Income Tax , Ward -1(4), NAGPUR V. M/s Wadhwani Impex, Nagpur

ITA 84/NAG/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 9159 (ITAT-NAGPUR)
• Duration Of Justice: 9 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-01-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2002-2003
• Appeal Filed On: 29-03-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AGNESH P THOMAS
• Assessee Lawyers: HIMESH DEMBLE
• Keywords: Reassessment proceedings
• Section: 143(3); 80HHC; 80HH; 13

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL BENCH, NAGPUR (AT E - COURT, PUNE) BEFORE SHRI R.S. SYAL, VP AND SHRI PARTHA SARATHI CHAUDHURY , JM . / I TA NO. 84 /NAG /20 19 / ASSESSMENT YEAR : 2002 - 03 THE INCOME TAX OFFICER, WARD - 1(4), NAGPUR. ....... / APPELLANT / V/S. M/S. WADHWANI IMPEX, 301, BUSINESS PLAZA, RAMDASPETH, NAGPUR - 440 010 PAN: AAAFW1327L / RESPONDENT A SSESSEE BY : SHRI HIMESH DEMBLE REVENUE BY : SMT. AGNESH P. THOMAS / DATE OF HEARING : 13.01.2020 / DATE OF PRONOUNCEMENT : 13 .01.2020 / ORDER PER PARTHA SARATHI CHAUDHU RY, JM : THIS APPEAL PREFERRED BY THE R EVENUE EMANATES FROM THE ORDER OF THE LD. CIT(APPEALS) - 1, NAGPUR DATED 11.01.2019 FOR THE ASSESSMENT YEAR 2002 - 03 AS PER THE FOLLOWING GROUNDS OF APPEAL ON RECORD: 2 ITA NO. 84 /NAG /20 19 A.Y. 2002 - 03 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) WAS RIGHT IN DIRECTING THE ASSESSING OFFICER TO ALLOW DEDUCTION UNDER SECTION 80HHC TO THE ASSESSEE WHO IS A SUPPORTING MANUFACTURER IN THE SAME MANNER, AS IN THE CASE OF DIRECT EXPOR TER, TREATING THE SUPPORTING MANUFACTURER AT PAR WITH DIRECT EXPORTER AND IGNORING THE PROVISIONS OF SECTION 80HHC (1A) READ WITH SECTION 80HH C(3A) READ WITH CLAUSE (BAA) OF EXPLANATION TO SECTI ON 80HHC OF THE ACT. 2. WHETHER IN ANY VIEW OF THE MATTER, IF THE FIGURES AS COMPUTED UNDER CLAUSE (A) OR (B) OR (C) OF SUB SECTION (3) IS A NEGATIVE FIGURE, WOULD AN ASSESSEE BE ENTITLED TO A DEDUCTION UNDER SECTION 80HHC OF THE ACT. 3. ANY OTHER GROUND WHICH MAY BE RAISED WITH THE PERMISSION OF H O N BLE TRIBUNAL. 2. THE BRI EF FACTS IN THIS CASE ARE THAT THE ASSESSEE IS A REGISTERED PARTNERSHIP FIRM ENGAGED IN THE BUSINESS OF EXPORTS FILED ITS RETURN ON 31.10.2002 DECLARING TOTAL INCOME AT RS.1,94,330/ - AFTER CONSIDERING DEDUCTION U/S.80HHC OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT ) AMOUNTING TO RS.5,35,611/ - . THE CASE WAS SELECTED FOR SCRUTINY AND ASSESSED U/S.143(3) OF THE ACT WAS PASSED ON 25.11.2004 BY MAKING CERTAIN ADDITIONS. THE CLAIM OF DEDUCTION U/S.80HHC OF THE ACT WAS ALLOWED TO THE ASSESSEE. FURTHER, DURI NG THE COURSE OF AUDIT OF THE SAID ASSESSMENT THE OBJECTION RAISED BY THE REVENUE AUDITORS REGARDING ALLOWABILITY OF THE DEDUCTION U/S.80HHC OF THE ACT ON THE GROUND THAT THE SAID DEDUCTION SHALL NOT BE ALLOWED TO THE ASSESSEE AS THE ASSESSEE IS ONLY A TRADER AND NOT MANUFACTURER. ACCORDINGLY, ASSESSMENT WAS RE - OPENED AND NOTICE U/S.148 OF THE ACT WAS ISSUED AND SERVED ON 30.03.2009. ASSESSMENT U/S.143(3) R.W .S.147 OF THE ACT WAS PASSED ON 25.11.2009 AT RS.7,39,940/ - BY MAKING ADDITION OF RS.5,35,611/ - AS DISALLOWANCE OF DEDUCTION U/S.80HHC OF THE ACT. 3 . THAT BEFORE THE LD. CIT(APPEALS), THE ASSESSEE HAS CHALLENGED THE VALIDITY OF PROCEEDINGS U/S.147/148 OF THE ACT AND ALSO THE ADDITION MADE BY THE ASSESSING OFFICER ON MERITS. THAT BEFORE THE LD. CIT(APPEALS) , A DETAILED 3 ITA NO. 84 /NAG /20 19 A.Y. 2002 - 03 WRITTEN SUBMISSION WAS FILED BY THE ASSESSEE WHEREIN WITH REGARD TO PROCEEDINGS U/S.147/148 OF THE ACT, THEY HAD RE LIED ON THE VARIOUS JUDICIAL PRONOUNCEMENTS WHEREIN IT HAD BEEN HELD THAT THE INFORMATION, ON THE BASIS OF WHICH THE AO HAD INITIATED PROCEEDINGS U/S.147 BEING UNCERTAIN AND VAGUE, COULD NOT BE CONSTRU ED TO BE SUFFICIENT AND RELEVANT MATERIAL ON THE BASIS OF WHI CH A REASONABLE PERSON COULD HAVE FORMED A BELIEF THAT INCOME HAS E SCAPED ASSESSMENT . THE LD. CIT(APPEALS) ON ANALYZING THE FACTS OF THE CASE AND PERUSING THE PROCEEDINGS INITIATED HELD THEREFORE THAT THE REASSESSMENT PROCEEDINGS INITIATED BY THE ASSES SING OFFICER IS NOT VALID AS PER LAW AS EVIDENT AT PARA 5.2 OF HIS ORDER. THAT ON MERITS ALSO, THE LD. CIT(APPEALS) AS PER DISCUSSION GIVEN AT PARA 5.3 AN D 5.4 OF HIS ORDER , HAS ALLO WED THE APPEAL OF THE ASSESSEE. THEREFORE, THE LD. CIT(APPEALS) HAS HELD THAT THE REASSESSMENT PROCEEDINGS U/S.147/148 OF THE ACT WAS BAD IN LAW AND ALSO ON MERITS, HAVE GIVEN RELIEF TO THE ASSESSEE. 4. THE LD. AR OF THE ASSESSEE AT THE VERY OUTSET REITERATED THESE FACTS BEFORE US AT THE TIME OF HEARING THROUGH VIDEO CONFERENCE A ND SUBMITTED THAT THE REVENUE HAS NOT CHALLENGED THE QUASHING OF REASSESSMENT ORDER BY THE LD. C IT(APPEALS). THE REVENUE HAS ONLY PREFERRED GROUND OF APPEAL IN THE APPEAL MEMO W ITH REGARD TO DELETION OF ADDITION ON MERITS. IN ABSENCE OF REVENUE S TAKING GROUNDS IN RESPECT OF VALIDITY OF 147 /148 PROCEEDINGS, IT IS DEEMED THAT REVENUE HA S ACCEPTED THE DECISION OF THE LD. CIT(APPEALS). IN SUCH CIRCUMSTANCES, THE PRESENT APPEAL BY THE REVENUE DOES NOT SUSTAIN IN LAW. 5. THE LD. DR PLACED STRONG RELIANCE ON THE ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER. 4 ITA NO. 84 /NAG /20 19 A.Y. 2002 - 03 6. WE HAVE PERUSED THE CASE RECORDS AND ANALYZED THE JUDICIAL PRONOUNCEMENTS PLACED BEFORE US WHILE CONSI DERING THE FACTS OF THE CASE. IN THIS CASE, ASSESSMENT WAS COMPLETED U/S.143(3) R.W.S.147 OF THE ACT. THAT AGAINST THE REASSESSMENT PROCEEDINGS, THE GROUNDS WERE TAKEN BY THE ASSESSEE BEFORE THE LD. CIT(APPEALS) ALONG WITH GROUNDS ON MERITS. THE LD. CIT(APPEALS) VIDE HIS ORDER DATED 11.01.2019 HAS HELD THE REASSESSMENT PROCEEDINGS U/S.147/148 OF THE ACT TO BE BAD IN LAW AND ALSO, HAS GIVEN RELIEF TO THE ASSESSEE ON MERITS . THAT HOWEVER, THE REVENUE HAS ONLY TAKEN THE GROUND ON MERITS BEFORE US REGARDING DELETION OF ADDITION BUT T HE VERY BAS I S OF THE ENTIRE REASSESSME NT PROCEEDINGS U/S. 143(3) R.W.S.147/148 OF THE ACT WAS NOT CHALLENGED BEFORE US. MEANING THEREBY, REVENUE HAS ACCEPTED THAT THE RE ASSESSMENT PROCEEDINGS WAS BAD IN LAW. IN SUCH CIRCUMSTANCES , WE DO NOT FIND ANY INFIRMITY WITH THE FINDINGS OF THE LD. CIT(APPEALS) AND RELIEF PROVIDED TO THE ASSESSEE BOTH ON THE LEGAL GROUNDS AS WE LL AS GROUNDS ON MERITS BY THE LD. CIT(APPEALS) IS HEREBY SUSTAINED. 7. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. ORDER PRO NOUNCED ON 13 TH DAY OF JANUARY, 2020 . SD/ - SD/ - R.S.SYAL PARTHA SARATHI CHAUDHURY VICE PRESIDENT JUDICIAL MEMBER / PUNE; / DATED : 13 TH JANUARY , 20 20 . SB 5 ITA NO. 84 /NAG /20 19 A.Y. 2002 - 03 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. THE CIT(APPEALS) - 1, NAGPUR. 4. THE PR. CIT - 1, NAGPUR. 5 . , , / DR, ITAT, NAGPUR. 6. / GUARD FILE. // TRUE COPY // / BY ORDER, / PRIVATE SECRETARY , / ITAT, PUNE . 6 ITA NO. 84 /NAG /20 19 A.Y. 2002 - 03 DATE 1 DRAFT DICTATED ON 13.01.2020 SR.PS/PS 2 DRAFT PLACED BEFORE AUTHOR 1 3.01.2020 SR.PS/PS 3 DRAFT PROPOSED AND PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER AM/JM 5 APPROVED DRAFT COMES TO THE SR. PS/PS SR.PS/PS 6 KEPT FOR PRONOUNCEMENT ON SR.PS/PS 7 DATE OF UPLOADING OF ORDER SR.PS/PS 8 FILE SENT TO BENCH CLERK SR.PS/PS 9 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 10 DATE ON WHICH FILE GOES TO THE A.R 11 DATE OF DISPATCH OF ORDER