BTC Industries Ltd., Haldwani V. ACIT, Haldwani

ITA 780/DEL/2016

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 5216 (ITAT-DEHRADUN)
• Duration Of Justice: 5 year(s) 7 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-09-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2011-2012
• Appeal Filed On: 12-02-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: T S MAPWAL
• Keywords: Revision of order; Reasonable cause; Condonation of delay; Revised return; Set aside
• Section: 80IB; 119(2)(b); 143(1); 80IC; 139(1); 139(4); 80IC; 22; 54; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DEHRADUN BENCH, DEHRADUN BEFORE SH. AMIT SHUKLA, JUDICIAL MEMBER DR. B. R. R. KUMAR, ACCOUNTANT MEMBER ITA NO. 780/DEL/2016 : ASSTT. YEAR : 2011-12 BTC INDUSTRIES LTD., MAA SHEETLA TOWERS, NEAR VOLKSWAGAN HALDWANI, RAMPUR ROAD, HALDWANI VS ACIT, CIRCLE-1, HALDWANI (APPELLANT) (RESPONDENT) PAN NO. AACCB5752D ASSESSEE BY : SH. AMOL SINHA, ADV. REVENUE BY : SH. T. S. MAPWAL, SR. DR DATE OF HEAR ING: 17 . 09 .20 21 DATE OF PRONOUNCEMENT: 22 .0 9 .20 21 ORDER PER DR. B. R. R. KUMAR, ACCOUNTANT MEMBER: THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LD. CIT(A), HALDWANI DATED 18.12.2 015. 2. FOLLOWING GROUNDS HAVE BEEN RAISED BY THE ASSESS EE: 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE COMMISSIONER OF INCOME TAX (APPEALS)- HALDWANI, DISTRICT NAINITAL [BRIEFLY THE CIT (A)] HAS ERRED IN UPHOLDING THE DISALLOWANCE UNDER SECTION 8 0IC FOR THE REASON THAT DIGITAL SIGNATURE OF MR. TUSAR AGGARWAL, DIRECTOR OF THE APPELLANT HAD EXPIRED. 1.1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CA SE AND IN LAW, THE CIT(A) HAS ERRED IN NOT APPRECIATIN G THAT A FRESH APPLICATION FOR RENEWAL OF DIGITAL SIGNATUR E WAS MADE ON 27.9.2011 I.E. MUCH BEFORE EXPIRY OF DUE DA TE OF FILLING OF RETURN FOR THE ASSESSMENT YEAR 2011-1 2. 1.2. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CA SE AND IN LAW, THE CIT (A) HAS ERRED IN NOT APPRECIATI NG THAT THE DELAY IN FILLING THE RETURN HAD OCCURRED BECAUS E THE ITA NO. 780/DEL/2016 BTC INDUSTRIES LTD. 2 DIGITAL SIGNATURE WAS RECEIVED 'ON 4.10.2011 AND TH E APPELLANT FILED THE RETURN IMMEDIATELY ON THE NEXT DAY I.E. 5.10.2011, HENCE, THERE WAS SUFFICIENT AND REASONABLE CAUSE FOR NOT FILLING THE RETURN IN TIME . 2. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) HAS ERRED IN NOT APPRECIATING TH AT SECTION 80IC IS A BENEFICIAL PROVISION TO ENCOURAGE INDUSTRIALIZATION, HENCE HAS TO BE LIBERALLY CONSTR UED. 3. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT (A) HAS ERRED IN NOT APPRECIATING T HAT DELAY IN FILLING THE RETURN WAS A TECHNICAL DEFAULT FOR THE REASON THAT BECAUSE OF OVERSIGHT THE DIGITAL SIGNAT URE WAS NOT RENEWED IN TIME, THOUGH THE AUDITED BOOKS O F ACCOUNT WAS AVAILABLE WITH THE APPELLANT BEFORE THE DUE DATE OF FILLING OF RETURN. 4. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) HAS ERRED IN NOT APPRECIATING TH AT IT IS A SETTLED LAW THAT UNDER SECTION 80IC THE FILLING O F RETURN BEFORE DUE DATE AS PER SECTION 139(1) IS DIRECTORY AND NOT MANDATORY. 5. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT (A) HAS ERRED IN NOT CONSIDERING TH E ORDER OF HYDERABAD ITAT DATED 31.5.2012 IN ITO VS. SRI S. VENKATAIAH ITA 984/HYD/2011. 3. THE ASSESSEE E-FILED THE RETURN OF INCOME ON 05. 10.2011 DECLARING TOTAL INCOME OF RS.3,57,65,280/-. THE RET URN WAS PROCESS U/S 143(1) OF THE INCOME TAX ACT, 1961 ON 2 0.01.2012 DETERMINING THE TOTAL INCOME OF RS.5,40,43,730/- DI SALLOWING THE DEDUCTION OF RS.1,82,78,446/- CLAIMED U/S 80IC. THE ASSESSEE FILED APPLICATION U/S 154 PLEADING FOR REC TIFICATION OF THE ORDER U/S 143(1) WHICH WAS REJECTED BY THE AO O N THE GROUNDS THAT SINCE THE RETURN OF THE ASSESSEE FILED WAS DELAYED BY 5 DAYS, THE CLAIM OF DEDUCTION U/S 80IC CANNOT B E ALLOWED. 4. AGGRIEVED THE ASSESSEE FILED APPEAL BEFORE THE L D. CIT (A) WHO CONFIRMED THE ACTION OF THE ASSESSING OFFICER R EJECTING THE REASONS SHOWN BY THE ASSESSEE FOR DELAY OF FILING O F THE RETURN. ITA NO. 780/DEL/2016 BTC INDUSTRIES LTD. 3 5. DURING THE HEARING BEFORE US, THE LD. AR SUBMITT ED THAT THE DELAY OF 4 DAYS IN FILING THE RETURN WAS OWING TO R EASONS BEYOND THE CONTROL OF THE ASSESSEE. IT WAS SUBMITTED THAT THE DIGITAL SIGNATURE OF THE PERSON AUTHORIZED TO FILE THE RETU RN I.E. THE MANAGING DIRECTOR HAS EXPIRED AND ON 27.09.2011 HE HAD APPLIED FOR RENEWAL OF DIGITAL SIGNATURE. THE DIGIT AL SIGNATURE OF THE AUTHORIZED SIGNATORY WAS RECEIVED ON 04.10.2011 AND RETURN OF INCOME HAS BEEN FILED ON 05.10.2011. HE HAS SUBM ITTED ALL THE RELEVANT EVIDENCES PROVING THE APPLICATION FILE D FOR RENEWAL OF DIGITAL SIGNATURE AND THE RECEIPT OF THE AUTHORI ZATION CODE AND PLEADED THAT SINCE THE DELAY IN FILING OF THE R ETURN WAS DUE TO VALID REASONS, THE DEDUCTION ELIGIBLE SHALL NOT BE DISALLOWED. THE LD. AR RELIED UPON THE JUDGMENTS OF VARIOUS JUD ICIAL AUTHORITIES TO BUTTRESS HIS CLAIM. THE LD. AR HAS A LSO ARGUED THAT THE ASSESSEE WAS NOT GIVEN AN OPPORTUNITY WHIL E MAKING ADJUSTMENT OF THE DEDUCTION CLAIMED AS ENVISAGED UN DER THE PROVISIONS OF SECTION 143(1). HE ARGUED THAT IN THE ABSENCE OF ADHERENCE TO THE PROVISIONS OF SECTION 143(1), THE ORDER PASSED IS A NULLITY AND VOID AB-INITIO. 6. ON THE OTHER HAND, THE LD. DR VEHEMENTLY ARGUED THAT THERE IS NO PROVISION FOR CONDONING THE DELAY WITH REGARD TO ALLOWABILITY OF DEDUCTION U/S 80IC AND THE ONLY WAY IS TO FILE AN APPLICATION U/S 119(2) OF THE ACT TO CBDT. HE ARGUE D THAT THE PROVISIONS OF THE ACT HAVE TO BE STRICTLY INTERPRET ED AND THE ACT MANDATES FILING OF THE RETURN IN TIME TO CLAIM DEDU CTION, THE SAME OUGHT TO HAVE BEEN FOLLOWED BY THE ASSESSEE TO CLAIM THE BENEFIT. 7. HEARD THE ARGUMENTS OF BOTH THE PARTIES AND PERU SED THE MATERIAL AVAILABLE ON RECORD. ITA NO. 780/DEL/2016 BTC INDUSTRIES LTD. 4 8. THE PROVISIONS OF SECTION 80IC WITH REGARD TO AL LOWABILITY OF DEDUCTION IN CASE OF LATE FILING OF THE RETURN I N THE UNDISPUTED PRESENCE A REASONABLE CAUSE HAS BEEN EXAMINED BY VA RIOUS COURTS AND TRIBUNALS. 9. THE DIVISION BENCH OF HONBLE HIGH COURT OF ANDH RA PRADESH IN THE CASE OF CIT VS. S. VENKATAIAH IN ITA NO. 114/2013 REAFFIRMED THE ORDER OF THE TRIBUNAL HOLDI NG THAT THE ASSESSEE WHO IS OTHERWISE LEGALLY ENTITLED FOR DEDU CTION CANNOT BE DENIED THE SAME ON MERE TECHNICALITIES. IN THAT CASE ALSO, THE REVENUE TOOK UP A GROUNDS OF FILING APPLICATION TO THE CBDT U/S 119(2)(B) FOR EXTENSION OF TIME FOR FILING OF T HE RETURN AND THE SAME HAS BEEN DULY CONSIDERED BY THE TRIBUNAL. IN THAT CASE, THERE WAS A DELAY OF 74 DAYS OWING TO COMPUTE R GLITCHES WHICH WAS BEYOND THE CONTROL OF THE ASSESSEE. 10. FURTHER, IN THE CASE OF DCIT VS. VEGA CONVEYORS AND AUTOMATION LTD. IN ITA NO. 1231/HYD./2010, THE CO-O RDINATE BENCH OF TRIBUNAL HELD THAT THE DEDUCTION CANNOT BE DISALLOWED SINCE FORM 10CCB WAS NOT FILED ALONG WITH THE RETUR N. IT WAS HELD THAT THE ASSESSEE IS ELIGIBLE FOR DEDUCTION SI NCE THE AUDIT REPORT WAS FILED DURING THE COURSE OF ASSESSMENT PR OCEEDINGS. 11. IN THE CASE OF SYMBIOSIS PHARMACEUTICALS (P.) L TD. VS. DCIT, YAMUNA NAGAR IN ITA NO. 501/2017 DEALING WITH THE ISSUE OF DEDUCTION U/S 80IC AND NON-FILING OF THE RETURN BEFORE DUE DATE PROVIDED U/S 139(1), HELD THAT THE DEDUCTION U /S 80IC COULD NOT BE DENIED AS THERE WAS A REASONABLE CAUSE IN LATE FILING OF THE RETURN. ITA NO. 780/DEL/2016 BTC INDUSTRIES LTD. 5 12. THE HONBLE HIGH COURT OF PUNJAB & HARYANA IN T HE CASE OF CIT VS. JAGRITI AGGARWAL 15 TAXMAN 146 HELD THAT TH E DEDUCTION CLAIMED U/S 54 IS ALLOWABLE AND THE RETURN COULD BE FILED IN THE EXTENDED TIME LIMIT PROVIDED AS PER SECTION 139(4). 13. THE HONBLE HIGH COURT OF DELHI IN THE CASE OF PODDAR PIGMENTS VS. CIT 175 TAXMANN 302, THE CLAIM OF 80IB WHICH HAS NOT BEEN MADE IN THE ORIGINAL RETURN AND THE TI ME PERIOD OF FILING OF THE REVISED RETURN HAS ELAPSED AND THE AS SESSEES PREFERRED APPLICATION U/S 264, THE COURT HELD THAT DELAY OCCURRED DUE TO BONAFIDE REASONS AND THERE IS NO MA LAFIDE INTENTION OF THE ASSESSEE IN DELAYING IN FILING OF THE REVISED RETURN. THUS, WE FIND THAT THE COURTS HAVE INTERPRE TED THE PROVISIONS OF THE ACT GIVING BENEFIT TO THE ASSESSE E LIBERALLY. WE ALSO MAKE IT CLEAR THAT THE ASSESSEE HAS NO RIGHT A S A MATTER TO ROUTINE TO FILE RETURNS BELATELY AND CLAIM THE DEDU CTION CONTRARY TO THE PROVISIONS OF SECTION 80AC. 14. FURTHER, IN THE CASE OF FIBERFILL ENGINEERS VS DCIT 85TAXMANN27 VIDE ORDER DATED 10.08.2017 HELD THAT W HEN THE CLAIM OF THE ASSESSEE FOR DEDUCTION IS JUSTIFIED ON MERITS, THERE WAS NO JUSTIFICATION FOR NOT VIEWING THE DELAY OF 4 6 DAYS IN FILING THE RETURN TO BE BONAFIDE. THE HONBLE HIGH COURT H ELD THAT THE DELAY IS NOT SO EXTRAORDINARY SO AS NOT TO BE CONDO NED. THE HONBLE COURT HAS ALSO SET ASIDE THE ORDER OF THE C BDT PASSED U/S 119(2)(B) OF THE ACT REJECTING THE CONDONATION OF DELAY WHEN THE ASSESSEE IS ELIGIBLE FOR DEDUCTION U/S 80I C. 15. THE HONBLE APEX COURT IN THE CASE OF BALAJI TE MPO LTD. VS. CIT 196 ITR 188 HELD THAT DENIAL OF A BENEFIT O N MERE TECHNICAL GROUND SHOULD NOT BE TAKEN INTO ACCOUNT. IT HELD THAT ITA NO. 780/DEL/2016 BTC INDUSTRIES LTD. 6 A PROVISION IN TAXING STATUTE GRANTING INCENTIVES F OR PROMOTING GROWTH AND DEVELOPMENT SHOULD BE CONSTRUED LIBERALL Y AND SINCE THE PROVISION FOR PROMOTING ECONOMIC GROWTH HAS TO BE INTERPRETED LIBERALLY, THE RESTRICTION ON IT TOO HA S TO BE CONSTRUED SO AS TO ADVANCE THE OBJECTIVE OF THE PRO VISION AND NOT TO FRUSTRATE. 16. THUS, ON GOING THROUGH THE VARIOUS PROVISIONS O F THE ACT WITH REGARD TO SECTIONS 80IC, 80AC, 119(2)(B), 139( 1), 139(4) AND THE VARIOUS JUDGMENTS OF THE TRIBUNAL, HONBLE HIGH COURTS AND THE HONBLE APEX COURT AND CONSIDERING THE PECU LIAR FACTS OF THE CASE AND INTENTION OF THE LAW, WE HOLD THAT THE CLAIM OF THE ASSESSEE COULD NOT BE OUSTED AS THE RETURN WAS FILE D WITHIN THE TIME ALLOWED U/S 139(4). SINCE THE MERIT OF THE ALL OWABILITY OF THE DEDUCTION PER SE HAS NOT BEEN EXAMINED BY THE AO, THE LD. DR ALTERNATIVELY ARGUED THAT THE MATTER MAY BE REMA NDED BACK TO THE FILE OF THE AO FOR THE LIMITED PURPOSE OF EX AMINING THE ALLOWABILITY OF THE DEDUCTION AS PER THE PROVISIONS OF SECTION 80IC. WE FIND THAT THE DEDUCTION FOR THE SUBSEQUENT YEAR STANDS ALLOWED BY THE REVENUE WHICH PROVES THAT THE CLAIM OF THE DEDUCTION PER SE HAS BEEN ACCEPTED ON MERITS, HENCE, WE HOLD THAT REMANDING THE MATTER TO THE FILE OF THE AO DOE SNT SERVE ANY TANGIBLE PURPOSE AT THIS JUNCTURE. 17. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 22/09/2021. SD/- SD/- (AMIT SHUKLA) (DR. B. R. R. KUMAR) JUDICIAL MEMBER ACC OUNTANT MEMBER DATED: 22/09/2021