M/s Padm Services, Ranipur V. ITO, Haridwar

ITA 5532/DEL/2013

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 3102 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 7 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-05-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 18-05-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 10-10-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: F R MEENA
• Assessee Lawyers: SHANKARSH
• Keywords: Principle of natural justice; Condonation of delay
• Section: 10B; 139

Judgement Text

INCOME TAX APPELLATE TRIBUNAL DELHI BENCH F : NEW DELHI BEFORE SHRI BHAVNESH SAINI , JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER ITA NO. 5532/DEL/2013 (ASSESSMENT YEAR: 2009 - 10 ) M/S. PADM SERVICES, PLOT NO. 27, SECTOR - 1B, IIE SIDCUL, RANIPUR, PAN:AAJFP4857F VS. ITO, WARD - 2, HARIDWAR (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. SHANKARSH, CA REVENUE BY: SH. FR MEENA, SR. DR DATE OF HEARING 18/05 / 2017 DATE OF PRONOUNCEMENT 19 / 0 5 / 2017 O R D E R PER PRASHANT MAHARISHI , A. M. 1. ASSESSEE AGAINST THE ORDER OF THE LD CIT(A) - II, PREFERS THIS APPEAL , DEHRADUN DATED 29.07.2013 FOR THE AY 2009 - 10. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - 1. THE IMPUGNED ORDER IS AGAINST THE LAW AND FACTS OF THE CASE. 2. THAT THE IMPUGNED ORDER IS VIOLATIVE OF THE PRINCIPLE OF NATURAL JUSTICE CONFERRED BY THE CONSTITUTION OF INDIA. 3. THAT THE APPELLANT SET - UP A NEW INDUSTRIAL UNDERTAKING IN THE NOTIFIED AREA OF UTTARAKHAND FOR THE MANUFACTURING OF TALCUM POWDER. THE MAIN PROCESS OF MANUFACTURING OF TALCUM POWDER AS INSPECTED AND VERIFIED BY THE ASSESSING AUTHORITY INVOLVES GRADING BY SIEVING (SCREENING), MIXING AND BLENDING OF SEVERAL INGREDIENTS IN CERTAIN PROPO RTIONS USED FOR THE PRODUCTION OF A NEW FINAL PRODUCT TALCUM POWDER'. 4. THAT THE APPEAL BEFORE ID. COMMISSIONER OF INCOME TAX (APPEALS) - II, DEHRADUN IS PREFERRED MAINLY ON FOLLOWING TWO ISSUES - (I) DENIAL OF RELIEF U/S - 80IC OF THE INCOME TAX ACT, 196 1 ON THE GROUND THAT RETURN OF INCOME FOR THE A.Y 2009 - 10 WAS FILED BEYOND THE DUE DATE WITHIN THE MEANING OF SECTION 139 OF THE ACT AND (II) THE ACTIVITIES CARRIED OUT BY THE APPELLANT DO NOT COVER UNDER THE DEFINITION OF MANUFACTURING AS REQUIRED BY SECTION 2(29BA) OF THE INCOME TAX ACT, 1961, HENCE NOT ELIGIBLE FOR DEDUCTION UNDER SECTION 80IC OF THE ACT. M/S. PADM SERVICES, VS.ITO, ITA NO. 5532/DEL/2013 ASSESSMENT YEAR: 2009 - 10 2 5. THAT THE ID. CIT(A) - II, DEHRADUN REJECTED THE APPEAL BY TAKING INTO CONSIDERATION THE FIRST ISSUE OF 'DELAY IN FILING OF RETURN OF INCOME' BY TH E CONSULTANT OF THE APPELLANT. 6. THAT IT IS PLACED ON RECORD THAT A PETITION BEFORE CENTRAL BOARD OF DIRECT TAXES, NEW DELHI FOR CONDONATION OF DELAY IN FILING OF THE RETURN OF INCOME FOR THE ASSESSMENT YEAR 2009 - 10 UNDER SECTION 119(2)(B) OF THE ACT IS P REFERRED BY THE APPELLANT ON 12.03.2012. THE ISSUE IS PENDING FOR DECISION BY THE CBDT, WHICH IS THE ULTIMATE AUTHORITY ON THE SUBJECT - MATTER. THIS VERY FACT SHOULD HAVE BEEN KEPT IN MIND WHILE DECIDING THE APPEAL BY THE FIRST APPELLATE AUTHORITY. 7. THAT NO COGNIZANCE OF THE ANOTHER VITAL ISSUE REGARDING THE DECISION ON THE NATURE OF ACTIVITIES OF THE APPELLANT AS TO WHETHER THE SAME FALLS WITHIN THE MEANING OF THE DEFINITION OF 'MANUFACTURING' OR NOT HAS NOT BEEN DISCUSSED BY THE FIRST APPELLATE AUTHORITY AT ALL. 8. THAT IT IS PERTINENT TO NOTE THAT IF THE DELAY IN FILING OF THE RETURN IS CONDONED BY THE CENTRAL BOARD OF DIRECT TAXES, THE RESPONDENT SHALL AGAIN CHALLENGE THE ALLOWABILITY OF THE CLAIM U/S - 801C OF THE ACT ON THE SECOND GROUND OF NATURE OF ACTIVITIES OF THE APPELLANT NOT FALLING WITHIN THE SCOPE OF MANUFACTURING. THE SAID ISSUE OF 'MANUFACTURING ACTIVITIES' SHOULD HAVE THEREFORE, BEEN DECIDED BY THE ID. CIT (A) - LL, DEHRADUN IN HIS ORDER. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES, YOUR GOO D SELF IS HUMBLY PRAYED TO SET ASIDE THE IMPUGNED ORDER PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS) - II, DEHRADUN. 3. THE BRIEF FACTS OF THE CASE IS THAT ASSESSEE IS A PARTNERSHIP FIRM FILED ITS RETURN OF INCOME FOR ASSESSMENT YEAR 2009 - 10 ON 28.03.2010. IN THE RETURN OF INCOME THE ASSESSEE HAS CLAIMED DEDUCTION U/S 80IC OF THE INCOME TAX ACT. ACCORDING TO THE PROVISIONS OF SECTION 80AC OF THE ACT IF THE RE TURN IS NOT FILED ON OR BEFORE THE DUE DATE SPECIFIED U/S 139(1) OF THE ACT THEN SUCH DEDUCTION ARE NOT ALLOWABLE. IN VIEW OF THIS, THE LD ASSESSING OFFICER DISALLOWED THE DEDUCTION CLAIMED BY THE ASSESSEE. FURTHER, IT WAS ALSO HELD BY THE ASSESSING OFFICE R THAT THE ASSESSEE S ACTIVITY WAS NOT COVERED UNDER THE DEFINITION OF MANUFACTURING U/S 2(29BA) OF THE ACT AND THEREFORE THE DEDUCTION IS NOT ALLOWABLE. ACCORDINGLY, AGAINST THE RETURNED INCOME OF THE ASSESSEE OF RS. NIL THE TOTAL INCOME WAS DETERMINED AT RS. 1184143/ - . THE ASSESSEE AGGRIEVED WITH THE ORDER OF THE LD ASSESSING OFFICER HAS PREFERRED AN APPEAL BEFORE THE LD CIT(A), WHO DISMISSED THE APPEAL OF THE ASSESSEE APPLYING THE PROVISIONS OF SECTION 80AC OF THE ACT. THEREFORE, THE ASSESSEE IS IN APPEA L BEFORE US. 4. THE LD AUTHORISED REPRESENTATIVE SUBMITTED THE APPLICATION SEEKING ADJOURNMENT STATING THAT HIS OTHER MATTERS ARE PLACED BEFORE THE MUMBAI BENCHES AND THEREFORE, HE M/S. PADM SERVICES, VS.ITO, ITA NO. 5532/DEL/2013 ASSESSMENT YEAR: 2009 - 10 3 IS UNABLE TO REP RE SENT THE CASE AND THEREFORE REQUESTED THE ADJOURNMENT. WE HAVE PERUSED THE PROCEEDING SHEET BEFORE US WHEREIN WE HAVE NOTED THAT ON THE FIRST DATE ON 07.04.2014 NONE APPEARED ON BEHALF OF THE ASSESSEE. FURTHER , ON 26.05.2014, 11.11.2014, 08.07.2014 AND 18.08.2016 AT THE REQUEST OF THE LD AR THIS APPEAL IS ADJOURNED FOR HEARING. WE HAVE PERUSED THE ISSUE INVOLVED ALSO, THEREFORE, DUE TO REPEATED ADJOURNMENT SOUGHT BY THE ASSESSEE AS WELL AS FOR THE REASONS OF JUD ICIAL PRONOUNCEMENT ON THE ISSUE INVOLVED WE DO NOT FIND ANY MERIT IN THE REQUEST FOR ADJOURNMENT AND HENCE, IT IS REJECTED. 5. THE SHORT ISSUE INVOLVED IN THIS APPEAL IS THAT THE RETURN OF INCOME WAS DUE ON 30.09.2009 WHEREAS SAME WAS ACTUALLY FILED ON 28.0 3.2010 AND THEREFORE, ACCORDING TO THE PROVISIONS OF SECTION 80 AC DEDUCTION U/S 80IC CLAIMED BY THE ASSESSEE IS DISALLOWED. THE ABOVE ISSUE IS SQUARELY COVERED AGAINST THE ASSESSEE BY THE ORDER OF THE HON'BLE KARNATAKA HIGH COURT IN CASE OF UNIQUE SHELTERS PVT. LTD VS. UNION OF INDIA (2013) 37 TAXMANN.COM 338 HOLDING THAT FOR THE DELAYED RETURN DEDUCTION UNDER SPECIFIED SECTION CBDT ALONE CAN CONSIDER THE CLAIM OF THE ASSESSEE TO CONDONE THE DELAY, THEREFORE, APPARENTLY THE DEDUCTION IS NOT ELIGIBLE IF THE RETURN IS NOT FILED IN TIME. THE SPECIAL BENCH IN CASE OF SAFFIRE GARMENTS VS ITO 140 ITD 6 (RAJKOT) (SPECIAL BENCH) HAS ALSO DECIDED SIMILAR ISSUE . FURTHER, HON'BLE DELHI HIGH COURT IN CASE OF NATH BROTHERS EXIM INTERNATIONAL LTD. VS. UNION OF INDIA 80 TA XMANN.COM 327 HAS ALSO DECIDED THE SIMILAR ISSUE WITH RESPECT TO PROVISIONS OF SECTION 80A(5) WITH RESPECT TO DEDUCTION U/S 10A, 10AA, 10B AND SECTION 10BA OF THE ACT. IN VIEW OF THIS, WE DO NOT FIND ANY MERIT IN THE APPEAL OF THE ASSESSEE IN REJECTION OF THE CLAIM OF THE ASSESSEE U/S 80IC ON THIS COUNT. IT IS ALSO NOTED BY US THAT ASSESSEE HAS MADE A PETITION U/S 119(2)(B) OF THE INCOME TAX ACT REQUESTING TO CONDONATION OF DELAY IN FILING OF THE APPEAL ON 19.05.2015 BEFORE CBDT, WHICH IS PENDING FOR DISPOS AL. WE DO NOT FEEL IT NECESSARY TO KEEP THE ISSUE ALIVE TILL THE DISPOSAL OF THE ABOVE APPLICATION AS ALREADY TWO YEARS HAVE PASSED AND NO RESPONSE HAS BEEN RECEIVED. HOWEVER, IN CASE THE CBDT CONDONES THE DELAY IN FILING OF THE RETURN OF INCOME CERTAINLY THE CASE OF THE ASSESSEE WOULD BE REQUIRED TO BE DISPOSED OFF ON THE MERITS OF ITS MANUFACTURING ACTIVITIES. IN CASE, THE ASSESSEE RECEIVES ANY POSITIVE RESPONSE FROM THE CENTRAL BOARD OF DIRECT TAXES HE MAY APPROACH THE ASSESSING OFFICER FOR NECESSARY REM EDIES. IN THE RESULT, WE DISPOSE OFF THE APPEAL OF THE ASSESSEE DISMISSING GROUND M/S. PADM SERVICES, VS.ITO, ITA NO. 5532/DEL/2013 ASSESSMENT YEAR: 2009 - 10 4 NO. 4 OF THE APPEAL ON APPLICATION OF THE PROVISION OF SECTION 80AC OF THE ACT. AS THE ASSESSEE IS NOT ELIGIBLE FOR DEDUCTION U/S 80IC OF THE ACT ON THIS GROUND, WE DO NOT ADJUDICATE ON OTHER ISSUES. 6. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS DISMISSED. ORDER PRO NOUNCED IN THE OPEN COURT ON 19 / 05 / 2017 . - SD/ - - SD/ - ( BHAVNESHSAINI ) (PRASHANT MAHARISHI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 19 / 05 / 2017 A K KEOT COPY FORWARDED TO 1. APPLICANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI