M/s Skyline builders, Cochin V. ACIT, Ernakulam

ITA 350/COCH/2010

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 58255 (ITAT-COCHIN)
• Duration Of Justice: 1 year(s) 8 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2012
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Next Hearing Date: 27-12-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 28-05-2010
• Court: TRIBUNAL
• Department Lawyers: S VIJAYAPRABHA
• Assessee Lawyers: A S NARAYANAMOORTHY CAAR
• Section: 153A; 80IB; 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE S/SHRI N.R.S.GANESAN, JM AND SANJAY AROR A, AM I.T.A NO. 350/COCH/2010 ASSESSMENT YEAR:2006-07 SKYLINE BUILDERS, RAJAJI NAGAR, ERNAKULAM [PAN: AAMFS 8117N] VS. THE ASSISTANT COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-1, ERNAKULAM. (ASSESSEE-APPELLANT) (REVENUE- RESPONDENT) ASSESSEE BY SHRI A.S.NARAYANAMOORTHY, CA-AR REVENUE BY MS. S. VIJAYAPRABHA, JR.DR DATE OF HEARING 27/12/2011 DATE OF PRONOUNCEMENT 31/01/2012 O R D E R PER SANJAY ARORA, AM: THIS APPEAL BY THE ASSESSEE ARISING OUT OF THE ORD ER PASSED BY THE COMMISSIONER OF INCOME-TAX (CENTRAL), KOCHI (CIT FOR SHORT) U/ S. 263 OF THE INCOME-TAX ACT, 1961 ('THE ACT', HEREINAFTER) DATED 25-03-2009 IN THE AS SESSEES CASE FOR ASSESSMENT YEAR (A.Y) 2006-07. 2. AT THE VERY OUTSET, WE OBSERVE THAT THE APPEAL I S TIME BARRED BY A PERIOD OF 12 MONTHS (366 DAYS), HAVING BEEN PREFERRED ON 28-05-2 010, WHILE THE DATE OF COMMUNICATION OF THE ORDER APPEALED AGAINST IS 28-0 3-2009. NO MENTION OF THE SAME WAS MADE BY THE LD. AR DURING HEARING AND, ACCORDIN GLY, THE ASSESSEES APPEAL `HEARD ON MERITS. THE CONDONATION PETITION FILED ALONG WITH THE APPEAL STATES THAT THE IMPUGNED ORDER GOT MIXED UP WITH THE PAPERS FOR THE ASSESSME NT YEARS 2001-02 TO 2005-06, FOR WHICH, AGAIN, ACTION U/S. 263 HAD BEEN TAKEN BY THE LD. CIT, AND THUS, THE DELAY, WHICH IS I.T.A. NO. 350/COCH/2010 SKYLINE BUILDERS VS. ACIT, ERNAKULAM 2 INADVERTENT. THE APPEAL RAISING A COMMON ISSUE, IS , THEREFORE, PRAYED FOR BEING ADMITTED BY CONDONING THE DELAY. 3. IN OUR VIEW, FIRSTLY, IT WAS HIGHLY INAPPROPRIA TE FOR THE LD. COUNSEL TO HAVE NOT BROUGHT THIS ASPECT TO THE NOTICE OF THE BENCH WHIL E ARGUING THE ASSESSEES CASE. IT IS ONLY ON BEING ADMITTED THAT THE APPEAL QUALIFIES AS A VA LID APPEAL, SO THAT THE TRIBUNAL ASSUMES JURISDICTION TO PASS AN ORDER U/S. 254(1) OF THE AC T. FURTHER, THE SAME IMPINGES ON THE RIGHTS OF THE RESPONDENT INASMUCH AS SETTLED MATTER S ARE AGITATED IN APPEALS. EVEN ON MERITS, WE DO NOT FIND THE ASSESSEES CASE AS EXHIB ITING ANY SUFFICIENT CAUSE; IT ITSELF ADMITTING TO AN OMISSION AS A REASON FOR THE DELAY. AS SUCH, THE DELAY IN THE INSTANT CASE DOES NOT MERIT BEING CONDONED. HOWEVER, HAVING HEAR D THE APPEAL ON MERITS, AS AFORESAID, WHICH, EVEN AS STATED IN THE CONDONATION PETITION, RAISES A COMMON ISSUE, I.E., AS FOR THE EARLIER YEARS, WHICH STANDS SINCE HEARD BY THE TRIBUNAL (ON 22/12/2011), WE ONLY DEEM IT FIT UNDER THE CIRCUMSTANCES THAT WE ADJUDIC ATE THIS APPEAL ON ITS MERITS. 4. THE ASSESSEES CASE IS THAT ITS CLAIM OF DEDU CTION U/S. 80IB HAVING BEEN DECIDED IN APPEAL BY THE FIRST APPELLATE AUTHORITY, THE ASSESS MENT SUBJECT TO REVISION STANDS ALREADY MERGED WITH THE ORDER BY THE SAID AUTHORITY (PASSED ON 30-09-2008, COPY ON RECORD), SO THAT THE ADMINISTRATIVE-COMMISSIONER HAS NO JURISDI CTION OVER THE SAME. THE REVENUES CASE, ON THE OTHER HAND, IS THAT THE DEDUCTION U/S. 80IB STOOD ALLOWED IN ASSESSMENT, AND WAS NEVER A SUBJECT MATTER OF EXAMINATION ON ITS ME RITS BY THE ASSESSING AUTHORITY. AS SUCH, THE LD. CIT WAS FULLY WITHIN HIS REVISIONARY JURISDICTION, CONFERRED U/S. 263 OF THE ACT, TO ADDRESS THE SAID ASPECT OF THE ASSESSMENT, AND ISSUE PROPER INSTRUCTIONS, AS THE LD. CIT HAS INDEED DONE. 5. WE HAVE HEARD THE PARTIES, AND PERUSED THE MATER IAL ON RECORD. 5.1 WITHOUT DOUBT, THE ISSUE TO BE DECIDED BY U S IS THE COMPETENCE OF THE LD. CIT TO ASSUME JURISDICTION U/S. 263 IN THE FACTS AND CIRCU MSTANCES OF THE CASE. THE LD. CIT(A)S FINDING IS AT PARA 10 OF THE APPELLATE ORDER, WHICH IS AS UNDER:- I.T.A. NO. 350/COCH/2010 SKYLINE BUILDERS VS. ACIT, ERNAKULAM 3 10. LAST GROUND IS AGAINST NOT ALLOWING DEDUCTION U/S. 80IB ON THE ADDITION TO THE RETURNED INCOME. I ACCEPT THE CONTENTION OF THE A PPELLANT. THE APPELLANT IS ELIGIBLE FOR DEDUCTION U/S. 80IB, ON THE ADDITIONS MADE TO THE RETURNED INCOME. THEREFORE, AO IS DIRECTED TO ALLOW THE CLAIM. 5.2 WE FIND THAT THE VERY SAME ISSUE AROSE FOR ADJU DICATION IN THE ASSESSEES OWN CASE FOR A.Y. 2005-06 (IN I.T.A. NO. 224/COCH/2009 DATED 30-12-2011), WHICH WAS REPRESENTED BY THE SAME COUNSEL AS BEFORE US. THE R ELEVANT FINDINGS AND DECISION BY THE TRIBUNAL ARE AS UNDER:- ` 19.1 THE FACTS AND CIRCUMSTANCES FOR THIS YEAR ARE THE SAME AS THAT FOR THE IMMEDIATELY PRECEDING YEAR, I.E., A.Y. 2004-05. WE , THEREFORE, HAVE NO HESITATION IN UPHOLDING THE IMPUGNED ORDER ON BOTH THE GROUNDS. T HE ASSESSEE, NO DOUBT, HAS SOUGHT TO DRAW A DISTINCTION FOR THIS YEAR BY SUBMITTING THAT THE DEDUCTION U/S. 80IB WAS THE SUBJECT MATTER OF APPEAL BEFORE THE FIRST APPELLATE AUTHORI TY, FOLLOWING THE SEC. 153A ASSESSMENT DATED 28-12-2007. WE HAVE PERUSED THE SAID ORDER ( PLACED AT PB PGS. 43-47). THE DEDUCTION U/S. 80IB HAVING BEEN ALLOWED AT THE CLAI MED AMOUNT IN ASSESSMENT, THE ONLY ISSUE BEFORE THE FIRST APPELLATE AUTHORITY WAS THE ASSESSEES ENTITLEMENT THERETO ON THE ADDITIONAL INCOME, I.E., IN RESPECT OF THE ADDITION /S TO THE RETURNED INCOME ON ASSESSMENT, AND WHICH HE FOUND AS VALID. THE DEDUCTION U/S. 80 IB HAS NECESSARILY TO BE ALLOWED ON THE AMOUNT OF INCOME DERIVED FROM THE ELIGIBLE BUSI NESS AS INCLUDED IN THE `GROSS TOTAL INCOME. AS SUCH, WHERE THE `GROSS TOTAL INCOME S TANDS INCREASED ON ACCOUNT OF ANY ADDITION IN RESPECT OF INCOME DERIVED FROM THE ELIG IBLE BUSINESS, THE SAME WOULD AUTOMATICALLY QUALIFY FOR DEDUCTION. THIS ISSUE STA NDS DECIDED CONCLUSIVELY BY THE LD. CIT (A), PRECLUDING INTERFERENCE U/S. 263 ON THE BASIS OF THE DOCTRINE OF MERGER. THE LD. CIT, HOWEVER, QUESTIONS THE ELIGIBILITY OF THE ASSESSEE TO THE DEDUCTION, AN ASPECT WHICH HAS NOT BEEN EXAMINED EITHER IN THE ASSESSMENT U/S. 143 (3) OR IN SEC. 153A ASSESSMENT. 19.2 THIS ASPECT OF THE MATTER, I.E., THE SCOP E OF DOCTRINE OF MERGER, WHICH FINDS A STATUTORY ARTICULATION PER EXPLANATION (C) BELOW SE CTION 263(1), BEING AN ABIDING FEATURE OF THE PRESENT APPEALS, WE CONSIDER IT RELEVANT AND IN ORDER TO DWELL THEREON IN SOME DETAIL; THE SAME HAVING BEEN THE SUBJECT MATTER OF CONSIDERATION AND ELUCIDATION BY THE HIGHER COURTS OF LAW, INCLUDING BY THE APEX COURT ( ALSO REFER PARA 10.2 OF THIS ORDER). IT STANDS ABUNDANTLY CLARIFIED THAT THE PRINCIPLE WOUL D APPLY ONLY WHERE THE DECISION REACHED BY AN INFERIOR AUTHORITY HAS BEEN REVERSED, MODIFIED OR EVEN CONFIRMED BY THE APPELLATE AUTHORITY, AND WOULD HAVE NO APPLICATION WHERE THE SAME (I.E., THE DECISION BY AN INFERIOR AUTHORITY) DOES NOT COME IN FOR CONSIDE RATION BY THE APPELLATE AUTHORITY, SO THAT THERE IS NO DECISION BY HIM, EITHER BY WAY OF AFFIRMATION OR BY WAY OF REVERSAL OR MODIFICATION ON THE POINT DECIDED BY THE INFERIOR A UTHORITY. THE REAL TEST IS WHETHER ANY SUCH POINT WAS ACTUALLY CONSIDERED AND DECIDED BY T HE APPELLATE AUTHORITY, AND NOT WHETHER THE SAME COULD HAVE BEEN AGITATED BEFORE TH E SAID AUTHORITY AND DECIDED BY HIM. I.T.A. NO. 350/COCH/2010 SKYLINE BUILDERS VS. ACIT, ERNAKULAM 4 AS SUCH, WHERE THERE IS NO DECISION BY THE APPELLAT E AUTHORITY, THE ORDER OF THE ASSESSING AUTHORITY REMAINS UNTOUCHED, AND IT IS OPEN TO THE COMMISSIONER IN EXERCISE OF HIS POWER OF REVISION TO REVISE IT. REFERENCE IN THIS CONTEXT MAY BE MADE BY US TO THE FULL BENCH DECISION IN THE CASE OF CIT VS. R.S. BANWARILAL (1983) 146 ITR 3 (M.P.) (FB ) , RENDERED AFTER AN EXTENSIVE REVIEW OF THE CASE LAW ON THE SU BJECT, INCLUDING BY THE APEX COURT. THE SAME STANDS FOLLOWED SUBSEQUENTLY BY OTHER HIGH COU RTS AS WELL, AS IN THE CASE OF CIT VS. MAQBOOL ALAM & CO., 231 ITR 77 (PATNA) . 20. IN VIEW OF THE FOREGOING, WE DO NOT FIND ANY INFIRMITY IN THE IMPUGNED ORDER AND, CONSEQUENTLY, UPHOLD THE SAME. WE DECIDE ACCORDINGL Y . 5.3 THE FACTS AND CIRCUMSTANCES, AS WELL AS THE RES PECTIVE CASES OF THE OPPOSING PARTIES BEING THE SAME, WE HAVE NO HESITATION IN CONFIRMING THE IMPUGNED ORDER, FOLLOWING THE VIEW AS EXPRESSED EARLIER BY THE TRIBUNAL. FURTHER, WE MAY ADD THAT REFERENCE TO THE PROVISION OF EXPLANATION (C) BELOW S. 263(1), AS WELL AS TO THE DECISIONS B Y THE APEX COURT IN THE CASE OF CIT VS. SHRI ARBUDA MILLS LTD. (1998) 231 ITR 50 (SC) AND CIT VS. ALAGENDRAN FINANCE LTD . (2007) 293 ITR 1 (SC), TOWARD CLARIFYING THE CONC EPT OF THE DOCTRINE OF MERGER, AS APPLICABLE, STANDS MADE BY T HE TRIBUNAL PER ITS SAID ORDER, PARTICULARLY PER PARA 10.2 THEREOF, REFERRED TO IN THE PARA THEREOF AS REPRODUCED HEREINABOVE. THAT IS, THE INSTANT ORDER MAY BE READ IN CONJUNCTION THEREWITH, TOWARD FULLY CONVEYING THE DECISION BY THE TRIBUNAL. WE DECIDE A CCORDINGLY. 6. IN THE RESULT, THE ASSESSEES APPEAL IS DISMISSE D. SD/- SD/- (N.R.S.GANESAN) (SANJAY ARORA) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE: ERNAKULAM DATED: 31ST JANUARY, 2012 GJ COPY TO: 1. M/S. SKYLINE BUILDERS, RAJAJI NAGAR, ERNAKULAM 682 035. 2. THE ASSISTANT COMMISSIONER OF INCOME-TAX, CENTRA L CIRCLE-1, ERNAKULAM. 3. THE COMMISSIONER OF INCOME-TAX (CENTRAL), KOCHI. 4. THE COMMISSIONER OF INCOME-TAX, KOCHI. 5. D.R., I.T.A.T., COCHIN BENCH, COCHIN. 6. GUARD FILE . I.T.A. NO. 350/COCH/2010 SKYLINE BUILDERS VS. ACIT, ERNAKULAM 5 BY ORDER (ASSISTANT REGISTRAR) ITAT, C OCHIN BENCH