MEHTA API P.LTD, MUMBAI V. DCIT RG 4(2)(2), MUMBAI

ITA 3366/MUM/2017

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 3624 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-02-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2013-2014
• Appeal Filed On: 08-05-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: CHAITANYA ANJARIA
• Keywords: Opportunity of being heard; Revised return

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI BEFORE SHRI SHAMIM YAHYA, AM AND SHRI SANDEEP GOSAIN, JM ITA NO. 3366 /MUM/ 2017 (ASSESSMENT YEAR: 2013 - 14 ) MEHTA API PVT. LTD. 203, CENTER POINT, 2 ND FLOOR, J. B. NAGAR, ANDHERI KURLA ROAD, ANDHERI (E), MUMBAI - 400 059 VS. DY. CIT, RANGE - 4(2)(2) 6 TH FLOOR, ROOM NO. 642, AAYKAR BHAVAN, MUMBAI - 400 020 PAN/GIR NO. AAECS 9868 B ( APPELLANT ) : ( RESPONDENT ) APPELLANT BY : SHRI SANJAY PARIKH RESPONDENT BY : SHRI CHAITANYA ANJARIA DATE OF HEARING : 12.12.2018 DATE OF PRONOUNCEMENT : 20.02 .2019 O R D E R PER SHAMIM YAHYA, A. M.: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - 9, MUMBAI (LD.CIT(A) FOR SHORT) DATED 21.03.2017 AND PERTAINS TO THE ASSESSMENT YEAR (A.Y.) 2013 - 14. 2. THE GROUNDS OF APPEAL READ AS UNDER: 1. THE LEARNED CIT(APPEALS) OUGHT TO HAVE ALLOWED THE CLAIM U/S. 35(2AB) OF THE INCOME TAX ACT, 1961 MADE DURING THE COURSE OF ASSESSMENT PROCEEDINGS AMOUNTING TO RS.169.40 LAKHS AS AGAINST CLAIMED AT RS.91.47 LAKHS IN THE RETURN OF INCOME. 2. THE APPELLANT SUBMIT THAT THE ENTIRE CLAIM OF RS.169.40 LAKHS CLAIMED DURING THE COURSE OF ASSESSMENT OUGHT TO BE ALLOWED. 3. THE ISSUE IN DISPUTE IN THE CASE OF THE ASSESSEE IS TH E NON CONSIDERATION OF THE REVISED CLAIM OF DEDUCTION U/S. 35(2AB) BY THE ASSESSING OFFICER (A.O. FOR SHORT), WHICH WAS MADE DURING THE COURSE OF ASSESSMENT. 2 ITA NO.3366/MUM/2017 4. BEFORE THE LD. CIT(A) THE ASSESSEE SUBMITTED THAT D URING THE YEAR UNDER CONSIDER ATION THE ASSESSEE HAD INCURRED THE EXPENSES ON RESEARCH AND DEVELOPMENT. IN THE RETURN OF INCOME FILED FOR THE YEAR THE ASSESSEE CLAIMED RS.91.47 LAKHS U/S 35(2AB) OF THE ACT. HOWEVER, DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSEE RECEIVED ACCE PTANCE THROUGH FORM 3CL DATED 09.11.2015 FROM THE DIRECTOR GENERAL (INCOME TAX EXEMPTION) OF DEPARTMENT OF SCIENTIFIC AND INDUSTRIAL RESEARCH (DSIR), ACCEPTING THE FURTHER CLAIM OF RESEARCH AND DEVELOPMENT EXPENDITURE OF RS.77.93 LACS. THE COPY OF THE FORM 3CL WAS SUBMITTED TO THE A .O. DURING THE COURSE OF A SSESSMENT P ROCEEDINGS VIDE LETTER DATED 19.12.2015 ASKING HIM TO ENHANCE THE CLAIM U/S 35(2AB) OF THE ACT TO RS.169.40 LACS AS AGAINST THE CLAIM IN TH E RETURN OF INCOME FILED OF RS. 91.47 LACS , WHICH THE A.O. DID NOT ACCEPT . 5. THE ASSESSEE FURTHER REFERRED TO SEV ERAL CASE LAWS. H OWEVER , THE LD. C IT(A) WAS NOT CONVINCED. HE DID NOT ENTERTAIN THE ASSESSEES REQUEST PRIMARILY RELYING UPON THE ISSUE THAT THE CLAIM WAS NOT PROPERLY MADE THROUGH REVISED RETURN. THE LD. CIT(A) HELD AS UNDER: 6.3. I HAVE CONSIDERED THE FACTS OF THE CASE, ASSESSMENT ORDER PASSED BY THE AO AS WELL AS SUBMISSIONS FILED BY THE APPELLANT. THIS GROUND NO.2 RELATING TO APPELLANT'S CLAIM U/S.35(2AB) OF 1 T ACT, 1961 WHICH IS STATED TO HAVE BEEN CLAIMED BY THE APPELLANT BEFORE THE AO DURING THE ASSESSMENT PROCEEDINGS, MEANING THEREBY WAS NOT ORIGINALLY CLAIMED WHILE FILING THE RETURN OF INCOME BY THE APPELLANT, AND WHICH HAS NOT BEEN ALLOWED BY THE AO, DOES NOT FIND ANY MEN TION IN THE ASSESSMENT ORDER DATED 31/12/2015. FROM THE ASSESSMENT ORDER, IT IS SEEN THAT THE RETURN OF INCOME WAS E - FILED 29/09/2013 AND WAS FURTHER REVISED ON 31/03/2015. FROM THE SUBMISSION OF THE APPELLANT, IT IS CLEAR THAT THE COPY OF THE FORM 3CL WAS SUBMITTED TO THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS VIDE LETTER DATED 19.12.2015 [REFER PAGE 6 OF THE SUBMISSION] ASKING HIM TO ENHANCE THE CLAIM U/S. 35(2AB) OF THE ACT TO RS. 169.40 LACS AS AGAINST THE CLAIM IN THE RETURN OF I NCOME FILED OF RS.91.47 LACS. FROM THE ABOVE, FACTS, IT CAN BE CONCLUDED WITHOUT ANY DOUBT THAT THE REVISED CLAIM WAS MADE BEFORE THE AO AFTER 31/03/2015 I.E. AFTER THE END OF LAST 3 ITA NO.3366/MUM/2017 DATE OF REVISING THE RETURN I.E. IT WAS MADE AFTER ALMOST 9 MONTHS. THE ID. AR DOES NOT GIVE SATISFACTORY REASONS AS TO WHY THERE WAS SUCH IN - ORDINATE DELAY ON THE PART OF THE APPELLANT AND AS TO WHY IT WAS NOT TO CLAIM WHILE REVISING THE INCOME TAX RETURN ON 31/03/2015. BESIDES, THE APPELLANT IS ALSO REQUIRED TO FULFILL THE VARIO US CONDITIONS AS LAID DOWN IN THE PROVISIONS OF SECTION 35(2AB) OF THE I T ACT, 1961. IN THIS REGARD, REFERENCE IS MADE AND RELIANCE IS PLACED TO THE JUDGMENT OF HON'BLE IT AT, HYDERABAD BENCH IN THE CASE OF VIVIMET LABS LTD. VS. DCIT(2016) 66 TAXMANN. 94( HYD) FOR AY 2009 - 10, ACCORDING TO WHICH DEDUCTION U/S.35(2AB) WILL BE ALLOWED ONLY IF APPROVAL BY THE DSIR IN PRESCRIBED FORM NO.SBM WAS OBTAINED. IN VIEW OF THIS, THE CASE WAS CITED BY THE LD. AR IS DISTINGUISHABLE THE FAT OF THE PRESENT CASE AND HENCE N OT APPLICABLE TO THE PRESENT CASE. ACCORDINGLY, THIS GROUND OF APPEAL CANNOT BE ALLOWED AT THIS JUNCTURE. IN THE RESULT, THIS GROUND OF APPEAL IS TO BE TREATED AS DISMISSED, 6. AGAINST THE ABOVE ORDER, THE ASSESSEE IS IN APPEAL BEFORE US. 7. WE HAVE H EARD BOTH THE COUNSEL AND PERUSED THE RECORDS. WE FIND THAT THE ASSESSEE HAS MADE A CLAIM OF DEDUCTION U/S. 35 ( 2AB ) ON THE GROUND THAT THE ASSESSEE RE CEIVED ACCEPTANCE THROUGH FORM 3CL LATER ON FROM DIRECTOR GENERAL (INCOME TAX EXEMPTION) OF DEPARTMENT OF SCIENTIFIC AND INDUSTRIAL RESEARCH (DSIR), ACCEPTING THE FURTHER CLAIM OF RESEARCH AND DEVELOPMENT EXPENDITURE OF RS.77.93 LACS. THIS HAS NOT BEEN REJECTED BY THE AUTHORITIES BELOW ON MERITS, RATHER ON TECHNICAL ISSUE THAT IT WAS NOT CLAIMED ORIGINALLY. 8. WE FIND THAT IT IS A BONAFIDE CLAIM WHICH DESERVES TO BE CONSIDERED ON MERITS. THIS PROPOSITION IS S U P PORTED BY THE HON'BLE JURISDICTIONAL HIGH COURT DECISION IN THE CASE OF CIT VS. PRUTHVI BROKERS & SHAREHOLDERS PVT. LTD. (2012) 349 ITR 336 (BOM). EVEN THE HON'BLE APEX COURT IN THE CASE OF GOETZE (INDIA) LTD. V. CIT [2006] 284 ITR 323 (SC) HAS HELD THAT ITS ORDER IN THAT CASE DID NOT IMPINGE UPON THE ITAT S JURISDICTION TO ENTERTAIN THE GROUND OTHER THAN REVISED RETURN. 4 ITA NO.3366/MUM/2017 ACCORDINGLY, IN THE INTEREST OF JUSTICE, WE REMIT THIS ISSUE TO THE FILE OF THE A.O. THE A.O. SHALL CONSIDER THIS ISSUE ON MERITS AFTER GIVING THE ASSESSEE PROPER OPPORTUNITY OF BEING HEARD. 9. IN THE RESULT, THIS APPEAL BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 2 0 . 0 2 . 2 0 1 9 S D / - S D / - ( SANDEEP GOSAIN ) (SHAMIM YAHYA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED : 2 0 . 0 2 . 2 0 1 9 ROSHANI , SR. PS COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. CIT - CONCERNED 5. DR, ITAT, MUMBAI 6. GUARD FILE BY ORDER, (DY./ASSTT. REGISTRAR) ITAT, MUMBAI