Modern Papers , Delhi V. ITO, Ward- 34(3), New Delhi

ITA 3931/DEL/2018

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 3040 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-06-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: 2013-2014
• Appeal Filed On: 24-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SOHAIL MALIK
• Assessee Lawyers: S S NAGAR
• Keywords: Capital asset; Question of law; Capital receipt; Revised return; Set aside
• Section: 143(3); 115JB; 139(5); 208; 192; 37; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH E NEW DLEHI BEFORE SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER AND SHRI K. NARASIMHA CHARY, JUDICIAL MEMBER ITA NO. 3931/DEL/2018 ASSESSMENT YEAR: 2013-14 MODERN PAPERS, B-95, VS. INCOME-TAX OFFICER, WAZIRPUR INDUSTRIAL AREA, WARD 34(3), NEW DELHI DELHI. PAN : AAFQM2930H (APPELLANT) (RESPONDENT) APPELLANT BY : SH. S.S. NAGAR, C.A. RESPONDENT BY: SH. SOHAIL MALIK, SR. DR DATE OF HEARING: 31/03/2021 DATE OF ORDER : 18/06/2021 ORDER PER K. NARASIMHA CHARY, J.M. AGGRIEVED BY THE ORDER DATED 19.03.2018 PASSED BY T HE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-12, NEW DELHI ('LD. CIT(A)') FOR THE ASSESSMENT YEAR 2013-14, MODERN PAPERS (THE AS SESSEE) FILED THIS APPEAL. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF AGRO CHEMICALS AND SET UP A MANUFACTURING UNIT I N THE STATE OF JAMMU & KASHMIR, WHICH IS NOTIFIED AREA, ENTITLING THE AS SESSEE ALL THE BENEFITS OF EXCISE DUTY REFUND IN ACCORDANCE WITH THE EXCISE NO TIFICATION 2 NOS. 56 & 57 OF 2002 DATED 14.11.2002 ISSUED BY THE CENTRAL EXCISE DEPARTMENT AND IN ACCORDANCE WITH THE SCHEMES/POLIC IES OF THE GOVERNMENT OF INDIA, MINISTRY OF COMMERCE AND INDUS TRIES. DURING THE FINANCIAL YEAR 2012-13 RELEVANT TO ASSESSMENT YEAR 2013-14, THE ASSESSEE RECEIVED AN EXCISE SUBSIDY AMOUNTING TO RS.14,55,88 ,357/-. THE ASSESSEE FILED THEIR RETURN OF INCOME FOR THE ASSESSMENT YEA R 2013-14 ON 30.11.2013 DECLARING THE TAXABLE INCOME OF RS.10,08 ,580/- WHERE UNDER THE ASSESSEE HAD OFFERED THE EXCISE SUBSIDY OF RS.1 4,55,88,357/- ALSO. SUBSEQUENTLY, IN VIEW OF THE DECISIONS OF HONBLE S UPREME COURT IN THE CASE OF PONI SUGARS & CHEMICALS LTD. (2008) 306 ITR 392 (SC) AND SHREE BALAJI ALLOYS VS. CIT, 287 CTR 459, THE EXCISE SUBS IDY HAS TO BE CHARACTERIZED AS CAPITAL RECEIPT UNDER THE NEW IND USTRIAL POLICY AND OTHER CONCESSIONS SCHEME DATED 14.06.2002 IN THE S TATE OF JAMMU & KASHMIR AND THEREFORE, DURING THE COURSE OF ASSESSM ENT PROCEEDINGS, THE ASSESSEE FILED A LETTER DATED 01.02.2016 AND MADE C ERTAIN SUBMISSIONS IN THAT RESPECT ON 28.11.2016, PRAYING FOR THE ADMISSI ON OF THE CLAIM OF ASSESSEE TO TREAT THE EXCISE REFUND AS CAPITAL RECE IPTS AND NON-TAXABLE. 3. THE ASSESSING OFFICER, HOWEVER, RECORDED THAT IN VIEW OF THE PROVISIONS OF SECTION 139(5) OF THE INCOME-TAX ACT (THE ACT), IN THE ABSENCE OF ANY REVISED RETURN, NO CLAIM OF ASSESSEE COULD BE CONSIDERED BY WAY OF A SIMPLE LETTER. THE ASSESSING OFFICER TH EN RELIED ON THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF GO ETZE (INDIA) LTD. VS. CIT, 284 ITR 323 (SC). ASSESSING OFFICER ACCORDINGL Y REFUSED TO CONSIDER THE CLAIM OF ASSESSEE TO TREAT THE EXCISE SUBSIDY A S CAPITAL RECEIPT INSTEAD OF REVENUE RECEIPTS THOUGH THE ASSESSEE OFFERED THE SAME TO TAX UNDER THE MISTAKEN IMPRESSION. 3 4. WHEN THE ASSESSEE PREFERRED APPEAL BEFORE THE CI T(A), THE CIT(A) REFERRED TO THE OBSERVATIONS OF HONBLE SUPREME COU RT IN THE CASE OF GOETZE (INDIA) (SUPRA) AND HELD THAT THE ASSESSING OFFICER WAS JUSTIFIED IN REJECTING THE CLAIM OF ASSESSEE TO TREAT THE EXCISE REFUND AS CAPITAL RECEIPTS WHICH WAS DECLARED AS REVENUE RECEIPT BY T HE ASSESSEE IN THEIR RETURN OF INCOME IN VIEW OF THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF GOETZE (INDIA)(SUPRA). ACCORDING TO CIT(A) ALSO, THE DECISION OF HONBLE SUPREME COURT IS APPLICABLE AND BOTH THE AS SESSING OFFICER AND CIT(A) HAVE NO JURISDICTION TO CONSIDER THE MODIFIC ATION OF THE CLAIM OF ASSESSEE IN THE ABSENCE OF ANY REVISED RETURN U/S. 139(5) OF THE ACT WHEREAS NO SUCH BAR IN SO FAR AS INCOME-TAX APPELLA TE TRIBUNAL IS CONCERNED. IN SUCH CIRCUMSTANCES, THE CIT(A) ALSO R EFUSED TO CONSIDER THE CLAIM OF ASSESSEE AND DISMISSED THE APPEAL. 5. AGGRIEVED BY SUCH AN ORDER, THE ASSESSEE PREFERR ED THIS APPEAL ORIGINALLY STATING THAT TO ALLOW THE ADDITIONAL CLA IM OF ASSESSEE BY TREATING EXCISE DUTY REFUND IS WITHIN THE POWER OF INCOME-TA X APPELLATE TRIBUNAL. SUBSEQUENTLY, THE ASSESSEE, HOWEVER, FILED ADDITION AL GROUND PREFERRING THE CLAIM FOR DEDUCTION OF EDUCATION CESS IN COMPUT ING THE TAX LIABILITY ALSO. 6. SO FAR AS ADMISSION OF ADDITIONAL GROUND IS CONC ERNED, THE LAW IS FAIRLY SETTLED IN VIEW OF DECISION OF HONBLE SUPRE ME COURT IN THE CASE OF JUTE CORPORATION OF INDIA LTD. VS. CIT, 187 ITR 688 (SC) AND NATIONAL THERMAL POWER CO. LTD. VS. CIT, 229 ITR(SC) AND OTH ER CATENA OF DECISIONS FROM VARIOUS AUTHORITIES, WHEREIN IT IS HELD THAT I F CONSIDERATION OF ADDITIONAL GROUNDS DOES NOT REQUIRE ANY ADDITIONAL MATERIAL AND SUCH ADDITIONAL GROUNDS COULD BE ADJUDICATED WITH REFERE NCE TO THE MATERIAL 4 ALREADY AVAILABLE ON RECORD, IT WOULD BE JUST AND P ROPER TO ENTERTAIN THE ADDITIONAL GROUND FOR ADJUDICATION, AS UNDER THE AC T ALL THE ENDEAVOUR OF THE AUTHORITIES SHOULD BE TO DETERMINE THE JUST TAX LIABILITY OF THE ASSESSEE. IN THIS CASE, THE FACTS ARE ADMITTED AND ARE NOT IN DISPUTE. HENCE, WE ADMIT THE ADDITIONAL GROUND FOR ADJUDICAT ION. 7. IT COULD BE SEEN FROM THE ORDERS OF THE AUTHORIT IES BELOW THAT BOTH THE AUTHORITIES BELOW FELT HELPLESS TO CONSIDER THE CLAIM OF ASSESSEE PREFERRED BY WAY OF A LETTER IN THE ABSENCE OF ANY REVISED RETURN IN VIEW OF THE DECISION OF HONBLE SUPREME COURT IN THE CAS E OF GOETZE (INDIA)(SUPRA). OBSERVATIONS OF HONBLE SUPREME CO URT ARE EXTRACTED BY THE CIT(A) IN HIS ORDER AND THEY CLEARLY EXCLUDE TH E INCOME-TAX APPELLATE TRIBUNAL FROM THE BAR TO CONSIDER THE CLAIM OF ASSE SSEE IN THE ABSENCE OF REVISED RETURN, U/S. 254 OF THE ACT. IT IS, THEREFO RE, CLEAR THAT THE DUTY OF THE AUTHORITIES UNDER THE ACT IS TO DETERMINE THE J UST TAX LIABILITY OF THE ASSESSEE WITHOUT BEING DETERRED BY ANY TECHNICALITI ES AND IN VIEW OF THE DECISION OF HONBLE SUPREME COURT IN GOETZE (INDIA) , THE TRIBUNAL IS FREE TO CONSIDER SUCH CLAIMS U/S. 254 OF THE ACT. LEARNE D AR OF THE ASSESSEE HAS ALSO PLACED STRONG RELIANCE ON THE DECISION OF COORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF M/S. CRYSTAL CROP PROT ECTION (P) LTD. VS. DCIT DATED 19.12.2019 (ITA NO. 1539/DEL/2016), WHEREIN T HE IDENTICAL CLAIMS OF ASSESSEE STOOD ALLOWED BY THE TRIBUNAL. 8. IN THIS MATTER, THERE IS NO DISPUTE ON THE AMOUN T OF EXCISE DUTY REFUND. FACT OF ASSESSEES UNIT BEING LOCATED IN TH E NOTIFIED AREA ENTITLING THE ASSESSEE TO THE BENEFITS OF EXCISE DUTY REFUND IN ACCORDANCE WITH EXCISE NOTIFICATION NOS. 56 & 57/2002 ISSUED BY THE CENTRAL EXCISE DEPARTMENT UNDER THE INDUSTRIAL POLICY OF THE GOVER NMENT OF INDIA, 5 MINISTRY OF COMMERCE AND INDUSTRIES, IS ALSO NOT IN DISPUTE AT EITHER OF THE STAGES BEFORE OF AUTHORITIES BELOW OR BEFORE US . THE ONLY DISPUTE CENTRES ROUND THE ADMISSIBILITY OR OTHERWISE OF ASS ESSEES SUBSEQUENT CLAIM FOR TREATMENT OF EXCISE DUTY REFUND AS CAPITA L IN NATURE WITHOUT FILING ANY REVISED RETURN. THIS ISSUE IS FOUND SQUA RELY COVERED IN FAVOUR OF THE ASSESSEE BY THE ORDER OF CO-ORDINATE BENCH OF T HIS TRIBUNAL IN THE CASE OF M/S. CRYSTAL CROP PROTECTION (P) LTD. VS. D CIT (SUPRA), AS RIGHTLY ARGUED BY THE LD. COUNSEL FOR THE ASSESSEE,WHERE TH E IDENTICAL CLAIMS OF ASSESSEE FOR TREATING THE EXCISE DUTY REFUND AS CAP ITAL RECEIPT AND DEDUCTION OF EDUCATION CESS STAND ALLOWED IN THE SI MILAR SET OF FACTS. OBSERVATIONS AND FINDINGS REACHED BY COORDINATE BEN CH READ AS UNDER : 8. HEARD THE ARGUMENTS OF BOTH THE PARTIES AND PERU SED THE MATERIAL AVAILABLE ON RECORD. 9. IN THE CASE OF JUTE CORPORATION OF INDIA LTD. VS CIT VIDE ORDER DATED 04.09.1990, 1991 AIR 241 HELD THAT THE HONBLE APEX COURT WHILE ADJUDICATING ON THE ISSUE OF ADDITIONAL GROUND HELD THAT THE DECLARATION OF LAW IS CLEAR THAT THE POWER OF THE APPELLATE ASSIST ANT COMMISSIONER IS COTERMINUS WITH THAT OF THE INCOME TAX OFFICER. IF THAT BE SO, THERE APPEARS TO BE NO REASON AS TO WHY THE APPELLATE AUTHORITY C ANNOT MODIFY THE ASSESSMENT ORDER ON AN ADDITIONAL GROUND EVEN IF NO T RAISED BEFORE THE INCOME TAX OFFICER. NO EXCEPTION COULD BE TAKEN TO THIS VIEW AS THE ACT DOES NOT PLACE ANY RESTRICTION OR LIMITATION ON THE EXER CISE OF APPELLATE POWER. EVEN OTHERWISE AN APPELLATE AUTHORITY WHILE HEARING APPEAL AGAINST THE ORDER OF A SUBORDINATE AUTHORITY HAS ALL THE POWERS WHICH THE ORIGINAL AUTHORITY MAY HAVE IN DECIDING THE QUESTION BEFORE IT SUBJECT TO THE RESTRICTIONS OR LIMITATION IF ANY PRESCRIBED BY THE STATUTORY PROVISIONS. IN THE ABSENCE OF ANY STATUTORY PROVISIONS TO THE CONTRARY THE APPELLATE AUTHORITY IS VESTED WITH ALL THE PLENARY POWERS WHICH THE SUB ORDINATE AUTHORITY MAY HAVE IN THE MATTER. 10. THE HONBLE APEX COURT HAS ALSO HELD THAT IF TH E APPELLATE ASSISTANT COMMISSIONER IS SATISFIED HE WOULD BE ACTING WITHIN HIS JURISDICTION IN CONSIDERING THE QUESTION SO RAISED IN ALL ITS ASPEC TS. OF COURSE, WHILE PERMITTING THE ASSESSEE TO RAISE AN ADDITIONAL GROU ND, THE APPELLATE ASSISTANT COMMISSIONER SHOULD EXERCISE HIS DISCRETI ON IN ACCORDANCE WITH 6 LAW AND REASON. HE MUST BE SATISFIED THAT THE GROUN D RAISED WAS BONA FIDE AND THAT THE SAME COULD NOT HAVE BEEN RAISED EARLIE R FOR GOOD REASONS. THE SATISFACTION OF THE APPELLATE ASSISTANT COMMISSIONE R DEPENDS UPON THE FACTS AND CIRCUMSTANCES OF EACH CASE AND NO RIGID PRINCIP LES OR ANY HARD AND FAST RULES CAN BE LAID DOWN FOR THIS PURPOSE. 11. THE SIMILAR PROPOSITION HAS REITERATED BY THE H ONBLE APEX COURT WHILE DEALING WITH THE SIMILAR ISSUE IN THE CASE NATIONAL THERMAL POWER CO. LTD. VS CIT 229 ITR 383. THE APEX COURT REITERATED THAT 6. IN THE CASE OF JUTE CORPORATION OF INDIA LTD. V . C.I.T. THIS COURT, WHILE DEALING WITH THE POWERS OF THE APPELLATE ASSISTANT COMMISSIONER OBSERVED THAT AN APPELLATE AUTHORITY HAS ALL THE POWERS WHICH THE ORIGINAL AUTHORITY MAY HAVE IN DECIDING THE QUESTION BEFORE IT SUBJECT TO THE RESTRICTIONS OR LIMITATIONS, IF ANY, PRESCRIBED BY THE STATUTORY PROVISIONS. IN THE ABSENCE OF ANY STATUTORY PROVISION, THE APPELLATE AUTHORITY IS VESTED WITH A LL THE PLENARY POWERS WHICH THE SUBORDINATE AUTHORITY MAY HAVE IN THE MATTER. T HERE IS NO GOOD REASON TO JUSTIFY CURTAILMENT OF THE POWER OF THE APPELLATE A SSISTANT COMMISSIONER IN ENTERTAINING AN ADDITIONAL GROUND RAISED BY THE ASS ESSEE IN SEEKING MODIFICATION OF THE ORDER OF ASSESSMENT PASSED BY T HE INCOME-TAX OFFICER. THIS COURT FURTHER OBSERVED THAT THERE MAY BE SEVERAL FA CTORS JUSTIFYING THE RAISING OF A NEW PLEA IN AN APPEAL AND EACH CASE HAS TO BE CONSIDERED ON ITS OWN FACTS. THE APPELLATE ASSISTANT COMMISSIONER MUST BE SATISF IED THAT THE GROUND RAISED WAS BONA FIDE AND THAT THE SAME COULD NOT HAVE BEEN RAISED EARLIER FOR GOOD REASONS. THE APPELLATE ASSISTANT COMMISSIONER SHOUL D EXERCISE HIS DISCRETION IN PERMITTING OR NOT PERMITTING THE ASSESSEE TO RAISE AN ADDITIONAL GROUND IN ACCORDANCE WITH LAW AND REASON. THE SAME OBSERVATIO NS WOULD APPLY TO APPEALS BEFORE THE TRIBUNAL ALSO. 12. WHILE DEALING WITH THE CASE OF NTPC, THE HONBL E APEX COURT ENUNCIATED THAT IT WOULD NOT BE PROPER IF THE TRIBUNAL IS CONF INED ONLY TO ISSUES ARISING OUT OF THE APPEAL BEFORE THE COMMISSIONER OF INCOME -TAX (APPEALS) AND IT AMOUNTS TO TAKING TOO NARROW A VIEW OF THE POWERS O F THE APPELLATE TRIBUNAL. UNDOUBTEDLY, THE TRIBUNAL WILL HAVE THE D ISCRETION TO ALLOW OR NOT ALLOW A NEW GROUND TO BE RAISED. BUT WHERE THE TRIB UNAL IS ONLY REQUIRED TO CONSIDER A QUESTION OF LAW ARISING FROM THE FACTS W HICH ARE ON RECORD IN THE ASSESSMENT PROCEEDINGS WE FAIL TO SEE WHY SUCH A QU ESTION SHOULD NOT BE ALLOWED TO BE RAISED WHEN IT IS NECESSARY TO CONSID ER THAT QUESTION IN ORDER TO CORRECTLY ASSESS THE TAX LIABILITY OF AN ASSESSE E. THUS, WE FIND THAT THE COURTS HAVE ALWAYS UPHELD THE POWERS OF THE TRIBUNA L OR RATHER DIRECTED THE TRIBUNALS TO ASSESS THE CORRECT TAX LIABILITY OF TH E ASSESSEES. IN CASE THE ASSESSEE HAS WRONGLY OR OWING TO LACK OF KNOWLEDGE PAYS TAX ON AN ITEM OF AMOUNT WHICH IS NOT TAXABLE IN ACCORDANCE WITH THE PROVISIONS OF THE INCOME 7 TAX ACT, THE ASSESSEE WOULD HAVE EVERY RIGHT TO PRA Y FOR RIGHT TAXATION OF HIS TAXABLE INCOME. 13. THUS, IT CAN BE SAID THAT THE CLAIM OF THE ASSE SSEE HAS TO BE CONSIDERED BASED ON THE FACT THAT WHETHER THE AMOUNTS IN QUEST ION OR TAXABLE OR NOT, NOTWITHSTANDING THE FACT THAT THE ASSESSEE HAS SUO- MOTO OFFERED THE AMOUNTS TO TAXATION ALREADY. FOR DETERMINATION OF T HE ISSUE WHETHER THE ASSESSING OFFICER OR THE TRIBUNAL EMPOWERED TO CONS IDER THE PLEA OF THE ASSESSEE, THE PROVISIONS OF THE ACT ARE EXAMINED. 14. YEAR-1989 -- THE PROVISION SUB-SECTION (3) WAS SUBSTITUTED BY THE FOLLOWING PROVISION BY THE DIRECT TAX LAWS (AMENDME NT) ACT, 1987 WITH EFFECT FROM 1ST APRIL 1989, WHICH READ AS FOLLOWS ' (3) ON THE DAY SPECIFIED IN THE NOTICE ISSUED UNDER SUB-SECTION (2), OR AS SOON AFTERWARDS AS MAY BE, AFTER HEARING SUCH EVIDENCE AS THE ASSESSEE MAY PRO DUCE AND SUCH OTHER EVIDENCE AS THE ASSESSING OFFICER MAY REQUIRE ON SP ECIFIED POINTS, AND AFTER TAKING INTO ACCOUNT ALL RELEVANT MATERIAL WHICH HE HAS GATHERED, THE ASSESSING OFFICER SHALL, BY AN ORDER IN WRITING, MA KE AN ASSESSMENT OF THE TOTAL INCOME OR LOSS OF THE ASSESSEE, AND DETERMINE THE SUM PAYABLE BY HIM ON THE BASIS OF SUCH ASSESSMENT.' 15. ON PERUSAL OF THE ABOVE PROVISION, IT IS NOTED THE LEGISLATURE SPECIFICALLY EXCLUDED THE A.O.'S POWER TO DETERMINE SUM 'REFUNDA BLE' TO THE ASSESSEE ON COMPLETION OF ASSESSMENT UNDER SUB-SECTION (3) OF S ECTION 143 OF THE ACT. THE INTENTION OF THE LEGISLATURE IN INTRODUCING AME NDED SECTION 143(3) WAS EXPLAINED BY THE CBDT IN CIRCULAR NO. 549 DATED 31. 10.1989 WHEREIN THE BOARD STATED THAT UNDER THE AMENDED PROVISIONS, THE ASSESSING OFFICER IN AN ASSESSMENT ORDER PASSED UNDER SECTION 143(3) CANNOT ASSESS INCOME AT A FIGURE LOWER THAN THE RETURNED INCOME, NOR CAN LOSS BE ASSESSED AT A FIGURE HIGHER THAN THE RETURNED, AND THEREFORE NO TAX PAID WITH REFERENCE TO THE RETURNED INCOME CAN NOW BE REFUNDED TO THE ASSESSEE ON COMPLETION OF REGULAR ASSESSMENT. 16. YEAR 1998 -- THE ABOVE PROVISION WAS LATER ON S UBSTITUTED BY THE FINANCE (NO.2) ACT OF 1998 AND THE POWER TO DETERMINE 'SUM REFUNDABLE' TO THE ASSESSEE BY THE ASSESSING OFFICERS IN THE PROCEEDIN GS U/S 143(3) WAS RE- INSTATED BY THE LEGISLATURE. THE RELEVANT PROVISION , AS IT STANDS NOW READS AS UNDER: '(3) ON THE DAY SPECIFIED IN THE NOTICE ISSUED UNDE R SUB-SECTION (2), OR AS SOON AFTERWARDS AS MAY BE, AFTER HEARING SUCH EVIDENCE A S THE ASSESSEE MAY PRODUCE AND SUCH OTHER EVIDENCE AS THE ASSESSING OF FICER MAY REQUIRE ON SPECIFIED POINTS, AND AFTER TAKING INTO ACCOUNT ALL RELEVANT MATERIAL WHICH HE 8 HAS GATHERED, THE ASSESSING OFFICER SHALL, BY AN OR DER IN WRITING, MAKE AN ASSESSMENT OF THE TOTAL INCOME OR LOSS OF THE ASSES SEE, AND DETERMINE THE SUM PAYABLE BY HIM OR REFUND OF ANY AMOUNT DUE TO HIM O N THE BASIS OF SUCH ASSESSMENT.' 17. THE CBDT CIRCULAR NO. 772 DTD. 23.12.1998-- EXP LAINING THE ABOVE SUBSTITUTED PROVISION OF SECTION 143(3) EXPLICITLY STATED THAT UNDER THE ERSTWHILE PROVISIONS, THERE WAS NO PROVISION TO ISS UE REFUND AND THE ASSESSING OFFICER WAS ONLY EMPOWERED TO DETERMINE T HE SUM PAYABLE BY THE ASSESSEE, BUT UNDER THE AMENDED PROVISIONS THE A.O. IS EMPOWERED TO PROVIDE FOR DETERMINATION OF SUM PAYABLE BY THE ASS ESSEE AS WELL AS THE REFUND OF ANY AMOUNT DUE TO HIM. 18. ON HARMONIOUS READING OF THESE PROVISIONS & AFTE R GIVING DUE CONSIDERATION OF THE LEGISLATIVE HISTORY OF SECTION 143(3) AND THE JUDGMENT OF THE HON'BLE CALCUTTA HIGH COURT IN THE CASE OF CIT VS BRITANNIA INDUSTRIES LTD IN ITA NO. 03/2013 VIDE ORDER DATED 13.07.2017 HELD THAT EVEN IF IT (ACCEPTING THE FRESH CLAIM OF THE ASSESSEE) RESULTS IN AN ASSESSMENT BELOW THE RETURNED INCOME AND CONSEQUENTLY REFUND ARISES, IT IS VALID AS PER LAW. 19. THE HONBLE HIGH COURT HAS ALSO HELD THAT THERE IS NO CONFLICT BETWEEN THE GURJARGRAVURES PRIVATE LTD. AND GOETZE (INDIA) LTD. IN THE FORMER A CLAIM FOR EXEMPTION WAS FOR THE FIRST TIME PUT UP BEFORE THE APPELLATE ASSISTANT COMMISSIONER WHO REJECTED THE CLAIM AS NOT MADE BEF ORE THE I.T.O. THIS REJECTION WAS SET ASIDE BY THE TRIBUNAL WITH DIRECT ION UPON THE APPELLATE ASSISTANT COMMISSIONER TO ENTERTAIN THE QUESTION OF RELIEF UNDER SECTION 84, CLAIMED BY THE ASSESSEE IN THAT CASE. THE SUPREME C OURT HELD THAT IT WAS NOT COMPETENT FOR THE TRIBUNAL TO HAVE DONE SO. THE DIS TINCTION BETWEEN THE TWO AUTHORITIES ELIMINATING ANY CONFLICT IS THAT IN GURJARGRAVURES PRIVATE LTD. THE COMPETENCE OF THE TRIBUNAL TO DIRECT THE APPELL ATE ASSISTANT COMMISSIONER TO ENTERTAIN A CLAIM NOT MADE BEFORE T HE I.T.O WAS FOUND TO BE LACKING. IN GOETZE (INDIA) LTD. THE SUPREME COUR T HELD THAT THE ASSESSING AUTHORITY'S POWER WAS LIMITED BUT NOT THAT OF THE T RIBUNAL IN THE CONTEXT OF DEALING WITH A CLAIM OF THE ASSESSEE THEREIN NOT PU T FORWARD BEFORE THE ASSESSING OFFICER. IN GURJARGRAVURES PRIVATE LTD. ( SUPRA) THE TRIBUNAL ITSELF DID NOT CONSIDER TO ALLOW THE CLAIM FOR RELIEF. 20. FURTHER, THE CBDT CIRCULAR NO. 14(XL-35 DATED 1 1.04.1955) WHEREIN IT IS HELD AS UNDER: '3. OFFICERS OF THE DEPARTMENT MUST NOT TAKE ADVANT AGE OF IGNORANCE OF AN ASSESSEE AS TO HIS RIGHTS. IT IS ONE OF THEIR DUTIE S TO ASSIST A TAXPAYER IN EVERY REASONABLE WAY, PARTICULARLY IN THE MATTER OF CLAIM ING AND SECURING RELIEFS AND IN THIS REGARD THE OFFICERS SHOULD TAKE THE INITIAT IVE IN GUIDING A TAX PAYER 9 WHERE PROCEEDINGS OR OTHER PARTICULARS BEFORE THEM INDICATE THAT SOME REFUND OR RELIEF IS DUE TO HIM. THIS ATTITUDE WOULD, IN TH E LONG RUN, BENEFIT THE ITA NO.679/KOL/2016 SMT. SHARMILA KUMAR, AY- 2011-12 DE PARTMENT FOR IT WOULD INSPIRE CONFIDENCE IN HIM THAT HE MAY BE SURE OF GE TTING A SQUARE DEAL FROM THE DEPARTMENT. ALTHOUGH, THEREFORE, THE RESPONSIBILITY FOR CLAIMING REFUNDS AND RELIEFS RESTS WITH ASSESSEES ON WHOM IT IS IMPOSED BY LAW, OFFICERS SHOULD' 21. FURTHER, WE ALSO NOTE THAT THE RELIEF SOUGHT CA NNOT BE REFUSED MERELY BECAUSE THE ASSESSEE HAS OMITTED TO CLAIM THE RELIE F AS HELD BY THE HON'BLE SUPREME COURT IN ANCHOR PRESSINGS P. LTD. VS. CIT 1 61 ITR 159. HENCE, KEEPING IN VIEW THE ENTIRE FACTS ON RECORD, THE JUD ICIAL PRONOUNCEMENTS OF THE HONBLE APEX COURT ON THE ISSUE OF ALLOWABILITY OF THE CLAIM, WE HEREBY HOLD THAT THE ASSESSEE IS ELIGIBLE TO RAISE THE ISS UE AT APPELLATE LEVELS. 22. HAVING SAID SO, THE ISSUE WHETHER THE EXCISE DU TY SUBSIDY AND INTEREST SUBSIDY CAN BE TREATED AS CAPITAL RECEIPT IS EXAMIN ED. THE SIMILAR SUBSIDY HAS BEEN ALLOWED AS CAPITAL RECEIPT AND ALSO THE IS SUE OF COMPUTATION OF PROFITS U/S 115JB HAS BEEN EXAMINED BY THE CO-ORDIN ATE BENCH OF TRIBUNAL IN ITA NO. 3837/DEL/2016 IN THE CASE OF M/S DHANUKAAGR ITECH LTD. WHEREIN THE APPEAL OF THE ASSESSEE IS ALLOWED. THE SAME IS SQUA RELY APPLICABLE TO THE FACTS OF THE INSTANT CASE. FURTHER, THE MATTER STAN DS SQUARELY COVERED BY THE ORDER OF THE HONBLE JAMMU & KASHMIR HIGH COURT IN T HE CASE OF SHRI BALAJI ALLOYS VS CIT 333 ITR 335. THE SNIPPETS OF THE ORDE R OF THE HONBLE HIGH COURT AND THE DECISION OF THE HONBLE APEX COURT ON THE ISSUE IS AS UNDER: THE ASSESSEE, PURSUANT TO THE NEW INDUSTRIAL POLIC Y ANNOUNCED FOR THE STATE OF J&K, RECEIVED EXCISE REFUND AND INTEREST SUBSIDY, E TC WHICH IT CLAIMED TO BE A CAPITAL RECEIPT. IN THE ALTERNATIVE, IT WAS CLAIMED THAT THE SAME WAS ELIGIBLE FOR DEDUCTION U/S 80-IB. THE AO, CIT (A) AND TRIBUNAL R EJECTED THE CLAIM AND HELD THE RECEIPTS TO BE REVENUE ON THE GROUND THAT THE S UBSIDY (I) WAS FOR ESTABLISHED INDUSTRY AND NOT TO SET UP A NEW ONE, ( II) IT WAS AVAILABLE AFTER COMMERCIAL PRODUCTION, (III) IT WAS RECURRING IN NA TURE, (IV) IT WAS NOT FOR PURCHASING CAPITAL ASSETS AND (V) IT WAS FOR RUNNIN G THE BUSINESS PROFITABLY. ON APPEAL BY THE ASSESSEE, THE HIGH COURT (333 ITR 335 ) REVERSED THE LOWER AUTHORITIES AND HELD AS FOLLOWS: (I) THE RATIO OF SAHNEY STEEL 228 ITR 253 (SC), PON NI SUGARS 306 ITR 392 (SC) AND MEPCO INDUSTRIES 319 ITR 208 (SC) IS THAT TO DETERMINE WHETHER INCENTIVES & SUBSIDIES ARE REVENUE OR CAPITAL RECEIPTS, THE PURPOSE UNDERLYING THE INCENTIVES IS THE DETERMINATIVE TEST. IF THE OBJECT OF THE SUBSIDY SC HEME IS TO ENABLE THE ASSESSEE TO RUN THE BUSINESS MORE PROFIT ABLY THEN THE RECEIPT IS ON REVENUE ACCOUNT. ON THE OTHER HAND, I F THE OBJECT OF THE SUBSIDY SCHEME IS TO ENABLE THE ASSESSEE TO SET UP A NEW UNIT 10 OR TO EXPAND THE EXISTING UNIT THEN THE RECEIPT OF THE SUBSIDY WAS ON CAPITAL ACCOUNT. IT IS THE OBJECT FOR WHICH THE SUBSIDY/ASSISTANCE IS GIVEN WHICH DETERMINES THE NA TURE OF THE INCENTIVE SUBSIDY. THE FORM OR THE MECHANISM THROUG H WHICH THE SUBSIDY IS GIVEN IS IRRELEVANT; II) ON FACTS, THE OBJECT OF THE SUBSIDY SCHEME WAS (A) TO ACCELERATE INDUSTRIAL DEVELOPMENT IN J&K AND (B) GEN ERATE EMPLOYMENT IN J&K. SUCH INCENTIVES, DESIGNED TO ACH IEVE A PUBLIC PURPOSE, CANNOT, BY ANY STRETCH OF REASONING, BE CO NSTRUED AS PRODUCTION OR OPERATIONAL INCENTIVES FOR THE BENEFI T OF ASSESSES ALONE. IT CANNOT BE CONSTRUED AS MERE PRODUCTION AN D TRADE INCENTIVES; (III) THE FACT THAT THE INCENTIVES WERE AVAILABLE O NLY AFTER COMMENCEMENT OF COMMERCIAL PRODUCTION CANNOT BE VIE WED IN ISOLATION. THE OTHER FACTORS WHICH WEIGHED WITH THE TRIBUNAL ARE ALSO NOT DECISIVE TO DETERMINE THE CHARACTER OF THE INCENTIVE SUBSIDIES IN VIEW OF THE STATED OBJECTS OF THE SUBS IDY SCHEME; (IV) QUESTION WHETHER THE SUBSIDY RECEIPTS ARE ELI GIBLE U/S 80- IB NOT DECIDED. 23. ON APPEAL BY THE DEPARTMENT TO THE SUPREME COUR T HELD DISMISSING THE APPEAL: THE ISSUE RAISED IN THESE APPEALS IS COVERED AGAIN ST THE REVENUE BY THE DECISION OF THIS COURT IN COMMISSIONER OF INCOME T AX, MADRAS VS. PONNI SUGARS AND CHEMICALS LTD., REPORTED IN (2008) 9 SC C 337, OR IN THE ALTERNATE, IN COMMISSIONER OF INCOME TAX VS. M/S M EGHALAYA STEELS LTD., REPORTED IN (2016) 3 SCALE 192 (383 ITR 217 (SC)). THEREFORE, FOR THE AFORESAID REASONS GIVEN ABOVE, THE REVENUE'S GR OUND OF APPEAL IS DISMISSED. 24. THE APPEAL OF THE ASSESSEE ON THE GROUND OF EXC ISE DUTY SUBSIDY AND INTEREST SUBSIDY AS CAPITAL RECEIPT IS HEREBY ALLOW ED. 25. REGARDING THE CLAIM OF EDUCATION CESS AS AN ALL OWABLE EXPENDITURE, WE FIND THAT THE CBDT VIDE CIRCULAR NO. 91/58/66 ITJ (19) CLARIFIED AS UNDER: INTERPRETATION OF PROVISIONS OF SECTION 40(A)(II) OF THE I.T ACT CLARIFICATION REGARDING. 11 SECTION 40(A)(II) RECENTLY A CASE HAS COME TO THE NOTICE OF THE BOARD WHERE THE ITO HAS DISALLOWED THE CESS PAID BY THE ASSESSEE ON THE GROUND THAT THERE HAS BEEN NO MATERIAL CHANGE IN TH E PROVISIONS OF SECTION 10(4) OF THE OLD ACT AND SECTION 40(A)(II) OF THE NEW ACT. 2. THE VIEW OF THE ITO IS NOT CORRECT. CLAUSE 40(A) (II) OF THE IT BILL, 1961 AS INTRODUCED IN THE PARLIAMENT STOOD AS UNDER: (A ) ANY SUM PAID ON ACCOUNT OF ANY CESS, RATE OR TAX LEVIED ON THE PROF ITS OR GAINS OF ANY BUSINESS OR PROFESSION OR ASSESSED AT A PROPORTION OF, OR OTHERWISE ON THE BASIS OF, ANY SUCH PROFITS OR GAINS. WHEN THE MATTER CAME UP BEFORE THE SELECT COMMITTEE , IT WAS DECIDED TO OMIT THE WORD CESS FROM THE CLAUSE. THE EFFECT OF THE OMISSION OF THE WORD CESS IS THAT ONLY TAXES PAID ARE TO BE DISAL LOWED IN THE ASSESSMENTS FOR THE YEARS 1962-63 AND ONWARDS. 3. THE BOARD DESIRE THAT THE CHANGED POSITION MAY P LEASE BE BROUGHT TO THE NOTICE OF ALL THE ITOS SO THAT FURTHER LITIGATI ON ON THIS ACCOUNT MAY BE AVOIDED. 26. THE SIMILAR ISSUE OF ALLOWABILITY OF CESS U/S 3 7 HAS BEEN EXAMINED BY THE CO-ORDINATE BENCH OF ITAT IN ITA NO. 685/CAL./2014 WHEREIN THE AMOUNT OF THE CESS PAID HAS BEEN HELD TO BE AN ALLOWABLE DEDU CTION. 27. FURTHER, WE FIND THAT THE HONBLE HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JAIPUR IN ITA NO. 52/2018 IN THE CASE OF CHAMBAL FERTILIZERS AND CHEMICALS LTD. HELD THAT IN VIEW OF THE CIRCULAR OF CBDT WHER E THE WORD CESS IS DELETED, THE CLAIM OF THE ASSESSEE FOR DEDUCTION IS ACCEPTABLE. IN THAT CASE, THE HONBLE HIGH COURT HELD THAT THERE IS DIFFERENC E BETWEEN THE CESS AND TAX AND CESS CANNOT BE EQUATED WITH THE CESS. HENCE , KEEPING IN VIEW THE PROVISIONS OF THE ACT, CIRCULAR OF THE CBDT AND JUD ICIAL PRONOUNCEMENTS, WE HEREBY HOLD THAT THE ASSESSEE IS ELIGIBLE TO CLAIM THE DEDUCTION OF THE CESS AS PER THE PROVISIONS OF SECTION 37 OF THE INCOME T AX ACT. 9. WE FIND NOTHING ON RECORD ON BEHALF OF THE DEPAR TMENT TO TAKE A DIFFERENT VIEW. THEREFORE, TO PRESERVE THE CONSISTE NCY IN VIEW, AS APPROVED BY THE HONBLE SUPREME COURT IN THE CASE O F RADHASOAMI SATSANG V.CIT [1992] 193 ITR 321, AND RESPECTFULLY FOLLOWING THE VIEW TAKEN BY COORDINATE BENCH, WE ALLOW THE CLAIMS OF A SSESSEE. 12 10. IN THE RESULT, THE APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 18/06/2021 SD/- SD/- (PRASHANT MAHARISHI) (K. NARASIMHA CHARY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 18/06/2021 AKS COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI