DCIT, CHENNAI V. Shasun Pharmaceuticals Ltd., CHENNAI

ITA 437/CHNY/2014

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 77240 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-05-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2002-2003
• Appeal Filed On: 19-02-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHAJI P JACOB IRS
• Assessee Lawyers: SRHI S SRIDHAR
• Keywords: Retrospective amendment
• Section: 80HHC

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI . , ! , ' # BEFORE SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER & SHRI VIKAS AWASTHY, JUDICIAL MEMBER ./ I.T.A. NOS.436 & 437/MDS/2014 ( / ASSESSMENT YEAR : 2001-02 & 2002-03) THE DEPUTY COMMISSIONER OF INCOME TAX, COMPANY CIRCLE VI(2) CHENNAI 600 034. ( !$ /APPELLANT) VS M/S. SHASUN PHARMACEUTICALS LTD (FORMERLY M/S. SHASUN CHEMICALS & DRUGS LTD) NO.3, DORAISWAMY ROAD, T. NAGAR, CHENNAI 600 017. [PAN :AAACS5031L] ( %&!$ /RESPONDENT) / APPELLANT BY : SHRI.SHAJI P. JACOB, IRS, ADDL. CIT / RESPONDENT BY : SRHI. S. SRIDHAR, ADVOCATE ! /DATE OF HEARING : 15.04.2014 '# ! /DATE OF PRONOUNCEMENT : 09.05.2014 ' / O R D E R PER BENCH THE APPEALS HAVE BEEN FILED BY THE REVENUE ASSAILIN G THE ORDERS OF THE COMMISSIONER OF INCOME TAX (APPEALS)-VI, CHE NNAI, RELEVANT TO THE ASSESSMENT YEARS 2001-02 AND 2002-03. BOTH ORDE RS ARE DATED 27.9.2013. I.T.A.NOS.436 & 437/MDS/2014. . :- 2 -: 2. IN BOTH APPEALS, COMMON ISSUE RELATING TO APPLICABI LITY OF PROVISO 3 RD AND 4 TH TO SEC.80HHC(3) OF THE ACT IS RAISED. THE ASSESSE E IN ITS RETURN FOR THE RESPECTIVE ASSESSMENT YEARS HAS CLAI MED DEDUCTION UNDER SECTION 80HHC. THE ASSESSING OFFICER HELD TH AT THE ASSESSEE IS NOT ENTITLED FOR DEDUCTION UNDER SECTION 80HHC IN V IEW OF JUDGMENT OF THE HONBLE APEX COURT IN THE CASE OF M/S. IPCA LABORATORIES LTD VS. CIT (266 ITR 521). AGGRIEVED AGAINST THE ASSESSMENT O RDER FOR THE RESPECTIVE ASSESSMENT YEARS, THE ASSESSEE FILED APP EALS BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS). THE COMMISSI ONER OF INCOME TAX (APPEALS) FOLLOWING THE DECISION OF THE HONBL E GUJARAT HIGH COURT IN THE CASE OF M/S. AVANI EXPORTS & OTHERS VS. CIT REPORTED AS 348 ITR 391 ALLOWED THE APPEALS OF THE ASSESSEE. NOT SATISFIED WITH THE ORDERS OF THE COMMISSIONER O F INCOME TAX (APPEALS) THE REVENUE HAS COME IN APPEAL BEFORE THE TRIBUNAL. 3. WE HAVE HEARD THE SUBMISSIONS MADE BY THE REPRESEN TATIVES OF RIVAL PARTIES AND HAVE PERUSED THE ORDERS OF THE AU THORITIES BELOW. THE ONLY ISSUE IN BOTH THE APPEALS IS APPLICABILITY OF 3 RD AND 4 TH PROVISO TO SEC.80HHC(3). THE HONBLE GUJARAT HIGH COURT IN THE CASE OF M/S. AVANI EXPORTS AND OTHERS (SUPRA) HAS DEALT WITH THE ISSUE OF I.T.A.NOS.436 & 437/MDS/2014. . :- 3 -: CONSTITUTIONAL VALIDITY OF THE PROVISIONS AND THEIR RETROSPECTIVE APPLICABILITY. THE HONBLE HIGH COURT WHILE ADJUDIC ATING THE ISSUE CONSIDERED CATENA OF JUDGEMENTS, INCLUDING JUDGEMEN T OF THE HONBLE SUPREME COURT OF INDIA IN THE CASE OF M/S. IPCA LABORATORIES LTD (SUPRA). THE HONBLE HIGH COURT HELD THAT THE AMENDMENT BR OUGHT IN BY THE FINANCE ACT 2005 BY INSERTING 3 RD AND 4 TH PROVISO OF SECTION 80HHC(3) HAVE NO APPLICABILITY WITH RETROSPECTIVE EFFECT. THE AMENDMENT IS PROSPECTIVE IN NATURE. THE HONBLE CO URT FURTHER HELD, THE AMENDMENT IS LIABLE TO BE QUASHED TO THE EXTENT THAT THE OPERATION OF THE SECTION COULD BE GIVEN EFFECT FROM THE DATE OF AMENDMENT AND NOT IN RESPECT OF EARLIER ASSESSMENT YEARS IN CASE OF ASESSEES WHOSE EXPORT TURNOVER IS ABOVE F10 CRORES. THE HONBLE CO URT HAS HELD THAT IN CASE OF SUBSTANTIVE AMENDMENT, RETROSPECTIVE OPE RATION CAN BE GIVEN ONLY IF IT IS FOR THE BENEFIT OF THE ASSESSEE S BUT NOT IN A CASE WHERE IT AFFECTS EVEN A FEWER SECTION OF THE ASSESS EES. IN OTHER WORDS, THE RETROSPECTIVE AMENDMENT SHOULD NOT BE DE TRIMENTAL TO ANY OF THE ASESSEEES. 4. WE DO NOT FIND ANY INFIRMITY IN THE ORDERS OF THE C OMMISSIONER I.T.A.NOS.436 & 437/MDS/2014. . :- 4 -: OF INCOME TAX (APPEALS). ACCORDINGLY, BOTH THE APPE ALS OF THE REVENUE ARE DISMISSED BEING DEVOID OF MERIT. . ORDER PRONOUNCED ON FRIDAY, THE 9 TH OF MAY, 2014, AT CHENNAI. SD/- SD/- ( . ) (A.MOHAN ALANKAMONY) / ACCOUNTANT MEMBER ( ! ) (VIKAS AWASTHY) ' / JUDICIAL MEMBER $% /DATED:09.05.2014. KV. %& ' ( )( /COPY TO: 1. * APPELLANT, 2. / RESPONDENT, 3. + ( )/CIT(A), 4. + /CIT, 5. (,- . /DR, 6. -/ 0 /GF. I.T.A.NOS.436 & 437/MDS/2014. . :- 5 -: