M/s Surendra Steels Pvt. Limited, Kolkata V. DCIT, CC-2(3), Kolkata

ITA 78/KOL/2022

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 1725 (ITAT-KOLKATA)
• Duration Of Justice: 3 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-05-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2019-2020
• Appeal Filed On: 07-02-2022
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RANU BISWAS
• Keywords: Procedural lapse
• Section: 143(1); 250; 80IC; 80IC

Judgement Text

आयकर अपीलȣय अͬधकरण Ûयायपीठ, कोलकाता IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, KOLKATA ] ] BEFORE SHRI RAJPAL YADAV, VICE PRESIDENT AND SHRI GIRISH AGRAWAL, ACCOUNTANT MEMBER ITA No. 78/Kol/2022 Assessment Year: 2019-20 M/s. Surendra Steels Private Limited Charu Market SRCB Road Fancy Bazar Guwahati (Assam) - 781001 PAN : AAICS6451J Vs Deputy Commissioner of Income Tax, Central Circle- 2(3), Kolkata अपीलाथȸ/ (Appellant) Ĥ× यथȸ/ (Respondent) Assessee by : Shri Devesh Poddar, A/R Revenue by : Smt. Ranu Biswas, Addl. CIT D/R स ु नवाई कȧ तारȣख/Date of Hearing : 18/05/2022 घोषणा कȧ तारȣख /Date of Pronouncement : 20/05/2022 आदेश/O R D E R PER RAJPAL YADAV, VICE PRESIDENT : The present appeal is directed at the instance of the assessee against the order of the ld. Commissioner of Income Tax (Appeals), Kolkata - 20, [hereinafter the “ld. CIT(A)”], dt. 10/12/2021, passed u/s 250 of the Income Tax Act, 1961 (in short “the Act”) for the Assessment Year 2019-20. 2. Though the assessee has taken six grounds of appeal but its grievance revolves around a single issue, namely, that the ld. CIT(A) has erred in upholding the disallowance of deduction amounting to Rs.3,92,08,790/- claimed u/s 80IC of the Act. 3. Brief facts of the case are that the assessee filed its return of income for the year under consideration on 30/10/2019 declaring total income of Rs.11,06,63,550/-. This return was proposed to be processed u/s 143(1) of ITA No. 78/Kol/2022 Assessment Year: 2019-20 M/s. Surendra Steels Private Limited 2 the Act and the first proposal to make adjustment was intimated to the assessee vide notice dt. 20/03/2020. According to the assessee, it has not filed Form No. 10CCB in support of its claim of deduction u/s 80IC of the Act, along with the return. However, it was submitted that the claim of deduction u/s 80IC was duly reflect in the tax audit report in Form 3CD and that Form 10CCB was uploaded by the assessee on 06/02/2020 but the computerized system did not accept the reply of the assessee and made an adjustment in the assessment made as incorrect claim u/s 143(1)(a)(ii) of the Act. 4. Dissatisfied with the adjustment, the assessee carried the matter in appeal before the ld. First Appellate Authority. 5. The ld. First Appellate Authority has upheld the adjustment by observing as under:- “I have carefully considered the facts of the case and submission of the appellant. Perusal of the adjustments memo shows that adjustment has been made for the following reason: "In Schedule VI-A under Part-C deduction in respect of certain income in SI. No. 2.j deduction is claimed u/s.801C/801E without filing the corresponding schedule 80/C /801E/Form 10BBC OR Form 10 CCB has not been e-filed within the due date." Perusal of Form No.10CCB shows that assessee has not filled up the relevant columns of the audit report in respect of eligible business u/s.801C. Further, this audit report has been obtained and uploaded on 06.02.2020. The case laws cited by the assessee in support of its contentions that audit report can be submitted any time before the finalization of assessment, can be distinguished on facts. In the case laws cited by the assessee, audit report was obtained within due date of filing return. However it was not submitted along with the return. It was submitted later during the assessment proceedings. Under these circumstances, the Courts have held that deduction u/s.80IB/801C can be allowed. However, in appellant’s case, audit report in Form No.10CCB was obtained after the due date. Hence, assessee's case is distinguishable on facts. Further, the relevant columns of the audit report have not been filled up. Under these circumstances, the adjustments made by the CPC are justified. Hence, addition of Rs.3,92,08,970/- is confirmed.” ITA No. 78/Kol/2022 Assessment Year: 2019-20 M/s. Surendra Steels Private Limited 3 6. The ld. Counsel for the assessee, at the outset on the strength of the decisions rendered by the Hon’ble Madhya Pradesh High Court in the case of CIT vs. Panama Chemical Works reported in 292 ITR 147, submitted that the non-submission of Form 10CCB along with the return is a mere irregularity which is not fatal to the claim of deduction u/s 80IC of the Act. In other words, this is an irregularity which is curable in nature. He further relied upon the judgment of the Hon’ble Supreme Court in the case of CIT vs. G M Knitting Industries Pvt. Ltd. 376 ITR 456. He also relied upon the decisions of the ITAT Kolkata Bench in the case of M/s. Reckitt Benckiser (India) Ltd. order dt. 14/09/2018 and decision of the ITAT Delhi Bench in the case of M/s. Lancer Food Products vs. ITO dated 04/09/2017. On the strength of these decisions it was submitted before us that there is no lapse at the end of the assessee substantively because Form 10CCB was submitted before the adjustment was made by the Assessing Officer. 7. On the other hand, the ld. Sr. D/R submitted that firstly the assessee did obtain the audit report in Form 10CCB within the time limit prescribed and consequentially the ld. First Appellate Authority has specifically observed that from this report it is not discernible as to how deduction has been worked out by the assessee, therefore, adjustment has rightly been made. 8. We have duly considered rival contentions and perused the material available on record. To our mind there are two issues involved. First being the procedural irregularity and second the legitimate quantification for disallowance. If the adjustment has been made on the basis of first defect i.e., for procedural irregularity then according to the decisions referred by ITA No. 78/Kol/2022 Assessment Year: 2019-20 M/s. Surendra Steels Private Limited 4 the ld. Counsel for the assessee, this irregularity is not fatal enough to deny the claim of deduction u/s 80IC of the Act. More so, when in response to the first proposed adjustment, the assessee has reiterated submission of Form 10CCB. As far as the arguments raised by the ld. D/R is concerned, if a disallowance is to be made after filing of Form 10CCB, then it is a debatable issue and the same is not permissible u/s 143(1) in a prima facie adjustment and the assessee should have been given a notice for that. In other words, if a disallowance is required to be established by arguments and long drawn process of reasoning on points, which there may conceivably be two opinions about, then the case should have been selected for scrutiny assessment. In view of the above discussion, we delete the disallowance of deduction u/s 80IC of the Act, made by the Assessing Officer and upheld by the ld. CIT(A) and allow the appeal of the assessee. 9. In the result, appeal of the assessee is allowed. Order pronounced in the Court on 20 th May, 2022 at Kolkata. Sd/- Sd/- (GIRISH AGRAWAL) (RAJPAL YADAV) ACCOUNTANT MEMBER VICE-PRESIDENT Kolkata, Dated 20/05/2022 *SC SrPs ITA No. 78/Kol/2022 Assessment Year: 2019-20 M/s. Surendra Steels Private Limited 5 आदेश कȧ ĤǓतͧलͪप अĒेͪषत/Copy of the Order forwarded to : 1. अपीलाथȸ / The Appellant 2. Ĥ×यथȸ / The Respondent. 3. संबंͬधत आयकर आय ु Èत / Concerned Pr. CIT 4. आयकर आय ु Èत)अपील (/ The CIT(A)- 5. ͪवभागीय ĤǓतǓनͬध ,आयकर अपीलȣय अͬधकरण,Kolkata/DR,ITAT, Kolkata 6. गाड[ फाईल /Guard file. आदेशान ु सार/ BY ORDER, TRUE COPY Assistant Registrar आयकर अपीलȣय अͬधकरण ITAT, Kolkata