M/s Modgill Fashion Exports, Ludhiana V. ACIT, Ludhiana

ITA 662/CHANDI/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 73510 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 8 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-03-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 04-03-2014
• Assessment Year: 2002-2003
• Appeal Filed On: 13-06-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Reopening of assessment
• Section: 143(3); 80HHC; 80IB; 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH A, CHANDIGARH BEFORE SHRI T.R.SOOD, ACCOUNTANT MEMBER AND MS. SUSHMA CHOWLA, JUDICIAL MEMBER ITA NO.662 /CHD/2012 ASSESSMENT YEAR : 2002-03 MODGILL FASHION EXPORTS VS. THE A.C.I.T., 2 BAL SINGH NAGAR, CIRCLE III, RAHON ROAD, LUDHIANA. LUDHIANA. PAN: AAEFM1205H (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SUDHIR SEHGAL RESPONDENT BY : SHRI AKHILESH GUPTA, DR DATE OF HEARING : 04.03.2014 DATE OF PRONOUNCEMENT : 06.03.2014 O R D E R PER SUSHMA CHOWLA, J.M. : THE APPEAL FILED BY THE ASSESSEE IS AGAINST THE ORD ER OF THE COMMISSIONER OF INCOME-TAX (APPEALS), CHANDIGARH DA TED 17.04.2012 RELATING TO ASSESSMENT YEAR 2002-03 AGAINST THE ORD ER PASSED UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 (IN SHOR T THE ACT). 2. THE ASSESSEE RAISED THE FOLLOWING GROUND OF APPE AL: 1. THAT THE WORTHY COMMISSIONER OF INCOME TAX (APP EALS) HAS ERRED IN HOLDING THAT THE PROCEEDINGS INITIATED U/S 147 ARE IN ORDER AND NOT BAD IN LAW. 2. NOTWITHSTANDING GROUNDS OF APPEAL IN PARA NO.1 A BOVE, THE WORTHY CIT (A) HAS ERRED IN CONFIRMING THE ADDITION OF RS. 7,53,15 6/- MADE BY THE ASSESSING OFFICER BY DISALLOWING SO CALLED EXCESS DEDUCTION U /S 80 HHC CLAIMED BY THE ASSESSEE. 3. THAT THE WORTHY CIT(A) HAS ERRED IN NOT CONSIDER ING THAT DEDUCTION OF RS. 30,09,722/- U/S 80HHC AND RS. 10,84,059/- U/S 80-IB CLAIMED BY THE ASSESSEE WAS IN ORDER. 2 4. THAT THE WORTHY CIT (A) HAS ERRED IN NOT CONSIDE RING THAT PROVISIONS OF SECTION 80IA(9) ARE NOT APPLICABLE TO THE ASSESSEE AS NO CLAIM OF DEDUCTION WAS MADE BY HIM U/S 80IA. 5. THAT THE WORTHY CIT (A) HAS ALSO ERRED IN NOT CO NSIDERING THAT EVEN IF PROVISIONS OF SECTION 80IA (9) ARE APPLICABLE TO TH E ASSESSEE EVEN THEN SAID PROVISION DOES NOT SPEAK OF RESTRICTIONS FOR REDUCI NG THE DEDUCTION CLAIMED U/S 80IB OUT OF TOTAL GROSS INCOME FOR THE PURPOSE OF COMPUTING DEDUCTION U/S 80HHC. 6. THAT THE APPELLANT CRAVES LEAVE TO ADD OR AMEND ANY GROUNDS OF APPEAL BEFORE THE APPEAL IS FINALLY HEARD OR DISPOSED OFF. 3. THE GROUND OF APPEAL NO.1 RAISED BY THE ASSESSEE IS INITIATION OF RE-ASSESSMENT PROCEEDINGS UNDER SECTION 147 OF THE ACT. 4. THE BRIEF FACTS RELATING TO THE CASE ARE THAT TH E ASSESSEE HAD FURNISHED RETURN OF INCOME DECLARING TOTAL INCOME O F RS.2,42,454/-, WHICH WAS PROCESSED UNDER SECTION 143(1) OF THE ACT . CONSEQUENT THERETO, IT WAS NOTED BY THE ASSESSING OFFICER THAT THE ASSESSEE HAD CLAIMED DEDUCTION UNDER SECTION 80HHC AND 80IB OF T HE ACT IN CONTRAVENTION OF THE PROVISIONS OF SECTION 80IA(9) OF THE ACT. THE ASSESSING OFFICER RECORDED THE REASONS FOR REOPENIN G OF THE ASSESSMENT UNDER SECTION 147 OF THE ACT AND NOTICE UNDER SECTI ON 148 OF THE ACT WAS ISSUED TO THE ASSESSEE. THE ASSESSEE IN REPLY SUBMITTED THAT THE AFORESAID DEDUCTIONS WERE CLAIMED AS PER THE PROVIS IONS OF LAW AND AS PER VARIOUS DECIDED CASES. THE ASSESSING OFFICER R EJECTING THE CLAIM OF THE ASSESSEE RECOMPUTED THE DEDUCTION UNDER SECTION 80HHC OF THE ACT RESULTING IN ADDITION OF RS.7,53,156/-. 5. BEFORE THE CIT (APPEALS) THE ASSESSEE RAISED THE ISSUE OF INITIATION OF RE-ASSESSMENT PROCEEDINGS UNDER SECTION 147 OF T HE ACT. THE CIT (APPEALS) OBSERVED THAT THE RETURN OF INCOME WAS ON LY PROCESSED UNDER SECTION 143(1) OF THE ACT AND THE ASSESSMENT FRAMED UNDER SECTION 3 143(3) R.W.S. 147 OF THE ACT WAS FIRST ASSESSMENT M ADE IN THE HANDS OF THE ASSESSEE FOR THE RELEVANT YEAR. 6. THE ASSESSEE IS IN APPEAL AGAINST THE SAID FINDI NGS OF THE CIT (APPEALS). THE LEARNED A.R. FOR THE ASSESSEE PLACE D RELIANCE ON THE DECISION OF THE HON'BLE MADRAS HIGH COURT IN BAPALA L & CO.EXPORTS VS. JCIT(OSD)[289 ITR 37 (MAD)] AND POINTED OUT THAT RE -ASSESSMENT PROCEEDINGS INITIATED IN THE CASE OF THE ASSESSEE W ERE BAD IN LAW. 7. THE LEARNED D.R. FOR THE REVENUE POINTED OUT THA T THERE IS NO MERIT IN THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE AGA INST INITIATION OF RE- ASSESSMENT PROCEEDINGS WHERE THE SAID ISSUE WAS NOT RAISED BEFORE THE ASSESSING OFFICER. 8. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. ADMITTEDLY, THE RETURN OF INCOME FILED BY THE ASSES SEE WAS PROCESSED UNDER SECTION 143(1) OF THE ACT AND NO REGULAR ASSE SSMENT UNDER SECTION 143(3) OF THE ACT WAS MADE. THEREAFTER REASONS WER E RECORDED FOR REOPENING OF THE ASSESSMENT WHICH ARE REPRODUCED AT PAGES 1 AND 2 OF THE ASSESSMENT ORDER, AS PER WHICH IT WAS NOTED BY THE ASSESSING OFFICER THAT THE ASSESSEE HAD CLAIMED DEDUCTION UNDER SECTI ON 80HHC AND 80IB OF THE ACT IN CONTRAVENTION OF THE PROVISIONS OF SE CTION 80IA(9) OF THE ACT. THEREAFTER THE ASSESSMENT PROCEEDINGS WERE CA RRIED OUT IN THE HANDS OF THE ASSESSEE AND THE SAME WAS COMPLETED UN DER SECTION 143(3) R.W.S. 148 OF THE ACT. THE ASSESSING OFFICER ADMIT TEDLY HAD RECORDED REASONS FOR REOPENING OF THE ASSESSMENT AND ISSUED NOTICE UNDER SECTION 148 OF THE ACT. THE RETURN OF INCOME HAVING ONLY B EEN PROCESSED UNDER SECTION 143(1) OF THE ACT, IT CANNOT BE SAID THAT T HE ASSESSMENT HAS BEEN COMPLETED IN THE HANDS OF THE ASSESSEE. CONSEQUENT LY NOTICE ISSUED FOR REOPENING OF ASSESSMENT UNDER SECTION 148 OF THE AC T IS VALID AND THE 4 ASSESSMENT PROCEEDINGS INITIATED AGAINST THE ASSESS EE ARE VALID. WE FIND SUPPORT FROM THE RATIO LAID DOWN BY THE HON'BLE SUP REME COURT IN ACIT VS. RAJESH JHAVERI, STOCK BROKERS PVT. LTD. [291 IT R 500 (SC)]. THE RELIANCE PLACED UPON THE DECISION OF THE HON'BLE MA DRAS HIGH COURT IN BAPALAL & CO.EXPORTS VS. JCIT(OSD) (SUPRA) IS MISPL ACED IN VIEW OF THE RATIO LAID DOWN BY THE HON'BLE SUPREME COURT IN ACI T VS. RAJESH JHAVERI, STOCK BROKERS PVT. LTD.(SUPRA). THE GROU ND OF APPEAL NO.1 RAISED BY THE ASSESSEE IS THUS DISMISSED. 9. THE GROUNDS OF APPEAL NOS.2 TO 5 ARE AGAINST THE RECOMPUTATION OF DEDUCTION UNDER SECTION 80HHC OF THE ACT ON THE PRO FITS DECLARED BY THE ASSESSEE ON WHICH BOTH DEDUCTION UNDER SECTION 80HH C AND 80IB OF THE ACT HAD BEEN CLAIMED. IN VIEW OF THE PROVISIONS OF SECTION 80IA(9) OF THE ACT, THE ASSESSEE WAS DUTY BOUND TO RECOMPUTE T HE PROFITS ELIGIBLE FOR DEDUCTION UNDER SECTION 80HHC OF THE ACT BY EXC LUDING SUCH PROFITS ON WHICH DEDUCTION UNDER SECTION 80IB OF THE ACT HA D ALREADY BEEN ALLOWED. THE ASSESSEE HAVING FAILED TO DO SO, BEFO RE COMPUTING ITS ASSESSABLE INCOME, IS LIABLE FOR SUCH RECALCULATION OF THE DEDUCTION ALLOWABLE UNDER SECTION 80HHC OF THE ACT. 10. THE LEARNED A.R. FOR THE ASSESSEE FAIRLY POINTE D OUT THAT THE ISSUE IN THE PRESENT APPEAL IS SQUARELY COVERED AGAINST T HE ASSESSEE BY THE RATIO LAID DOWN BY THE PUNJAB & HARYANA HIGH COURT IN FRIENDS CASTING P. LTD. VS. CIT [340 ITR 305 (P&H). IN VIEW OF TH E ADMISSION OF THE LEARNED A.R. FOR THE ASSESSEE AND THE LAW LAID DOWN BY THE HON'BLE PUNJAB & HARYANA HIGH COURT, WE CONFIRM THE RECOMPU TATION OF DEDUCTION ALLOWABLE UNDER SECTION 80HHC OF THE ACT. UPHOLDING THE 5 ORDER OF THE CIT (APPEALS), WE DISMISS THE GROUNDS OF APPEAL NOS.2 TO 5 RAISED BY THE ASSESSEE. 11. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 6 TH DAY OF MARCH, 2014. SD/- SD/- (T.R.SOOD) (SUSHMA CHOWLA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 6 TH MARCH, 2014 *RATI* COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT(A)/TH E CIT/THE DR. ASSISTANT REGISTRAR, ITAT, CHANDIGARH