Shree M.T.K.Textiles Private Limited, CHENNAI V. ACIT, Tuticorin

ITA 403/CHNY/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 8266 (ITAT-CHENNAI)
• Duration Of Justice: 8 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-10-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 18-10-2016
• Assessment Year: 2011-2012
• Appeal Filed On: 23-02-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: R KUMAR
• Keywords: Opportunity of being heard; Assessment record; Condonation of delay
• Section: 143(3)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI , . ' # , $ #% BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI G. PAVAN KUMAR, JUDICIAL MEMBER ./ ITA NO.403/MDS/2016 $ ' (' / ASSESSMENT YEAR : 2011-12 M/S SHREE M.T.K. TEXTILES PRIVATE LIMITED, C/O SHRI T.N. SEETHARAMAN, ADVOCATE, #384 (OLD NO.196), LLOYDS ROAD, CHENNAI - 600 086. PAN : AAHCS 2941 J V. THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 1, TUTICORIN. ( APPELLANT) ( RESPONDENT) *+ , - / APPELLANT BY : SHRI R. KUMAR, ADVOCATE ./*+ , - / RESPONDENT BY : SHRI CLEMENT RAMESH KUMAR, ADDL. CIT ' , 0 / DATE OF HEARING : 18.10.2016 12( , 0 / DATE OF PRONOUNCEMENT : 24.10.2016 / O R D E R PER G. PAVAN KUMAR, JUDICIAL MEMBER: THE ASSESSEE HAS FILED THE APPEAL AGAINST THE ORD ER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-1, MADURAI IN ITA NO.0014/2014-15 DATED 20.10.2015 UNDER 143(3) AND 2 50 OF INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT'). 2 I.T.A. NO.403/MDS/16 2. BEFORE WE PROCEED FOR HEARING, THERE IS DELAY OF 52 DAYS IN FILING THE APPEAL. THE LD. AUTHORIZED REPRESENTATI VE OF THE ASSESSEE FILED CONDONATION PETITION AND EXPLAINED T HE CIRCUMSTANCES FOR DELAY WHICH ARE NOT DELIBERATE. FURTHER THE LD. D.R. HAS NO SERIOUS OBJECTION FOR CONDONATION OF DE LAY. AFTER HEARING THE SUBMISSIONS, WE ARE SATISFIED WITH REAS ONABLE CAUSE SUBMITTED IN AFFIDAVIT FOR FILING THE APPEAL BELATE DLY. THEREFORE, THE DELAY IS CONDONED AND APPEAL IS ADMITTED. 3. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER: - (1) COMMISSIONER (APPEALS) ERRED IN NOT ACCEDING TO THE REASONABLE REQUEST TO ADJOURN THE APPEAL FROM OCTOBER 2015 TO DEC EMBER 2015 FOR THE REASON THAT THE APPELLANTS REPRESENTATIO N TO THE CENTRAL BOARD OF DIRECT TAXES TO RELAX THE REQUIREMEN TS OF SECTION 80AC BY GENERAL OR SPECIAL ORDER IN EXERCISE O F ITS POWER U/S 119(2)(C) OF THE ACT THEREBY ALLOW THE CLAI M FOR DEDUCTION U/S 80IA OF THE ACT IS PENDING. (2) THE COMMISSIONER (APPEALS) ERRED IN NOT APPRECIATIN G THE SEVERAL GROUNDS RAISED BEFORE HIM JUDICIAL DECISION S CITED IN SUPPORT AND DENYING THE DEDUCTION CLAIMED BY THE AP PELLANT U/S 80IA OF THE ACT. (3) THE COMMISSIONER (APPEALS) FAILED TO APPRECIATE THA T UNDER ANALOGOUS PROVISIONS OF THE ACT VIZ., BELATED FILIN G OF AUDIT REPORT, THE SUPREME COURT HAS DECIDED THE ISSUE IN FAVOUR OF THE APPELLANT CIT VS G.M. KNITTING INDUSTRIES (P) LTD. (2015) 376 ITR 456 (SC) 4. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E-COMPANY IS AN AGENT OF IMPORT AND DOMESTIC COTTON, WIND ENERGY FARMS AND 3 I.T.A. NO.403/MDS/16 WEAVING MILL. THE ASSESSEE-COMPANY FILED ITS E-RET URN OF INCOME ON 12.06.2012 ADMITTING A TOTAL INCOME OF ` 96,93,260/- . THE RETURN WAS PROCESSED UNDER SECTION 143(1) OF THE INCOME-TA X ACT, 1961 (IN SHORT 'THE ACT'). THE ASSESSING OFFICER ISSUED NOT ICE UNDER SECTION 143(2) OF THE ACT. IN RESPONSE TO THE NOTICE, THE LD. AR OF THE ASSESSEE APPEARED BEFORE THE ASSESSING OFFICER AND FILED THE DETAILS. THE ASSESSING OFFICER, ON VERIFICATION OF THE ASSESSMENT RECORDS, FOUND THAT THE ASSESSEE-COMPANY HAS CLAIME D DEDUCTION UNDER SECTION 80-IA OF THE ACT. BUT, AS PER THE PR OVISIONS OF SECTION 80-AC OF THE ACT, THE ASSESSEE HAS TO FILE RETURN O F INCOME WITHIN THE DUE DATE PRESCRIBED UNDER SECTION 139(1) OF THE ACT. BUT, THE ASSESSEE HAS FILED E-RETURN BELATEDLY ON 12.06.2012 , WHICH IS BEYOND THE DUE DATE SPECIFIED FOR THE COMPANY. THE A.O. WAS OF THE VIEW THAT SINCE IT IS MANDATORY TO FILE RETURN OF INCOME BEFORE THE DUE DATE, THE BELATED RETURN CANNOT BE TREATED AS V ALID RETURN FOR THE PURPOSE OF ALLOWING DEDUCTION UNDER SECTION 80-IA O F THE ACT. THE LD. A.O. HELD THAT INFORMATION SUBMITTED CANNOT BE ACCEPTED AS THERE IS A MANDATORY REQUIREMENT APPLICABLE TO THE ASSESSEE BY FINANCE ACT, 2006 WITH EFFECT FROM 1.4.2006 TO FILE THE RETURN OF INCOME WITHIN THE TIME ALLOWED UNDER SECTION 139(1) OF THE ACT AND THE ASSESSMENT WAS COMPLETED DISALLOWING THE AMOUNT OF 4 I.T.A. NO.403/MDS/16 ` 70,00,000/- CLAIMED BY THE ASSESSEE AS DEDUCTION UN DER SECTION 80-IA OF THE ACT AND ASSESSED THE TOTAL INCOME OF ` 1,69,17,120/- AND PASSED ORDER UNDER SECTION 143(3) OF THE ACT ON 28.02.2014. AGGRIEVED BY THE ORDER OF THE ASSESSING OFFICER, TH E ASSESSEE HAS FILED AN APPEAL BEFORE THE CIT(APPEALS). 5. IN THE APPELLATE PROCEEDING, THE LD. AUTHORIZED REPRESENTATIVE REITERATED HIS SUBMISSIONS MADE IN A SSESSMENT PROCEEDINGS WITH JUDICIAL DECISIONS AND EXPLAINED T HE CIRCUMSTANCES IN WHICH RETURN COULD NOT BE SUBMITTED WITHIN DUE D ATE. THE LD. AUTHORIZED REPRESENTATIVE RELIED ON VARIOUS DECISIO NS AND THE CO- ORDINATE BENCH OF THIS TRIBUNAL AND ARGUED THAT FIL ING OF RETURN OF INCOME WITHIN DUE DATE U/S 139(1) OF THE ACT IS ONL Y DIRECTORY AND NOT MANDATORY. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) CONSIDERED THE JUDICIAL DECISIONS AND APPLICATION P ENDING BEFORE THE CBDT AND OVERLOOKED THE CO-ORDINATE BENCH DECISION AND RELIED ON THE SPECIAL BENCH DECISION OF RAJKOT BENCH IN THE C ASE OF SAFFIRE GARMENTS V. ITO (151 TTJ 114) WHERE HELD THAT THE P ROVISIONS OF SECTION 10A(1A) OF THE ACT IN THE CASE OF DEDUCTION IS MANDATORY AND NOT DIRECTORY BY OVERRULING THE DECISIONS OF CH ENNAI AND DELHI TRIBUNALS AND CONFIRMED THE ORDER OF THE ASSESSING OFFICER IN DENYING DEDUCTION UNDER SECTION 80-IA OF THE ACT AN D DISMISSED THE 5 I.T.A. NO.403/MDS/16 APPEAL OF THE ASSESSEE. AGGRIEVED BY THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS), THE ASSESSEE ASSAILED AN APPEAL BEFORE THE TRIBUNAL. 6. BEFORE US, THE LD. AUTHORIZED REPRESENTATIVE REI TERATED HIS SUBMISSIONS MADE BEFORE ASSESSING OFFICER. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) RELIED ONLY ON SPECIAL BENCH DECISION OF SAFFIRE GARMENTS (SUPRA) AND DIST INGUISHED THE CO-ORDINATE BENCH DECISIONS APPLICABLE TO THE ASSES SEE. THE LD. AUTHORIZED REPRESENTATIVE SUBMITTED THAT THE ASSESS EE-COMPANY HAS MADE AN APPLICATION TO CBDT UNDER THE PROVISION S OF SECTION 119(2)(B) DATED 14.08.2015 PRAYING FOR RELAXATION O F THE PROVISIONS OF SECTION 80AC OF THE ACT AND PRAYED FOR ALLOWING THE APPEAL. 7. CONTRA, THE LD. DEPARTMENTAL REPRESENTATIVES CO NTENTION THAT THE ASSESSEE HAS NOT FILED RETURN OF INCOME UN DER SECTION 139(1) OF THE ACT WHICH IS MANDATORY REQUISITE FOR CLAIMING DEDUCTION UNDER SECTION 80-IA OF THE ACT AND PRAYED FOR DISMISSING THE GROUNDS OF THE ASSESSEE. 8. WE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATE RIAL AVAILABLE ON RECORD AND JUDICIAL DECISIONS CITED. THE SOLE CRUX OF THE ISSUE ARGUED BY THE LD. AR THAT THE ORDER OF THE CI T(APPEALS) IS BAD 6 I.T.A. NO.403/MDS/16 IN LAW AS THE APPELLATE AUTHORITY WITHOUT GOING INT O MERITS, CONSIDERED THE DECISION OF SPECIAL BENCH IN THE CAS E OF SAFFIRE GARMENTS (SUPRA) OVERRULING THE CO-ORDINATE BENCH D ECISION. WHEREAS, THE ASSESSEE-COMPANY HAS MADE AN APPLICATI ON BEFORE THE CBDT UNDER SECTION 119(2)(B) OF THE ACT FOR CON DONING THE DELAY FOR RELAXATION OF FILING THE RETURN OF INCOME BELATEDLY. WE PERUSED THE PETITION MADE UNDER SECTION 119(2)(B) O F THE ACT BY THE ASSESSEE DATED 14.08.2015 WHERE IT WAS PRAYED THAT THE PROVISIONS OF SECTION 80AC OF THE ACT MAY BE RELAXED IN THE AS SESSEES CASE. THE PROVISIONS OF SECTION 80AC OF THE ACT WAS INSER TED BY FINANCE ACT, 2006 WITH EFFECT FROM 01.04.2006, FOR THE ASSE SSMENT YEAR 2007-08, IS AS UNDER:- DEDUCTION NOT TO BE ALLOWED UNLESS RETURN FURNISHED. 80AC. WHERE IN COMPUTING THE TOTAL INCOME OF AN ASSESSEE OF THE PREVIOUS YEAR RELEVANT TO THE ASSES SMENT YEAR COMMENCING ON THE 1ST DAY OF APRIL, 2006 OR ANY SUBSEQUENT ASSESSMENT YEAR, ANY DEDUCTION IS ADMISS IBLE UNDER SECTION 80-IA OR SECTION 80-IAB OR SECTION 80-IB OR SECTION 80-IC, OR SECTION 80-ID OR SECTION 80-IE NO SUCH DEDUCTION SHALL BE ALLOWED TO HIM UNLESS HE FU RNISHES A RETURN OF HIS INCOME FOR SUCH ASSESSMENT YEAR ON OR BEFORE THE DUE DATE SPECIFIED UNDER SUB-SECTION (1) OF SECTION139. 7 I.T.A. NO.403/MDS/16 9. FURTHER, THE LD. AR OF THE ASSESSEE DREW OUR ATT ENTION TO THE APPLICATION AND SUPPORTED HIS ARGUMENT WITH THE DEC ISION OF CO- ORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF CHEL LA SOFTWARE PVT. LTD. V. ACIT IN I.T.A. NO. 2081/MDS/2015 DATED 03.0 3.2016, WHERE A SIMILAR ISSUE WAS DEALT AND ALSO THE APPLICATION WA S PENDING BEFORE THE CBDT FOR CONDONING THE DELAY IN FILING THE RETU RN OF INCOME. WE PERUSED THE ORDER OF THE CO-ORDINATE BENCH OF THIS TRIBUNAL AND CONCURRED THAT THE FACTS ARE SIMILAR TO THE PRESENT CASE HELD AT PARA 7 OF PAGE 9 AS UNDER:- 7. WE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD, JUDICIAL DECISIONS CITED. THE LD. AUTHORISED REPRESENTATIVE EMPHASIZED THAT RETURN CO ULD NOT FILED WITHIN DUE DATE AND FILED SUBMISSIONS IN ASSESSMENT PROCEEDINGS AND APPELLATE PROCEEDINGS RE LYING ON THE DECISION OF CO-ORDINATE BENCH OF THE TRIBUNAL. BU T THE LD. COMMISSIONER OF INCOME TAX (APPEALS) WITHOUT GOI NG INTO THE MERITS, CONSIDERED THE DECISION OF SPECIAL BENCH IN THE CASE SAFFIRE GARMENTS(SUPRA) AND OVER RULED THE ASSESSEES OBJECTIONS AND OBSERVED FILING RETURN OF INCOME U/S .139(1) OF THE ACT IS MANDATORY. THE LD. AUTHORISED REPRES ENTATIVE DREW ATTENTION TO THE DECISION OF HYDERABAD BENCH, TRIBUNAL IN THE CASE OF S. VENKATAIAH (SUPRA) WHERE SIMILAR ISSUE WAS DEALT AND DELAY WAS CONDONED DUE TO TECHN ICALITIES. SUBSEQUENTLY, ON APPEAL BY REVENUE U/S.260A OF THE ACT THE HONBLE ANDHRA PRADESH HIGH COURT HAS CONFIRMED THE ORDER OF THE TRIBUNAL IN I.T.T.A NO.114 OF 2013, DATED 26.06.2013. THE ANDHRA PRADESH HIGH COURT CONSIDERED THE TECHNICALITIES AND CIRCUMSTANCES WERE THE ASSESSEE COULD NOT FILE THE RETURN. THE ASSESSEE COMPANY HAS MADE A APPLICATION WITH CBDT FOR CONDONOTION OF DELAY BY LE TTER DATED 4.12.2014. THE ASSESSEE DEMONSTRATED THE 8 I.T.A. NO.403/MDS/16 SUBMISSIONS MADE TO CBDT. WE CONSIDERING THE FACTUAL ASPECTS, EVIDENCES, PROVISIONS OF LAWS AND DECISION OF HIGH COURTS AND TRIBUNAL RELIED BY THE ASSESSEE, ARE INC LINED TO REMIT THE ISSUE IN DISPUTE TO THE FILE OF ASSESSING OFFICER AS THE APPLICATION FILED IS PENDING WITH THE CBDT U/S.119(2)(A) OF THE ACT. THE ASSESSING OFFICER HAS TO PASS THE ORDER BASED ON THE SATISFACTORY DIRECTIONS FROM CBDT AFTER PROVIDING ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 10. WE FIND IN THE PRESENT CASE THAT THE ASSESSEE H AS MADE AN APPLICATION TO THE CBDT FOR CONDONATION OF DELAY BY LETTER DATED 14.08.2015. WE RELY ON THE TRIBUNALS DECISION AND REMIT THE DISPUTED ISSUE TO THE FILE OF THE ASSESSING OFFICER AS THE APPLICATION IS PENDING WITH THE CBDT UNDER SECTION 119(2)(B) OF THE ACT. FURTHER, THE ASSESSING OFFICER SHALL PASS THE ORDER BASED ON THE DIRECTIONS OF THE CBDT. THE A.O. SHALL PROVIDE ADE QUATE OPPORTUNITY OF HEARING TO THE ASSESSEE BEFORE PASSI NG THE ORDER. THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTIC AL PURPOSES. ORDER PRONOUNCED ON 24 TH OCTOBER, 2016 MONDAY AT CHENNAI. SD/- SD/- ( ) ( . ' #) (CHANDRA POOJARI) (G. PAVAN KUMAR) / ACCOUNTANT MEMBER $ /JUDICIAL MEMBER /CHENNAI, 4 /DATED, THE 24 TH OCTOBER, 2016. KRI. 9 I.T.A. NO.403/MDS/16 5 , .$067 87(0 /COPY TO: 1. *+ /APPELLANT 2. ./*+ /RESPONDENT 3. ' 90 () /CIT(A)-1, MADURAI 4. PRINCIPAL CIT, MADURAI-1, MADURAI 5. 7 :; .$0$ /DR 6. ;<' = /GF.