ITO, New Delhi V. M/s. Him Valves & Regulators Pvt. Ltd., New Delhi

ITA 5098/DEL/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 77694 (ITAT-DELHI)
• Duration Of Justice: 8 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-05-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2005-2006
• Appeal Filed On: 04-09-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SATPAL SINGH
• Keywords: Audit objection; Tangible material; Reason to believe
• Section: 80IB; 147; 148

Judgement Text

INCOME TAX APPELLATE TRIBUNAL DELHI BENCH C : NEW DELHI BEFORE SHRI G. D. AGARWAL, HONBLE VICE PRESIDENT AND SHRI A. T. VARKEY, JUDICIAL MEMBER ITA NO. 5098 /DEL/ 2013 (ASSESSMENT YEAR: 2005 - 06 ) ITO WARD - 12(4), C.R. BUILDING, I.P. ESTATE, NEW DELHI VS. HIM VALVES & REGULATORS PVT. LTD., D - 9, PEENA GARHI, ROHTAK ROAD, UDYOG NAGAR, NEW DELHI 110041 PAN: AAACH7259M (APPELLANT) (RESPONDENT) APPELLANT BY : SATPAL SINGH, SR. DR RESPONDENT BY : O R D E R PER A. T. VARKEY , JUDICIAL MEMBER THIS IS AN APPEAL PREFERRED BY THE REVENUE AGAINST THE ORDER OF THE LD CIT(A) - X V , NEW DELHI DATED 31.07.2013 FOR THE ASSESSMENT YEAR 2005 - 06 . 2. THE GROUNDS OF APPEAL ARE AS FOLLOWS: - 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE ORDER OF THE LD CIT(A) IS WRONG AND AGAINST THE PROVISIONS OF LAW WHICH IS LIABLE TO BE SET ASIDE. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD CIT(A) HAS ERRED IN DELETING THE DISALLOWAN CE OF DEDUCTION OF RS. 9,53,519/ - MADE BY THE A.O. SINCE ASSESSEE HAS CLAIMED THE SAID DEDUCTION U/S 80IB OF THE I.T. ACT, 1961WITHOUT FURNISHING MANDATORY AUDIT REPORT IN PRESCRIBED PROFORMA (FORM NO. 10CCB) WHICH IS ELIGIBILITY CONDITION TO AVAIL DEDUCTI ON U/S 80IB OF THE ACT, 1961. 3. THE APPELLANT CRAVES TO ADD, ALTER, AMEND, MODIFY, ADD OR FOREGO ANY GROUND OF APPEAL AT ANY TIME BEFORE OR DURING THE HEARING OF THIS APPEAL. 3. BRIEF FACTS OF THE CASE AS STATED BY THE LD CIT(A) IS REPRODUCED HERE AS UNDER: - THE ASSESSEE COMPANY HAS CLAIMED DEDUCTION U/S 80 - IB IN THE ASSESSMENT YEAR 2005 - 06. A FORM NO. 10CCB HAS BEEN INCORPORATED ALONG WITH THE RETURN. BUT THE SAID FORM DOES NOT PROVIDE ALL THE DETAILS REQUIRED AS PER THE REQUIREMENT OF IT RULES ENUMERATED IN FORM NO. 10CCB READ WITH RULE 18BBB. THEREFORE, SHOW CAUSE WHY NOT DEDUCTING CLAIMED U/S 80 - IB IS DISALLOWED SINCE PAGE NO. 2 IT DOES NOT FULL FILL ALL THE CONDITIONS ENUMERATED IN THE ACT MAINLY AS MENTIONED BELOW: - I) UNDERTAKING WAS INCORPORATED IN THE YEAR 1987 , WHICH WAS NOT WITHIN THE PERIOD STIPULATED IN THE SECTION 80 - IB, AS SUCH ASSESSEE WAS NOT ELIGIBLE FOR DEDUCTION UNDER THIS SECTION. II) THE ASSESSEE HAS NOT FURNISHED THE MANDATORY AUDIT REPORT IN FORM 10CCB IN ABSENCE OF WHICH ELIGIBILITY CONDITIONS T O AVAIL DEDUCTION UNDER THIS SECTION WERE NOT VERIFIABLE. THE ASSESSING OFFICER CONSIDERED THE REPLY OF THE ASSESSEE AND AGREED WITH THE CONTENTION THAT THE ASSESSEES YEAR OF INCORPORATION WAS 1997, WHICH WAS BY MISTAKE WRITTEN AS 1987. HOWEVER, ON THE SECOND ISSUE, HE HELD THAT BY NOT FURNISHING THE MANDATORY AUDIT REPORT IN FORM NO. 10CCB IN THE RELEVANT FORMAT, THE ASSESSEE HAS NOT FULFILLED THE NECESSARY ELIGIBILITY CONDITIONS. AS A RESULT OF WHICH, THE DEDUCTION U/S 80 - IB WAS DISALLOWED. 4. AGGRIEV ED BY THE SAID ORDER OF THE ASSESSING OFFICER , THE ASSESSEE FILED AN APPEAL BEFORE THE LD CIT(A), WHO WAS PLEASED TO ALLOW THE SAME. AGGRIEVED BY THE SAID ORDER OF THE LD CIT(A) THE REVENUE IS BEFORE US. 5. THE LD DR SUBMITTED THAT THE ASSESSEE COMPANY HA D CLAIMED DEDUCTION U/S 80 - IB OF THE INCOME - TAX ACT, 1961 (HEREIN AFTER THE ACT) IN THE RELEVANT YEAR UNDER CONSIDERATION AND HAD NOT FILED THE MANDATORY AUDIT REPORT IN FORM NO. 10CCB PRESCRIBED BY THE STATUT E TO BE ELIGIBLE FOR CLAIM ING THE DEDUCTION. ACCORDING TO THE LD DR SINCE THE FORM FURNISHED BY THE ASSESSEE DID NOT PROVIDE ALL THE DETAILS REQUIRED AS PER THE REQUIREMENT OF INCOME TAX RULES ENUMERATED IN FORM NO . 10CCB READ WITH RULE 18BBB, THE AUDIT PARTY HAS CORRECTLY POINTED OUT THE FACT THAT T HE ASSESSEE HAS FAILED TO SATISF Y THE ELIGIBILITY REQUIREMENT TO CLAIM THE SAID DEDUCTION U/S 80IB OF THE ACT. AND SINCE THE ASSESSEE HAS WRONGLY CLAIMED THE DEDUCTION BY FILING THE OUT - DATED FORM (10CCB) FOR THE ASSESSMENT YEAR AND SINCE THE ASSESSING OFF ICER HAD NOT NOTICE D THE SAID FACT, THE AUDIT OBJECTION IS VALID AS PER THE APEX COURT S DECISION IN CIT VS. P. V.S. BEEDIES PVT. LTD. (1999) 237 ITR 13 (SC ), WHEREIN, IT HAS BEEN HELD THAT THAT IF THE ASSESSING OFFICER FAILED TO TAKE NOTE OF A FACT IN THE ORIGINAL ASSESSMENT, AND LATER IF THE AUDIT PARTY STUMBLES ACROSS IT AND THEN BRINGS IT TO THE NOTICE OF THE SAID FACT BEFORE THE ASSESSING OFFICER, THEN THE SAID FACT CONSTITUTERS AN PAGE NO. 3 'I NFORMATION CONTEMPLATED UNDER SEC 147 READ WITH SECTION 148 OF THE ACT, WHICH WOULD ENABLE THE ASSESSING OFFICER TO RE - OPEN THE ASSESSMENT. ON THE OTHER HAND THE LD AR SUBMITTED THAT THE ASSESSING OFFICER MECHANICALLY ACTED ON THE OBJECTION RECEIVED FROM THE AUDIT PARTY AND THERE WAS NO MATERIAL OR ANY INFORMATION WHICH COULD BE TERMED AS TANGIBLE MATERIAL FOR RE - OPENING THE ASSESSMENT. ACCORDING TO THE LD AR IN THE INSTANT CASE THE ASSESSING OFFICER DID NOT AGREE WITH THE OBJECTION POINTED OUT BY THE AUDIT PARTY AND IN FACT ASKED THE AUDIT PARTY TO WITHDRAW THE SAID OBJECTION RAISED BY THEM. SO THEREFORE , ACCORDING TO THE LD AR , THE SATISFACTION REQUIRED BY THE ASSESSING OFFICER TO RE - OPEN THE ASSESSMENT IS COMPLETELY ABSENT IN THIS CASE AND THEREFORE THE ENTIRE PROCEEDING IS VITIATED AND THEREFORE NULL AND VOID BECAUSE THE ASSESSING OFFICER CANNOT ASSUME JURISDICTION TO REOPEN U/S 148 READ WITH SECTION 147 WITHOUT REASON TO BELIEVE THAT INCOME HAS ESCAPED ASSESSMENT AND CONTENDED THAT IN THIS CASE IT WAS ABSENT THROUGHOUT. THE AR CITED THE CASES OF RAJESH JHAVERI STOCK BROKERS (P) LTD. VS. ACIT REPORTED AS 284 ITR 593 (GUJ.), INDIAN & EASTERN NEWSPAPER SOCIETY VS. CIT 119 ITR 996 (SC) TO BUTTRESS THE ABOVE PREPOSITIONS OF LAW . THE LD AR CONTENDED THAT INADVERTENTLY, THE ASSESSEE FILED THE AUDIT REP ORT IN THE OLD FORMAT OF FORM NO . 10CCB, INSTEAD OF THE NEW FORMAT AND DURING THE RE - ASSESSMENT PROCEEDING BEFORE THE ASSESSING OFFICER, THE ASSESSEE HAS FILED THE REVISED FORM NO. 10CCB AND ALSO DURING THE A PPELLATE PROCEEDINGS BEFORE THE LD CIT(A). THE LD AR ALSO STATED THAT THE COPY OF THE AUDIT REPORT IN THE CORRECT FORM NO. 10CCB WAS FILED BEFORE THE LD CIT(A) DURING THE COURSE OF APPELLATE PROCEEDINGS, WHICH IS MATERIALLY NOT MUCH DIFFERENT AS COMPARED T O THE AUDIT REPORT IN THE OLD FORMAT FILED ALONG WITH RETURN OF INCOME AND THERE WAS NO ESCAPEMENT OF INCOME. THE LD A R ON THE MERITS OF THE CASE, ARGUED THAT THE ASSESSEE COMPANYS , ACCOUNT WAS FULLY AUDITED FOR THE PURPOSE OF STATUTORY AUDIT, TAX AUDIT A ND FOR THE CLAIM OF DEDUCTION U/S 80IB , AUDIT REPORT IN FORM NO. 10CCB WAS ALSO FURNISHED. THEREFORE , ACCORDING TO THE LD AR, THE LD CIT(A) HAS RIGHTLY APPRECIATED THE FACTS AND ALLOWED THE APPEAL. SO, HE PLEADS US NOT TO DISTURB THE IMPUGNED ORDER OF THE LD CIT(A). 8 . WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE CASE LAWS CITED BY BOTH THE PARTIES AND HAVE GONE THROUGH THE RECORD. WE FIND THAT THE ASSESSEE HAD FILED THE OLD FORM 10CCB WHILE CLAIMING DEDUCTION U/S 80IB, INSTEAD OF THE PAGE NO. 4 REVISED FORMAT OF F ORM 10CCB FOR THE ASSESSMENT YEAR . ON LEARNING ABOUT THE SAME FROM THE AUDIT PARTY, THE ASSESSING OFFICER, REOPENED THE ASSESSMENT, WHEREIN, THE ASSESSEE FILED THE REVISED NEW FORM 10CCB DURING THE RE - ASSESSMENT PROCEEDING , THEREBY , THE ASSESSEE HAS CORRECTED THE MISTAKE WHICH HAPPENED WHILE FILING THE RETURN AND HAS ADMITTED THAT THE CLAIM FOR DEDUCTION IN THE OLD FORMAT WAS AN INADVERTENT MISTAKE . THE LD CIT(A) HAVE COMPARED THE OLD AND THE REVISED FORMAT 10CCB FILE D BY THE ASSESSEE AND SINCE HE COULD NOT FIND ANY FAULT ON THE PART OF THE ASSESSEE WHICH COULD HAVE RESULTED IN ESCAPEMENT OF INCOME OR THERE WAS ANY OMISSIONS IN THE OLD FORMAT WHICH COULD HAVE MADE AN ADVERSE IMPACT ON THE CLAIM U/S 80IB , THE LD CIT(A) RIGHTLY ALLOWED T HE APPEAL OF THE ASSESSEE. THEREFORE WE FIND NO LEGAL INFIRMITY IN THE DECISION OF THE LD CIT(A). IN OUR VIEW, THE FACTUAL POSITION INDICATED THEREIN DOES NOT SOLICIT ANY INTERFERENCE AND WE DECLINE TO INTERFERE IN THE IMPUGNED ORDER. 9 . IN THE RESULT THE APPEAL OF REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 06 . 05 .2014. - SD/ - - SD/ - ( G. D. AGARWAL) (A. T. VARKEY) HONBLE VICE PRESIDENT JUDICIAL MEMBER DATED 06 / 05 /2014 A K KEOT COPY FORWARDED TO 1. APPLICANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI