Superfine Metals P Ltd, Ahmednagar V. Assistant Commissioner of Income-Tax, Central Circle 1(2), , Pune

ITA 631/PUN/2021

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 1477 (ITAT-PUNE)
• Duration Of Justice: 10 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-10-2022
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 27-09-2022
• Assessment Year: 2010-2011
• Appeal Filed On: 22-11-2021
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Depreciation; Rectification of order; Principle of natural justice; Additional depreciation; Set aside
• Section: 148; 154; 133A; 32(1)(iia); 119(2)(b); 143(1); 250

Judgement Text

॥ आयकर अपीलीय न्यायाधिकरण, पुणे “बी” न्यायपीठ, पुणे में ॥ ITAT-Pune Page 1 of 12 IN THE INCOME TAX APPELLATE TRIBUNAL, PUNE “B” BENCH, PUNE BEFORE SHRI S. S. GODARA, JUDICIAL MEMBER AND SHRI G. D. PADMAHSHALI, ACCOUNTANT MEMBER आयकर अपीऱ सं. / ITA Nos. 631 to 634/PUN/2021 निर्धारण वर्ा / Assessment Years : 2010-2011 to 2013-14 Superfine Metals Private Ltd., E29/E39, Supa MIDC, Tal. Parner, Ahmednagar – 414302 PAN:AAKCS6038H . . . . . . . अपीऱधर्थी / Appellant बनाम / V/s. Asst. Commissioner of Income Tax, Central Circle 1(2), Pune . . . . . . . . प्रत्यर्थी / Respondent द्वारा/ Appearances Assessee by : Shri M. K. Kulkarni Revenue by : Shri M. G. Jasnani स ु नवाई की तारीख / Date of conclusive Hearing : 28/09/2022 घोषणा की तारीख / Date of Pronouncement : 07/10/2022 आदेश / ORDER PER G. D. PADMAHSHALI, AM; Present bunch of five appeals of the assessee is assailed against separate orders of Commissioner of Income Tax (Appeals), Pune-11 [for short “CIT(A)”] all dt. 16/11/2021 passed u/s 250 of the Income-tax Act, 1961 [for short “the Act”], which arose out of rectification orders dt. 20/02/2021 passed u/s 154 by the Asst. Commissioner of Income Tax, Central Circle 1(2), Pune [for short “AO”] for assessment years [for short “AY”] 2010-11 to 2013-14. Superfine Metals Pvt. Ltd. ITA Nos.631 to 634/PUN/2021 AYs: 2010-11 to 2013-14 ITAT-Pune Page 2 of 12 2. The subject matter of adjudication falls within the narrow compass as to whether an intimation passed u/s 143(1) can be rectified after the expiry of statutory time limit prescribed u/s 154(7) of the Act. And if it reaches affirmative answer, then the consequential question as to whether claim for additional depreciation u/s 32(1)(iia) of the Act is in modification of original claim made in the ITR or a fresh claim to testify its allowance through rectification application. 3. Since the issue involved in all these appeals is identical, with the agreement of both the parties; the matter is heard together for a consolidated order, resultantly the adjudication in lead case ITA No.631/PUN/2021 positioned in succeeding paragraphs, shall mutatis mutandis apply to ITA Nos.632/PUN/2021 to 634/PUN/2021. 4. Before riding the cycle for adjudication, it is essential to reproduce the grounds challenged by appellant, as; 1) On the facts and in the circumstances of the case and in law the Ld. CIT(A) was not justified in dismissing the appeal ignoring the detailed written submissions placed before him for consideration. It Superfine Metals Pvt. Ltd. ITA Nos.631 to 634/PUN/2021 AYs: 2010-11 to 2013-14 ITAT-Pune Page 3 of 12 appears from the appellate order of the Ld. CIT(A) that the same has been completely ignored by him as to facts and law. The appeal order be cancelled and/or be set aside for fresh order after considering all the issues raised therein. 2) On the facts and in the circumstances of the case and in law the appeal order is not sustainable in law since no opportunity was given to the assessee to hear properly on the legal as well as factual issues raised before him. The principles of natural justice mandate that a reasonable and effective opportunity needs to be granted especially when appellate authority proceeds to take an adverse view. The order of the CIT(A) be set aside. 3) On the facts and in the circumstances of the case and in law and without properly appreciating, the grounds of appeal raised before him. The same are reproduced below: 1. On the facts and in the circumstances of the case and in law the A.O. was not justified in rejecting the application of the assessee filed u/s 154 of the Act seeking allowing of the additional depreciation u/s 32(1)(iia) of the Act. It be allowed. 2. On the facts and in the circumstances of the case and in law the non-jurisdictional Delhi High Court in the case of Vedanta Ltd. (supra) held that the Additional depreciation u/s 32(1)(ii-a) is to be allowed whether claimed or not. This legal issue in the absence of any contrary judgment of jurisdictional High Court judgment is allowable as it is binding on the authorities. It be allowed. Superfine Metals Pvt. Ltd. ITA Nos.631 to 634/PUN/2021 AYs: 2010-11 to 2013-14 ITAT-Pune Page 4 of 12 3. On the facts and in the circumstances of the case and in law the application under S. 154 was maintainable since no jurisdictional High Court judgment was binding on the authorities and issue being 'substantial questions of law' can be raised at any time and of any stage of the proceedings. The mistake of law pointed out u/s 154 be directed to be corrected allowing the application u/s 154 of the Act. It be held accordingly. 4. On the facts and in the circumstances of the case and in law the Ld. CIT(A) failed to appreciate the legal issues raised before him through grounds of appeal. The basic issue for consideration was no assessing authority was entitled to withhold the claim of Additional Depreciation u/s 32(1)(ii-a) of the Act. The Ld. CIT(A) was not justified in confirming the withholding made by A. O. It be held accordingly. 5. On the facts and in the circumstances of the case and in law it was submitted S. 32(1) captioned 'Depreciation' which follows CIs. (i) / (ii), (ii-a) and (iii) which shows the depreciation was relevant to all clauses including Cl. (ii) and (ii-a) and it was not correct to contend that relief provided u/s 32(1)(iia) is a separate incentive. This legal interpretation was not appreciated by Ld. CIT(A). The resultantly the appeals were dismissed. 6. On the facts and in the circumstances of the case and in law the Ld. CIT(A) dismissed the appeal of the appellant-assessee relying solely on S. 154(7) which had no relevance in the legal issues pleaded before Ld. CIT(A). It was proved that such limitation provision of S. 154(7) is not applicable to the facts and law of this case. The Ld. Superfine Metals Pvt. Ltd. ITA Nos.631 to 634/PUN/2021 AYs: 2010-11 to 2013-14 ITAT-Pune Page 5 of 12 CIT(A) failed to appreciate this judicial interpretation. 7. On the facts and in the circumstances of the case and in law and it was submitted before CIT(A) through written submissions that the mandate of Explanation 5 and the interpretation made the additional depreciation as provided u/s 32(1)(ii-a) has to be allowed under CI. (ii) in the absence of any separate provision for allowing of additional depreciation under Cl. (ii-a). The claim of additional depreciation be allowed to the appellant as per law. 8. The appellant craves to leave, add/amend or alter any of the above grounds of appeal. 5. Tersely stated the facts of the case are; 5.1 The assessee is a private limited company, filed its income tax returns [for short “ITR”] which were summarily processed u/s 143(1) of the Act as; Asstt. Yr. Date of Return filed Return Processed u/s 143(1) 2010-2011 14/10/2010 10/09/2011 2011-2012 30/09/2011 10/01/2012 2012-2013 30/09/2012 25/03/2014 2013-2014 28/09/2013 14/04/2014 5.2 A survey action u/s 133A of the Act on the assessee was carried out on 07/02/2020 & 08/02/2020 wherein a statement of one of the director of the Superfine Metals Pvt. Ltd. ITA Nos.631 to 634/PUN/2021 AYs: 2010-11 to 2013-14 ITAT-Pune Page 6 of 12 company was recorded with respect to excess depreciation claimed as against the ITR filed, for the reasons the Ld. AO by issue of notices u/s 148 initiated proceedings for escapement of income for AY 2016-17 to 2018-19. 5.3 Upon the receipt of notice u/s 148 of the Act, the assessee company for impugned assessment years under adjudication filed a common application for rectification u/s 154 of the Act on 18/02/2021 thereby raised a claim for an additional depreciation u/s 32(1)(iia) first time and also preferred an application for relaxation of 154(7) limitation in its case before the Central Board of Direct Taxes [for short “CBDT”] u/s 119(2)(b) of the Act. In the absence any order from the CBDT granting any relaxation to the appellant company, the applications of rectification filed claiming additional depreciation u/s 32(1)(iia) of the Act for impugned assessment years, in the light of limitation casted in sub-section 7 of section 154 were summarily rejected by the Ld. AO being time-barred. Superfine Metals Pvt. Ltd. ITA Nos.631 to 634/PUN/2021 AYs: 2010-11 to 2013-14 ITAT-Pune Page 7 of 12 5.4 Aggrieved thereby the appellant company challenged the action of Ld. AO before the first appellate authority [for short “FAA”], wherein the Ld. CIT(A) beside echoing the views of tax authority below on ground of limitation set u/s 154(7) of the Act, has in the light of decision of Hon’ble Madras High Court in “Nagraj & Co. Pvt. Ltd. Vs ACIT” reported in 425 ITR 412, rejected to entertain the new claim of additional depreciation made by the appellant by filing of rectification application u/s 154 of the Act, as extra- legem. 5.5 Aggrieved by the orders of both the tax authorities below, the appellant company is before this Tribunal seeking relief on the grounds of appeal set at para 4 herein before. 6. During In the course of physical hearing, the learned representative for the assessee [for short “AR”] confirming the facts that, the original returns for the impugned assessment years were filed without a claim of additional depreciation which were processed summarily u/s 143(1) Superfine Metals Pvt. Ltd. ITA Nos.631 to 634/PUN/2021 AYs: 2010-11 to 2013-14 ITAT-Pune Page 8 of 12 of the Act, and upon initiation of 148 proceedings the assessee became aware of unclaimed additional depreciation. It is also submitted that, since the mistake was through oversight, apparent from record and claim of additional depreciation being bonafied needs one, hence due consideration thereof in arriving at correct computation of income is necessary, thus prayed for. Au contraire the learned departmental representative [for short “DR”] reiterating the provisions of section 154(7) and absence of any relaxation from the CBDT in the appellant’s case, has strongly placed reliance of the orders of both the tax authorities below for dismissing the appeals of the appellant. 7. After hearing to rival contentions of both the parties; and subject to the provisions of rule 18 of Income Tax Appellate Tribunal Rules, 1963 [for short “ITAT, Rules”] perused the material placed on record, case laws relied upon by the appellant as well the respondent and duly considered the facts of the case in the light of settled legal position forewarned to either parties. Superfine Metals Pvt. Ltd. ITA Nos.631 to 634/PUN/2021 AYs: 2010-11 to 2013-14 ITAT-Pune Page 9 of 12 8. The ground number 1 and 2 of the present bunch of appeals alleges the violation of principle of natural justice, however the facts reveals that, the orders of both the tax authorities below are culminated after according reasonable opportunities to the appellant and after due consideration to the written submissions made by the assessee during the proceedings before them, in the event the claim of the appellant being perverse stands dismissed, thus the ground number 1 and 2. 9. In so far as the ground number 3 and its counterpart is concerned, it alleged against denial of claim of additional depreciation made first-time through rectification application u/s 154(1) of the Act, after the expiry of time limit prescribed u/s 154(7) of the Act, this brings us to adjudicate two issues; 9.1 Whether intimation passed u/s 143(1) can be rectified after the expiry of statutory time limit prescribed u/s 154(7) of the Act. 9.2 Whether claim for additional depreciation u/s 32(1)(iia) of the Act is in modification of original claim Superfine Metals Pvt. Ltd. ITA Nos.631 to 634/PUN/2021 AYs: 2010-11 to 2013-14 ITAT-Pune Page 10 of 12 made in the ITR or a fresh claim so has to qualify through rectification application. 10. It is necessary to mention that, at this juncture, both the parties have expressed their agreement to the fact that, if legal ground as paraphrased in 9.1 is answered negatively and against the assessee, then the meritare ground laid in subsequent para at 9.2 shall turn academic, calling no adjudication. 10.1 In this context legal ground, without reproducing the text from the Act in verbatim, it shall be suffice to say that, the provision of section 154(1) r.w.s. 154(7) of the Act, empowers the income tax authority to rectify any mistake apparent from record, within the statutory limit of four years from the end of the financial year in which order sought to be amended was passed. And in the present bunch of appeals, it remained an undisputed fact that, the applications for rectification for claim of additional depreciation for all the impugned assessment years were made after the expiry of four years from the end of relevant financial year in which respective orders of Superfine Metals Pvt. Ltd. ITA Nos.631 to 634/PUN/2021 AYs: 2010-11 to 2013-14 ITAT-Pune Page 11 of 12 assessment were passed u/s 143(1) of the Act, for the sake of clarity the time-limit and application is tabled herein below; Asstt. Yr. Date of Date of Return filed Return Processed u/s 143(1) Expiry of Time Limit u/s 154(7) Application u/s 154(1) 2010-2011 14/10/2010 10/09/2011 31/03/2016 18/02/2021 2011-2012 30/09/2011 10/01/2012 31/03/2016 18/02/2021 2012-2013 30/09/2012 25/03/2014 31/03/2018 18/02/2021 2013-2014 28/09/2013 14/04/2014 31/03/2019 18/02/2021 10.2 Further the appellant’s application u/s 119(2)(b) made before the CBDT seeking relaxation on the subject matter remained unsuccessful, for the reason we see no infirmity with the orders of both the tax authorities below in holding the application for rectification as time-barred. 10.3 Since, the Ld. AR failed to bring on record any substantial evidence in support of allowability of belated claim made through belated application of rectification and in the absence of any order of relaxation from the CBDT, we beyond any iota of doubt are inclined to hold the orders of both the tax authorities free from any infirmity, ergo the ground Superfine Metals Pvt. Ltd. ITA Nos.631 to 634/PUN/2021 AYs: 2010-11 to 2013-14 ITAT-Pune Page 12 of 12 number 3 and its counter parts stand adjudicated against the assessee. Since the issue in the present bunch of appeals is adjudicated and dismissed on legal ground, the adjudication of meritare ground turned academic hence dispensed with. 11. Resultantly, all the appeals of the appellant assessee are dismissed in above terms. In terms of rule 34 of ITAT Rules, the order pronounced in the open court on this Friday 07 th day of October, 2022. -S/d- -S/d- S. S. GODARA G. D. PADMAHSHALI JUDICIAL MEMBER ACCOUNTANT MEMBER प ु णे / PUNE ; दिनाांक / Dated : 07 th day of October, 2022. आदेश की प्रधिधलधप अग्रेधिि / Copy of the Order forwarded to : 1.अपीलार्थी / The Appellant. 2. प्रत्यर्थी / The Respondent. 3. The Pr. CIT(Central), Pune (M.H.-India) 4. The CIT(A)-11, Pune (M.H.-India) 5. DR, ITAT, Pune Bench ‘B’, Pune 6. गार्डफ़ाइल / Guard File. आदेशानुसार / BY RDER, वररष्ठ ननजी सनिव / Sr. Private Secretary आयकर अपीलीय न्यायानिकरण, पुणे / ITAT, Pune.