Asstt.Commissioner of Income Tax Circle-1, Nagpur V. Smt Reena Arun Sexena, Nagpur

ITA 372/NAG/2012

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 1623 (ITAT-NAGPUR)
• Duration Of Justice: 3 year(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-10-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2006-2007
• Appeal Filed On: 09-10-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NARENDRA KANE
• Section: 143(3); 10B; 154

Judgement Text

1 ITA NO. 372/NAG/2012 IN THE INCOME TAX APPELLATE TRIBUNAL, NAGPUR BENCH, NAGPUR BEFORE SHRI MUKUL K. SHRAWAT, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER. I.T. A. NO.372/NAG/2012 ASSESSMENT YEAR : 2006 - 07. ASSTT. COMMISSIONER OF INCOME - TAX, SMT. REENA ARUN SAXENA, CIRCLE - 1, NAGPUR. VS. NAGPUR. PAN AETPS6959K. APPELLANT RESPONDENT. APPELLANT BY : SHRI NARENDRA KANE. RESPONDENT BY : SHRI MUKESH AGRAWAL. DATE OF HEARING : 22 - 09 - 2015. DATE OF PRONOUNCEMENT : 30 TH OCT., 2015. O R D E R PER SHRI SHAMIN YAHYA, A.M . THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF LEARNED CIT(APPEALS) - I, NAGPUR DATED 27 - 07 - 2012 AND PERTAINS TO ASSESSMENT YEAR 2006 - 07. GROUNDS OF APPEAL READ AS UNDER : 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE CIT(A) IS CORRECT IN GRANTING RELIEF U/S 10A THOUGH THE CONDITION LAID DOWN IN SECTION 10A(5) THAT FORM NO. 56F HAS TO BE FILED ALONG WITH THE RETURN OF INCOME HAS NOT BEEN FULFILLED. 2. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE CIT(A) WAS CORRECT IN ADMITTING AND ADJUDICATING ON A NEW CLAIM OF DEDUCTION WHICH WERE NOT THERE EITHER IN THE RETURN OR PUT FORTH IN COURSE OF ASSESSMENT PROCEEDINGS. 2 ITA NO. 372/NAG/2012 2. BRIEF FACTS OF THE CASE ARE AS UNDER : THE ASSESSEE IS ENGAGED IN THE BUSINESS OF EXPORT OF SOFTWARE AND IT RELATED SERVICES. RETURN OF INCOME WAS FILED ON 30 - 10 - 2006 DECLARING INCOME OF RS.2,14,620/ - . IN THE SAID RETURN, THE ASSESSEE CLAIMED DEDUCTION U/S 10B AMOUNTING TO RS.61,99, 108/ - . THE ORIGINAL ASSESSMENT U/S 143(3) WAS COMPLETED ON 12 - 11 - 2008 DETERMINING TOTAL INCOME AT RS.2,14,620/ - ALLOWING THE DEDUCTION U/S 10B. LATER ON AO ISSUED NOTICE U/S 154 TO WITHDRAW THE SAID EXEMPTION. T HE ASSESSEE CLAIMED DEDUCTION U/S 10A INSTEA D OF DEDUCTION U/S 10B OF THE I.T. ACT CLAIMED EARLIER IN THE ORIGINAL RETURN. HOWEVER, THE AO HAS INFORMED TO THE ASSESSEE THAT HER CLAIM OF DEDUCTION U/S 10A WOULD NOT BE ADMISSIBLE AS SHE HAD NOT FILED THE PRESCRIBED FORM NO. 56F ALONG WITH THE RETURN O F INCOME BEFORE THE DUE DATE OF FILING IT RETURN U/S 139(1) OF THE I.T. ACT. HENCE THE AO HAS PASSED AN ORDER U/S 154 ON 26 - 04 - 2011 REJECTING THE SAID CLAIM U/S 10A. 3. AGAINST THE ABOVE ORDER, ASSESSEE APPEALED BEFORE THE LEARNED CIT(APPEALS). THE LEARNE D CIT(APPEALS) DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE BY HOLDING AS UNDER : I HAVE CAREFULLY CONSIDERED THE ISSUE BEFORE ME. AS REGARDS GROUND NO. 1 REGARDING JURISDICTION U/S 154 IT IS TO BE NOTED THAT THIS IS A CASE WHERE MORE THAN ONE VIEW WAS N OT POSSIBLE. AS SUCH ON THE PRINCIPLES ESTABLISHED IN THE CASE OF T.S. BALARAM VS. VOLKAT B ROS 82 ITR 50 (SC) AND M.K. VEN KATACHALAM, ITO VS. BOMBAY DYEING AND MANUFACTURING CO. LTD. 34 ITR 143 (SC) THERE IS NO OBVIOUS AND PATENT MISTAKE OR A GLARING AN D OBVIOUS MISTAKE. IT HAS BEEN BY THE DELHI HIGH COURT IN THE CASE OF R.A. BOGA VS. AAC 110 ITR 1 (DEL.) (FB) THAT HOTLY DEBATABLE ISSUES ARE EXCLUDED U/S 154. THE TEST IS NOT THE COMPLEXITY OF THE ISSUES BUT THE SIMPLICITY OF THE MISTAKE. A MISTAKE APP ARENT FROM RECORD MEANS AN OBVIOUS AND PATENT OR A GLARING AND OBVIOUS. THE ISSUES INVOLVED IS LEGAL AND IN EARLIER CASES, THE ITAT HAS ALLOWED THE CLAIM OF THE ASSESSEE U/S 10A. SECTION 10E EVEN INSPITE OF THE CLAIM MADE U/S 10B. THEREFORE AO WAS SINS ERROR IN INVOK ING SECTION 154 TO WITHDRAW THE CLAIM OF THE APPELLANT U/S 10B. 3 ITA NO. 372/NAG/2012 IN THE APPELLANTS CASE THERE WAS A GENUINE MISCONCEPTION WHETHER THE CLAIM U/S 10A OR 10B WAS ELIGIBLE. THEREFORE THERE HAS BEEN A BONAFIDE ERROR ON THE PART OF THE ASSESSEE WH ILE FILING THE RETURN OF INCOME. IN THIS CONNECTION FINDING WAS GIVEN BY ME REGARDING THIS ISSUE IN THE APPELLATE ORDE R NO. CIT(A) - I/289/10 - 11 DATED 21 - 08 - 2011 FOR AY 2008 - 09 WHEREIN I HAVE A HAVE ALLOWED THE APPEAL OF THE ASSESSEE FOR CLAIM U/S 10A EVEN T HOUGH IT WAS WRONGLY CLAIMED U/S 10B. THE SAME SETS OF FACTS SUBSISTS FOR THE PRESENT APPEAL. THE AO IS THEREFORE DIRECTED TO ALLOW THE APPELLANTS CLAIM. 4. AGAINST THE ABOVE ORDER, REVENUE IS IN APPEAL BEFORE US. 5. WE HAVE HEARD BOTH THE COUNSEL AND P ERUSED THE RECORDS. FIRSTLY WE AGREE WITH THE LEARNED CIT(APPEALS) THAT THE DISALLOWANCE OF ASSESSEES CLAIM OF DEDUCTION U/S 10A BY WAY OF ORDER U/S 154 BY THE AO IS NOT SUSTAINABLE. THE IMPUGNED ISSUE WAS A DEBATABLE ONE AS TO WHETHER THE ASSESSEE CA N CLAIM DEDUCTION U/S 10A IN PLACE OF SECTION 10B DURING THE ASSESSMENT PROCEEDINGS. HENCE IT CANNOT BE SAID THAT IT WAS A MISTAKE APPARENT FROM RECORD. HENCE LEARNED CIT(APPEALS) HAS RIGHTLY HELD THAT THE AO WAS IN ERROR IN INVOKING SECTION 154 TO WITHDR AW THE CLAIM OF DEDUCTION OF ASSESSEE. FURTHER MORE ON MERITS WE FIND THAT THE LEARNED CIT(APPEALS) HAS GIVEN A FINDING THAT THERE WAS A BONAFIDE ERROR ON THE PART OF THE ASSESSEE IN MAKING THE CLAIM U/S 10B IN PLACE OF SECTION 10A. IN ASSESSEES OWN CASE THIS TRIBUNAL IN ITA NO. 152/NAG/2011 FOR ASSESSMENT YEAR 2008 - 09 HAS HELD THE ISSUE ON MERITS IN FAVOUR OF THE ASSESSEE BY HOLDING AS UNDER : AFTER CONSIDERING THE ORDER OF THE LEARNED CIT(A), WE FOUND NO INFIRMITY IN THE FINDING OF THE CIT(A). WE NOTE D HAT LEARNED CIT(A) HAS ALLOWED THE ISSUE IN FAVOUR OF THE ASSESSEE FOLLOWING THE DECISION IN THE CASE OF INFOSPECTRUM PVT. LTD. (SUPRA), WHERE THE SIMILAR FACTS WERE INVOLVED. THE MAIN REASON FOR DENIAL OF DEDUCTION UNDER SECTION 10A WAS THAT THE ASSESSE E CLAIMED DEDUCTION UNDER SECTION 10B INSTEAD OF UNDER SECTION 10A. THE PROVISIONS OF SECTIONS 10A AND 10B ARE SIMILAR. THE FORMATS OF FORM NO. 56F & 56G ARE SAME, THEREFORE, THIS WAS A TECHNICAL 4 ITA NO. 372/NAG/2012 DEFECT, IF ANY AND ONLY ON ACCOUNT OF TECHNICALITY AND VENIA L DEFECT, THE BENEFIT ALLOWABLE TO THE ASSESSEE SHOULD NOT HAVE DISALLOWED BY THE AO. THIS VIEW OF OURS FIND FURTHER SUPPORT FROM THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF HINDUSTAN STEEL, REPORTED IN 135 TAXMAN 461. 6. SINCE ON IDENTICAL I SSUE IN ASSESSEES OWN CASE THIS TRIBUNAL HAS DECIDED THE ISSUE ON MERITS IN FAVOUR OF THE ASSESSEE, IT FURTHER PROVES THAT THE AOS REJECTION OF ASSESSEES CLAIM IS TOTALLY UNSUSTAINABLE. IN THESE CIRCUMSTANCES WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF LEARNED CIT(APPEALS). ACCORDINGLY WE UPHOLD THE SAME. 7. IN THE RESULT, REVENUES APPEAL STANDS DISMISSED. - ORDER PRONOUNCED IN THE OPEN COURT ON THIS 30 TH DAY OF OCT., 2015. SD/ - SD/ - (MUKUL K. SHRAWAT) ( SHAMIM YAHYA) JUDICIAL MEMBER ACCOUNTANT MEMBER. NAGPUR, DATED: 30 TH OCT., 2015. 5 ITA NO. 372/NAG/2012 COPY FORWARDED TO : 1 SMT. REETA ARUN SAXENA, 11/2, INFOTECH PARK, NEAR VRCE TELEPHONE EXCHANGE, PARSODI, SOUTH AMBAZARI ROAD, NAGPUR. 2. ACIT, CIRCLE - 1, NAGPUR. 3. C.I.T., CONCERNED 4. CIT(APPEALS) - I, NAGPUR. 5. D.R., ITAT, NAGPUR. 6. GUARD FILE TRUE COPY. BY ORDER WAKODE ASSISTANT REGISTRAR, ITAT, NAGPUR