ACIT, Ernakulam V. M/s Mangala Sea Products, Cochin

ITA 525/COCH/2006

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 1040 (ITAT-COCHIN)
• Duration Of Justice: 6 year(s) 2 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-01-2013
• Appeal Filed By: Department
• Bench Allotted: DB
• Next Hearing Date: 08-01-2013
• Assessment Year: 2003-2004
• Appeal Filed On: 20-10-2006
• Court: TRIBUNAL
• Department Lawyers: S VIJAYAPRABHA; M ANIL KUMAR
• Assessee Lawyers: K R SUDHAKARAN PILLAI
• Keywords: Opportunity of being heard; Retrospective amendment; Revised return
• Section: 80HHC; 139(5)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE S/SHRI N.R.S.GANESAN, JM AND B.R.BASKAR AN, AM I.T.A. 525/COCH/2006 ASSESSMENT YEAR : 2003-04 THE ASSISTANT COMMISSIONER OF INCOME-TAX, CIRCLE-1(1), RANGE-1, ERNAKULAM. VS. M/S. MANGALA SEA PRODUCTS, BHAT MEMORIAL BUILDING, THOPPUMPADY, COCHIN-6 [PAN: AADFM 8632R] (REVENUE-APPELLANT) (ASSESSEE -R ESPONDENT) REVENUE BY SMT. S. VIJAYAPRABHA & SHRI M. ANIL KUMAR, CIT(DR) ASSESSEE BY SHRI K.R. SUDHAKARAN PILLAI, ADV. DATE OF HEARING 08/01/2013 DATE OF PRONOUNCEMENT 11/01/2012 O R D E R PER B.R.BASKARAN, ACCOUNTANT MEMBER: THE APPEAL FILED BY THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 01-06-2006 PASSED BY THE LD. CIT(A)-II, KOCHI AND IT RELATES T O THE ASSESSMENT YEAR 2003-04. 2. THE REVENUE IS ASSAILING THE DECISION OF LD CIT(A) ON THE FOLLOWING TWO ISSUES:- (A) VALIDITY OF THE ORDER OF LD CIT(A) IN SETTING ASIDE THE MATTER OF COMPUTATION OF DEDUCTION U/S 80HHC OF THE ACT. (B) VALIDITY OF DIRECTION GIVEN BY LD CIT(A) TO A LLOW THE FOREIGN TRAVEL EXPENSES, WHICH WAS CLAIMED IN THE REVISED RETURN. 3. THE FACTS RELATING TO THE ABOVE SAID TWO ISS UES ARE STATED IN BRIEF. BEFORE THE LD CIT(A), THE ASSESSEE PLACED RELIANCE ON THE 3 RD AND 4 TH PROVISO TO SUB-SECTION 3 OF SEC. 80HHC OF THE ACT, WHICH WERE INSERTED BY THE TAXATI ON LAWS (AMENDMENT) ACT, 2005 WITH RETROSPECTIVE EFFECT FROM 01-04-1998, IN CONNE CTION WITH ITS CLAIM FOR DEDUCTION U/S I.T.A. NO.525COCH/2006 2 80HHC OF THE ACT. ACCORDINGLY, THE LD CIT(A) DIREC TED THE AO TO ALLOW AN OPPORTUNITY TO THE ASSESSEE TO FURNISH CERTAIN PARTICULARS AND ALL OW THE CLAIM U/S 80HHC AS PER THE PROVISIONS AS AMENDED BY THE TAXATION LAWS AMENDMEN T ACT, 2005. THE ASSESSEE HAD FILED A REVISED RETURN BY CLAIMING FOREIGN TOUR EXP ENSES TO THE TUNE OF RS.6,87,807/-. THOUGH THE SAID REVISED RETURN WAS FILED PRIOR TO T HE COMPLETION OF THE ASSESSMENT, YET THE ASSESSING OFFICER DID NOT TAKE COGNIZANCE OF TH E SAME AND COMPLETED THE ASSESSMENT WITHOUT EXAMINING THE CLAIM FOR DEDUCTIO N OF FOREIGN TOUR EXPENSES. THE LD CIT(A) DIRECTED THE AO TO CONSIDER THE REVISED RETU RN AND ALLOW THE FOREIGN TRAVEL EXPENSES. AGGRIEVED BY THE ORDER OF LD CIT(A), THE REVENUE HAS FILED THIS APPEAL BEFORE US. 4. IT WAS SUBMITTED THAT VARIOUS ASSESSEE FILED WRIT PETITIONS BEFORE THE HONBLE HIGH COURT OF KERALA CHALLENGING THE RETROSPECTIVE AMEND MENTS REFERRED SUPRA. SINCE MANY APPEALS/WRIT PETITIONS WERE FILED BEFORE VARIOUS HI GH COURTS ON THE VERY SAME ISSUE, THE HONBLE SUPREME COURT CLUBBED ALL THOSE APPEALS AND WRIT PETITIONS THAT WERE PENDING BEFORE VARIOUS HIGH COURTS AND POSTED THEM BEFORE T HE HONBLE GUJARAT HIGH COURT FOR FINAL DISPOSAL. ACCORDINGLY, THE HONBLE GUJARAT H IGH COURT, VIDE ITS ORDER DATED 02-07- 2012, IN THE CASE OF AVANI EXPORTS AND OTHERS VS. CI T (2012)(348 ITR 391) HAS RENDERED ITS DECISION ON THE ABOVE SAID ISSUE. THE OPERATIVE PORTION OF THE SAID ORDER READS AS UNDER:- 27. WE, ACCORDINGLY, QUASH THE IMPUGNED AMENDMENT ONLY TO THIS EXTENT THAT THE OPERATION OF THE SAID SECTION COULD BE GIVEN E FFECT FROM THE DATE OF AMENDMENT AND NOT IN RESPECT OF EARLIER ASSESSMENT YEARS OF THE ASSESSES WHOSE EXPORT TURNOVER IS ABOVE RS. 10 CRORE. IN O THER WORDS, THE RETROSPECTIVE AMENDMENT SHOULD NOT BE DETRIMENTAL TO ANY OF THE ASSESSEES. 5. BOTH THE PARTIES SUBMITTED THAT THIS APPEAL MAY BE SET ASIDE TO THE FILE OF THE ASSESSING OFFICER FOR DECIDING THE IMPUGNED ISSUE I N ACCORDANCE WITH THE DECISION RENDERED BY THE HONBLE HIGH COURT OF GUJARAT, REFE RRED SUPRA. THE LD. DR SUBMITTED THAT THE ISSUE OF TAXABILITY OF DEPB CREDITS HAS SIN CE BEEN SETTLED BY THE HONBLE APEX COURT IN THE CASE OF TOPMAN EXPORTS (342 ITR 49) AND ACCORDINGLY SUBMITTED THAT THE I.T.A. NO.525COCH/2006 3 ASSESSING OFFICER MAY BE DIRECTED TO CONSIDER THE I MPUGNED ISSUE IN THE LIGHT OF THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE O F TOPMAN EXPORTS, REFERRED SUPRA. 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND PER USED THE RECORD. WE FIND FORCE IN THE CONTENTIONS MADE BY BOTH THE COUNSEL. WE AGREE WIT H THE CONTENTIONS OF BOTH THE COUNSEL THAT THE ISSUES RELATING TO THE TAXABILITY OF DEPB BENEFITS AND THE APPLICABILITY OF THE 3 RD AND 4 TH PROVISO TO SEC. 80HHC(3) DURING THE YEARS UNDER CO NSIDERATION NEED TO BE EXAMINED AFRESH IN THE LIGHT OF THE DECISIONS RE FERRED SUPRA. ACCORDINGLY, WE SET ASIDE THE ORDERS OF THE LD. CIT(A) ON THE IMPUGNED ISSUE AND RESTORE THE SAME TO THE FILE OF THE ASSESSING OFFICER WITH THE DIRECTION TO EXAMINE THE ISSUE AFRESH IN THE LIGHT OF THE DECISIONS RENDERED BY HONBLE GUJARAT HIGH COUR T AND HONBLE APEX COURT, REFERRED SUPRA AND DECIDE THE SAME IN ACCORDANCE WITH LAW AF TER AFFORDING NECESSARY OPPORTUNITY OF BEING HEARD TO THE ASSESSEE . 7. THE NEXT ISSUE RELATES TO THE CLAIM OF FOREIG N TOUR EXPENSES. THE ADMITTED FACT IS THAT THE ASSESSEE FILED A REVISED RETURN ON 31.3.20 05, WITHIN THE TIME PRESCRIBED UNDER SEC. 139(5) OF THE ACT. IN THE SAID REVISED RETURN , THE ASSESSEE HAD CLAIMED EXPENDITURE RELATING TO FOREIGN TOUR. THE ASSESSMEN T WAS COMPLETED BY THE ASSESSING OFFICER ON 27.12.2005, I.E., AFTER THE DATE OF FILI NG THE REVISED RETURN, WITHOUT CONSIDERING THE SAID REVISED RETURN. IN THE NORMAL COURSE, THE ASSESSING OFFICER SHOULD HAVE CONSIDERED THE REVISED RETURN FILED BY THE ASS ESSEE. HENCE THE LD CIT(A) HAS DIRECTED THE ASSESSING OFFICER TO CONSIDER THE REVI SED RETURN. WHILE DOING SO, THE LD CIT(A) HAS ALSO DIRECTED THE ASSESSING OFFICER TO A LLOW THE EXPENSES ON FOREIGN TRAVEL AFTER EXAMINING THE DETAILS. 8. IN OUR VIEW, THE LD CIT(A) WAS JUSTIFIED IN DIRECTING THE ASSESSING OFFICER TO CONSIDER THE REVISED RETURN. HOWEVER, IN OUR VIEW, HE SHOULD HAVE LEFT THE MATTER OPEN, I.E., FOR THE CONSIDERATION OF THE ASSESSING OFFICE R INSTEAD OF DIRECTING HIM TO ALLOW THE EXPENSES. THE DIRECTION GIVEN BY LD CIT(A) HAS, IN FACT, SUSPENDED THE AUTHORITY OF THE ASSESSING OFFICER. ACCORDINGLY, WE SET ASIDE THE O RDER OF LD CIT(A) ON THIS ISSUE AND I.T.A. NO.525COCH/2006 4 RESTORE THE SAME TO THE FILE OF THE ASSESSING OFFIC ER WITH THE DIRECTION TO EXAMINE THE CLAIM OF THE ASSESSEE AND TAKE APPROPRIATE DECISION IN ACCORDANCE WITH LAW. 9. IN THE RESULT, THE APPEAL OF THE REVENUE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED ACCORDINGLY O N 11-01-2013. SD/- SD/- (N.R.S.GANESAN) (B.R.BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE: KOCHI DATED: 11TH JANUARY, 2013 GJ COPY TO: 1. M/S. MANGALA SEA PRODUCTS, BHAT MEMORIAL BUILDIN G, THOPPUMPADY, COCHIN-6 2. THE ASSISTANT COMMISSIONER OF INCOME-TAX, CIRCLE -1(1), RANGE-1, ERNAKULAM.. 3. THE COMMISSIONER OF INCOME-TAX (APPEALS)-II, KOC HI. 4.THE COMMISSIONER OF INCOME-TAX, KOCHI 5. D.R., I.T.A.T., COCHIN BENCH, COCHIN. 6. GUARD FILE. BY ORDER (ASSISTANT REGISTRAR) I.T.A.T, COCHIN I.T.A. NO.525COCH/2006 5