RNB International Pvt. Ltd., New Delhi V. DCIT, Circle- 3, New Delhi

ITA 4092/DEL/2017

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 5583 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 3 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-10-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: 2012-2013
• Appeal Filed On: 20-06-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: VED JAIN CA SH ASHISH GOEL
• Keywords: Set aside
• Section: 10AA; 13; 10

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: F NEW DELHI BEFORE SHRI N.K.BILLAIYA, ACCOUNTANT MEMBER & SHRI K.NARASIMHA CHARY, JUDICIAL MEMBER ITA NO.- 4092 /DEL/2017 (ASSESSMENT YEAR: 2012-13) M/S RNB INTERNATIONAL PRIVATE LIMITED, RNB HOUSE, SHIVAJI ENCLAVE, NEW DELHI VS. DCIT CIRCLE-3, NOIDA PAN NO. AACCR 7686L APPELLANT RESPONDENT ASSESSEE BY SH. VED JAIN, CA SH. ASHISH GOEL, CA REVENUE BY SH. AKHILESH GUPTA, SR.DR DATE OF HEARING: 6/10/2020 PRONOUNCEMENT ON 6/10/2020 ORDER PER K. NARASIMHA CHARY, JM. AGGRIEVED BY THE ORDER DATED 23/2/2017 IN APPEAL N O. 179/2015- 16/NOIDA BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-I, NOIDA (LD. CIT(A)) FOR THE ASSESSMENT YEAR 2013-14, M/S RNB INTERNATIONAL PRIVATE LIMITED (THE ASSESSEE) FILED THIS APPEAL. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A PVT. LTD COMPANY AND HAS BEEN ENGAGED IN THE BUSINESS OF TRADING OF WOOL AND YARN, PUBLICATION AND RESEARCH WORK. FOR THE ASSESSMENT Y EAR 2012-13, IT HAS 2 FILED ITS RETURN OF INCOME ON 30/11/2012 DECLARING AN INCOME OF RS.42,96,600/-. DURING THE YEAR, THE ASSESSEE TO TH E TUNE OF RS. 8,43,23,793/- AND NET PROFIT OF RS. 74,409/-. ASSES SEE CLAIMED EXEMPTION UNDER SECTION 10 AA OF THE INCOME TAX ACT, 1961 (FO R SHORT THE ACT) FOR RS.57,02,774/-. 3. WHEN THE LEARNED ASSESSING OFFICER SOUGHT TO TH E JUSTIFICATION TO CLAIM SUCH EXEMPTION, THE ASSESSEE FURNISHED THE AU DIT REPORT IN FORM NO. 56FWHERE IN COLUMN NO. 13 THE ASSESSEE HAD SHOW N THE TOTAL EXPORT TURNOVER OF RS. 1,05,76,018.48AND CLAIMED AS PROFIT RS. 57,02,774/- UNDER SECTION 10AA OF THE ACT. LEARNED ASSESSING OFFICER FOUND THAT THE ASSESSEE HAD NOT FULFIL THE CONDITIONS FOR CLAIMING THE EXEMPTION UNDER SECTION 10 AA OF THE ACT AND HAS NOT FURNISHED ANY EVIDENCE OF THE FULL CONSIDERATION IN CONVERTIBLE FOREIGN EXCHANGE BEING THE BROUGHT TO INDIA WITHIN A PERIOD OF 6 MONTHS FROM THE END OF THE PRE VIOUS YEAR AND THE PARTICULARS FURNISHED UNDER COLUMN 16 OF THE REPORT IN FORM NO. 56F WERE SAID TO HAVE BEEN NOT APPLICABLE. LEARNED ASSESSING OFFICER, THEREFORE, RECORDED A FINDING THAT THE ASSESSEE HAD NOT FULFIL LED THE CONDITIONS REQUIRED TO BE ELIGIBLE FOR ASSUMPTION UNDER SECTIO N 10AA OF THE ACT AND ACCORDINGLY DISALLOWED THE SAID CLAIM OF EXEMPTION AND ADDED THE SUM OF RS.57,02,774/- TO THE INCOME OF THE ASSESSEE. 4. AGGRIEVED BY SUCH AN ACT OF THE LEARNED ASSESSIN G OFFICER, ASSESSEE PREFERRED APPEAL AND IN VIEW OF THE FINDINGS OF THE LEARNED ASSESSING OFFICER THAT THE ASSESSEE DID NOT FULFIL THE CONDIT ION OF BRINGING THE FULL SALE CONSIDERATION IN CONVERTIBLE FOREIGN EXCHANGE TO INDIA, THE ASSESSEE FILED ANOTHER FORM 56F MAKING A CLAIM THAT THE ASSE SSEE HAD BROUGHT THE PROCESS OF EXPORT ACTIVITY IN FULLY CONVERTIBLE FOR EIGN EXCHANGE WITHIN 6 3 MONTHS FROM THE END OF THE RELEVANT PREVIOUS YEAR. ASSESSEE ALSO CONTENDED THAT NOWHERE IN THE SECTION 10AA OF THE A CT IT IS PRESCRIBED THAT FOR AVAILING THE BENEFIT OF DEDUCTION UNDER SE CTION 10AA OF THE ACT, THE PROCESS OF THE EXPORT ACTIVITY SHOULD BE BROUGH T TO IN INDIA IN CONVERTIBLE FOREIGN EXCHANGE WITHIN 6 MONTHS FROM T HE END OF THE PREVIOUS YEAR; THAT THEY FORM NO. 56F WAS INITIALLY INTRODUCED FOR CLAIMING EXEMPTION UNDER SECTION 10 A OF THE ACT AND THEREAF TER WAS MADE APPLICABLE TO THE PROVISIONS OF SECTION 10AA OF THE ACT WHEN SUCH PROVISION WAS INSERTED IN THE STATUTE; AND THAT THE RE IS A SPECIFIC REQUIREMENT UNDER SECTION 10A OF THE ACT TO BRING T HE FULL PROCESS OF THE EXPORT ACTIVITY IN CONVERTIBLE FOREIGN EXCHANGE TO INDIA WITHIN 6 MONTHS FROM THE END OF THE RELEVANT YEAR, THERE IS NO SUCH REQUIREMENT UNDER SECTION 10AA OF THE ACT. 5. LD. CIT(A) OBSERVED THAT FORM 56F IS APPLICABLE TO THE CASE UNDER SECTION 10AA OF THE ACT AND THEREFORE THE REPORT OF THE PRESCRIBED AUDITOR IN FORM NO. 56 HAS TO BE SUBMITTED BY THE C LAIMANT OF THE EXEMPTION AND THE SAID FORM NUMBER 56F HAS TO BE FI LLED UP AS PRESCRIBED; AND THAT ONCE PARTICULAR INFORMATION IS REQUIRED TO BE DISCLOSED IN FORM NUMBER 56F AND THE SAME IS NOT DO NE UNDER THE POWERS OF DELEGATED LEGISLATION OF THE CENTRAL GOVE RNMENT AND THE ASSESSEE HAS NOT CHALLENGED THE CONSTITUTIONAL VALI DITY OF THE SAME, FORM NUMBER 56F HAS TO BE COMPLIED WITH IN TOTALITY AS P ER LETTER. LD. CIT(A) FURTHER HELD THAT THERE IS NO PROVISION IN LAW WHIC H PERMITS THE AUDITOR AS PRESCRIBED UNDER SECTION 288 OF THE ACT TO SUBMIT A 2 ND REPORT ON THE SAME CAUSE OF ACTION THE TATTOO WITH SO MUCH OF DEL AY AS AN AFTERTHOUGHT AND COUNTERBLAST TO THE FRAMING OF ASSESSMENT ORDER AND THE CONCERNED 4 ACCOUNTANT IS ALSO NOT PERMITTED IN LAW TO REVISE I TS FINDING TO SUIT THE CONVENIENCE OF THE ASSESSEE. LD. CIT(A) OBSERVED TH AT THE ACCOUNTANT SUBMITTING THE STATUTORY AUDIT REPORT IS NOT ACTING FOR THE BENEFIT OF THE ASSESSEE, BUT IN DISCHARGE OF A STATUTORY OBLIGATIO N AND ONCE REPORT IS A FURNISHING BY AN ACCOUNTANT IN DISCHARGE OF A STATU TORY OBLIGATION, THE SAID ACCOUNTANT CANNOT CHANGE THE CONTENT OF THE SA ME WHATEVER BE THE CONSIDERATION OR INDUCEMENT. LD. CIT(A), THEREFORE, REFUSED TO LOOK INTO THE REVISED AUDITORS REPORT AND AS A CONSEQUENCE T HEREOF DISMISSED THE APPEAL. 6. AGGRIEVED BY SUCH AN ACT OF THE LD. CIT(A), ASSE SSEE IS BEFORE US IN THIS APPEAL STATING THAT THE LD. CIT(A) FAILED TO N OTICE THAT THE CONDITION PRESCRIBED FOR SECTION 10A OF THE ACT IS NOT APPLIC ABLE TO SECTION 10AA OF THE ACT AND THEREFORE THE AUDITOR IS JUSTIFIED IN S TATING IN FORM 56F THAT THE DETAILS OF COLUMN 16 ARE NOT APPLICABLE. FURTHE R, LEARNED ASSESSING OFFICER ALSO DID NOT ENQUIRE AS TO THE REASON FOR N ON-APPLICABLE TEA OF THE DETAILS MENTIONED IN COLUMN 16 TO THE CASE OF THE A SSESSEE AND WITHOUT GIVING AN OPPORTUNITY TO THE ASSESSEE ON THIS ASPEC T, LEARNED ASSESSING OFFICER DISALLOWED THE CLAIM OF THE ASSESSEE FOR EX EMPTION CLAIMED UNDER SECTION 10AA OF THE ACT. LD. AR SUBMITTED THAT THOU GH THE CONDITION OF BRINGING THE FULL CONSIDERATION OF THE EXPORT ACTIV ITY WITHIN 6 MONTHS INTO INDIA IN CONVERTIBLE FOREIGN EXCHANGE, IS NOT AVAIL ABLE TO THE CASE UNDER SECTION 10AA OF THE ACT, STILL THE ASSESSEE HAD COM PLIED WITH THE SAME AND MERELY BECAUSE THE AUDITOR MENTIONED THAT THE D ETAILS REQUIRED IN COLUMN NO. 16 OF FORM 56F ARE NOT APPLICABLE TO THE CASE OF THE ASSESSEE, IT DOES NOT MEAN THAT ASSESSEE DID NOT DO SO. IN AL L FAIRNESS, THE AUTHORITIES BELOW SHOULD HAVE MADE ENQUIRIES ON THI S ASPECT AND WITHOUT 5 DOING SO THE ASSESSMENT IS FRAMED, AND THAT IS THE REASON WHY SUCH AN ASSESSMENT IS BAD UNDER LAW. 7. PER CONTRA, LD. DR SUBMITTED THAT ALL THE CONDIT IONS OF SECTION 10A OF THE ACT ARE APPLICABLE TO THE CASES UNDER SECTIO N 10 AA OF THE ACT. HE SPECIFICALLY SUBMITTED THAT, FILING OF REVISED AUDI TORS REPORT IS IMPERMISSIBLE UNDER LAW AND MORE PARTICULARLY SUCH AUDITOR REPORT WHICH IS FILED ALONG WITH THEIR RETURN ALONE MERITS CONSI DERATION IN VIEW OF THE PROVISIONS UNDER SECTION 10 A (5) OF THE ACT WHICH IS MADE APPLICABLE TO THE PROVISIONS OF SECTION 10AA OF THE ACT BY SUBSEC TION (8) THEREOF. ACCORDING TO HIM THE VERY FACT THAT BOTH THE SECTIO NS, NAMELY, SECTIONS 10A AS WELL AS 10AA OF THE ACT STIPULATE THE FILING OF THE REPORT IN FORM NUMBER 56F CLEARLY INDICATES THAT ALL THE INFORMATI ON REQUIRED IN FORM 56F HAS TO BE FURNISHED ALONG WITH THE RETURN OF IN COME.HE, THEREFORE, JUSTIFIED THE ACTION OF THE AUTHORITIES BELOW AND S UBMITS THAT THE ORDER OF THE LD. CIT(A) DOES NOT SUFFER ANY INFIRMITY. 8. WE HAVE GONE THROUGH THE RECORD IN THE LIGHT OF THE SUBMISSIONS MADE ON EITHER SIDE. NO DOUBT SECTION 10 A (3) OF T HE ACT STIPULATE IS THAT IN ORDER TO MAKE THE SECTION 10 A OF THE ACT APPLIC ABLE, THE SALE PROCEEDS OF ARTICLES OR THINGS OR COMPUTER SOFTWARE EXPORTED OUT OF INDIA ARE RECEIVED IN, ARE BROUGHT INTO, INDIA BY THE ASSESSE E IN CONVERTIBLE FOREIGN EXCHANGE, WITHIN A PERIOD OF 6 MONTHS FROM THE END OF THE PREVIOUS YEAR OR, WITHIN SUCH FURTHER PERIOD AS THE COMPETENT AUT HORITY MAY ALLOW IN THIS BEHALF. AT THE SAME TIME, SUBSECTION (5) THERE OF SAYS THAT THE DEDUCTION UNDER SECTION 10A OF THE ACT SHALL NOT BE ADMISSIBLE FOR ANY ASSESSMENT YEAR BEGINNING ON OR AFTER THE 1 ST DAY OF APRIL, 2001, UNLESS THE ASSESSEE FURNISHES THE PRESCRIBED FORM, ALONG W ITH THE RETURN OF 6 INCOME, THE REPORT OF AN ACCOUNTANT, AS DEFINED IN EXPLANATION BELOW SUBSECTION (2) OF SECTION 288 OF THE ACT. 9. IT IS PERTINENT TO NOTE THAT WHILE INSERTING SEC TION 10 AA OF THE ACT IT IS SPECIFICALLY PROVIDED BY WAY OF SUBSECTION (80 THER EOF THAT THE PROVISIONS OF SUBSECTION IS (5) AND (6) OF SECTION 10 A SHALL APPLY TO THE ARTICLES OR THINGS OR SERVICES REFERRED TO IN SUBSECTION (1), R EFERENCE TO SUBSECTION (3) OF SECTION 10 A IS CONSPICUOUSLY ABSENT. WHEN T HE LEGISLATURE THOUGHT IT FIT TO MAKE CERTAIN CONDITIONS OF SECTION 10 A O F THE ACT APPLICABLE TO THE PROVISIONS IN SECTION 10 AA OF THE ACT, BY SPEC IFICALLY OMITTING CERTAIN OTHER SUBSECTIONS, THEN THE LEGISLATIVE INTENT IS C LEAR THAT THE CONDITIONS PRESCRIBED UNDER THE SUBSECTIONS WHICH ARE SPECIFIC ALLY OMITTED, SHALL NOT BE MADE APPLICABLE TO SECTION 10AA OF THE ACT. IT I S THEREFORE CLEAR THAT IN THE ABSENCE OF REFERENCE TO SUBSECTION (3) OF SECTI ON 10 A OF THE ACT, IN SECTION 10AA OF THE ACT, IT IS NOT OPEN FOR THE LEA RNED ASSESSING OFFICER TO SAY THAT ALL THE CONDITIONS PRESCRIBED UNDER SECTIO N 10A OF THE ACT TO AVAIL THE BENEFIT THEREUNDER SHOULD INVARIABLY BE C OMPLIED WITH TO AVAIL THE BENEFIT UNDER SECTION 10AA OF THE ACT. 10. THE CASE OF REVENUE IS ALSO THAT IN THE AUDITOR S REPORT, IN RESPECT OF THE INFORMATION UNDER COLUMN 16 THEREOF, IT WAS MENTIONED THAT FURNISHING OF SUCH INFORMATION IS NOT APPLICABLE TO THE CASE OF THE ASSESSEE.SUCH A STATEMENT, HOWEVER, DOES NOT IPSO F ACTO MEAN THAT THERE IS FAILURE OF THE ASSESSEE IN RESPECT OF COMPLIANCE OF THE CONDITION COVERED BY SUCH INFORMATION. WHEN IT IS STATED THAT SUCH INFORMATION IS IRRELEVANT FOR THE PURPOSES OF CLAIMING BENEFIT UND ER SECTION 10AA OF THE ACT, AND IF THE LEARNED ASSESSING OFFICER WAS OF TH E OPINION THAT IT WAS NECESSARY, IN ALL FAIRNESS, THERE SHOULD HAVE BEEN SOME ENQUIRY AS TO WHY 7 THE AUDITOR SAID THAT SUCH INFORMATION WAS IRRELEVA NT OR NOT APPLICABLE, INSTEAD OF SAYING THAT THE CONDITIONS UNDERLYING SU CH INFORMATION ARE NOT COMPLIED WITH BY THE ASSESSEE. 11. THERE IS NO PROVISION IN THE ACT PERMITTING THE FILING OF A REVISED AUDITORS REPORT. THE REVISED AUDITORS REPORT, IN THIS CASE, HOWEVER, IS NOT RELATING TO ANY SUBSTANTIVE FINANCIALS ARE OPERATIO NS OF THE ASSESSEE, BUT IT IS ONLY CLARIFICATORY IN NATURE TO SAY THAT EVEN OTHERWISE THE ASSESSEE COMPLIED WITH THE CONDITIONS REQUIRED UNDER SUBSECT ION (3) OF SECTION 10 A OF THE ACT. WHEN WE KEEP IN MIND THAT THE ENTIRE EXERCISE OF ASSESSMENT IS TO DETERMINE THE JUST AND CORRECT TAX LIABILITY OF THE ASSESSEE, REFUSING TO LOOK INTO THE RELEVANT MATERI AL, THOUGH SUBMITTED AT A BELATED STAGE, IN THE ABSENCE OF ANY MANDATORY PR OVISIONS OF LAW PROHIBITING SUCH A COURSE, WOULD RUN CONTRARY TO TH E OBJECT OF ASSESSMENT PROCEEDINGS. UNLESS PROHIBITED OR PROVIDED CONTRARY , ALL THE ENDEAVOUR IN THE ASSESSMENT PROCEEDINGS SHOULD BE TO GIVE A FAIR CHANCE TO THE ASSESSEE TO JUSTIFY THEIR CLAIM FOR ANY BENEFIT PRO VIDED BY LAW. LEST, THE ASSESSMENT PROCEEDINGS WOULD BE PERFUNCTORY RENDERI NG IT TO BE A MECHANICAL EXERCISE. 12. WITH THIS VIEW OF THE MATTER, WE ARE OF THE CON SIDERED OPINION THAT THE PROVISIONS OF SECTION 10 A (3) OF THE ACT CANNOT BE MADE APPLICABLE TO THE CASE OF THE ASSESSEE, IF THE ASSE SSEE IS COVERED BY THE PROVISIONS OF SECTION 10AA OF THE ACT AND EVEN OTHE RWISE, THE LEARNED ASSESSING OFFICER IS FREE TO VERIFY WHETHER THE FUL L CONSIDERATION OF THE EXPORT ACTIVITY IS BROUGHT TO INDIA IN CONVERTIBLE FOREIGN EXCHANGE WITHIN 6 MONTHS OR NOT. 8 13. WITH THESE OBSERVATIONS, WE SET ASIDE THE IMPU GNED ORDER AND REMAND THE ISSUE TO THE FILE OF THE LEARNED ASSESSI NG OFFICER TO VERIFY WHETHER THE ASSESSEE IS OTHERWISE ENTITLED TO CLAIM THE EXEMPTION UNDER SECTION 10AA OF THE ACT, AND IF THE LEARNED ASSESSI NG OFFICER FEELS IT NECESSARY, HE MAY CALL FOR ANY INFORMATION REQUIRED FOR THAT PURPOSE. 14. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 6TH OCTOBER, 2020. SD/- SD/- (N.K.BILLAIYA) (K. NARSIMHA CHARY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 6/10/2020