EA INFRASTRUSTURE OPERATIONS P. LTD, MUMBAI V. ACIT 10(2), MUMBAI

ITA 4945/MUM/2009

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 55585 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 1 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-09-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: I
• Next Hearing Date: 13-04-2011
• Assessment Year: 2004-2005
• Appeal Filed On: 28-08-2009
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: ARUN SHATE
• Keywords: Assessment record
• Section: 143(3); 6; 263; 154

Judgement Text

1 ITA NOS. 4924 &4945/MUM/2009 (ASST YEARS 200304 & 2004-05 ) . IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI I BENCH MUMBAI BENCHES, MUMBAI BEFORE SHRI J SUDHAKAR REDDY, AM & SHRI VIJAY PAL RAO, JM ITA NOS. 4924 &4945/MUM/2009 (ASST YEARS 200304 & 2004-05 ) M/S EA INFRASTRUCTURE OPERATIONS P LTD SUITE B1-34/A DEONAR ANCILLARY INDL. COMPLEX GOVANDI (W) - MUMBAI 43 VS THE ASST COMMR OF INCOME TAX 10(2), MUMBAI (APPELLANT) (RESPONDENT) PAN NO. AAACE8218R ASSESSEE BY SHRI ARUN SHATE REVENUE BY SHRIA SUNIL KUMAR SINGH DT.OF HEARING 19 TH SEPT 2011 DT OF PRONOUNCEMENT 28 TH ,SEPT 2011 PER VIJAY PAL RAO, JM THESE APPEALS BY THE ASSESSEE ARE DIRECTED AGAINST TWO SEPARATE ORDERS BOTH DATED 25 TH JUNE 2009 OF THE CIT(A) FOR THE AYS 2003-04 AND 2 004-05 RESPECTIVELY. 2 THE ASSESSEE HAS RAISED THE FOLLOWING COMMON GROU NDS: I) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT(A) OUGHT TO HAVE HELD THAT THERE IS NO MISTAKE APPARENT FROM THE RECORD, THE ASSESSING OFFICER CANNOT ASSUME JURISDICTION TO PROCE ED WITH RECTIFICATION U/S 154 AND WITHDRAW THE RELIEF ORIGINALLY GRANTED U/S 80 IA AND, THEREFORE, ERRED IN CONFIRMING ORDER U/S 154. II) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD CIT(A) ERRED IN DISMISSING THE APPEAL WITHOUT CONSIDERING THE GROUND NO.4 MENTIONED HEREIN BELOW WHICH GOES TO THE ROOT OF THE ORDER U/S 154. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LD ASSESSING OFFICER OUGHT TO HAVE HELD THAT THERE IS N O MISTAKE APPARENT FROM THE RECORD IN ALLOWING THE CLAIM U/S 80IA. 2 ITA NOS. 4924 &4945/MUM/2009 (ASST YEARS 200304 & 2004-05 ) . III ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD CIT(A) OUGHT TO HAVE HELD THAT THE FORM NO. 10CCB WAS FILE D ALONG WITH THE RETURN OF INCOME AS NO OBJECTION WAS RAISED FOR REGARDING NON AV AILABILITY OF FORM NO.10CCB ON RECORD WHILE ALLOWING THE CLAIM FOR EXEMPT ION U/S 80IA AFTER CARRYING OUT THREADBARE ENQUIRIES AND THUS THERE IS NO MISTAKE APPARENT FROM RECORD WHICH CAN BE RECTIFIED U/S 154 OF THE I T ACT 1 961. IV ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT(A) WHEN THE CERTIFICATE WAS ALREADY FILED ALONG WITH TH E RETURN ERRED IN HOLDING THAT THERE IS NO DISPUTE REGARDING THE MATTER THAT A CERTIFICATE U/S 10CCB OUGHT TO HAVE BEEN FILED WITH RETURN OF INCOME AND, THEREFORE, ERRED IN CONFIRMING ORDER U/S 154. 3 THE ASSESSEE FILED ITS RETURN OF INCOME AND CLAIM ED DEDUCTION U/S 80IA BECAUSE THE ASSESSEE WAS ENGAGED IN THE BUSINESS OF BUILD, OWN, OPERATE & TRANSFER (BOOT) ENVIRONMENTAL INFRASTRUCTURE PROJEC T FOR TREATMENT OF HAZARDOUS BIO MEDICAL WASTE. THE ASSESSMENTS FOR THESE YEARS WE RE COMPLETED U/S 143(3) OF THE I T ACT AND THE CLAIM OF DEDUCTION U/S 80IA WAS ALLOW ED. SUBSEQUENTLY, THE ASSESSING OFFICER INVOKED SECTION 154 OF THE I T ACT ON THE G ROUND THAT FROM THE RECORDS, IT WAS SEEN THAT THE ASSESSEE WAS WRONGLY ALLOWED U/S 80IA AS IT HAS FAILED TO FURNISH THE AUDIT REPORT REQUIRED UNDER THE PROVISIONS OF SEC. 80IA(7) R.W. R 18BBE OF THE I T RULES. THUS, TO RECTIFY THE ERROR, THE ASSESSING OFFICER ISSUED NOTICE U/S 154 ON 30.1.2008 ASKING THE ASSESSEE TO SHOW CAUSE AS TO WHY THE DE DUCTION WRONGLY ALLOWED U/S 80IA SHOULD NOT BE WITHDRAWN AS THE ASSESSEE FAIL ED TO FURNISH THE AUDIT REPORT REQUIRED U/S 80IA (7) OF THE I T ACT. IN RESPONSE TO SHOW CAUSE NOTICE, THE ASSESSEE SUBMITTED THAT THE REQUIRED AUDIT REPORT IN FORM 10 CCB WAS FILED ALONG WITH THE RETURN. THE ASSESSING OFFICER DID NOT ACCEPT THE E XPLANATION OF THE ASSESSEE AND HELD THAT NO AUDIT REPORT AS REQUIRED U/S 80IA(2) W AS FILED BY THE ASSESSEE. ACCORDINGLY, THE ASSESSING OFFICER HAS WITHDRAWN TH E DEDUCTION U/S 80IA VIDE ORDER DATED 1.4.2008 PASSED U/S 154 OF THE I T ACT. 3 ITA NOS. 4924 &4945/MUM/2009 (ASST YEARS 200304 & 2004-05 ) . 3.1 THE ASSESSEE CHALLENGED THE ACTION OF THE ASSES SING OFFICER BEFORE THE CIT(A). HOWEVER, THE CIT(A) HAS ALSO FOUND THAT THE AUDIT REPORT IN FORM 10CCB WAS NOT FILED BY THE ASSESSEE AND ACCORDINGLY, DISMISSED TH E APPEAL OF THE ASSESSEE 4 BEFORE US, THE LD AR OF THE ASSESSEE HAS SUBMITTE D THAT AS PER THE ACKNOWLEDGEMENT OF THE RETURN, THE ASSESSEE IN COL UMN NO.40(B) HAS DULY MENTIONED THE AUDIT REPORT CONTAINING 16 PAGES FOR THE AY 2003-04 WHEREAS FOR THE AY 2004-05 IN COLUMN 40(B) MENTIONED THE FIGURE 5 WHICH DENOTE, FIVE AUDIT REPORTS INCLUDING FORM 10CCB. THE LD AR HAS FURTHER SUBMI TTED THAT WHEN THE ISSUE OF WHETHER THE ASSESSEE HAS FILED FORM 10CCB AUDIT REP ORT OR NOT IS A DEBATABLE QUESTION OF FACT AND HAVING TWO POSSIBLE VIEWS; THE REFORE, THIS ISSUE CANNOT BE DECIDED U/S 154 OF THE I T ACT. HE HAS FURTHER SUB MITTED THAT EVEN OTHERWISE, THE ISSUE OF DEDUCTION SEC. 80IA WAS PENDING BEFORE TH E APPELLATE AUTHORITIES AND WAS FINALLY DECIDED BY THE TRIBUNAL VIDE ORDER DATED 9 .7.2010 FOR THE AY 2004-05 AND 2006-07 AND NO SUCH OBJECTION WAS RAISED BY THE RE VENUE. THEREFORE, THE AO CANNOT ASSUME JURISDICTION TO PRECEDE U/S 154 FOR W ITHDRAWAL OF THE DEDUCTION U/S 80IA. HE HAS RELIED UPON THE ORDER OF THE COORDINAT E BENCH OF THE TRIBUNAL IN THE CASE OF M/S DODSON LINDBLOM HYDRO POWER (P) LTD DAT ED 4.6.2010 IN ITA NO.3811/MUM/2009 AND SUBMITTED THAT IN THE SAID CAS E, THE TRIBUNAL HAS HELD THAT THE REQUIREMENT OF AUDIT REPORT IS NOT MANDATORY BU T IS REGULATORY AND CAN BE FILED EVEN AT APPELLATE STAGE. HE HAS FURTHER SUBMITTED THAT THE ASSESSEE HAS FILED COPIES OF THE AUDIT REPORT IN FORM 10CCB AND THEREFORE, TH E SAME MAY BE ACCEPTED. 4 ITA NOS. 4924 &4945/MUM/2009 (ASST YEARS 200304 & 2004-05 ) . 4.1 ON THE OTHER HAND, THE LD DR HAS SUBMITTED THAT THE ASSESSING OFFICER AND THE CIT(A) HAVE GIVEN A SPECIFIC FINDING OF THE FACT TH AT THE ASSESSEE DID NOT FILE THE AUDIT REPORT IN FORM 10CCB ALONG WITH THE RETURN O F INCOME. THEREFORE, THERE WAS APPARENT MISTAKE ON RECORD WHEN THE DEDUCTION U/S 8 0IA WAS ALLOWED WITHOUT COMPLIANCE OF THE PROVISIONS OF THE ACT AND THE ASS ESSING OFFICER IS JUSTIFIED IN RECTIFYING THE SAID MISTAKE. HE HAS RELIED UPON TH E ORDERS OF THE LOWER AUTHORITIES. HE HAS PRODUCED THE ASSESSMENT RECORDS OF THE CASE AND SUBMITTED THAT THE ASSESSEE THOUGH FILED OTHER AUDIT REPORT BUT HAS NOT FILED T HE AUDIT REPORT IN FORM 10CCB. 5 WE HAVE CONSIDERED THE RIVAL CONTENTION AS WELL A S THE RELEVANT MATERIAL ON RECORD. ON THE DIRECTION OF THE BENCH, THE LD DR HA S PRODUCED THE ASSESSMENT RECORDS OF THE CASE BEFORE US. THE LD AR THOUGH MA INTAINED THE STAND THAT THE ASSESSEE FILED THE AUDIT REPORT IN FORM 10CCB. FROM THE PERUSAL OF THE ASSESSMENT RECORDS, WE FIND THAT THE AUDIT REPORT FILED BY THE ASSESSEE ALONG WITH THE RETURN OF INCOME DOES NOT CONTAIN THE AUDIT REPORTS IN THE FO RM 10CCB. AS PER SECTION 80IA(7), THE AUDIT REPORT U/S 10CCB IS A CONDITION FOR ADMISSIBILITY OF THE DEDUCTION U/S 80IA. ONCE THE ASSESSING OFFICER FOUND FROM THE RECORDS THAT THE AUDIT REPORT IN FORM 10CCB IS NOT ON THE RECORD, THEN, THE DEDUCTIO N ALLOWED U/S 80IA TO THE ASSESSEE, AT THE TIME OF ORIGINAL ASSESSMENT, WAS C ERTAINLY BY IGNORING THE RELEVANT PROVISIONS OF LAW AND WOULD AMOUNTS AN ERROR APPARE NT ON THE FACE OF THE ORDER TO BE RECTIFIED U/S 154 OF THE ACT. THUS, IN OUR OPIN ION, THERE WAS NO ILLEGALITY IN ASSUMING JURISDICTION U/S 154 OF THE ACT BY THE ASS ESSING OFFICER UNDER GIVEN CIRCUMSTANCES WHEN THE AUDIT REPORT IN FORM 10CCB W AS NOT FOUND ON THE RECORDS OF THE ASSESSMENT. 5 ITA NOS. 4924 &4945/MUM/2009 (ASST YEARS 200304 & 2004-05 ) . 5.1 AS REGARDS THE ORDER OF THE TRIBUNAL IN ASSESSE ES OWN CASE FOR AY 2004-05 TO 2006-07. IT IS TO BE NOTE THAT THIS ISSUE OF NON FI LING OF AUDIT REPORT IN FORM 10CCB WAS NEITHER BEFORE THE CIT(A) NOR BEFORE THE TRIBUNAL . MOREOVER, THE ORDER OF THE TRIBUNAL IS SUBSEQUENT TO THE ORDER PASSED U/S 154. THEREFOR E, WHEN THE ISSUE IS NOT COMMON OR INVOLVED IN THE PROCEEDINGS BEFORE THIS TRIBUNAL IN QUANTUM PROCEEDINGS, THEN, THERE IS NO BAR IN INVOKING THE PROVISIONS OF SEC. 154. 6 SINCE THE ASSESSEE HAS PRODUCED THE COPIES OF AUD IT REPORT IN FORM 10CCB BEFORE US, THEREFORE, IN VIEW OF THE DECISION OF TH E COORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF M/S DODSON LINDBLOM HYDRO POWER (P) LTD (SUPRA), THE MATTER IS REQUIRED FRESH ADJUDICATION AT THE LEVEL OF THE ASS ESSING OFFICER. THIS IS COMMON FACT IN THE CASE BEFORE US AS WELL AS IN THE CASE OF M/S DODSON LINDBLOM HYDRO POWER (P) LTD (SUPRA) THAT THE AUDITOR, WHO HAS PREPARED THE AUDIT REPORT, HAS EXPIRED. THE TRIBUNAL IN THE SAID CASE HAS HELD IN PARA 9 OF TH E ORDER AS UNDER: 9. IN THE PRESET CASE, WE FIND THAT PERSON, WHO CLAI MS TO HAVE FILED AUDIT REPORT IS DEAD AND THE ASSESSEE HAS ALSO EXPRESSED ITS INABILITY TO FILE PROOF FOR HAVING FILED THE REPORT BEFORE THE ASSESSING OFFICER. TAKING INTO CONSIDERATION THE JUDICIAL PRONOUNCEMENTS REFERRED TO ABOVE, WE ARE OF THE VIEW THAT THE ORDER OF LD CIT U/S 263 REQUIRES TO BE MODIFIED. WE A CCORDINGLY MODIFY THE ORDER OF LD CIT AND ALLOW OPPORTUNITY TO THE ASSESSE E TO FILE FORM NO. 10CCB BEFORE THE ASSESSING OFFICER IN PROCEEDINGS PURSUANT TO ORDER OF LD CIT U/S 263. THE ASSESSING OFFICER WILL VERIFY THE CLAIM OF THE A SSESSEE IN THE LIGHT OF SUCH CERTIFICATE AND DECIDE ON THE ELIGIBILITY OF DEDUCT ION U/S 80IA OF THE ACT. 6.1 THEREFORE, IN VIEW OF THE ORDER OF THE COORDINA TE BENCH OF THE TRIBUNAL IN THE CASE OF M/S DODSON LINDBLOM HYDRO POWER (P) LTD (SU PRA), WE SET ASIDE THIS ISSUE TO 6 ITA NOS. 4924 &4945/MUM/2009 (ASST YEARS 200304 & 2004-05 ) . THE RECORDS O THE ASSESSING OFFICER TO VERIFY THE C ERTIFICATE FILED BY THE ASSESSEE BEFORE US AND THEN DECIDE THE CLAIM U/S 80IA. 7 IN THE RESULT, THE APPEALS FILED BY THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED ON THE 28 TH , DAY OF SEPT 2011. SD/- SD/- ( J SUDHAKAR REDDY ) ACCOUNTANT MEMBER ( VIJAY PAL RAO ) JUDICIAL MEMBER PLACE: MUMBAI : DATED: 28 TH , SEPT 2011 RAJ* COPY FORWARDED TO: 1 APPELLANT 2 RESPONDENT 3 CIT 4 CIT(A) 5 DR /TRUE COPY/ BY ORDER DY /AR, ITAT, MUMBAI