The DCIT, Circle-4, Baroda V. Moflex Suspensions Pvt.Ltd., Baroda

ITA 454/AHD/2012

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 0098 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 8 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-11-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 28-10-2016
• Assessment Year: 2005-2006
• Appeal Filed On: 17-02-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: M K PATEL
• Keywords: Difference of opinion; Change of opinion
• Section: 143(3); 80IB; 147; 148

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER AND SHRI MAHAVIR PRASAD, JUDICIAL MEMBER ./ ITA NO. 454/AHD/2012 & CO NO.87/AHD/2012 / ASSESSMENT YEAR: 2005-2006 DCIT, CIRCLE-4, BARODA VS. M/S. MOFLEX SUSPENSIONS PVT LTD, 301, SILVER POINT, ANAND SOCIETY, B/H. EXPRESS HOTEL, RC DUTT ROAD, ALKAPURI, BARODA PAN : AABCM 8271 B / (APPELLANT) / (RESPONDENT) & CROSS-OBJECTOR REVENUE BY : SHRI MUDIT NAGPAL, SR DR ASSESSEE BY : SHRI M.K. PATEL, AR / DATE OF HEARING : 28/10/2016 / DATE OF PRONOUNCEMENT: 09/11/2016 / O R D E R PER N.K. BILLAIYA, ACCOUNTANT MEMBER: ITA NO. 454/AHD/2012 & CO NO.87/AHD/2012 ARE APPEAL BY REVENUE AND CROSS-OBJECTION BY THE ASSESSEE RESPECT IVELY; BOTH ARE DIRECTED AGAINST THE VERY SAME ORDER OF THE CIT(A)-III, BARO DA DATED 21.11.2011 PERTAINING TO AY 2005-06. 2. THE REVENUE IS AGGRIEVED BY THE ORDER OF LD. CIT (A) ALLEGING THAT THE CIT(A) ERRED IN DELETING THE ADDITION MADE ON ACCOU NT OF DISALLOWANCE OF DEDUCTION CLAIMED U/S 80IB OF THE ACT. 3. IN ITS CROSS-OBJECTION, THE ASSESSEE HAS CHALLEN GED THE VALIDITY OF THE NOTICE ISSUED U/S. 148 OF THE ACT, THEREBY ALLEGING THAT THE ASSESSMENT ORDER ITA NO. 454/AHD/2012 & CO NO.87/AHD/2012 ASSESSEE - MOFLEX SUSPENSION PVT LTD AY 2005-2006 2 DATED 02.12.2010 MADE U/S 147 R.W.S. 143(3) OF THE ACT IS UNLAWFUL AND LIABLE TO BE QUASHED. 4. WE HEARD THE CROSS-OBJECTION OF THE ASSESSEE FIR ST SINCE IT GOES TO THE ROOT OF THE MATTER. 5. HAVING HEARD THE RIVAL SUBMISSIONS, WE HAVE CARE FULLY PERUSED THE ORDERS OF THE AUTHORITIES BELOW. WE FIND THAT IN T HIS CASE THE ORIGINAL ASSESSMENT ORDER WAS MADE U/S 143(3) OF THE ACT VID E ORDER DATED 31.12.2007. SUBSEQUENTLY, THE AO ISSUED NOTICE U/S 148 OF THE ACT STATING THAT DEDUCTION U/S 80IB OF THE ACT ALLOWED TO THE A SSESSEE IS NOT AS PER THE PROVISIONS OF THE ACT AND PROPOSED TO WITHDRAW THE SAID DEDUCTION BY REOPENING THE ASSESSMENT. WE FIND THAT THE INITIAL YEAR OF THE CLAIM OF DEDUCTION IS ASSESSMENT YEAR 2003-04. IN THAT ASSE SSMENT YEAR, THE AO DID NOT ALLOW THE CLAIM OF DEDUCTION U/S 80IB OF THE AC T TO THE ASSESSEE. THE ASSESSEE AGITATED THE MATTER BEFORE THE FIRST APPEL LATE AUTHORITY AND THE FIRST APPELLATE AUTHORITY ALLOWED THE CLAIM OF DEDU CTION TO THE ASSESSEE. THE DR COULD NOT BRING ANY EVIDENCE TO SHOW THAT SU CCESSIVE APPEALS WERE PREFERRED BY THE REVENUE. THEREFORE, THE MATTER H AS ATTAINED FINALITY BY THE ORDER OF THE FIRST APPELLATE AUTHORITY VIDE ORDER D ATED 19.10.2006. WE ALSO FIND THAT IN SUBSEQUENT ASSESSMENT YEAR, I.E. AY 20 04-05, THE ASSESSING OFFICER HIMSELF HAD ALLOWED THE CLAIM OF DEDUCTION U/S 80IB OF THE ACT. THUS, THE ASSESSEE WAS ALLOWED DEDUCTION U/S 80IB O F THE ACT FOR TWO CONSECUTIVE ASSESSMENT YEARS. THEREFORE, IN OUR CON SIDERED OPINION, THE REOPENING OF THE ASSESSMENT UNDER CONSIDERATION IS NOTHING BUT CHANGE OF OPINION BY THE ASSESSING OFFICER. 6. DURING THE COURSE OF ORIGINAL ASSESSMENT PROCEED INGS ITSELF, THE ASSESSEE HAD EXPLAINED ITS CLAIM MADE U/S 80IB OF T HE ACT VIDE REPLY DATED 14.11.2007. THE RELEVANT PART OF THE SAID REPLY RE ADS AS UNDER:- ITA NO. 454/AHD/2012 & CO NO.87/AHD/2012 ASSESSEE - MOFLEX SUSPENSION PVT LTD AY 2005-2006 3 .. 5. AT POINT NO.20 OF YOUR NOTICE DATED 16.04.2007, YOU HAVE REQUIRED US TO JUSTIFY THE CLAIM OF DEDUCTION U/S 80-IB OF THE INC OME-TAX ACT, 1961 AND TO STATE WHETHER ALL THE CONDITIONS LAID DOWN FOR CLAI MING THE SAID DEDUCTION HAVE BEEN FULFILLED. IN THIS REGARD, IT IS SUBMITTED THAT THE CLAIM FOR DEDUCTION U/2 80-IB(3)(II) OF RS.32,10,114/- IS IN ACCORDANCE WITH LAW AS THE COM PANY HAS FULFILLED ALL THE CONDITIONS LAID DOWN IN THE ACT FOR THE PURPOSES OF CLAIMING THE SAID DEDUCTION. IT WOULD BE PERTINENT TO STATE HERE THAT IN THE ASS ESSMENT FOR THE AY 2003-04, THE THEN ASSESSING OFFICER HAD DISALLOWED THE CLAIM FOR DEDUCTION U/S 80-IB ON THE GROUND THAT THE COMPANY IT DID NOT FALL WITH IN THE DEFINITION OF SMALL- SCALE INDUSTRY. HOWEVER, THE LD. CIT(APPEALS)-III, BARODA VIDE HIS ORDER FOR THE AY 2003-04 IN APPEAL NO.CAB/III/43/06-07 DATED 19 TH OCTOBER 2006, HAS CATEGORICALLY HELD THAT . THE APPELLANT HAS SATISFIED ALL THE C ONDITIONS NECESSARY FOR BEING QUALIFIED AS A SMALL-SCALE INDUSTRIAL UNDERTA KING IN TERMS OF NOTIFICATIONS AND CLARIFICATORY CIRCULARS ISSUED IN THIS REGARD BY THE GOVERNMENT OF INDIA. IN VIEW THEREOF, IT IS HELD T HAT THE ACTION OF THE AO IN DENYING THE DEDUCTION U/S 80IB ON THE GROUND THAT T HE APPELLANT WAS NOT A SMALL-SCALE INDUSTRIAL UNDERTAKING WAS NOT JUSTIFIE D. THE AO IS DIRECTED TO ALLOW THE DEDUCTION U/S 80IB AS CERTIFIED BY THE AU DITORS. IN THE ASSESSMENT FOR THE AY 2004-05, YOUR KIND HONOUR HAD ALSO ALLOW ED THE SAID DEDUCTION U/S 80-IB OF THE ACT. IT IS, THEREFORE, PRAYED THA T THE DEDUCTION BE ALLOWED, AS CLAIMED. 7. THE HONBLE JURISDICTIONAL HIGH COURT IN THE CAS E OF SAURASHTRA CEMENT & CHEMICAL INDUSTRIES LTD. VS. CIT , REPORTE D IN 123 ITR 669 (GUJ), HAS HELD THAT WITHOUT DISTURBING THE RELIEF GRANTED IN THE INITI AL YEAR, THE ITO CANNOT EXAMINE THE QUESTION AGAIN AND DECIDE TO WIT HHOLD OR WITHDRAW THE RELIEF ALREADY GRANTED . A SIMILAR VIEW WAS TAKEN BY THE HONBLE HIGH CO URT OF BOMBAY IN THE CASE OF CIT VS. PAUL BROTHERS, REPORT ED IN (1995) 216 ITR 548 (BOM) AND ALSO IN THE CASE OF CIT VS. WESTERN OUTDO OR INTERACTIVE P. LTD., REPORTED IN (2012) 349 ITR 309. ITA NO. 454/AHD/2012 & CO NO.87/AHD/2012 ASSESSEE - MOFLEX SUSPENSION PVT LTD AY 2005-2006 4 8. CONSIDERING THE FACTS IN TOTALITY, IN THE LIGHT OF THE RATIO LAID DOWN BY THE HONBLE HIGH COURTS (SUPRA), THE NOTICE ISSUED U/S 148 OF THE ACT IS LIABLE TO BE QUASHED AND ACCORDINGLY WE QUASH THE A SSESSMENT ORDER MADE U/S 143(3) R.W.S. 147 OF THE ACT. THE CROSS OBJECTI ON OF THE ASSESSEE IS ALLOWED. 9. SINCE WE HAVE QUASHED THE RE-ASSESSMENT ORDER, W E DO NOT FIND IT NECESSARY TO DELVE INTO THE MERITS OF THE CASE. 10. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISS ED AND THE CROSS- OBJECTION OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE COURT ON 9 TH NOVEMBER, 2016 AT AHMEDABAD. SD/- SD/- (MAHAVIR PRASAD) JUDICIAL MEMBER (N.K. BILLAIYA) ACCOUNTANT MEMBER AHMEDABAD; DATED 09/11/2016 BIJU T., PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ! # / CONCERNED CIT 4. # ( ) / THE CIT(A) , AHMEDABAD 5. & ! , ! , / DR, ITAT, AHMEDABAD 6. / GUARD FILE . / BY ORDER, TRUE COPY / ( DY./ASSTT.REGISTRAR) # $, / ITAT, AHMEDABAD