, NOR THE ASSESSED INCOME OF THE ASSESSEE HAS UNDERGONE ANY CHANGE WHATSOEVER. PARA 11. IN 'CIT VS. RAMCO INTERNATIONAL', 332 ITR 306 (P&H), IT WAS HE LD THAT SINCE THE ASSESSEE HAD NOT MADE ANY FRESH CLAIM AND HAD DULY FURNISHED THE DOCUMENTS AND HAD SUBMITTED FORM FOR CLAIM U/S 80I B OF THE ACT, THERE WAS NO REQUIREMENT OF FILING ANY REVISED RETURN OF INCOME. PARA 12. IN 'CIT VS. MAHAVIR SPINNING MILL S LTD.' 303 ITR 353 (P&H), THE ISSUE WAS AS TO WHETHER THE I TA NOS. 3028 TO 3030 /DE L/201 3 AKSHAY BHARDWAJ 5 TRIBUNAL HAD CORRECTLY GRANTED EXEMPTION U/S 10B OF THE ACT, WHEN NO CLAIM HAD BEEN MADE BY THE ASSESSEE, EITHER IN THE RETURN OF INCOME OR IN THE REVISED RETURN, THEREBY VIOLATING 'GOETZE (INDIA). ' IT WAS HELD THAT THE MAIN CONTROVERSY WAS THAT THE ASSESSEE HAD CLAIMED DEDUCTION U/S 80I OF THE ACT DURING THE ASSESSMENT PROCEEDINGS AND HAD CLAIMED EXEMPTION U/S 10B OF THE ACT AFTER THE CONVERSION OF THE ASSESSEE UNIT AS A 100% EOU; THAT IN SUCH A SI TUATION, THE MATTER HAD TO BE ANALYZED IN THE LIGHT OF BOTH SECTIONS 10B AND 80I AND THEIR REQUIREMENTS. THE DEPARTMENT'S APPEAL WAS DISMISSED AS NOT GIVING RISE TO ANY SUBSTANTIAL QUESTION OF LAW. PARA 13. IN 'CIT VS. JAI PARABOLIC SPRINGS LTD.' 306 IT R 42 (DEL), IT WAS HELD THAT THE CIT (A) HAD THE JURISDICTION TO ENTERTAIN THE ADDITIONAL CLAIM NOT FILED BEFORE THE ASSESSING OFFICER. PARA 14. IN 'CIT VS. LUCKNOW PUBLIC EDUCATIONAL SOCIETY', 318 ITR 223 (ALL), THE ORIGINAL RETURN HAD BEEN FILED LATE, DUE TO WHICH, THE REVISED RETURN WAS TREATED BY THE ASSESSING OFFICER AS A NONEST, IT WAS HELD THAT A CLAIM TO WHICH THE ASSESSEE IS LEGALLY ENTITLED CANNOT BE DENIED BY THE ASSESSING OFFICER ON TECHNICAL GROUNDS, EVEN IF SUCH A CLAIM HAS NOT BEEN MADE BY THE ASSESSEE. PARA 15. IN 'RACHHPAL SINGH VS. INCOME - TAX OFFICER' 276 ITR (AT) 163 (ASR.), THE ASSESSEE WITHDREW ITS CLAIM BEFORE THE ASSESSING OFFICER CONSIDERING THAT IT WAS NOT ENTITLED TO SUCH CLAIM. SUBSEQUENTLY, THE ASSESSEE MADE THAT VERY CLAIM BE FORE THE APPELLATE AUTHORITY, WHICH WAS ACCEPTED. PARA 16. IN 'DEEPAK NITRITE LTD. VS. CIT', 307 ITR 289 (GUJ), IN THE ORIGINAL RETURN DEDUCTION WAS CLAIMED U/S I TA NOS. 3028 TO 3030 /DE L/201 3 AKSHAY BHARDWAJ 6 32A OF THE ACT, WHEREAS IN THE BELATED REVISED RETURN, SUCH CLAIM WAS RECTIFIED AND MADE U/S 32AB, WHICH CLAIM WAS ACCEPTED. PARA 17. THE AFORE - DISCUSSED CASE LAWS RELIED ON BY THE ASSESSEE ALL GO TO SUPPORT THE ASSESSEE'S CASE. CONCURRING THEREWITH, WE HOLD THAT THE LD. CIT (A) HAS CORRECTLY HELD THE CLAIM OF THE ASSESSEE TO BE ALLOWABLE, IF FO UND TO BE IN ACCORDANCE WITH LAW. MOREOVER, THE ASSESSEE'S ELIGIBILITY FOR THE CLAIM U/S 10A RATHER THAN U/S 10B OF THE ACT NOWHERE STANDS DISPUTED. IT IS ONLY THAT THE DEPARTMENT CONTENDS THAT THE CLAIM U/S 10A DID NOT EXIST IN THE ORIGINAL RETURN AND, TH EREFORE, IT CANNOT BE ALLOWED. WE, AS PER THE FOREGOING DISCUSSION, DO NOT SUBSCRIBE TO THIS VIEW. PARA 18. IN VIEW OF THE ABOVE, FINDING NO MERIT THEREIN, THE GRIEVANCE SOUGHT TO BE RAISED BY THE DEPARTMENT IS REJECTED.' 4.3 AFTER CAREFUL CONSIDERATIO N OF THE FACTS OF THE INSTANT CASE IN VIEW OF THE CASE OF EFEXTRA ESOLUTIONS PVT. LTD., THE OPINION OF THE ASSESSING OFFICER THAT THE CASE OF THE ASSESSEE IS COVERED BY THE GOETZE INDIA LTD. CASE, BECOMES UNSUSTAINABLE. IN THE CASE OF GOETZE INDIA, THE CLA IM MADE SUBSEQUENTLY WAS AN ALTOGETHER FRESH CLAIM WHEREBY THE RETURNED INCOME GOT CHANGED. IT IS NOT THE CASE OF THE APPELLANT. AND THE FACTS OF THE CASE MENTIONED SUPRA BEING SAME AS IN CASE OF THE APPELLANT, THE APPELLANT'S REVISED CLAIM IN FORM 56 - F BE COMES VALID BECAUSE THE APPELLANT HAD ALREADY MADE A CLAIM (SECTION 10B) IN THE RETURN OF INCOME AND BY CHANGING THE CLAIM THE RETURNED INCOME DOESN'T CHANGE AND ASSESSED INCOME ALSO DOESN'T CHANGE. IN VIEW OF THE LEGAL POSITION OF THE MANY CASES REFERRED TO BY THE APPELLANT, I AM OF THE CONSIDERED OPINION THAT THE APPELLANT IS ELIGIBLE FOR CLAIM U/S 10A. THE GROUND RAISED IN APPEAL ON THE ISSUE STANDS ALLOWED. I TA NOS. 3028 TO 3030 /DE L/201 3 AKSHAY BHARDWAJ 7 5 . NOW THE DEPARTMENT IS IN APPEAL. THE LD. D R STRONGLY SUPPORTED THE ORDER OF THE AO AND SUBMI TTED THAT SINCE THE ASSESSEE DID NOT FURNISH THE RELEVANT DOCUMENTS WITH IN SPECIFIED TIME, IN SUPPORT OF ITS CLAIM FOR DEDUCTION U/S 10 A OF THE ACT. THEREFORE, THE AO RIGHTLY DENIED THE CLAIM OF THE ASSESSEE AND THE LD. CIT(A) WAS NOT JUSTIFIED IN ALLOWIN G THE CLAIM. 6 . IN HIS RIVAL SUBMISSIONS THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW AND FURTHER SUBMITTED THAT THE PRESENT CASE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE VIDE ORDER DATED 24.08.2012 O F THE ITAT DELHI BENCH E , NEW DELHI IN THE CASE OF ITO VS EFEXTRA ESOLUTIONS PVT. LTD., NEW DELHI IN ITA NO. 313/DEL/2012 FOR THE ASSESSMENT YEAR 2007 - 08 AND THE ORDER DATED 25.07.2014 IN ITA NO. 1135/DEL/2011 FOR THE ASSESSMENT YEAR 2007 - 08 IN THE CASE OF ITO, WARD - 4(1), NEW DELHI VS M/S JC INFOSOFT TECHNOLOGIES LTD., NEW DELHI (COPIES OF THE SAID ORDERS W ERE FURNISHED WHICH ARE PLACED ON RECORD). 7 . WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON THE I TA NOS. 3028 TO 3030 /DE L/201 3 AKSHAY BHARDWAJ 8 RECORD. IT IS NOTICED THAT THE FACTS OF THE PRESENT CASE ARE SIMILAR TO THE FACTS IN THE CASE OF ITO VS EFEXTRA ESOLUTIONS PVT. LTD., NEW DELHI (SUPRA), WHICH THE LD. CIT(A) HAS FOLLOWED WHILE ALLOWING THE CLAIM OF THE ASSESSEE. 8. ON A SIMILAR IS SUE, THE ITAT DELHI BENCH D , NEW DELHI IN THE CASE OF ITO, WARD - 4(1) VS J C INFOSOFT TECHNOLOGIES LTD. (SUPRA) HELD AS UNDER: 7.2 THE DISPUTED ISSUE ACCORDING TO US IS NO MORE RES - INTEGRA AND IS COVERED BY THE JUDGMENT OF THE HIGH COURT OF DELHI IN THE CASE OF CIT VS VALIANT COMMUNICATIONS LTD. (ITA NO. 438/2012, 439/2012, 440/2012 & 441/2012 DATED 4.1.2013). IN THAT CASE, WHEN THE TRIBUNAL HAD ALLOWED THE CLAIM UNDER SECTION 10B OF THE ACT, THE HON BLE HIGH COURT VIDE ITS JUDGMENT DATED 17.9.2012 HELD THAT THE DEDUCTION WAS NOT ALLOWABLE UNDER SECTION 10B OF THE ACT, HOWEVER ON A REVIEW PETITION, VIDE ITS ORDER DATED 4.1.2013 DIRECTED THE CLAIM MADE BE EXAMINED UNDER SECTION 10A OF THE ACT, IF THE SAME IS ALLOWABLE, PROVIDED CONDITIONS OF SECTION 10A OF THE ACT ARE SATISFIED. 7.3 IN THE CASE OF CIT VS REGENCY CREATION IN ITA NO. 69/2008 VIDE ORDER DATED 30.11.2012, IT HAS BEEN HELD AS UNDER: THE APPLICANT HAD CLAIMED THE BENEFIT OF SECTION 10B OF THE INCOME TAX ACT, 1961 ( ACT FOR SHORT). BEFORE THE A.O, IT HAD RELIED UPON THE CERTIFICATE AND OTHER SUPPORTING MATERIALS ISSUED BY THE STP IN RESPECT OF THE APPROVAL UNDER SECTION 10A AND CLAIMED THAT AS LONG AS THESE CONDITIONS WERE SATISFIED, THE STATUTORY I TA NOS. 3028 TO 3030 /DE L/201 3 AKSHAY BHARDWAJ 9 MANDATE OF SECTION 10B TOO WAS ALSO AUTOMATICAL LY SATISFIED. IN THE JUDGMENT OF THIS COURT, THE ASSESSEE S CLAIM FOR GRANT OF BENEFIT UNDER SECTION 10B HAD BEEN TURNED DOWN. IT IS URGED BY THE ASSESSEE/APPLICANT THAT UPON REMAND AFTER THE JUDGMENT, THE A.O IS SEEKING TO DENY EVEN THE BENEFIT OF SECTION 10A. WE HAVE CAREFULLY CONSIDERED THE RECORDS AND SUBMISSION. IT APPEARS THAT THE ASSESSEE HAD CLAIMED THE BENEFIT OF SECTION 10B ON THE BASIS OF THE PROVISIONS WHICH PERTAINS TO SECTION 10A. THEREFORE, A.O MUST IN FAIRNESS CONSIDER THE DOCUMENTS ON THE BASIS OF THE CLAIM AND ASCERTAIN WHETHER THEY ARE PROPER AND AFTER VERIFYING THEM, PASS APPROPRIATE ORDER AS TO WHETHER THE BENEFIT OF SECTION 10A CAN BE GRANTED. 7.4. ADMITTEDLY, IN THIS CASE REVENUE HAS NOT RAISED THE CONTENTION THAT ASSESSEE HAS NOT S ATISFIED THE CONDITIONS THAT ARE REQUIRED FOR CLAIMING DEDUCTION U/S 10A OF THE ACT NOR HAS THE REVENUE CONTROVERTED THE FINDINGS OF THE CIT(A) THAT ASSESSEE IS ENTITLED TO THE BENEFIT OF DEDUCTION U/S 10A OF THE ACT. THEREFORE, WE ARE OF THE VIEW THAT THE CIT(A) ORDER GRANTING DEDUCTION U/S 10A OF THE ACT IS JUSTIFIED. 9. IN THE PRESENT CASE, ALSO THE ASSESSEE FULFILLED ALL THE CONDITIONS FOR 100% TAX EXEMPTION U/S 10B OF THE ACT WHICH WAS EARLIER GRANTED U/S 143(1) OF THE ACT. THE CONDITIONS LAID DOWN F OR EXEMPTION U/S 10A OF THE ACT ARE SIMILAR TO THE EXEMPTION U/S 10B OF THE ACT . THEREFORE, THE AO SHOULD HAVE ALLOWED THE CLAIM OF THE ASSESSEE U/S 10A OF THE ACT WHICH WAS EARLIER CLAIMED UNDER A BONAFIDE BELIEF I TA NOS. 3028 TO 3030 /DE L/201 3 AKSHAY BHARDWAJ 10 U/S 10B OF THE ACT. WE, THEREFORE, DO NOT SEE ANY VALID GROUND TO INTERFERE WITH THE FINDINGS OF THE LD. CIT(A), ACCORDINGLY DO NOT SEE MERIT IN THESE APPEAL S OF THE DEP A RTMENT. 10 . IN THE RESULT, APPEAL S OF THE DEPARTMENT ARE DISMISSED. ( ORDER PRON OUNCED IN THE COURT ON 21 /05 / 2015) . SD/ - SD/ - (A. T. VARKEY ) ( N. K. SAINI ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 21 /05 /2015 *SUBODH* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR