DCIT, Tiruppur V. Sunrise Knitting Mills, Tiruppur

ITA 44/CHNY/2016

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 9476 (ITAT-CHENNAI)
• Duration Of Justice: 3 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-04-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: misc
• Appeal Filed On: 08-01-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P RADHAKRISHNAN
• Assessee Lawyers: R KUMAR
• Keywords: Reasonable cause
• Section: 143(3)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , A B ENCH, CHENNAI . . . , . , % BEFORE SHRI N.R.S.GANESAN, JUDICIAL MEMBER AND SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ I.T.A.NO.44/MDS/2016 ( / ASSESSMENT YEAR: 2011-12) THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-2, 121, 60 FEET ROAD, TIRUPUR-641 602 VS M/S. SUNRISE KNITTING MILLS, KULIVAYAL THOTTAM KULLEGOUNDER PUDUR TIRUPUR-641 687. PAN:AALFS4137P ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : MR. P.RADHAKRISHNAN, JCIT /RESPONDENT BY : MR. R.KUMAR, ADVOCATE /DATE OF HEARING : 17 TH FEBRUARY, 2016 /DATE OF PRONOUNCEMENT : 22 ND APRIL, 2016 / O R D E R PER A. MOHAN ALANKAMONY, AM:- THIS APPEAL IS FILED BY THE REVENUE AGGRIEVED BY T HE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX(APP EALS)- 3, COIMBATORE DATED 25.09.2015 IN ITA NO.68/2014-1 5 PASSED UNDER SECTION 143(3) OF THE ACT. 2. THE APPEAL FILED BY THE REVENUE WAS BARRED BY LIMITATION OF 13 DAYS. THE REVENUE HAS FILED AN AFF IDAVIT EXPLAINING THE REASON THAT DUE TO INTERVENING HOLID AYS THERE WAS A DELAY OF 14 DAYS IN FILING THE APPEAL. IT WA S FURTHER SUBMITTED THAT THE DELAY IN FILING THE APPEAL WAS U NINTENTIONAL 2 ITA NO.44 /MDS/2016 AND THEREFORE PRAYED FOR CONDONATION OF DELAY. CONS IDERING THE SUBMISSIONS OF THE REVENUE, WE ARE SATISFIED TH AT THERE WAS REASONABLE CAUSE FOR THE DELAY IN FILING THE AP PEAL. THEREFORE IN THE INTEREST OF JUSTICE, WE HEREBY CON DONE THE DELAY IN FILING THIS APPEAL AND ADMIT THE SAME FOR ADJUDICATION. 3. THOUGH THE REVENUE HAS RAISED SEVERAL GROUNDS IN ITS APPEAL HOWEVER, THE CRUX OF THE ISSUE IS THAT THE L EARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN D ELETING THE ADDITION OF ` 88,91,835/- MADE BY THE LEARNED ASSESSING OFFICER WHO HAD DISALLOWED THE CLAIM OF THE ASSESSE E UNDER SECTION 80IA OF THE ACT . 4. BRIEF FACTS ARE THAT THE ASSESSEE IS A FIRM ENGA GED IN THE MANUFACTURING AND EXPORT OF HOSIERY GARMENTS FI LED ITS RETURN OF INCOME ON 30.09.2011 FOR THE ASSESSMENT Y EAR 2011-12 ADMITTING INCOME OF ` 65,99,550/-. IN THE SCRUTINY ASSESSMENT PROCEEDINGS, THE LEARNED ASSESSING OFFIC ER DISALLOWED THE CLAIM OF DEDUCTION UNDER SECTION 80I A OF THE ACT MADE BY THE ASSESSEE BECAUSE THE ASSESSEE HAD TAKEN THE INITIAL ASSESSMENT YEAR AS THE YEAR IN WHICH IT HAD 3 ITA NO.44 /MDS/2016 CLAIMED DEDUCTION UNDER SECTION 80IA OF THE ACT INS TEAD OF THE INITIAL ASSESSMENT YEAR IN WHICH THE ASSESSEE C OMMENCE THE ELIGIBLE BUSINESS FOR COMPUTING THE PERIOD OF D EDUCTION. THOUGH THE ISSUE WAS HELD IN FAVOUR OF THE ASSESSEE BY THE HONBLE JURISDICTIONAL HIGH COURT, THE LEARNED ASSE SSING OFFICER OPINED THAT HE NEED NOT FOLLOW THE SAME BEC AUSE THE MATTER WAS PENDING BEFORE THE APEX COURT BY WAY OF SLP. 5. ON APPEAL, THE LEARNED COMMISSIONER OF INCOME TA X (APPEALS) FOLLOWING THE DECISION OF THE JURISDICTI ONAL HIGH COURT IN THE CASE OF SRI VELAYUTHASAMY SPINNING MIL LS REPORTED IN 231 ITR 368 ALLOWED THE APPEAL OF THE A SSESSEE BY OBSERVING AS UNDER:- 6. I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE APPELLANT AND THE MATERIALS AVAILABLE ON RECORD. A PERUSAL OF THE ASSESSMENT ORDER ITSELF INDICATES TH AT THE ISSUE IS COVERED BY THE JURISDICTIONAL HIGH COURT I N THE CASE OF CIT VS. SRI VELAYUTHASAMY SPINNING MILLS REPORTED IN 231 ITR 368. THE ASSESSING OFFICER HAS ADDED THIS AMOUNT SINCE THE DEPARTMENT HAS FILED SL P BEFORE THE SUPREME COURT CHALLENGING THE ABOVE DECISIONS. 6.1 IN VIEW OF THE BINDING DECISION OF THE JURISDIC TIONAL HIGH COURT IN THE CASE OF CIT VS. SRI VELAYUTHASAMY SPINNING MILLS THE 80IA CLAIM OF THE ASSESSEE TO THE EXTENT OF RS.88,91,835/- IS ALLOWED. 6. BEFORE US, THE LEARNED DEPARTMENTAL REPRESENTATI VE ARGUED IN SUPPORT OF THE ORDER OF THE LEARNED ASSES SING 4 ITA NO.44 /MDS/2016 OFFICER WHILE AS THE LEARNED AUTHORIZED REPRESENTAT IVE ARGUED IN SUPPORT OF THE ORDER OF THE LEARNED COMMI SSIONER OF INCOME TAX (APPEALS). 7. WE HAVE HEARD THE RIVAL CONTENTIONS AND CAREFULL Y PERUSED THE MATERIAL ON RECORD. ON A PERUSAL OF THE ASSESSMENT ORDER, IT APPEARS THAT THE LEARNED ASSES SING OFFICER WAS OF THE VIEW THAT SINCE THE REVENUE PREF ERRED AN APPEAL AGAINST THE DECISION OF THE JURISDICTIONAL H IGH COURT IN THE CASE OF SRI VELAYUDHASWAMY SPINNING MILLS PVT.L TD. CITED SUPRA BEFORE THE HONBLE SUPREME COURT, THE ISSUE H AS NOT BECOME FINAL. HOWEVER, WE FIND THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) BY FOLLOWING T HE DECISION OF THE JURISDICTIONAL HIGH COURT IN THE CA SE OF SRI VELAYUDHASWAMY SPINNING MILLS PVT.LTD. CITED SUPRA HAS RIGHTLY ALLOWED THE CLAIM OF THE ASSESSEE UNDER SEC TION 80IA OF THE ACT. FURTHER, IT IS NOT THE CASE OF THE REVE NUE THAT THE JUDGMENT OF THE HONBLE MADRAS HIGH COURT IN THE CA SE VELAYUDHASWAMY SPINNING MILLS P. LTD (SURPA) IS STA YED BY THE HONBLE APEX COURT. IT IS PERTINENT TO MENTION THAT IN THE ABSENCE OF ANY STAY GRANTED BY THE HONBLE APEX COU RT 5 ITA NO.44 /MDS/2016 AGAINST THE OPERATION OF THE JUDGMENT OF THE HONBL E MADRAS HIGH COURT, ALL THE LOWER JUDICIARIES AS WELL AS QU ASI JUDICIAL AUTHORITIES ARE BOUND TO FOLLOW THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT. SINCE THE LEARNED COMMI SSIONER OF INCOME TAX (APPEALS) HAS RIGHTLY FOLLOWED THE DECI SION OF THE HONBLE JURISDICTIONAL MADRAS HIGH COURT(SUPRA) AND HELD THE ISSUE IN FAVOUR OF THE ASSESSEE, WE DO NOT FIND IT NECESSARY TO INTERFERE WITH THE ORDERS OF THE LEARNED COMMISS IONER OF INCOME TAX (APPEALS). THEREFORE WE HEREBY CONFIRM THE ORDERS OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS). 8. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON 22 ND APRIL, 2016 SD/- SD/- ( . . . ) ( . ) (N.R.S.GANESAN) ( A.M OHAN ALANKAMONY ) # % / JUDICIAL MEMBER % / ACCOUNTANT MEMBER # /CHENNAI, ( /DATED 22 ND APRIL, 2016 SOMU *+ ,+ /COPY TO: 1. APPELLANT 2. RESPONDENT 3. - () /CIT(A) 4. - /CIT 5. + 1 /DR 6. /GF