M/s Zeus Pharmaceuticals, Solan V. ITO, Baddi

ITA 317/CHANDI/2011

• Counselvise Citation: 31721514 RSA 2011
• Duration Of Justice: 11 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-03-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 29-02-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 24-03-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANJEET SINGH
• Assessee Lawyers: VINEET KRISHAN
• Keywords: Additional evidence; Reasonable cause
• Section: 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH B BEFORE SHRI H.L. KARWA, V.P. AND SHRI MEHAR SINGH, AM ITA NO. 317/CHD/2011 ASSESSMENT YEAR 2007-08 ZEUS PHARMACEUTICALS V. I.T.O. BADDI (H.P) PLOT NO. 116, EPIP, PHASE I JHARMAJRI, SOLAN (HP) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI VINEET KRISHAN RESPONDENT BY: SHRI MANJEET SINGH DATE OF HEARING: 29.2.2012 DATE OF PRONOUNCEMENT: 01.03.2012 ORDER PER MEHAR SINGH, AM THE PRESENT APPEAL FILED BY THE ASSESSEE, FOR ASSE SSMENT YEAR 2007-08, IS DIRECTED AGAINST THE ORDER OF LD. CIT(A ), SHIMLA DATED 3.2.2011 U/S 250(6) OF THE INCOME-TAX ACT (IN SHORT THE ACT). 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1 THAT THE LD. CIT(A), SHIMLA ERRED IN HAVING UPHE LD THE ORDER OF THE AO PASSED U/S 144 OF THE INCOME-TAX ACT. 2. THAT UNDER THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE ACTION OF THE LD. CIT(A) IN NOT HAVI NG ADMITTED THE ADDITIONAL EVIDENCES SUBMITTED BEFORE HER BY INVOKI NG RULE 46A OF THE INCOME-TAX RULES, 1962 INSPITE OF SPECIFIC R EQUEST MADE BY THE APPELLANT TO DO SO, IS ILLEGAL AND UNWARRANTED. 3. (A) THAT THE LD. CIT(A) ERRED IN REFUSING TO ENT ERTAIN CLAIM U/S 80IC OF THE INCOME-TAX ACT, 1961 AMOUNTING TO R S. 84,15,514/- ON THE PROFIT DERIVED FROM THE INDUSTRI AL UNDERTAKING SET UP BY THE APPELLANT IN THE STATE OF HIMACHAL 2 PRADESH, SOLAN DISTRICT FOR THE MANUFACTURE OF PHARMACEUTICAL FORMULATIONS. (B) THAT THE APPELLANT HAVING COMPLIED WITH ALL TH E REQUIREMENTS U/S 80IC(2) OF THE ACT WAS ELIGIBLE FO R DEDUCTION OF THE CLAIM U/S 80IC AND THUS THE LD. C IT(A) ERRED IN CONFIRMING THE ACTION OF THE AO IN DENYING THE SAME. (C) THAT THE REQUIREMENT OF FILING THE FORM NO. 10 CCB FOR CLAIMING THE SAID DEDUCTION U/S 80IC OF THE ACT, HA VING BEEN CARRIED OUT BEFORE THE LD. CIT(A) BY FILING TH E SAME BEFORE HER AND THE LD. COUNSEL OF THE APPELLANT HAV ING ADMITTED HIS NEGLIGENCE IN NOT HAVING FILED THE SAM E BEFORE THE AO THE APPELLANT WAS PREVENTED BY SUFFICIENT AN D REASONABLE CAUSE IN NOT FURNISHING THE AUDIT REPORT IN THE FORM NO. 10CCB BEFORE THE AO WHICH THE LD. CIT(A) F AILED TO ACCEPT AND THUS ERRED IN REFUSING TO ADMIT THE A DDITIONAL EVIDENCE FILED BEFORE HER. 4. (A) THAT THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS. 33,23,000/- MADE BY THE AO ON ACCOUNT OF UNSEC URED LOANS RAISED BY THE APPELLANT. (B) THAT THE LD. CIT(A) ERRED IN CONFIRMING THE AD DITION OF RS. 4,50,000/- MADE BY THE AO ON ACCOUNT OF CAPITA L INTRODUCED BY THE PARTNERS. (C) THAT THE ADDITIONAL EVIDENCES EXPLAINING THE UNSECURED LOANS RAISED BY THE APPELLANT AND THE CAP ITAL INTRODUCED BY THE PARTNERS HAVING BEEN FILED BEFORE THE LD. CIT(A) AND THE COUNSEL OF THE APPELLANT HAVING ADMI TTED HIS NEGLIGENCE IN NOT HAVING FILED THE SAME BEFORE THE AO, THE APPELLANT WAS PREVENTED BY SUFFICIENT AND REASONABL E CAUSE IN NOT PRODUCING THE SAME BEFORE THE AO WHICH THE L D. CIT(A) FAILED TO ACCEPT AND THUS ERRED IN REFUSING TO ADMIT THE ADDITIONAL EVIDENCE FILED BEFORE HER. 5. THAT THE APPELLANT CRAVES TO AMEND, ALTER, MODIF Y, ADD TO, ABRIDGE AND /OR RESCIND ANY OR ALL OF THE ABOVE GROUNDS IN FUTURE. 3. IN THE COURSE OF PRESENT APPELLATE PROCEEDINGS, THE LD. 'AR' FOR THE ASSESSEE CONTENDED THAT NON-FILING OF AUDIT RE PORT IN FORM NO. 3 10CCB READ WITH RULE 18BB OF INCOME-TAX RULES IS AT TRIBUTED TO THE NEGLIGENCE OF THE THEN LD 'AR' FOR THE ASSESSEE. H E ARGUED THAT SHRI DINESH CHANDEL, ADVOCATE AND AUTHORIZED REPRESENTAT IVE OF THE ASSESSEE ATTENDED THE ASSESSMENT PROCEEDINGS ON 22. 10.2009, 30.10.2009 AND 17.11.2009 EVIDENCING THE FACTUM OF BEING AUTHORIZED REPRESENTATIVE OF THE ASSESSEE-APPELLANT. THE ASSE SSEE ALSO FILED AFFIDAVIT FROM SHRI ARVINDER SINGH SON OF LATE SHRI IQBAL SINGH, CHARTERED ACCOUNTANT DATED 6.5.2011 TO THE EFFECT T HAT HE PREPARED THE CERTIFICATE IN FORM NO. 10CCB FOR THE AY 2007-08 ON 26.9.2007. THE CONTENTS OF THE AFFIDAVIT ARE REPRODUCED HEREUNDER: - I, ARVINDER SINGH SON OF LATE SHRI IQBAL SINGH R/O H NO. 1105, SECTOR 21-B, CHANDIGARH DO HEREBY DECLARE THAT I BE ING A CHARTERED ACCOUNTANT BY PROFESSION AND PARTNER OF M /S ASHWANI K. GUPTA & ASSOCIATES, H NO. 1044-A, SECTOR -2, PAN CHKULA (HR) PREPARED THE CERTIFICATE IN FORM NO. 10CCB OF INCOM E-TAX RULES IN RESPECT OF M/S ZEUS PHARMACEUTICALS, PLOT NO. 11 6, EPIP PHASE I, JHARMAJRI, BAROTIWALA FOR THE AY 2007-08 AND SIGNED THE SAME ON 26.9.2007. I SOLEMNLY AFFIRM THAT ABOVE INFORMATION IS TRUE TO THE BEST OF MY KNOWLEDGE AND BELIEF. PLACE: PANCHKULA SD/- DATED: 6.5.2011 DEPONENT SIMILARLY, THE ASSESSEE FILED AFFIDAVIT OF SHRI MAD HUSUDAN BALASARIA DATED 24.1.2012, ATTRIBUTING THE FAULT FOR NON-FILI NG THE DOCUMENTS TO THE LD 'AR' FOR THE ASSESSEE. THE LD 'AR' FOR THE ASSESSEE, FURTHER, ARGUED THAT THE SAID FORM WAS FILED BEFORE THE LD. CIT(A), IN THE COURSE 4 OF APPELLATE PROCEEDINGS. HOWEVER, THESE DOCUMENTS WERE NOT ADMITTED AND THE GROUNDS OF APPEAL WERE DISMISSED. 4. THE LD 'DR' FOR THE REVENUE PLACED RELIANCE ON T HE ORDERS PASSED BY THE AUTHORITIES BELOW. 5. WE HAVE PERUSED THE FACT SITUATION OF THE CASE, RELEVANT RECORD AND RIVAL SUBMISSIONS. A BARE PERUSAL OF THE ASSES SMENT ORDER REVEALS THAT THE AO IN PARA 4 REFERRED TO SCHEDULE A ANNE XED TO THE COPY OF BALANCE SHEET FOR THE PURPOSE OF ASCERTAINING THE Q UANTUM OF ADDITION TO THE CAPITAL ACCOUNT. SIMILARLY, IN PARA 5 OF TH E ASSESSMENT ORDER DATED 4.12.2009 FOR AY 2007-08, IT IS MENTIONED BY THE AO THAT AS PER AUDIT REPORT NO PAYMENT HAS BEEN MADE ON ACCOUNT OF THESE HEADS NAMELY ESI AND EPF. FROM THESE OBSERVATIONS OF THE AO, IT IS EVIDENT THAT THE ASSESSEE HAD FILED AUDIT REPORT ALONG WITH THE RETURN OF INCOME AS CONTEMPLATED UNDER RULE 44AB OF THE ACT. FORM OF AUDIT REPORT FOR CLAIMING DEDUCTION U/S 80IC IS REQUIRED TO BE FILED AS PER RULE 18BBB IN FORM NO. 10CCB. THE ASSESSEE IS REQUIRED TO FIL E FORM NO. 10CCB ALONG WITH RETURN OF INCOME. HOWEVER, IN VIEW OF V ALID REASONS, THE SAID FORM COULD BE FILED BEFORE THE LD. CIT(A). TH E FILING OF SUCH FORM IS DIRECTORY IN NATURE AND CAN BE FILED BEFORE THE LD. CIT(A), AS HELD BY VARIOUS HIGH COURTS, IN THE MATTER. 6. HAVING REGARD TO THE ABOVE LEGAL AND FACTUAL DIS CUSSIONS, WE FIND THAT THERE IS MERIT AND SUBSTANCE, IN THE CONTENTIO NS OF THE LD 'AR', FOR THE ASSESSEE THAT THE CASE BE RESTORED TO THE FILE OF AO. THE DENIAL OF 80IC FOR NON-FILING OF SUCH FORM AMOUNTS TO DENIAL OF JUSTICE. THE ASSESSEE COULD NOT FILE SUCH FORM, BEFORE THE AO, I N VIEW OF THE FAULT OF THE THEN LD 'AR' FOR THE ASSESSEE. THEREFORE, W E ARE OF THE CONSIDERED VIEW THAT THE CASE DESERVES TO BE RESTOR ED TO THE FILE OF AO, 5 WITH A VIEW TO SUB-SERVE THE CAUSE OF JUSTICE AND F OR FRESH ADJUDICATION OF THE CASE, BY THE AO, IN ACCORDANCE WITH RELEVANT PROVISIONS OF THE ACT. THE AO IS DIRECTED TO PROVIDE PROPER REASONAB LE OPPORTUNITY TO THE ASSESSEE. SIMILARLY, THE ASSESSEE MUST RENDER EFFECTIVE CO- OPERATION TO THE REVENUE IN THE MATTER. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 01 .03.2012 SD/- SD/- (H. L. KARWA) (M EHAR SINGH) VICE PRESIDENT ACCOUNANT MEMBER CHANDIGARH, THE 01 .03.2012 SURESH COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR