Appeal details
Counselvise Citation
[2023] 140 COUNSELVISE.COM (IT) 301878 (ITAT-SURAT)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
3 year(s) 2 month(s) 1 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
05-01-2023
Appeal Filed By
Assessee
Order Result
Dismissed
Bench Allotted
DB
Next Hearing Date
12-12-2022
Assessment Year
2009-2010
Appeal Filed On
03-11-2019
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI PAWAN SINGH, JM & DR. A. L. SAINI, AM आयकर अपील सं./ITA No.506/SRT/2019 Ǔनधा[रणवष[/Assessment Year: (2009-10) (Virtual Court Hearing) Prime Health Care Products, Plot No.198 to 207, Dabhel Indl. Co. Society Ltd., Village. Dabhel, Daman, Daman-396210. Vs. The DCIT, Vapi Circle, Vapi. (Assessee) (Respondent) èथायीलेखासं./जीआइआरसं./PAN/GIR No.: AADFP6232C Assessee by Shri Nitin Mehta, AR Respondent by Shri Vinod Kumar, Sr. DR Date of Hearing 13/12/2022 Date of Pronouncement 06/01/2023 आदेश / O R D E R PER DR. A. L. SAINI, AM: Captioned appeal filed by the assessee, pertaining to Assessment Year (AY) 2009-10, is directed against the order passed by the Learned Commissioner of Income Tax (Appeals), [in short “the ld. CIT(A)”], in Appeal No. CIT(A)/VLS/158/18-19, dated 27.08.2019, which in turn arises out of an assessment order passed by Assessing Officer under section 154 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”), dated 01.06.2018. 2. The grounds of appeal raised by the assessee are as follows: “1. The learned CIT (Appeals) has erred in dismissing the appeal holding that there is no mistake apparent from the record and the rectification application was rightly rejected. 2. The learned CIT (A) failed to appreciate that the disallowance done by the Assessing officer had already become final in favour of Assessee and was accepted by the Department in earlier years in case of Assessee itself and therefore Assessing Officer was required to follow and apply it in the current year. Page | 2 ITA 506/SRT/2019/AY.2009-10 Prime Health Care Products 3. The learned CIT (A) has failed to appreciate the judgments of various Courts and Tribunals which supported the proposition of the Assessee that under the present facts, the rectification sought by it, ought to be allowed. 4. The learned CIT (A) has failed to follow the principle of consistency enumerated by various Courts especially in case of the same assessee where similar claims have been earlier already decided in favour of the Assessee. 5. The learned CIT(A) erroneously holds that the Appellate orders of earlier years were not brought to the notice of the AO in the assessment proceedings as the same is always part of the record of the file of Assessee. Even assuming without admitting that the same were not brought to the notice of the AO, it is the duty of AO to apply the law and provide the relief which the Assessee is entitled for even if the same is missed out by it. If the relief is not given, the same is a mistake apparent on record and further when the same is pointed out to the AO, by the Assessee by way of a rectification application, it is nothing but a mistake apparent on record. 6. The learned CIT(A) erred in holding that the assessee missed the deadline for filing regular appeal and recourse of rectification was taken to bring the issue to back to life for further legal remedy or that the Assessee cannot raise the issue which could have been taken up in regular appeal only, since the same is not based on any cogent reason and is not applicable to the facts of the present case. As already demonstrated above the present facts are squarely covered as mistake apparent on record and therefore the Assessee has an option to choose to go in appeal or file a rectification application within the time prescribed. 7. That on facts and in law the assessee prays that appeal be allowed.” 3. Succinct facts are that assessee has filed rectification application under section 154 of the Act, for assessment year 2009-10, before the assessing officer, vide its application dated 22.05.2018. The assessee has stated in the rectification application that assessment under section 143(3) of the Income Tax Act was completed on 29.08.2011, with assessed income of Rs.3,99,43,790/-. In the assessment order under section 143(3) of the Act, there was disallowance of claim under section 80IB of the Act, by excluding income from Scrap sale of Rs.4,92,789/- and discount received of Rs.14,99,839/- from the eligible profits, in the said assessment order. The assessee has requested the assessing officer to allow this claim of deduction under section 80IB of the Act, by doing rectification under section 154 of the Act. That is, assessee wanted to correct the mistake in the original order passed by assessing officer under section 143(3) of the Act, by relying on various judgments, and has requested the assessing officer to rectify the mistake under section 80IB of the I.T. Act. Page | 3 ITA 506/SRT/2019/AY.2009-10 Prime Health Care Products 4. However, the assessing officer has rejected the claim of the assessee holding that the issue involved did not come under the purview of mistake apparent from records which are rectifiable under section 154 of the I.T. Act. Hence, the application of the assessee under section 154 was rejected by the assessing officer. 5. Aggrieved by the order of the assessing officer, ( passed u/s 154), the assessee carried the matter in appeal before the ld. CIT(A), who has confirmed the action of Assessing Officer, observing as follows: “3.3......Considering the above facts, I agree with the AO that the issue of allowing ie claim u/s 80IB of the IT Act does not come under the purview of mistake apparent from record which is rectifiable u/s 154 of the IT Act as the disallowance u/s 80IB was made by mentioning of cogent reasons given in the assessment order u/s 143(3) of the IT Act 'by the AO. The discussion on page No. 4 of the assessment order clearly indicate that the AO had referred to the decision of Hon'ble ITAT, Ahmedabad in the case of Standard Oil and greases (ITA No. 3096/A/2007) wherein the Hon'ble bench held that scrap sale of damaged barrel, pail and cartoons in the business of manufacturing of lubricating oils and greases could not be considered as scrap generated in manufacturing process and deduction u/s 80IB was not allowed. Thus, the AO had taken reasoned view on the basis of various decisions of courts and ITAT on this issue and the said order cannot be considered for rectification merely on the ground that earlier years case of assessee was allowed in its favour. The assessment order indicates that such appellate orders were not brought to the notice of the AO in the assessment proceedings. Hence, I agree with the AO that there is no mistake apparent from the record in the current case and rectification application was rightly rejected. Facts also indicate that the assessment order passed on 29/08/2011 and first rectification application is claimed to have been filed on 26/08/2015. This shows that the assessee missed the deadline for filing regular appeal and recourse to rectification was taken to bring the issue to back to life for further legal remedy. However, by way of rectification petition, the assessee cannot-raise the issue which could have been taken up in regular appeal only. In view of the above facts and circumstances, the appeal for allowing rectification application on the issue of section 80IB deduction for scrap sale income is hereby dismissed. The case laws relied on by the assessee are not applicable for the issue of rectification. Hence, assessee’s appeal is hereby dismissed.” 6. Aggrieved by the order of Ld. CIT(A), the assessee is in further appeal before us. Page | 4 ITA 506/SRT/2019/AY.2009-10 Prime Health Care Products 7. Learned Counsel for the assessee, pleads before the Bench that disallowance u/s 80IB, on same issues, were done in A.Y.2004-05, A.Y.2005- 06, A.Y.2006-07 A.Y.2007-08 and A.Y.2008-09 by the Assessing Officer u/s 143(3) but the same was allowed by ITAT for A.Y.2004-05, 2005-06 and A.Y.2006-07 and by CIT (Appeals) in A.Y.2007-08 and A.Y.2008-09. 8. The ld Counsel relied on several case law on merit and stated that claim u/s 80IB is allowable in case of discount and scrap income. The ld Counsel also argued that as per “Principle of Consistency” such claims may be allowed. Thus, Ld. Counsel submitted that issue has settled, and assessee has been granted deduction under section 80IB of the Act, therefore it should be rectified under section 154 of the Act. 9. On the other hand, Learned Departmental Representative (Ld. DR) for the Revenue submitted that the issue relating to deduction under section 80IB/80IA is a debatable issue therefore it cannot be rectified under section 154 of the Act. Besides, ld DR also stated that assessee filed the appeal against the order of rectification under section 154 of the Act, therefore assessee`s appeal should not be allowed on merit. 10. We have heard both the parties and carefully gone through the submission put forth on behalf of the assessee along with the documents furnished and the case laws relied upon, and perused the fact of the case including the findings of the ld. CIT(A) and other materials brought on record. We note that assessee has filed an appeal against the order passed by the Assessing Officer, under section 154 of the Act before the ld.CIT(A). On appeal, ld CIT(A) held that the issue relating to deduction under section 80IB of the Act, is a debatable issue and therefore cannot be rectified under section 154 of the Act. We observed that “any mistake apparent from the record” can be rectified under section 154 of the Act. The plain meaning of the word 'apparent' is that it must be something which appears to be ex-facie and incapable of argument and debate. Therefore, we find merit in the submissions of ld DR for the Revenue that deduction under section 80IB is a debatable issue which can not be rectified under section 154 of Page | 5 ITA 506/SRT/2019/AY.2009-10 Prime Health Care Products the Act. Therefore, we agree with the reasoning given by ld CIT(A) that the issue of allowing claim u/s 80IB of the IT Act does not come under the purview of mistake apparent from record which is rectifiable u/s 154 of the IT Act as the disallowance u/s 80IB was made by mentioning of cogent reasons given in the assessment order u/s 143(3) of the IT Act by the AO. The discussion on page No. 4 of the assessment order clearly indicate that the AO had referred to the decision of Hon'ble ITAT, Ahmedabad in the case of Standard Oil and greases (ITA No. 3096/A/2007) wherein the Hon'ble Bench held that scrap sale of damaged barrel, pail and cartoons in the business of manufacturing of lubricating oils and greases could not be considered as scrap generated in manufacturing process and deduction u/s 80IB was not allowed. Thus, the AO had taken reasoned view on the basis of various decisions of courts and ITAT on this issue and the said order cannot be considered for rectification merely on the ground that earlier years` case of assessee was allowed in its favour. The assessment order indicates that such appellate orders were not brought to the notice of the AO in the assessment proceedings. Hence, there is no mistake apparent from the record in the current case and rectification application was rightly rejected by assessing officer. Facts also indicate that the assessment order passed on 29/08/2011 and first rectification application is claimed to have been filed on 26/08/2015. This shows that the assessee missed the deadline for filing regular appeal and recourse to rectification was taken to bring the issue to back to life for further legal remedy. However, by way of rectification petition, the assessee cannot-raise the issue which could have been taken up in regular appeal only. This way, the ld CIT(A) has confirmed the action of the assessing officer and dismissed the appeal of the assessee. We have gone through the case law submitted by ld Counsel for the assessee and noted that none of the case law assists the assessee`s issue under consideration. Therefore, we do not find any infirmity in the order of ld CIT(A). The conclusions arrived at by the CIT(A) are, therefore, correct and admit no interference by us. We, approve and confirm the order of the CIT(A). Page | 6 ITA 506/SRT/2019/AY.2009-10 Prime Health Care Products 11. In the result, appeal filed by the assessee is dismissed Order pronounced on 06/01/2023 by placing the result on the Notice Board. Sd/- Sd/- (PAWAN SINGH) (Dr. A.L. SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER lwjr /Surat Ǒदनांक/ Date: 06/01/2023 SAMANTA Copy of the Order forwarded to 1. The Assessee 2. The Respondent 3. The CIT(A) 4. CIT 5. DR/AR, ITAT, Surat 6. Guard File By Order // TRUE COPY // Assistant Registrar/Sr. PS/PS ITAT, Surat
AI Insights
The case involves Prime Health Care Products, which filed an appeal against the order of the CIT(A) confirming the rejection of their rectification application under section 154 of the Income Tax Act by the Assessing Officer. The rectification sought to correct the exclusion of income from scrap sales and discounts from eligible profits under section 80IB, which was initially disallowed in the assessment for AY 2009-10. The CIT(A) and the Assessing Officer both found that the issue did not constitute a mistake apparent from the record, as it involved a debatable issue concerning the interpretation and application of section 80IB, supported by various judicial decisions.
