Rakesh Juneja, New Delhi V. Addl.CIT, New Delhi

ITA 4368/DEL/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 53344 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 2 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-11-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: F
• Next Hearing Date: 22-09-2011
• Assessment Year: 2003-2004
• Appeal Filed On: 27-09-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: PRATIMA KAUSHIK
• Keywords: Reopening of assessment; Depreciation; Period of limitation; Retrospective amendment; Reason to believe
• Section: 143(3); 80HHC; 80IB; 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH F NEW DELHI) BEFORE SHRI U.B.S. BEDI, JUDICIAL MEMBER AND SHRI B.K. HALDAR, ACCOUNTANT MEMBER I.T.A. NO.4368/DEL/2010 ASSESSMENT YEAR : 2003-04 SHRI RAKESH JUNEJA, ADDL. CIT, PROP. M/S BAG MAKERS, RANGE-27, G-29, COMMUNITY CENTRE, NEW DELHI. VARDHMAN TOWER, VIKAPURI, NEW DELHI. V. (APPELLANT) (RESPONDENT) PAN /GIR/NO. PAN /GIR/NO. PAN /GIR/NO. PAN /GIR/NO.AAAPJ AAAPJ AAAPJ AAAPJ- -- -1176 1176 1176 1176- -- -C CC C APPELLANT BY : SHRI RAJAN BHATIA, ADVOCATE. RESPONDENT BY : SMT. PRATIMA KAUSHIK, SR. DR ORDER PER B.K. HALDAR, AM: THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF LD CIT(A)-XXIV, NEW DELHI DATED 10.8.,2010 FOR ASSESSMENT YEAR 2004-05. THE ASSESSEE HAS TAKEN FOLLOWING GROUNDS OF APPEALS:- 1. THE LD CIT(A) ERRED IN LAW AND ON FACTS AND CIRCUMS TANCES OF THE CASE IN UPHOLDING THE DECISION OF THE ASSESSING OFFICER T HAT HE WAS JUSTIFIED IN ISSUING THE NOTICE U/S 148 AFTER THE EXPIRY OF PERIOD OF LIMITATION AND OBSERVING THAT THERE IS NO E RROR OF LAW AND FACTS COMMITTED BY THE ASSESSING OFFICER IN INVOKIN G PROVISIONS OF SECTION 148 READ WITH SECTION 147 OF THE INCOME TAX ACT, 1961. ITA NO4368/DEL/10 2 2. THE LD CIT(A) ERRED IN REJECTING THE ASSESSEES OBJECTIO NS THAT THE NOTICE U/S 148 OF THE INCOME TAX ACT, 1961 IS INV ALID, ILLEGAL AND UNCALLED FOR AND IN OBSERVING THAT THERE WERE EN OUGH REASONABLE GROUNDS FOR THE ASSESSING OFFICER TO BELIEVE THAT THE INCOME OF THE ASSESSEE HAD ESCAPED ASSESSMENT FOR THE YEAR UNDER CONSIDERATION. 3. LD CIT(A) ERRED IN UPHOLDING THE JUSTIFICATION OF D ISALLOWING THE DEDUCTION U/S 80IB OF THE INCOME TAX ACT, 1961 AS CLA IMED BY THE ASSESSEE. 4. THE ORDER PASSED BY THE ADDL. CIT, RANGE-27, NEW DELH I IS WRONG ON FACTS AND ERRONEOUS ON POINT OF LAW. RIGHT IS RESERV ED TO ASSAIL THE SAME ON SUCH GROUNDS AS MAY BE ADVANCED AT THE HEAR ING FOR WHICH THE APPELLANT CRAVES LEAVE TO AMEND VARY O R ADD TO THE GROUNDS HEREIN BEFORE APPEARING. 2. IN THIS CASE THE ORIGINAL RETURN OF INCOME WAS FILE D ON 28.11.2003 DECLARING TOTAL INCOME OF `.1,39,74,966/-. THE SAME WAS ASSESSED U/S 143(3) OF THE ACT VIDE ORDER DATED 31.3.2005 ACCEPT ING THE RETURNED INCOME. IN PARA 2 OF THE SAID ORDER, THE ASSESSING OFFI CER STATED AS UNDER:- DURING THE COURSE OF ASSESSMENT PROCEEDINGS, VARIOUS DE TAILS INCLUDING PROOF OF INWARD REMITTANCE HAVE BEEN FILE D BY THE ASSESSEE. THE ASSESSEE HAS CLAIMED THE DEDUCTION U/S 80HHC WERE `. 1,62,21,624/- AND THE DEDUCTION U/S 80IB WOR TH `.34,60,346/-. THE ASSESSEE HAS FILED RELEVANT DETAILS IN SUPPORT OF THE DEDUCTION CLAIMED U/S 80HHC AND 80 IB. IN CO MPUTATION OF DEDUCTION U/S 80HHC, IT IS SEEN THAT THE ADJUSTED PROFI T OF THE ASSESSEE IS COMING TO POSITIVE, HENCE THE DEDUCTION U/S 80 HHC HAS BEEN ALLOWED. ITA NO4368/DEL/10 3 3. SUBSEQUENTLY, VIDE NOTICE U/S 148 OF THE ACT DATED 7.8.2008 THE CASE WAS REOPENED BY THE ASSESSING OFFICER. THE REASONS RE CORDED BY THE ASSESSING OFFICER FOR REOPENING THE ASSESSMENT IS REPRO DUCED HEREUNDER:- THE ASSESSEE-FIRM IS ENGAGED IN THE EXPORT OF BAGS. SECT ION 80IB OF THE INCOME TAX ACT, 1961 PROVIDES THAT WHERE THE GROSS TOTAL INCOME OF THE ASSESSEE INCLUDES ANY PROFIT AND GAI N DERIVED FROM ANY ELIGIBLE BUSINESS, THERE SHALL IN ACCORDANCE W ITH AND SUBJECT TO THE PROVISION OF THIS SECTION, BE ALLOWED, I N COMPUTING THE INCOME OF THE ASSESSEE, A DEDUCTION FROM SUCH GAINS A ND PROFIT OF AN AMOUNT EQUAL TO SUCH PERCENTAGE AND FO R SUCH NUMBER OF ASSESSMENT YEARS SPECIFIED IN THIS SECTION. AS PER SECTION 80IA (7) OF INCOME TAX ACT, 1961 READ WITH R ULE 18DBB OF THE INCOME TAX RULE, IN ORDER TO CLAIM DEDUCTION UNDER 80IB, A SEPARATE REPORT IS TO BE FURNISHED BY EACH UNDERTAKIN G OR ENTERPRISE OF THE ASSESSEE CLAIMING DEDUCTION UNDER SECT ION 80IB AND SHALL BE ACCOMPANIED BY THE PROFIT AND LOSS ACCOU NT AND BALANCE SHEET OF THE UNDERTAKING OR ENTERPRISE AS IF THE UNDERTAKING OR ENTERPRISE WERE A DISTINCT ENTITY. THE RETURN OF SHRI RAKESH JUNEJA FOR THE ASSESSMENT YEAR 2003- 04 WAS COMPLETED AFTER SCRUTINY IN MARCH 2003 DETERMI NING AN INCOME OF RS I ,39,74,970/ - AFTER ALLOWING DEDUCTIO N OF RS 34,80,346/ - UNDER SECTION 80LB. RECORDS REVEAL THAT THE ASSESSEE HAS NOT FURNISHED THE MANDATORY REPORT IN THE PRESCRIBED FORM 10CCB AS REQUIRED UNDER SECTION 80IA(7 ) OF THE ACT, APPLICABLE TO SECTION 80IB ALSO, IN ABSENCE OF WH ICH THE DEDUCTION IS NOT PERMISSIBLE. IN ABSENCE OF FORM 10CCB REPORT, IT ITA NO4368/DEL/10 4 IS NOT POSSIBLE TO VERIFY THE CORRECTNESS OF THE DEDUCTI ON CLAIMED. MOREOVER, AMOUNT OF DEDUCTION ALLOWED UNDER SECTION 80-IB WAS NOT REDUCED FROM THE PROFIT CONSIDERED FOR CALCULATI NG DEDUCTION UNDER SECTION 80 HHC. AS PER EXPLANATION 2 TO SECTION 147 OF THE IT ACT, 19 61-FOR THE PURPOSES OF THIS SECTION, THE FOLLOWING SHALL ALSO BE DEE MED TO. BE CASES WHERE INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT, NAMELY :- (C) WHERE AN ASSESSMENT HAS BEEN MADE, BUT- (1) INCOME CHARGEABLE TO TAX HAS BEEN UNDERASSESSED; OR (I1) SUCH INCOME HAS BEEN ASSESSED AT TOO IOWA RATE ; OR (IIZ) SUCH INCOME HAS BEEN MADE THE SUBJECT OF EXCESSIVE RELIEF UNDER THIS ACT; OR (IV) EXCESSIVE LOSS OR DEPRECIATION ALLOWANCE OR ANY O THER ALLOWANCE UNDER THIS ACT HAS BEEN COMPUTED. HENCE THIS IS A CASE SQUARELY COVERED BY EXPLANATION 2 TO S. 147, SINCE INCOME CHARGEABLE TO TAX HAS BEEN UNDER ASSESSED. MOREOVER, INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT BY REASON OF THE FAILURE ON THE PART OF THE ASSESSEE TO DISC LOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR HIS ASSESSMENT. THIS IS EVIDENT FROM THE FACT THAT THE ASSESSEE HAS NOT FURNISHED THE MANDATORY REPORT IN THE PRESCRIBED FORM 10CCB AS REQU IRED UNDER SECTION 80IA(7) RWS 80LB. IN THE ABSENCE OF DETA ILS LIKE DATE OF COMMENCEMENT OF ELIGIBLE BUSINESS, TRANSFER OF MACHINERY, INITIAL ASSESSMENT YEAR ETC, THE NECESSARY ELI GIBILITY CONDITIONS ARE NOT VERIFIABLE. IN VIEW OF THE ABOVE, I HAVE REASON TO BELIEVE THAT THE INCOME HAS ESCAPED ASSESSMENT FOR THE A.Y. 2003-04. HENCE, IT IS ITA NO4368/DEL/10 5 CONSIDERED NECESSARY TO ISSUE NOTICE U/S 148 OF THE IT. A CT, 1961 IN THE ABOVE MENTIONED CASE FOR ASSESSMENT YEAR 2003-04, IF APPROVED. 4. DURING THE RE-ASSESSMENT PROCEEDINGS, THE ASSESSEE CHALLE NGED THE REOPENING OF THE CASE. AFTER CONSIDERING THE SUBM ISSIONS MADE BY THE ASSESSEE ON THIS BEHALF AN ORDER OF REJECTION OF THE CONTENTION OF THE ASSESSEE WAS PASSED BY ASSESSING OFFICER NAMELY ADDL. CIT , RANGE-27, NEW DELHI WHICH IS REPRODUCED HEREUNDER:- ORDER OF REJECTION SUB: YOUR OBJECTION REGARDING ISSUANCE OF NOTICE U/S F OR A.Y. 2003-04 ORDER OF REJECTION -REG. - IN THIS CONNECTION, YOUR SUBMISSION IN THE ABOVE SAID MATTE( IS REPRODUCED BELOW)- .....THAT THERE IS NO REASON TO BELIEVE/OR FRESH EVID ENCE BEFORE THE AO WHICH CAME TO HIS POSSESSION OR KNOWLEDGE AFTER M AKING THE ASSESSMENT UNDER SECTION 143(3) TO ARRIVE AT CONCLUSI ON THAT THE INCOME HAS ESCAPED ASSESSMENT FOR THE A.Y. 2003-04, HENCE THE NOTICE U/S 147 IS INVALID, ILLEGAL AND UNCALLED F OR THE ABOVE SUBMISSION IS PERUSED AND IS ON RECORD : REASONS FOR REOPENING WERE PROVIDED TO THE ASSESSEE IN NOVEMBER 2008 AND CLEARLY SATE THAT AS PER SECTION 80L A (7) OF THE INCOME TAX ACT, 1961 READ WITH RULE 18BB OF THE INCOME TAX RULE, IN ORDER TO CLAIM DEDUCTION U/S 801B. A SEP ARATE REPORT IN THE PRESCRIBED PROFORMA HAS TO BE FURNISHED, THIS I S A MANDATORY REQUIREMENT MOREOVER. AMOUNT OF DEDUCTION ALLOWED UNDER SECTION 80/IB WAS NOT REDUCED FROM THE PROFIT C ONSIDERED FOR CALCULATING DEDUCTION U/S 80HHC. ITA NO4368/DEL/10 6 THE FOLLOWING ARE THE DISCREPANCIES IN THE SAID ASSESSMENT YEAR: 1. THE ASSESSEE HAS NOT SUBMITTED ANY REPORT U/S 10CCB FOR CLAIMING DEDUCTION U/S 80IB WITH HIS RETURN OF INCOME FOR THE ABOVE SAID ASSESSMENT YEAR WHICH IS NECESSARY AS PER SECTION 80IA(7) OF INCOME TAX ACT, 1961 THE AMOUR! OF DEDUC TION CLAIMED IS RS. 34,80,348/. U/S 80IB FOR A. Y. 2003-04 2.APART FROM THIS AMOUNT OF DEDUCTION ALLOWED UNDER SECTION 80IB WAS NOT REDUCED FROM THE PROFIT CONSIDERED FOR C ALCULATING DEDUCTION U/S 80HHC THIS HAS RESULTED IN EXCESS DEDUCTIO N OF RS. 17.40 1671/- U/S 80HHC. 3. FURTHER. THE ASSESSEE HAS NOT SUBMITTED ANY CALCULAT ION OF 80IB AMOUNTING TO RS. 34,80,.346/. AT THE TIME OF FI LING OF HIS RETURN. AS FAR AS THE TECHNICAL REQUIREMENT OF REOPENING IS CO NCERNED. THE DEPARTMENT HAS ISSUED THE NOTICE U/S 148 AFTER FULF ILLING ALL THE CONDITIONS AND FOLLOWING THE PROCEDURES INVOLVED FURTHER, AS PER EXPLANATION 2 TO SECTION 147 OF THE I.T. ACT, 19 61 FOR THE PURPOSE OF THIS SECTION, THE FOLLOWING SHALL ALSO BE DEE MED TO BE CASES WHERE INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMEN T, NAMELY'- C) WHERE AN ASSESSMENT HAS BEEN MADE, BUT - I) INCOME CHARGEABLE TO TAX HAS BEEN UNDER ASSESSED AT TOO LOW A RATE: OR IT) SUCH INCOME HAS BEEN MADE THE SUBJECT AT TOO LOW IT RATE; OR III) SUCH INCOME HAS BEEN MADE THE SUBJECT OF EXCESSIVE RELIEF UNDER THIS ACT; OR IV) EXCESSIVE LOSS OF DEPRECIATION ALLOWANCE OR ANY O THER ALLOWANCE UNDER THIS ACT HAS BEEN COMPUTED. ITA NO4368/DEL/10 7 HENCE THIS IS CASE SQUARELY COVERED BY EXPLANATION 2 T O SEC. 147, SINCE INCOME CHARGEABLE TO TAX HAS BEEN UNDER ASSESSED. AFTER CONSIDERING THE ABOVE, YOUR OBJECTION VIDE THE ABOVE REFERRED LETTER IS NOT ACCEPTED AND IS. HEREBY REJECT ED. 5. IN THE ORIGINAL ASSESSMENT DATED 31.3.2005 DEDUCTIO N CLAIMED BY THE ASSESSEE AND ALLOWED BY THE ASSESSING OFFICER U/S 80HHC & 80IB WERE AS UNDER:- I) DEDUCTION U/S 80HHC `,1,69,21,624/- II) DEDUCTION U/S 80 IB `. 34,80,346/- 6. THOUGH THE ASSESSING OFFICER IN THE ORIGINAL ASSESSMENT MENTIONED THAT THE ASSESSEE HAS FILED RELEVANT DETAILS I N SUPPORT OF THE DEDUCTIONS CLAIMED U/S 80HHC & 80IB, IT WAS NOTI CED SUBSEQUENTLY THAT FORM NO.10 CCB WAS NOT FURNISHED BY THE ASSESSEE. IT WAS NOTICED THAT THE DEDUCTION U/S 80HHC WAS ALLOWE D WITHOUT REDUCING THE ELIGIBLE PROFIT BY THE DEDUCTION CLAIM ED U/S 80IB. THESE WERE THE REASONS FOR REOPENING OF THE ORIGINAL ASSESSMENT . DURING THE RE-ASSESSMENT PROCEEDINGS, THE ASSESSEE WAS THEREFORE, REQUI RED TO SHOW CAUSE AS TO WHY DEDUCTION U/S 80IB SHOULD NOT BE DI SALLOWED AND IF DEDUCTION U/S 80IB WAS ALLOWED WHY DEDUCTION U/S 80 HHC SHOULD NOT BE REDUCED BY AN AMOUNT OF `.17,40,167/-. THE ASSESSE E VIDE HIS LETTER DATED 9.11.2009 SUBMITTED AS UNDER:- WE WOULD LIKE TO STATE THAT, WE HAD ALREADY SUBMITTE D THE REPORT AS REQUIRED FOR CLAIMING DEDUCTION U/S 80IB A T THE TIME OF FILING OF THE RETURN. THE CASE WAS TAKEN UP FOR SCRUT INY ASSESSMENT U/S 143(3) AND THAT THE RELEVANT DETAILS IN SU PPORT OF ITA NO4368/DEL/10 8 THE DEDUCTION U/S 80IB WERE FILED. THE SAME IS EVIDEN T FROM THE ORDER PASSED U/S 143(3) DATED 31.3.2003. WE ARE AGAIN FURNISHING HEREWITH A COPY OF REPORT U/S 80IB. 7. THE ASSESSING OFFICER DID NOT ACCEPT THE CONTENTION OF THE ASSESSEE. IT WAS STATED BY HIM THAT THAT IN RETURN OF INC OME FOR ASSESSMENT YEAR 2003-04 THERE WAS ONLY THE LETTER OF CER TIFICATION BY THE AUDITORS NAMELY M/S SK BAGLA & CO. DATED 25.8.200 3. COMPLETE ACCOMPANIMENT OF FORM NO.10CCB WAS NOT AVAILABLE. TH E SAID CERTIFICATION HAS BEEN ANNEXED TO THE ASSESSMENT ORDER AS ANNEXURE A. COPY OF THE COMPLETE FORM NO.10CCB INCLUDING THE CE RTIFICATION HAS BEEN ANNEXED BY THE ASSESSING OFFICER TO THE ASSESSMENT OR DER AS ANNEXURE B. THE SAID FORM CONSIST OF SIX PAGES. THE CERTIFICATION/DECLARATION IS AT PAGE 6 OF THE SAID FO RM. FROM THE ABOVE IT WAS NOTED BY THE ASSESSING OFFICER THAT THE ORIGINAL REP ORT OF THE AUDIT FILED WITH THE RETURN OF INCOME CONSISTED OF ONE PAGE AND IS ON THE LETTER AHEAD OF THE AUDITORS WHEREAS 6 TH PAGE OF ANNEXURE B IS A LETTER ON PLAIN PAPER. IT WAS, THEREFORE, HELD BY HIM THAT THE AUDIT REPORT FURNISHED BY THE ASSESSEE DURING THE RE-ASSESSMENT PROCEEDIN GS (ANNEXURE B) WAS NOT A COPY OF THE REPORT OF FORM NO ,.10CCB AS ORIGINALLY FURNISHED BY THE ASSESSEE WITH THE RETURN OF INCOME DATED 28.11.2003. HE, THEREFORE, CONCLUDED THAT AS ON THE DATE OF FILING OF THE RETURN, THE ASSESSEE DID NOT HAVE THE MANDATORY RE PORT IN THE REVISED PRESCRIBED FORM 10CCB AS APPLICABLE FROM ASSESSME NT YEAR 2003-04. THIS BEING THE CASE, HE DID NOT ALLOW DEDUC TION U/S 80IB OF THE ACT. 8. THOUGH THE ASSESSING OFFICER DID NOT ALLOW THE DEDUC TION CLAIMED BY THE ASSESSEE U/S 80IB OF THE ACT, HE PROCEEDED TO REC ALCULATE THE ADMISSIBLE DEDUCTION U/S 80HHC OF THE ACT BY REDUCING THE ELIGIBLE PROFIT BY THE DEDUCTION CLAIMED U/S 80IB OF THE ACT. HE, THEREFORE, ITA NO4368/DEL/10 9 MADE A DISALLOWANCE OF `.17,14,167/- U/S 80HHC OF THE ACT. AGGRIEVED, THE ASSESSEE FILED APPEAL BEFORE THE LD CIT(A). 9. BEFORE THE LD CIT(A) IT WAS CONTENDED BY THE ASSESSEE THAT AS THE ORIGINAL ASSESSMENT ORDER IN THIS CASE WAS PASSED U/S 14 3(3) OF THE ACT AND REOPENING OF THE SAID ASSESSMENT WAS DONE AFTER FOUR YEARS FROM THE END OF ASSESSMENT YEAR, THE REOPENING WAS INVA LID IN TERMS OF PROVISO TO SECTION 147 OF THE ACT. THERE WAS NO FAILU RE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FAC TS NECESSARY FOR HIS ASSESSMENT FOR THE IMPUGNED ASSESSMENT YEAR. IN SUPPORT O F THE ABOVE, IT WAS CONTENDED THAT THE FOLLOWING FACTS EMER GED FROM THE RECORD:- A) THE RETURN OF INCOME WAS FILED BY THE ASSESSEE ALONG WITH THE AUDIT REPORT U/S 44AB, THE AUDITED BALANCE SHEET, P&L ACCOUNT, AUDIT REPORT U/S 80HHC AND AUDIT REPORT U/S 80IB ETC. B) DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSEE FURNISHED ALL DETAILS/INFORMATION ASKED FOR BY THE ASSESSING OFFICE R INCLUDING RELEVANT DETAILS IN SUPPORT OF DEDUCTION C LAIMED U/S 80HHC AND 80IB. AFTER CONSIDERING THE SAME, THE ASSESSI NG OFFICER ALLOWED THE DEDUCTION U/S 80IB & 80HHC OF TH E ACT. C) NO INFORMATION CAME TO THE POSSESSION OF THE ASSESSING OFFICER SUBSEQUENT TO THE ORIGINAL ASSESSMENT ORDER ON THE BASIS OF WHICH THE CASE COULD BE REOPENED. D) NOTICE U/S 148 DATED 18.8.2005 WAS SERVED UPON THE ASSESSEE ON 22 .8.2008 WHICH WAS BEYOND FOUR YEARS FROM THE EN D OF THE RELEVANT ASSESSMENT YEAR I.E. 2003-04. ITA NO4368/DEL/10 10 10. THE ASSESSEE FURTHER RELIED ON THE FOLLOWING CASE LA WS:- 1. CIT V. KELVINATOR INDIA LTD. 256 ITR 1 (DEL.) (FB). 2. CIT V. TVS MOTORS CO. LTD. 319 ITR 192 (MAD). 3. MISTRY LALJI MERCY DEVELOP. CORPN. V. ACIT AND OTHER 323 ITR. 4. CIT V. GOETZ INDIA LTD. 321 ITR 431. 5. DT & TDC LTD. V. ACIT DELHI 324 ITR 234 (DEL.). 6. INDICTO ISPECT V. ACIT 320 ITR 458 (GUJ.). 7. EAGLE FASHION PVT. LTD. V. DCIT (GUJ.). 2919 TIOL 19 9. 11. THE ASSESSEE, THEREFORE, CONTENDED THAT THE REOPENI NG OF ASSESSMENT BE CONSIDERED AS INVALID. 12. WITHOUT PREJUDICE TO THE ABOVE, IT WAS CONTENDED BY THE ASSESSEE THAT DEDUCTION U/S 80IB WAS WRONGLY DISALLOWED. T HE ASSESSEE BECAME ENTITLED TO CLAIM DEDUCTION U/S 80IB IN ASSESSMENT YEAR 2002-03. THE DEDUCTION U/S 80IB CLAIMED BY THE ASSESSEE IN SUBSEQUENT YEARS HAVE BEEN ALLOWED IN FULL. A CHART SH OWING THE DEDUCTION CLAIMED AND ALLOWED U/S 80IB & 80HHC WAS FU RNISHED BEFORE THE LD CIT(A). 13. IT WAS FURTHER SUBMITTED THAT DURING THE RE-ASSESSM ENT PROCEEDINGS THE ASSESSING OFFICER WAS INFORMED THAT THE AUDIT REPORT IN PRESCRIBED FORM AS REQUIRED U/S 80IB WAS ON THE FILE AS THE SAME WAS FILED ALONG WITH THE RETURN. HOWEVER, ANOTHER COPY OF THE SAME REPORT WAS FILED. THE ALLEGATION OF THE ASSESSING OFFICER THAT THE AUDIT REPORT U/S 80IB FILED ON 9.11.2009 WAS SIGNED BY THE CHARTERE D ACCOUNTANT BACK DATED WAS BASED ON SURMISES AND CONJECTURES. IT WAS, THEREFORE, CONTENDED THAT DEDUCTION U/S 80IB BE ALLOWED TO THE ASSESSEE. ITA NO4368/DEL/10 11 14. IT WAS FURTHER CONTENDED BY THE ASSESSEE THAT THOUG H THE ASSESSING OFFICER DISALLOWED THE DEDUCTION U/S 80IB, HE C ALCULATED THE DEDUCTION ALLOWABLE U/S 80HHC BY REDUCING THE ELIGIB LE PROFIT BY THE CLAIM OF THE ASSESSEE U/S 80IB OF THE ACT AMOUNTING TO ` .34,80,346/-. IT WAS SUBMITTED THAT THE PROVISION OF SECTION 80A DOES NO T GIVE THE ASSESSING OFFICER THE AUTHORITY TO DO SO. SECTION 80A(2 ) ONLY LIMITS THE AGGREGATE DEDUCTION UNDER CHAPTER -VIA TO THE GROSS TOTAL INCOME OF THE ASSESSEE. 15. AFTER CONSIDERING THE FACTS AND CIRCUMSTANCES OF T HE CASE, THE LD CIT(A) IN PARA 4.7. OF HIS ORDER HELD AS UNDER:- NOW THE QUESTION BEFORE ME IS THAT AS TO WHETHER ON T HE BASIS OF FACTS OF THIS CASE, THE ASSESSING OFFICER HAS REASON TO B ELIEVE THAT INCOME HAS ESCAPED ASSESSMENT. IT IS EVIDENT FROM THE CASE RECORDS THAT THE ASSESSEE HAD NOT DISCLOSED FULL FACTS ABOU T THE CLAIM OF DEDUCTION U/S 80IB AND THUS THIS FAILURE ON H IS PART HAS RESULTED ESCAPEMENT OF INCOME. THE CLAIMED AUDIT REPO RT FURNISHED ALONG WITH THE RETURN FILED U/S 139(1) WAS N OT IN THE PRESCRIBED FORMAT GIVING ALL PARTICULARS FOR ALLOWABI LITY OF DEDUCTION U/S 80IB. ON THE BASIS OF THIS FACT, THE ASSE SSING OFFICER BELIEVED THAT THE CORRECTNESS OF CLAIM U/S 80I B REMAINED UNVERIFIABLE. THE ANNEXURE-A AND B OF THE IMPUGNED ORDER ALSO ESTABLISHES THE FACTS MENTIONED IN THE REASONS RECORDED BY THE ASSESSING OFFICER FOR REOPENING THE ASSESSMENT. THUS IT IS ESTABLISHED THAT THE APPELLANT FAILED TO MAKE FULL AN D TRUE DISCLOSURE OF ALL MATERIAL FACTS NECESSARY FOR THE ASSESSMEN T FOR RELEVANT YEAR. I HAVE REFERRED TO VARIOUS DECISIONS O F SUPREME COURT WHEREIN IT HAS BEEN SPECIFICALLY LAID DOWN THA T POWER TO ITA NO4368/DEL/10 12 REOPEN AN ASSESSMENT BY THE ASSESSING OFFICER IS SUBJECT TO CONDITION THAT HE HAS REASON TO BELIEVE THAT INCOME H AS ESCAPED ASSESSMENT. THEREFORE, THE ASSESSING OFFICERS BELIEF THAT T HE APPELLANT CLAIMED WRONG DEDUCTION U/S 80HHC /80IB IS JUSTIFIED. 16. IN PARA 4.11, THE LD CIT(A) ALSO RECORDED FOLLOW ING FINDING OF FACT:- THE ORIGINAL RETURN IN COLUMN DOCUMENTS ATTACHED WI TH THE RETURN EVEN DOES NOT STATE THE FORM 10CCB AS ENCLOSER. THE PHOTOCOPY OF THE RETURN IN ONE PAGE IS ENCLOSED HERE WITH AS ANNEXURE A FOR PROPER APPRECIATION OF FACTS. I HAVE PERUSED THE RECORD AND FOUND THAT NEITHER THE ASSESSING OFFICER HAD CALLED THE DETAILS REQUIRED TO FILL UP THIS FORM NOR THE APP ELLANT HAD SUBMITTED THESE DETAILS SPECIFICALLY IN A CONSOLIDATED F ORM AT ONE PLACE DURING THE ORIGINAL ASSESSMENT PROCEEDINGS. 17. FINALLY IN PARA 4.16 OF THE ORDER, THE LD CIT(A ) HAS HELD AS UNDER:- NOW THE MATTER COMES AT THE STAGE OF VALIDITY OF NOT ICES U/S 147/148 OF THE ACT. INQUIRY AT THIS STAGE IS ONLY TO SE E WHETHER THERE WERE REASONABLE GROUNDS FOR THE ASSESSING OFFICER T O BELIEVE THAT THE INCOME HAS ESCAPED ASSESSMENT AND THERE WAS FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULL AND TRUE FACTS OF HIS INCOME. IT IS NECESSARY TO KEEP THIS DISTINCTION I N MIND. IN ITO V. BIJU PATNAIK (1991) 188 ITR 247, THE APEX CO URT HAS SOUNDED THE NOTE OF CAUTION THAT AT THE STAGE OF NOTI CE U/S 147/148 OF THE ACT, THE COURT IS NOT TO GO INTO THE MERITS OF THE CONTROVERSY WHETHER A PARTICULAR INCOME IS TAXABLE. T AKING THE TOTALITY OF THE FACTS AND CIRCUMSTANCES OF THIS CASE INT O ITA NO4368/DEL/10 13 CONSIDERATION AND IN THE LIGHT OF LEGAL PRINCIPLES LA ID DOWN BY THE HON'BLE SUPREME COURT, HIGH COURTS AND ITAT REFERRED ABOVE BY ME, I AM OF THE CONSIDERED VIEW THAT THERE WERE ENOU GH REASONABLE GROUNDS FOR THE ASSESSING OFFICER TO BELIEVE THAT THE INCOME OF THE APPELLANT HAD ESCAPED ASSESSMENT FOR ASSESSM ENT YEAR UNDER CONSIDERATION. I, THEREFORE, DO NOT FIND ANY ERROR OF LAW AND FACT COMMITTED BY THE ASSESSING OFFICER IN INV OKING PROVISIONS OF SECTION 148 READ WITH SECTION FOR THE YEA R UNDER CONSIDERATION. THEREFORE, THE GROUNDS NO.1 TO 4 ARE D ISMISSED. 18. AS REGARDS THE CORRECTNESS OF DISALLOWANCE OF DEDUCT ION U/S 80IB OF THE ACT, THE LD CIT(A) OPINED THAT REQUIREMENT O F FILING OF AUDIT REPORT WAS MANDATORY AND FAILURE TO FILE THE SAME IS T OTAL. FOR THE ABOVE PROPOSITION, HE RELIED ON THE DECISION OF HON'B LE BOMBAY HIGH COURT IN THE CASE OF CIT V. SHIVANAND ELECTRONICS REP ORTED IN 209 ITR 63. HOWEVER, THE ASSESSEE CAN FILE SUCH AUDIT REPORT BE FORE THE COMPLETION OF ASSESSMENT IF HE HAS FAILED TO FILE THE SAM E ALONG WITH THE RETURN. IN SUCH A CASE THE ASSESSING OFFICER HAS THE POWER TO ACCEPT THE SAME PROVIDED THE ASSESSEE SHOWS THAT THE DELAY IN FILING THE SAME WAS FOR GOOD AND SUFFICIENT REASONS. AS IN THE P RESENT CASE, THE ASSESSEE HAS NOT BROUGHT ON RECORD ANY REASONS JUSTIFYI NG THE BELATED SUBMISSION OF THE REQUISITE AUDIT REPORT DATED 25.8.2003 DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND TAKING N OTE OF THE DISCREPANCIES POINTED OUT BY THE ASSESSING OFFICER IN SUC H AUDIT REPORT, THE LD CIT(A) HELD THAT THE ASSESSEE WAS NOT ENTITLED TO DEDUCTION U/S 80IB OF THE ACT. 19. AGGRIEVED, THE ASSESSEE FILED APPEAL BEFORE THE TRI BUNAL. ITA NO4368/DEL/10 14 20. BEFORE US THE LD AR FOR THE ASSESSEE IN ADDITION TO REITERATING THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW, SUBMITTED THAT THE ASSESSEE FILED ALL NECESSARY DETAILS DURING THE ORIGINAL A SSESSMENT PROCEEDINGS AND THEREFORE IT CANNOT BE SAID THAT INCO ME ESCAPED ASSESSMENT DUE TO THE FAILURE OF THE ASSESSEE TO DISCLOSE FU LLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR HIS ASSESSMENT. THUS, IT W AS CONTENDED THAT THE FIRST PROVISO TO SECTION 147 OF THE ACT IS NOT APPLICABLE IN THE FACTS OF THE PRESENT CASE. THE CASE WAS REOPENED BY THE ASSESSING OFFICER MERELY ON THE BASIS OF CHANGE OF O PINION. IT WAS, THEREFORE, CONTENDED THAT THE REOPENING OF ASSESSMENT W AS INVALID. RELIANCE WAS PLACED IN THE FOLLOWING CASE LAWS:- 1. CIT V. KELVINATOR OF INDIA LTD. 256 ITR 1 (DEL.). 2. HONDA SIEL POWER PRODUCTS LTD. V. DCIT 333 ITR 547 ( DEL.). 21. THE LD DR, ON THE OTHER HAND, IN ADDITION TO RE LYING ON THE ORDERS OF THE AUTHORITIES BELOW SUBMITTED THAT THE LD CIT(A) HAS GIVEN A FINDING OF FACT THAT THE ORIGINAL RETURN OF INCOME DID NOT SHOW THAT FORM NO.10CCB WAS ENCLOSED ALONG WITH THE RETURN. THE LD CIT(A) HAS ALSO HELD ON PERUSAL OF THE RECORD OF ASSESSMENT THAT THE ASSE SSING OFFICER NEITHER CALLED FOR THE DETAILS WITH REFERENCE TO ALL OWABILITY OF DEDUCTION U/S 80IB OF THE ACT NOR WAS ANY DETAIL FURNISHED BY TH E ASSESSEE DURING THE ORIGINAL ASSESSMENT PROCEEDINGS. THUS, IT WAS CONTEND ED BY HIM THAT THERE WAS ESCAPEMENT OF INCOME DUE TO THE FAILUR E OF THE ASSESSEE TO FURNISH FULLY AND TRULY ALL MATERIAL FACTS AL ONG WITH THE RETURN. IN SUCH CIRCUMSTANCES, THE PROVISO TO SECTION 1 47 OF THE ACT WAS CLEARLY ATTRACTED. IT WAS FURTHER SUBMITTED BY HI M THAT THE HON'BLE DELHI HIGH COURTS DECISION IN THE CASE OF HONDA SIEL POWER PRODUCTS LTD. (SUPRA) WAS REVERSED ON THE POINT OF VALIDITY OF REOPENING OF ASSESSMENT U/S 147 OF THE ACT BY THE HON'BLE SUPREME COU RT VIDE THEIR ITA NO4368/DEL/10 15 JUDGMENT DATED 29.7.2011 IN PETITION FOR SPECIAL LE AVE TO APPEAL (CIVIL) NO.S.19085/2011. 22. WE HAVE HEARD THE PARTIES AND PERUSED THE RECORD. WE ARE OF THE CONSIDERED OPINION TAKING NOTE OF THE FACT THAT THE HON'BLE APEX COURTS JUDGMENT IN THE CASE OF HONDA SIEL POWER PROD UCTS LTD. (SUPRA) AND CONSIDERING THE FACTS OF THE PRESENT CASE, IT HAS TO BE HELD THAT REOPENING OF ASSESSMENT U/S 147 OF THE ACT WAS VALIDLY M ADE BY THE ASSESSING OFFICER AND THE SAME WAS RIGHTLY UPHELD BY THE LD CIT(A). THUS, GROUND NO.1 & 2 TAKEN BY THE ASSESSEE ARE REJECTED . 23. ON MERIT OF ADMISSIBILITY OF DEDUCTION U/S 80IB OF THE ACT, THE LD AR FOR THE ASSESSEE HAS REITERATED THE SUBMISSIONS MADE BEFO RE THE AUTHORITIES BELOW. IT WAS FURTHER SUBMITTED BY HIM TH AT EVEN IF IT IS CONSIDERED THAT THE ASSESSEE DID NOT FURNISH THE REQUIRED AUDIT REPORT FOR ADMISSIBILITY OF DEDUCTION U/S 80IB ALONG WITH TH E RETURN OR DURING THE ORIGINAL ASSESSMENT PROCEEDINGS, THE SAME WAS FURNISHE D DURING THE RE- ASSESSMENT PROCEEDINGS. AS ASSESSMENT INCLUDES RE- ASSESSMENT, IT WAS CONTENDED BY HIM THAT FURNISHING OF SUC H REPORT DURING THE RE-ASSESSMENT PROCEEDINGS WOULD ENTITLE THE ASSESSEE TO CLAIM DEDUCTION U/S 80IB OF THE ACT. RELIANCE WAS PLA CED BY HIM ON THE FOLLOWING CASE LAWS:- 1. CIT V. WALI COTTON TRADERS PVT. LTD. 288 ITR 400 (MA D.). 2. CIT V. CONTIMETERS ELECTRICALS PVT. LTD. 317 ITR 249. 3. CIT V. SHAHZADA NAND CHARITY TRUST 220 ITR 292 (P&H) . 24. IT WAS FURTHER CONTENDED BY THE LD AR FOR THE ASSE SSEE THAT PROVISIONS RELATING TO DEDUCTION SHOULD BE CONSTRUED LI BERALLY AS HELD BY THE HON'BLE APEX COURT IN THE CASE OF BAJAJ TEMPO LTD. V. CIT 196 ITA NO4368/DEL/10 16 ITR 188. IT WAS ALSO EMPHASIZED BY HIM THAT SUCH DEDUC TION WAS ALLOWED TO THE ASSESSEE IN THE EARLIER AS WELL AS SUBSEQUE NT ASSESSMENT YEARS. IT WAS, THEREFORE, CONTENDED BY HIM THA T THE DEDUCTION U/S 80IB OF THE ACT BE ALLOWED TO THE ASSESSEE . 25. THE LD DR IN ADDITION TO RELYING ON THE ORDERS O F THE AUTHORITIES BELOW EMPHASIZED THE FACT THAT IT WAS DOUBTFUL THAT THE AUDIT REPORT WAS OBTAINED BY THE ASSESSEE BEFORE THE DUE DATE. IF THE AUDIT REPORT WAS OBTAINED BEFORE THE DUE DATE, THE SAME COULD BE F URNISHED DURING THE ASSESSMENT PROCEEDINGS. HOWEVER, THE AUDIT REPORT OB TAINED AFTER THE DUE DATE, COULD NOT BE CONSIDERED BY THE ASSESSING OFFICER. IN THE ABOVE CIRCUMSTANCES, IT WAS CONTENDED BY HIM THAT THE CASE LAWS RELIED ON BY THE LD AR FOR THE ASSESSEE WERE NOT APPLIC ABLE IN THE FACTS OF THE PRESENT CASE. IT WAS, THEREFORE, SUBMITTED THAT THE ORDER OF THE LD CIT(A) ON THIS ISSUE MAY PLEASE BE CONFIRMED. 26. IN THE REJOINDER, THE LD AR FOR THE ASSESSEE SUBMIT TED THAT THE CONTENTION OF THE ASSESSING OFFICER THAT THE IMPUGNED AUDIT REPORT WAS BACK DATED WAS MERELY A CONJECTURE OR SURMISE. THERE, WAS EVIDENCE ON RECORD WHICH WOULD SHOW THAT THE IMPUGNED AUDIT R EPORT WAS OBTAINED BACK DATED. IF THE AUDIT REPORT WAS KEPT I N THE COMPUTER, A PRINT OUT OF THE SAME COULD BE TAKEN OUT AT ANY TIME AND THAT BY ITSELF WOULD NOT PROVE THAT THE REPORT WAS BACK DATED. 27. WE HAVE HEARD THE PARTIES AND PERUSED THE RECORD. WE FIND THAT TILL ASSESSMENT YEAR 2002-03, FORM NO,10CCB WAS OF ONE P AGE ONLY. VIDE IT (23 RD AMENDMENT RULES 2002), SUCH FORM NO.10CCB WAS CHANGED WITH RETROSPECTIVE EFFECT FROM 1.4.2002. IT APPEARS THAT AS THE CHANGE WAS NOT NOTED BY THE ASSESSEE, THE ASSESSEE FURNI SHED FORM NO.10 CCB AS WAS EXISTING EARLIER AND THE SAME WAS ACCEPTED BY ITA NO4368/DEL/10 17 THE ASSESSING OFFICER. IT APPEARS THIS MUST HAVE BEEN TH E CAUSE OF CONFUSION. THE REVENUE HAS ALSO NOT DISPUTED THE CLAIM OF THE ASSESSEE THAT IN EARLIER AS WELL AS IN SUBSEQUENT ASSESSMENT YEARS TH E ASSESSEE HAS BEEN ALLOWED DEDUCTION U/S 80IA/80IB OF THE ACT. IN THE ABOVE CIRCUMSTANCES, WE DEEM IT FIT TO SET ASIDE THE ORDER OF THE AUTHORITIES BELOW ON THE IMPUGNED ISSUE AND REMIT THE MATTER BACK TO THE FILE OF THE ASSESSING OFFICER WITH THE DIRECTION THAT IF THE ASSE SSEE OTHERWISE FULFILLS THE CONDITION FOR ALLOWABILITY OF DEDUCTIO N U/S 80IB OF THE ACT, DEDUCTION UNDER THE SAID SECTION SHOULD NOT BE DISALLOW ED MERELY ON ACCOUNT OF NON FURNISHING OF THE AUDIT REPORT OR FUR NISHING THE SAME AUDIT REPORT DURING THE RE-ASSESSMENT PROCEEDINGS. IF D EDUCTION U/S 80IB IS ALLOWED, DEDUCTION U/S 80HHC SHOULD BE CALCULA TED IN TERMS OF THE RATIO LAID DOWN IN THE CASE OF GREAT EASTERN EXPO RTS V. CIT, 332 ITR 14 (DEL.). THUS, GROUND NO.3 TAKEN BY THE ASSESSEE IS ALL OWED TO THE ABOVE EXTENT. 28. THE LD AR FOR THE ASSESSEE HAS NOT ARGUED ANYTHING O N GROUND NO.4 TAKEN BY THE ASSESSEE AND THE SAME IS NOT ADJUDICATE D UPON. 29. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED IN PART. 30. ORDER PRONOUNCED IN THE OPEN COURT ON THE 30 TH DAY OF NOVEMBER, 2011. SD/- SD/- (U.B.S. BEDI) (B.K. HAL DAR) JUDICIAL MEMBER ACCOUNTANT MEMBER DT. 30.11.2011. HMS ITA NO4368/DEL/10 18 COPY FORWARDED TO:- 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT (A)-, NEW DELHI. 5. THE DR, ITAT, LOKNAYAK BHAWAN, KHAN MARKET, NEW DEL HI. TRUE COPY. BY ORDER (ITAT, NEW DELHI).