DCIT, Circle , Parwanoo V. Altruist Technologies Pvt. Ltd., Shimla

ITA 447/CHANDI/2018

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 2011 (ITAT-CHANDIGARH)
• Duration Of Justice: 7 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-11-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 11-04-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: DR GULSHAN RAJ
• Keywords: Reason to believe

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, A, CHANDIGARH , !' # $ % &' , '( BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ./ ITA NOS. 447 TO 449/CHD/2018 / ASSESSMENT YEARS : 2010-11 TO 2012-13 THE DCIT, CIRCLE, PARWANOO M/S ALTRUIST TECHNOLOGIES PVT. LTD., 4 TH FLOOR,BEHIND HOTEL FIRHILL, NEAR TUNNEL NO. 103,SHIMLA (H.P.) ./PAN NO: AAFCA3725N (APPEAL AGAINST THE ORDER OF CIT(A) ,SHIMLA DATED 30.01.2018) / APPELLANT /RESPONDENT ! /ASSESSEE BY : DR. GULSHAN RAJ, CIT DR ' ! / REVENUE BY : SH. ROHIT GOEL, CA % # ) * '( /DATE OF HEARING : 09.10.2018 & ./ ITA NOS. 793 & 794 /CHD/2018 / ASSESSMENT YEARS : 2013-14 & 2014-2015 THE DCIT, CIRCLE, PARWANOO M/S ALTRUIST TECHNOLOGIES PVT. LTD., 4 TH FLOOR, BEHIND HOTEL FIRHILL,NEAR TUNNEL NO. 103,SHIMLA (H.P.) ./PAN NO: AAFCA3725N (APPEAL AGAINST THE ORDER OF CIT(A) ,SHIMLA DATED 21.03.2018) / APPELLANT /RESPONDENT ! /ASSESSEE BY : SH. ASHISH GUPTA, CIT DR ' ! / REVENUE BY : SH. ROHIT GOEL, CA % # ) * '( /DATE OF HEARING : 18.10.2018 +,-. * '( / DATE OF PRONOUNCEMENT : 16.11. 2018 '/ / ORDER ITA NO.447 TO 449 & 793-794-C-18- M/S ALTRUIST TECHNOLOGIES PVT LTD, SHIMLA 2 PER BENCH: THE CAPTIONED APPEALS HAVE BEEN PREFERRED BY THE RE VENUE AGAINST THE SEPARATE ORDERS OF THE COMMISSIONER OF INCOME T AX (APPEALS), SHIMLA [HEREINAFTER REFERRED TO AS CIT(A)]. 2. BEFORE PROCEEDING TO ADJUDICATE THESE APPEALS OF THE REVENUE, IT IS PERTINENT TO MENTION HERE THAT THE APPEALS OF THE A SSESSEE FOR THE SAME ASSESSMENT YEARS WERE HEARD ON 08.08.2018 BY THE A BENCH OF THE TRIBUNAL, HOWEVER, AT THAT TIME IT WAS NOT INFORMED BY THE PARTIES THAT THE APPEALS OF THE ASSESSEE FOR THE SAME ASSESSMENT YEA RS WERE ALSO PENDING. HOWEVER, THE ISSUES IN ASSESSEE APPEALS WERE DIFFER ENT FROM THE ISSUES INVOLVED IN THE PRESENT REVENUES APPEALS, HENCE, AS PER THE SUBMISSIONS OF BOTH THE LD. REPRESENTATIVES OF THE PARTIES, THE SE APPEALS OF THE REVENUE COULD BE DISPOSED OF INDEPENDENT OF THE ASSESSEES APPEALS. HENCE, WE PROCEED TO ADJUDICATE THESE APPEALS. 3. THE COMMON ISSUE TAKEN BY THE REVENUE IN ALL THE SE APPEALS IS REGARDING THE ELIGIBILITY OF THE ASSESSEE IN CLAIM ING DEDUCTION U/S 80IC OF THE ACT ON THE GROUND THAT THE BUSINESS ACTIVITY OF THE ASSESSEE DOES NOT FALL UNDER SCHEDULE XIV OF THE INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT'). SINCE THIS COMMON ISSUE IS INVOLVED IN ALL THE APPE ALS, THEREFORE, THESE HAVE BEEN HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS COMMON ORDER. ITA NO. 447/CHD/2018 FOR ASSESSMENT YEAR 2010-11 IS TAKEN AS A LEAD CASE. THE MODIFIED GROUNDS TAKEN BY THE REVENUE REA DS AS UNDER:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS . 21,70,58,065/- MADE BY THE ASSESSING OFFICER BY DISALLOWING CLAIM U/S 80IC, IGNORING THE FACT THAT THE ITA NO.447 TO 449 & 793-794-C-18- M/S ALTRUIST TECHNOLOGIES PVT LTD, SHIMLA 3 BUSINESS ACTIVITY OF THE ASSESSEE DOES NOT FALL UND ER SCHEDULE XIV OF THE INCOME-TAX ACT, 1961. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN HOLDING THAT ASSESSEE IS ENTITLED FOR DEDUCTION U/S 80IC(2)(B) OF THE INCOME -TAX ACT, 1961. 3. IT IS PRAYED THAT THE ORDER OF LD. CIT(A) BE SET-AS IDE AND THAT OF THE ASSESSING OFFICER RESTORED 4. THE APPELLANT CRAVES LEAVE TO ADD ANY OTHER GROUND OF APPEAL WHICH MAY ARISE AT THE TIME OF HEARING. 4. THE BRIEF FACTS RELEVANT TO THE ISSUE ARE THAT A SSESSEE IS ENGAGED IN THE BUSINESS OF INFORMATION AND COMMUNICATION TECHN OLOGY SINCE ASSESSMENT YEAR 2006-07. THE ASSESSEE IS FUNCTIONI NG FROM TWO UNITS I.E UNIT -II AND UNIT-III. THE ASSESSEE CLAIMED DE DUCTION U/S 80IC OF THE ACT IN RESPECT OF INCOME FROM BOTH THE UNITS, HOWEV ER, THE ASSESSING OFFICER DENIED THE SAME OBSERVING THAT ASSESSEE DID NOT QUALIFY FOR EXEMPTION U/S 80IC OF THE ACT. TO PROPERLY ADJUDI CATE THE ISSUE, WE DEEM IT FIT TO REPRODUCE THE RELEVANT PROVISIONS OF SECTION 80IC OF THE ACT, WHICH READ ARE AS UNDER:- SPECIAL PROVISIONS IN RESPECT OF CERTAIN UNDERTAKI NGS OR ENTERPRISES IN CERTAIN SPECIAL CATEGORY STATES. 80-IC. (1) WHERE THE GROSS TOTAL INCOME OF AN ASSESSEE IN CLUDES ANY PROFITS AND GAINS DERIVED BY AN UNDERTAKING OR AN ENTERPRISE FROM ANY BUSINESS REFERRED TO IN SUB-SECTION (2), T HERE SHALL, IN ACCORDANCE WITH AND SUBJECT TO THE PROVISIONS OF TH IS SECTION, BE ALLOWED, IN COMPUTING THE TOTAL INCOME OF THE ASSES SEE, A DEDUCTION FROM SUCH PROFITS AND GAINS, AS SPECIFIED IN SUB-SE CTION (3). 12. SINCE INTERPRETATION OF THE STATUTE (THE ACT) I S INVOLVED, WE DEEM IT APPROPRIATE TO REPRODUCE THE RELEVANT CLAUS ES THEREOF: 80-IC. (1) . 2. THIS SECTION APPLIES TO ANY UNDERTAKING OR ENTER PRISE,- ITA NO.447 TO 449 & 793-794-C-18- M/S ALTRUIST TECHNOLOGIES PVT LTD, SHIMLA 4 (A) WHICH HAS BEGUN OR BEGINS TO MANUFACTURE OR PRODUCE ANY ARTICLE OR THING, NOT BEING ANY ARTICLE OR THING SP ECIFIED IN THE THIRTEENTH SCHEDULE, OR WHICH MANUFACTURES OR PRODU CES ANY ARTICLE OR THING, NOT BEING ANY ARTICLE OR THING SP ECIFIED IN THE THIRTEENTH SCHEDULE AND UNDERTAKES SUBSTANTIAL EXPA NSION DURING THE PERIOD BEGINNING- (I) .. (II) ON THE 7TH DAY OF JANUARY, 2003 AND ENDING BEFORE T HE 1ST DAY OF APRIL, 2012, IN ANY EXPORT PROCESSING ZONE O R INTEGRATED INFRASTRUCTURE DEVELOPMENT CENTRE OR IND USTRIAL GROWTH CENTRE OR INDUSTRIAL ESTATE OR INDUSTRIAL PA RK OR SOFTWARE TECHNOLOGY PARK OR INDUSTRIAL AREA OR THEM E PARK, AS NOTIFIED BY THE BOARD IN ACCORDANCE WITH T HE SCHEME FRAMED AND NOTIFIED BY THE CENTRAL GOVERNMEN T IN THIS REGARD, IN THE STATE OF HIMACHAL PRADESH OR TH E STATE OF UTTARANCHAL; (B) WHICH HAS BEGUN OR BEGINS TO MANUFACTURE OR PR ODUCE ANY ARTICLE OR THING, SPECIFIED IN THE FOURTEENTH SCHED ULE OR COMMENCES ANY OPERATION SPECIFIED IN THAT SCHEDULE, OR WHICH MANUFACTURES OR PRODUCES ANY ARTICLE OR THING, SPEC IFIED IN THE FOURTEENTH SCHEDULE OR COMMENCES ANY OPERATION SPEC IFIED IN THE SCHEDULE AND UNDERTAKES SUBSTANTIAL EXPANSION DURIN G THE PERIOD BEGINNING- (I) . (II) ON THE 7TH DAY OF JANUARY, 2003 AND ENDING BEFORE T HE 1ST DAY OF APRIL, 2012, IN THE STATE OF HIMACHAL PRADES H OR THE STATE OF UTTARANCHAL; 13. RELEVANT PORTION OF THE SCHEDULE IS EXTRACTED A S UNDER: [THE FOURTEENTH SCHEDULE [SEE SECTION 80-IC(2)] LIST OF ARTICLES OR THINGS OR OPERATIONS PART C FOR THE STATE OF HIMACHAL PRADESH AND THE STATE OF UTTARANCHAL S.NO. ACTIVITY OR ARTICLE OR THING OR OPERATION 4/6 DIGIT EXCISE CLASSIFICA TION SUB-CLAUSE UNDER NIC CLASSIFICATI ON ON1998 ITC(HS) CLASSIFICA- TION 4/6 DIGIT 13 INFORMATION AND COMMUNICATION TECHNOLOGY INDUSTRY, COMPUTER HARDWARE, CALL CENTRE 84.71 300006/7 ITA NO.447 TO 449 & 793-794-C-18- M/S ALTRUIST TECHNOLOGIES PVT LTD, SHIMLA 5 4. THE ASSESSEE CLAIMED THAT IT WAS COVERED BY THE ITEM MENTIONED AT SR.NO.13 OF PART C OF THE XIV SCHEDULE (AS REPR ODUCED ABOVE) AND HENCE, WAS ELIGIBLE FOR DEDUCTION U/S 80IC(2) OF TH E ACT. THE ASSESSING OFFICER REJECTED THE CLAIM OF DEDUCTION U/S 80IC O F THE ACT HOLDING THAT THE ASSESSEE HAD NOT OBTAINED CENTRAL EXCISE 4/6 DI GIT CLASSIFICATION OR NATIONAL INDUSTRIAL CLASSIFICATION (NIC) CODE ON 19 98, STIPULATED AT POINT NO. 13 AND, HENCE, WAS NOT ELIGIBLE FOR STATUTORY D EDUCTION. THE LD. CIT(A), HOWEVER, REVERSED THE ORDER OF THE ASSESS ING OFFICER AND HELD THAT THE ASSESSEE WAS ENTITLED TO DEDUCTION U/S 80 IC OF THE ACT WHILE RELYING UPON THE DECISION OF THE HON'BLE JURISDICT IONAL HIGH COURT OF HIMACHAL PRADESH IN THE OWN CASE OF ASSESSEE IN 201 7 (8) TMI 1299 ALTRUIST TECHNOLOGIES PVT LTD VS. DCIT, WHEREIN , THE HON'BLE HIGH COURT IN PARA 14 OF THE JUDGEMENT HAS OBSERVED AS UNDER:- 14. THAT THE ACTIVITY CARRIED OUT BY THE ASSESSEE FALLS IN THE CATEGORIES SPECIFIED IN THE CATEGORY SO MENTIONED A T SR. NO.13 OF THE SCHEDULE, IS NOT IN DISPUTE. THE ONLY OBJECTION BEING THAT SINCE THE ASSESSEE DOES NOT POSSESS NIC CODE AND EXCISE C LASSIFICATION, IT IS NOT ENTITLED TO THE STATUTORY DEDUCTION. IT I S HERE, WE FIND THE ASSESSING OFFICER TO HAVE COMMITTED GRAVE ILLEGALIT Y IN CORRECTLY AND COMPLETELY CONSTRUING THE PROVISIONS OF THE SCH EDULE. IN FACT, FROM THE OBSERVATIONS OF THE ASSESSING OFFICER, REP RODUCED SUPRA, IT STANDS ADMITTED THAT THE CODE / CLASSIFICATION, REP RODUCED SUPRA, IS REQUIRED ONLY FOR SUCH OF THOSE ACTIVITIES, WHICH F ALL UNDER THE CATEGORY OF MANUFACTURE. ASSESSEE IS RUNNING A CA LL CENTRE. IT DOES NOT DEAL WITH COMPUTER HARDWARE OR IS IN THE B USINESS OF MANUFACTURING INFORMATION AND COMMUNICATION TECHNOL OGY. IT IS NOT INTO THE BUSINESS OF MANUFACTURE OR PRODUCTION OF ANY ARTICLES REFERRED TO IN ITEM AT SR. NO.13. IT CARRIES OUT OP ERATION OF SUCH ITEMS, WHICH DO NOT REQUIRE REGISTRATION OR NECESSI TATE OBTAINING PERMISSION UNDER THE PROVISIONS OF THE CENTRAL EXCI SE ACT OR NATIONAL INDUSTRIAL (ACTIVITY) CLASSIFICATION, 1998 , VIS--VIS CODE 30006/7. SUB-CLASS UNDER NIC CLASSIFICATION ON 1998 AT 30006/7 READS AS UNDER: 3006: MANUFACTURE OF COMPLETE DIGITAL SYSTEMS COMP RISING A CENTRAL PROCESSING UNIT, AN INPUT UNIT AND AN OUTPU T UNIT; DIGITAL ITA NO.447 TO 449 & 793-794-C-18- M/S ALTRUIST TECHNOLOGIES PVT LTD, SHIMLA 6 SYSTEMS WHICH INCLUDE PERIPHERAL UNITS SUCH AS ADDI TIONAL INPUT/OUTPUT UNITS, ADDITIONAL STORAGE UNITS ETC. 30007: MANUFACTURE OF COMPUTER PERIPHERALS LIKE MAG NETIC DISC/FLOPPY/WINCHESTER DISK DRIVES, MAGNETIC TAPE/C ASSETTE/CARTRIDGE DRIVES; PUNCHY TAPE READERS, CURVE FOLLOWERS, GRAPH PLOTTERS: SERIAL/DAISY WHEEL/LINE PRINTERS. DATA ENTRY EQUIPM ENT WITH OR WITHOUT VISUAL DISPLAY; MAGNETIC OR OPTICAL READERS ; MACHINES FOR TRANSCRIBING DATA ONTO DATA MEDIA IN CODED FORM; AN D SO FORTH. 15. NOW, IF THE ASSESSEE IS OTHERWISE NOT SUBJECTED TO ANY OF THE PROVISIONS OF THE STATUTE, RULES, NOTIFICATIONS, CI RCULARS, UNDER THE SAID PROVISIONS, AND WHEN IT DOES NOT RELATE TO THE ACTIVITY OF OPERATIONS, SO CARRIED OUT BY HIM, THAT OF RUNNING A CALL CENTRE, FOR WHICH, IN ANY EVENT, THE AFORESAID PROVISIONS ARE N OT APPLICABLE, THEN OBVIOUSLY IT WOULD BE INCORRECT AND ILLEGAL TO READ THE PROVISIONS RELATING TO THE CODE INTO THE EXPRESSION CALL CENT RE, WHICH IS AN ACTIVITY, TOTALLY DISTINCT AND SEPARATE FROM MANUF ACTURE OR PRODUCTION OF INFORMATION AND COMMUNICATION TECHNO LOGY. IT IS IN THIS BACKDROP, WE FIND THE ASSESSING OFFICER TO HAV E ERRED IN FORMING ITS OPINION/REASON TO BELIEVE THAT THE ASSESSEE, WA S NOT ENTITLED TO STATUTORY DEDUCTIONS. THE INTERPRETATION IS PERVERS E, RESULTING INTO TRAVESTY OF JUSTICE. 5. SINCE THE ISSUE IS SQUARELY COVERED BY THE DECIS ION OF THE HON'BLE JURISDICTIONAL HIGH COURT AND LD. DR COULD NOT POIN T OUT ANY DISTINGUISHING DECISION, HENCE, WE DO NOT FIND AN Y INFIRMITY IN THE ORDER OF THE CIT(A) WHILE RELYING UPON THE DECISION OF THE HON'BLE HIGH COURT OF HIMACHAL PRADESH (SUPRA) ON THIS ISSUE. THERE IS NO MERIT IN THE APPEALS OF THE REVENUE AND , HENCE, THE SAME THEREFORE, DISMISSED. THE ISSUE BEING COMMON IN ALL THE CAPTIONED APPEALS , HENCE, ALL THESE APPEALS OF THE REVENUE ARE HEREBY DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 16.11.2018 SD/- SD/- ( # $ % &' / ANNAPURNA GUPTA) '( / ACCOUNTANT MEMBER ( / SANJAY GARG) / JUDICIAL MEMBER DATED : 16.11.2018 ITA NO.447 TO 449 & 793-794-C-18- M/S ALTRUIST TECHNOLOGIES PVT LTD, SHIMLA 7 .. $% &' (' / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ) * / CIT 4. ) * ( )/ THE CIT(A) 5. '+, - , . - , /01,2 / DR, ITAT, CHANDIGARH 6. ,1 34 / GUARD FILE $% ) / BY ORDER, 5 ' / ASSISTANT REGISTRAR