VIJAY FABRICS P.LTD, MUMBAI V. ITO WD 4(3)(3), MUMBAI

ITA 5096/MUM/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 4216 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-04-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: F
• Assessment Year: 2000-2001
• Appeal Filed On: 06-08-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: ISHWAR PRAKASH RATHI
• Keywords: Search and seizure; Period of limitation; Retrospective amendment; Reasonable cause; Difference of opinion; Time period of passing order
• Section: 143(3); 80HHC; 32

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL F BENCH, MUM BAI BEFORE SHRI JASON P. BOAZ, AM AND SHRI SANDEEP GOSA IN, JM ./ I.T.A. NO. 5096/MUM/2014 ( / ASSESSMENT YEAR: 2000-01) VIJAY FABRICS PVT LTD. 213, MARINA BLDG., 2 ND FLOOR, DR. CAWASJI HOMJI STREET, MARINE LINES MUMBAI-400 002. / VS. INCOME TAX OFFICER WARD 4 (3) (3) AAYKAR BHAWAN, M K ROAD, MUMBAI-400 020. ./ ./PAN/GIR NO. AAACV 2774R ( /APPELLANT ) : ( / RESPONDENT ) / APPELLANT BY : SHRI ISHWAR PRAKASH RATHI / RESPONDENT BY : SHRI JAVED AKHTAR / DATE OF HEARING : 22/02/2016 !'# / DATE OF PRONOUNCEMENT : 06/04/2016 $% / O R D E R PER SANDEEP GOSAIN, J. M.: THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE A GAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)- 8, DATED 08.0 5.2014 FOR A.Y. 2000-01 ON THE FOLLOWING GROUNDS OF APPEAL. 2 ITA NO. 5096/MUM/2014 (A.Y. 2000-01) M/S. VIJAY FABRICS PVT. LTD VS. ITO 1. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEA LS) HAS ERRED IN DISMISSING OUR APPEAL ON ACCOUNT OF DELAY OF DELAY OF 2060 DAYS IN FILLING THE APPEAL, WITHOUT APPRECIATING THE FACTS AND CIR CUMSTANCES FOR SUCH DELAY. 2. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL S) HAS ERRED IN DISMISSING THE APPEAL WITHOUT CONSIDERING THE GROUN DS OF APPEAL ON MERIT. 3. YOUR APPELLANT CRAVES TO CONSIDER EACH OF THE ABOVE GROUNDS OF APPEAL WITHOUT PREJUDICE TO EACH OTHER AND CRAVES LEAVE TO ADD, TO ALTER, TO AMEND OR TO FURNISH FRESH AND/ OR DETAILED GROUNDS OF APP EAL. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E FILED HIS RETURN OF INCOME ON 30.11.2000 DECLARING TOTAL INCOME OF RS.3,24,710/-. ASSESSMENT U/S 143(3) R.W.S. 254 OF THE I.T. ACT WAS PASSED ON 30.09.2007 DETERM INING THE TOTAL INCOME OF THE ASSESSEE AT RS.32,14,570/- AS ORIGINALLY ASSESSED V IDE ORDER U/S 143(3) OF THE ACT. 3. AGGRIEVED BY THE ORDER OF THE AO, ASSESSEE FILED THE APPEAL BEFORE CIT(A) AND THE CIT(A) AFTER CONSIDERING THE CASE OF THE AS SESSEE HAD DISMISSED THE APPEAL VIDE ITS ORDER DATED 08.05.14. 4. AGGRIEVED BY THE ORDER OF CIT(A) THE ASSESSEE FI LED THE PRESENT APPEAL BEFORE US ON THE GROUNDS MENTIONED HEREIN ABOVE. 3 ITA NO. 5096/MUM/2014 (A.Y. 2000-01) M/S. VIJAY FABRICS PVT. LTD VS. ITO GROUND NO. 1,2 &3 SINCE ALL THE GROUNDS RAISED BY THE ASSESSEE ARE I NTER-CONNECTED AND INTER- RELATED THEREFORE WE THOUGHT IT FIT TO DISPOSE OFF THE SAME THROUGH THE PRESENT COMMON ORDER. 5. AT THE VERY OUTSET LD. AR APPEARING ON BEHALF OF ASSESSEE RELIED UPON WRITTEN SUBMISSIONS FILED BEFORE CIT(A) AND SUBMITTED THAT SINCE THE AO HAD PASSED THE ORDER ON 30.09.2007 AP PEAL WOULD HAVE BEEN FILED WITHIN 30 DAYS I.E. 29/10/2007. HOWEVER, DUE TO DIFFERENCES OF OPINIONS AND COMPLICATIONS WITH REFERENCE TO DED UCTIONS U/S. 80HHC ON DEPB INCENTIVES, THE APPELLANT NOW AFTER K NOWING THE CORRECT POSITION OF LAW, FILED THUS APPEAL UNDER TH E AFORESAID CIRCUMSTANCES, WHICH IS LATE BY 2060 DAYS. YOUR HON OUR WILL APPRECIATE THAT THE RETROSPECTIVE AMENDMENT MADE IN DECEMBER, 2005 FOR DEDUCTION U/S 80HHC WAS VERY MUCH CONTROVERSIAL . THERE WERE CONTENTIOUS DECISIONS BY DIFFERENCE BENCHES AND THE REAFTER, THREE MEMBERS SPECIAL BENCH HAD ALLOWED THE DEDUCTION U/S 80HHC ON FACE VALUE OF DEPB. THE SAME HAS BEEN REVERSED BY THE MU MBAI HIGH COURT AND FINALLY THE SUPREME COURT HAS ALLOWED THE DEDUCTION U/S 4 ITA NO. 5096/MUM/2014 (A.Y. 2000-01) M/S. VIJAY FABRICS PVT. LTD VS. ITO 80HHC ON FACE OF DEPB IN THE CASE OF TOPMAN EXPORTS . UNDER THE AFORESAID FACTS AND CIRCUMSTANCES AND AS PER THE AD VICE OF THE TAX CONSULTANTS, THE APPELLANT HAS BONAFIDELY AND HONES TLY ACCEPTED THE ORDER U/S 143(3) DATED 30.09.2007 GIVING EFFECT TO THE ORDER OF THE ITAT AND STARTED PAYING TAXED OVER A PERIOD OF FIVE YEARS AS PER THE CIRCULAR NO.02/2006, DATED 17.01.2006. THE ISSUES I NVOLVED IN THIS APPEAL IS PURELY A LEGAL ISSUE AND UNDER THE AFORES AID CIRCUMSTANCES, WE REQUEST YOUR HONOUR TO CONDONE THE GENUINE DELAY OCCURRED DUE TO AFORESAID REASONABLE AND SUFFICIENT CAUSE. THE APPELLANT ALSO RELIED ON THE FOLLOWING DECISION S:- I. COLLECTOR LAND ACQUSITION VS. MST. KATIJI & OTHERS [1987] 167 ITR 471 (SC) II. VEDABAI ALIAS VAIJAYNATABAI BABURAO PATIL & OTHERS [2001] [253 ITR 798] (SC) III. O.P. KATHPALA VS. LAKHMIR SINGH, AIR 1984 SC 1744 IV. REMEX CONSTRUCTIONS/REMEX ELECTRICALS VS. FIRST ITO , BOMBAY HIGH COURT [166 ITR 18] V. N. BALAKRISHNAN V.M. KRISHNAMURTHY AIR 1988 SC 32 22 TREASURE HOLDING (P) LTD. 4 SOT 228 (MUMBAI ITAT) STATE OF WEST BENGAL VS. ADMINISTRATOR HOWRAH MUNIC IPALITY AIR 5 ITA NO. 5096/MUM/2014 (A.Y. 2000-01) M/S. VIJAY FABRICS PVT. LTD VS. ITO 1972 SC 749 VI. M/S. MAGNUM EXPORTS VS. ACIT, ITA NO. 1111/KOL/2012 , DT. 08.02.2013 ITAT B BENCH KOLKATA, WHERE THE DELAY OF 2078 DAY S WAS CONDONED. VII. M/S. PAHILARJRAI JAIKISNAN VS. JCIT, ITA NO.1398/MU M/2012. 6. ON THE OTHER HAND, LD. DR REPRESENTING THE REVEN UE RELIED UPON THE ORDER PASSED BY REVENUE AUTHORITIES AND REQUEST FOR DISMI SSING THE APPEAL. 7. WE HAVE HEARD THE COUNSELS FOR BOTH THE PARTIES AND PERUSED THE MATERIAL PLACED ON RECORD AS WELL AS THE ORDERS PASSED BY TH E LOWER AUTHORITIES. AFTER CONSIDERING THE RIVAL SUBMISSIONS WE HAVE NOTICED T HAT THE SOLE GROUND TAKEN BY THE ASSESSEE BEFORE US IS WITH RESPECT TO SEEKING CONDO NATION OF DELAY OF 2060 DAYS IN FILING APPEAL BEFORE CIT. THE REASONS PUT FORTH BY THE ASSESSEE FOR THIS DELAY IS THAT THERE WAS DIFFERENCE OF OPINION WITH REFERENCE TO D EDUCTIONS U/S 80HHC ON DEPB INCENTIVES. IT WAS SUBMITTED BY THE LD. AR THAT THE RETROSPECTIVE AMENDMENT MADE IN DECEMBER, 2005 FOR DEDUCTION U/S 80HHC WAS VERY MUCH CONTROVERSIAL AND THAT THERE WERE CONTENTIOUS DECISIONS BY DIFFER ENT BENCHES AND COURTS AND FINALLY THE HONBLE SUPREME COURT HAS DECIDED AND A LLOWED THE DEDUCTION U/S 80HHC ON FACE OF DEPB IN THE CASE OF TOPMAN EXPORTS (SUPRA). IT WAS SUBMITTED THAT AFTER THE DECISION OF HONBLE SUPREME COURT AN D AS PER THE ADVICE OF THE TAX 6 ITA NO. 5096/MUM/2014 (A.Y. 2000-01) M/S. VIJAY FABRICS PVT. LTD VS. ITO CONSULTANTS, THE ASSESSEE FILED THE APPEAL BEFORE T HE LD. CIT(A) AND THEREFORE, THE ASSESSEE WAS HAVING SUFFICIENT AND REASONABLE CAUSE FOR NOT FILING THE APPEAL WITHIN LIMITATION AND THEREFORE THE DELAY OF 2060 DAYS. L D. AR ALSO RELIED UPON THE JUDGEMENTS PASSED IN SIMILAR CIRCUMSTANCES BY CO-OR DINATE BENCH OF ITAT KOLKATA BENCH IN CASE OF M/S. MAGNUM EXPORTS VS. ACIT IN IT A NO. 1111/KOL/2012, DT. 08.02.2013 AND THE COORDINATE BENCH OF ITAT MUMBAI IN THE CASE OF M/S. PAHILARJRAI JAIKISNAN VS. JCIT IN ITA NO.1398/MUM/2 012. 7.1 THE MOOT QUESTION BEFORE US IS WHETHER THERE IS SUFFICIENT CAUSE FOR DELAY OF 2060 DAYS OR NOT IN FILING THE APPEAL BEFORE THE CIT(A). IN ORDER TO ASCERTAIN THAT, WE HAVE PERUSED THE APPLICATION FILED BY THE ASSESSEE BEFORE THE CIT(A) FOR SEEKING CONDONOTION OF DELAY AND WE HAVE NOTICED AT PAGE NO. 2 THAT IT HAS BEEN CATEGORICALLY MENTIONED BY THE ASSESSEE HIMSELF THA T THIS ISSUE OF PROFIT ON TRANSFER OF DEPB AND THE ALLOWABILITY OF DEDUCTION U/S 80HC HAS BEEN FINALLY SETTLED BY THE HONBLE SUPREME COURT IN THE CASE OF TOPMAN EXPORTS AND OTHERS VS. CIT VIDE ORDER DATED 08.02.2012 AND AT PAGE NO. 3 OF THE SA ID APPLICATION IT IS MENTIONED BY THE ASSESSEE HIMSELF THAT THE ISSUE ON THE RETROSPE CTIVE AMENDMENT DISCRIMINATING DEDUCTION U/S 80HHC ON EXPORT TURNOVER OF RS.10CROR ES AND ABOVE, WAS ALSO FINALLY SETTLED BY GUJARAT HIGH COURT IN WRIT PETIT ION DATED 02.07.2012. 7 ITA NO. 5096/MUM/2014 (A.Y. 2000-01) M/S. VIJAY FABRICS PVT. LTD VS. ITO 7.2 WE HAVE NOTICED THAT IN THE PRESENT CASE THE AS SESSMENT ORDER U/S 254 R.W.S.143(3) OF THE I.T. ACT FOR AY 2000-01WAS PASS ED ON 30/09/2007 BY THE AO, GIVING EFFECT TO THE ORDERS OF ITAT AND ASSESSEE HA D NOT FILED ANY APPEAL AGAINST THE SAID ORDER WITHIN THE PERIOD OF LIMITATION WHIC H MEANS THEREBY THAT THE ORDER PASSED BY AO HAS ATTENDED FINALITY BETWEEN THE ASSE SSEEE AS WELL AS DEPARTMENT AFTER EXPIRY OF LIMITATION PERIOD. IN ADDITION, TO THE ABOVE, ASSESSEE HAS ALSO ACCEPTED THE ORDER ASSESSMENT AND STARTED PAYING TA X OVER A PERIOD OF FIVE YEARS AS PER CIRCULAR DATED 17/01/2006. NOW, ALL OF A SUDDEN ON 21.06.2013 THE ASSESSEE FILED APPEAL BEFORE THE CIT(A) TAKING THE GROUND TH AT RETROSPECTIVE AMENDMENT MADE IN DECEMBER 2005 FOR DEDUCTION U/S 80HHC WAS V ERY CONTROVERSIAL AND ALLOWABILITY OF DEDUCTION WAS SETTLED BY SUPREME CO URT IN THE CASE OF TOPMAN EXPORTS ON 08.02.2012. ALTHOUGH THE ASSESSEE HAS AL SO FURTHER TRIED TO CONVINCE US BY REFERRING TO THE JUDGEMENT RENDERED BY GUJARAT H IGH COURT IN THE WRIT PETITION THEREBY SETTLING THE ISSUE REGARDING THE APPLICABIL ITY OF RETROSPECTIVE AMENDMENT FOR DEDUCTION U/S 80HHC ON EXPORT TURNOVER OF RS.10 CRORES AND ABOVE, BY REFERRING TO US APPLICATION MOVED BEFORE THE CIT(A) . 7.3 WE HAVE PERUSED AND ANALYSED THE APPLICATION MO VED BY ASSESSEE BEFORE CIT(A) AND IN THE SAID APPLICATION THE ASSESSEE HIM SELF HAS ADMITTED THAT THE GUJARAT HIGH COURT HAS ALSO DECIDED THE CITED CASE ON 02.07.2012. EVEN IF FOR A 8 ITA NO. 5096/MUM/2014 (A.Y. 2000-01) M/S. VIJAY FABRICS PVT. LTD VS. ITO MOMENT THE PLEA OF ASSESSEE IS TO BE BELIEVED TO BE TRUE AND DATE OF KNOWLEDGE IS TAKEN AS 02.07.2012, EVEN THEN THE APPEAL BEFORE CI T(A) OUGHT TO HAVE BEEN FILED WITHIN THE PERIOD OF LIMITATION, THEREFROM, BUT THE SAME WAS FILED ON 26.06.2013 I.E. APPROXIMATELY AFTER 11 MONTHS OF ORDERS BY HIGH COU RT. IN THIS FACTUAL MATRIX OF THE CASE WE ARE AFRAID THAT THE ASSESSEE COULD NOT CONVINCE US BY ANY REASONS THAT THERE WAS REASONABLE OR SUFFICIENT CAUSE OF SUCH A LONG DELAY OF 2060 DAYS IN FILING THE APPEAL. AFTER CONSIDERING THE JUDGEMENTS PASSED BY CO-ORDINATE BENCHES, RELIED ON BY THE ASSESSEE (SUPRA), WE ARE OF THE CONSIDERE D VIEW THAT THE FACTS OF EACH CASE BEING DIFFERENT AND THE JUDGEMENTS CANNOT BE USED TO APPLY IN ALL THE CASES ACROSS THE BOARD AS THE FACTS OF EACH CASE IS TO BE CONSID ERED SEPARATELY AND INDEPENDENTLY. IN THE PRESENT CASE, THE ASSESSEE HA S NOT BEEN ABLE TO CONVINCE US THAT THERE WAS SUFFICIENT AND REASONABLE CAUSE TO E XPLAIN THE INORDINATE DELAY IN FILING THE APPEAL BEFORE THE CIT(A). THE ENTIRE ARG UMENTS OF THE ASSESSEE ARE BASED ON THE FINDINGS RECORDED BY THE HONBLE SUPREME COU RT IN TOPMANS CASE DECIDED ON 08.02.2012 AND THE MATTER DECIDED BY GUJARAT HIG H COURT ON 2.07.2012. EVEN IF WE TAKE THESE DATES TO BE THE DATE OF ATTAINING KNO WLEDGE BY ASSESSEE, EVEN THEN THERE IS INORDINATE DELAY IN FILING OF THE APPEAL B EFORE THE CIT(A) AND THE EXPLANATION BEING OFFERED BEFORE US BY THE ASSESSEE DOES NOT, IN OUR OPINION, CONSTITUTE REASONABLE CAUSE AND THEREFORE IS NOT AC CEPTABLE. IT IS TRITE LAW THAT THE 9 ITA NO. 5096/MUM/2014 (A.Y. 2000-01) M/S. VIJAY FABRICS PVT. LTD VS. ITO ASSESSEE IS UNDER OBLIGATION TO CONVINCE THE COURT BY SHOWING SUFFICIENT CAUSE IN GETTING THE DELAY CONDONED, WHICH IN THE PRESENT CA SE, THE ASSESSEE HAS FAILED TO DO. 8. AFTER CONSIDERING THE DETAILED ARGUMENTS WE ARE OF THE CONSIDERED VIEW THAT ASSESSEE HAS FAILED TO ESTABLISH SUFFICIENT AND RE ASONABLE CAUSE IN NOT FILING THE APPEAL WITHIN THE PERIOD OF LIMITATION BEFORE CIT(A ). WE HAVE ALSO CONSIDERED THE JUDGEMENTS REFERRED BY ASSESSEE BUT THE SAME ARE DI STINGUISHABLE AND ARE NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE. IT IS A SETTLED LAW THAT THE ASSESEE HAS TO SHOW SUFFICIENT CAUSE FOR CONDONING DELAY, AND IN THE PRESENT CASE THE ASSESSEE HAS NOT BEEN ABLE TO ESTABLISH ANY SUFFICIENT CAUS E FOR GETTING THE DELAY CONDONED. 9. AFTER ANALYZING THE IMPUGNED ORDER, WE FIND THAT THE CIT(A) HAS DEALT WITH THE ISSUE AND HAS PASSED JUDICIOUS ORDER AND NO CIR CUMSTANCES HAVE BEEN BROUGHT BEFORE US IN ORDER TO CONTROVERT OR DEVIATE FROM TH E FINDINGS RECORDED BY THE CIT(A). THEREFORE, WE SEE NO REASON TO DEVIATE FROM OR INTERFERE WITH THE FINDINGS RECORDED BY THE CIT(A) AND HENCE, WE REJECT THE GRO UNDS RAISED BY THE ASSESSEE AND UPHOLD THE ORDER OF THE CIT(A) 10. IN THE RESULT, THE ASSESSEES APPEAL IS DISMISS ED. 10 ITA NO. 5096/MUM/2014 (A.Y. 2000-01) M/S. VIJAY FABRICS PVT. LTD VS. ITO ORDER PRONOUNCED IN THE OPEN COURT ON 6 TH APRIL, 2016 SD/- SD/- (JASON P. BOAZ) (SANDEEP GOSAIN) $ / ACCOUNTANT MEMBER &' $ / JUDICIAL MEMBER ( ) MUMBAI; *$ DATED :06.04.2016 PS. ASHWINI / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. + ( ) / THE CIT(A) 4. + / CIT - CONCERNED 5. ./0 ''12 , 12# , ( ) / DR, ITAT, MUMBAI 6. 045 6 / GUARD FILE / BY ORDER, / !'# (DY./ASSTT. REGISTRAR) #$ %, ( ) / ITAT, MUMBAI