Shri Ashok Garg, Siliguri V. CIT, Siliguri, Siliguri

ITA 938/KOL/2009

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 2522 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 1 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2010
• Appeal Filed By: Assessee
• Bench Allotted: C
• Next Hearing Date: 27-04-2010
• Assessment Year: 2004-2005
• Appeal Filed On: 29-05-2009
• Court: TRIBUNAL
• Department Lawyers: K K SRIVASTAVA
• Assessee Lawyers: S K TULSIYAN
• Keywords: Assessment record; Set aside
• Section: 143(3); 80IB; 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : KOLKATA [BEFORE HONBLE SRI D. K. TYAGI, JM & HONBLE SRI B. C. MEENA, AM] I.T.A. NO.938/KOL/2009 ASSESSMENT YEAR: 2004-05 SRI ASHOK GARG -VS- COMMISSIONER OF INCOME-TAX, SILIGURI (PA NO.AESPG 9879 B) (APPELLANT) (RESPONDENT) APPELLANT BY : SRI S. K. TULSIYAN RESPONDENT BY : SRI K. K. SRIVASTAVA O R D E R PER D. K. TYAGI, JM: THE APPEAL PREFERRED BY THE ASSESSEE IS DIRECTED AG AINST THE ORDER OF THE LD. CIT, SILIGURI DATED 30.03.2009 FOR ASSESSMENT YEAR 2004- 05 PASSED U/S. 263 OF THE I. T. ACT. 2. BRIEF FACTS OF THE CASE ARE THAT THE AO WHILE GI VING 80IB DEDUCTION HAS OBSERVED AS UNDER : DURING THE COURSE OF HEARING, ASSESSEE PRODUCED BO OKS OF ACCOUNTS, BANK STATEMENT AND OTHER RELEVANT DOCUMENTS WHICH WERE EXAMINED. ASSESEE HAS CLAIMED DEDUCTION U/S. 80IB TO THE TUNE OF RS.22,69,416/- IN RESPECT OF INCOME EARNED FROM THE MANUFACTURING FIRM, M/S. SHREE WOOD, MADUKARAI VILL AGE, PONDICHERY. M/S. SHREE WOOD ENGAGED IN MANUFACTURING OF VENEER, NOT MENTIO NED IN ELEVENTH SCHEDULED OF THE INCOME TAX ACT, 1961 AND ALSO THE FACTORY IS SITUAT ED IN THE STATE OF PONDICHERY WHICH HAS BEEN INCLUDED IN THE EIGHT SCHEDULED OF THE ACT FOR HUNDRED PER CENT DEDUCTION U/S. 80IB ON EVERY ITEM MANUFACTURED THERE. THE A.R OF THE ASSESSEE ALSO PRODUCED THE PERMANENT REGISTRATION CERTIFICATE ISSUED BY DIREC TORATE OF INDUSTRIES AND COMMERCE, GOVT. OF PONDICHERY ALONGWITH BILLS OF PLANTS AND MACHINERY AND WAGE REGISTER IN SUPPORT OF HIS CLAIM OF DEDUCTION U/S. 80IB. ALL T HE DOCUMENTS WERE CHECKED AND THE DEDUCTION CLAIMED U/S. 80IB IS FOUND IN ORDER AS P ER PROVISION OF SECTION 80IB OF THE INCOME TAX ACT, 1961. IN VIEW OF THE ABOVE FACT AND CIRCUMSTANCES, THE TO TAL INCOME OF THE ASSESSEE DISCLOSED AT RS.1,34,480/- IN THE RETURN OF INCOME FOR ASSESS MENT YEAR 2004-05, IS ACCEPTED AS PER RETURN. SUBSEQUENTLY, THE LD. CIT HAS ISSUED NOTICE U/S. 26 3 ON 6.12.2007 TO THE ASSESSEE PROPOSING REVISION OF THE CASE BY STATING THAT THE PROPER ENQUIRIES FOR ELIGIBILITY AS PER PROVISIONS OF SECTION 80IB HAS NOT BEEN MADE BY THE AO. IN REPLY, THE ASSESSEE HAS FILED A DETAILED SUBMISSION, WHICH THE LD. CIT HAS REPROD UCED IN HIS 263 ORDER AND OBSERVED AS UNDER : 2 THE SUBMISSION OF THE ASSESEE HAS BEEN CAREFULLY C ONSIDERED. AS PER THE ASSESEE THE AUDIT REPORT WAS CLAIMED TO HAVE BEEN FILED ON 9.11 .2004. HOWEVER, THE SAME WAS NOT AVAILABLE IN THE RECORDS. AS A RESULT THE AO FAILE D TO MAKE ANY ENQUIRY REGARDING THE ELIGIBILITY OF DEDUCTION U/S. 80IB OF THE I T. ACT. THUS, THE AO HAS NOT VERIFIED AT ALL WHETHER THE ASSESSEE IS RIGHTLY ELIGIBLE FOR THE DE DUCTION. THUS, THE AO PASSED THE ASSESSMENT ORDER IN A HASTE, WITHOUT MAKING ENQUIRY ON THIS ISSUE. THIS HAS RENDERED THE ASSESSMENT ERRONEOUS AND PREJUDICIAL TO THE INT EREST OF REVENUE. *** *** IN VIEW OF THE ABOVE, THE ASSESSMENT ORDER PASSED B Y THE AO WAS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. THE ASSESS MENT IS, THEREFORE, SET ASIDE ON THE ISSUES DISCUSSED ABOVE. THE AO WILL VERIFY WHETHER THE AUDIT REPORT WAS INDEED FILED BY THE ASSESSEE ON 9.11.04 IN HIS OFFICE AS CLAIMED BY THE ASSESSEE. THE AO WILL FURTHER MAKE AN ENQUIRY ON THE ABOVE ISSUE OF ELIGIBILITY OF DEDUCTION AND PASS A SPEAKING ORDER BASED ON THE MERITS OF THE CASE. NOT TO MENT ION THE AO IS TO GIVE PROPER OPPORTUNITY OF HEARING TO THE ASSESSEE. AGGRIEVED BY THE SAID ORDER, NOW THE ASSESSEE IS IN APPEAL BEFORE US. 3. AT THE TIME OF HEARING BEFORE US, THE LD. COUNSE L FOR THE ASSESSEE WHILE SUPPORTING THE ORDER OF THE AO SUBMITTED THAT THE A SSESSEE IS A PROPRIETOR OF FOUR FIRMS VIZ., M/S. SHREE WOOD, MADUKARAI VILLAGE, PONDICHER Y, M/S. AVON UDYOG, YAMUNANAGAR, M/S. AVON UDYOG, DELHI AND M/S. AVON U DYOG, MUMBAI. M/S. SHREE WOOD DEALS IN MANUFACTURING AND SALE OF VENEERS AND OTHER FIRMS DEAL IN TRADING OF VENEERS. DURING THE ASSESSMENT YEAR UNDER CONSIDER ATION, THE ASSESSEE CLAIMED DEDUCTION U/S. 80IB OF THE I. T. ACT, 1961 AMOUNTIN G TO RS.22,69,416/- IN RESPECT OF INCOME EARNED FROM THE MANUFACTURING FIRM, M/S. SHR EE WOOD. HE, FURTHER CONTENDED THAT M/S SHREE WOOD IS ENGAGED IN THE BUSINESS OF M ANUFACTURING OF VENEER, NOT MENTIONED IN ELEVENTH SCHEDULE OF THE INCOME TAX AC T, 1961. THE FACTORY IS SITUATED IN THE STATE OF PONDICHERRY WHICH HAS BEEN INCLUDED IN THE EIGHT SCHEDULE OF THE INCOME TAX ACT, 1961 FOR HUNDRED PERCENT DEDUCTION U/S 801 B ON EVERY ITEM MANUFACTURED THERE. PERMANENT REGISTRATION CERTIFICATE HAS BEEN ISSUED BY DIRECTORATE OF INDUSTRIES AND COMMERCE, GOVERNMENT OF PONDICHERRY, WAGE REGIS TER SHOWING EMPLOYMENT OF 10 WORKERS. THE SAID FACTS SHOW THAT THE ASSESSEE HAS FULFILLED ALL THE CONDITIONS AND IS, THEREFORE, ELIGIBLE FOR DEDUCTION U/S 801B OF THE A CT. HOWEVER, FROM THE SHOW CAUSE NOTICE ISSUED BY THE CIT, IT IS NOTICED THAT THE CI T HAS RAISED THE FOLLOWING ISSUES: A) AUDIT REPORT IN FORM 10CCB WAS FURNISHED ALONG W ITH THE RETURN OF INCOME IN OLD FORM WHICH WAS APPLICABLE TILL 5.9.01 I.E. UPTO A.Y. 2002-03 B) CONDITIONS AS ENUMERATED UNDER SUB-SECTION (4) O F SECTION 801B WERE NOT FULLY VERIFIED. 3 IN THIS RESPECT, THE LD. COUNSEL FOR THE ASSESSEE S UBMITTED THAT FORM NO 10CCB WAS AMENDED BY THE INCOME TAX (TWENTY THIRD AMENDME NTS) RULES, 2002 W.E.F. 6.9.2002 CONSEQUENT TO THE AMENDMENT IN RULE 18BBB. HOWEVER, THE SAID AMENDMENT WAS OVERLOOKED BY THE AUDITOR INADVERTENTLY AND THE REQUIRED AUDIT REPORT WAS FURNISHED IN OLD FORM FOR AY 2003-04 AND AY 2004-05 ALONG WIT H THE INCOME TAX RETURN. HOWEVER, WHEN SUCH MISTAKE DISCOVERED BY THE ASSESS EE DULY FILED THE AUDIT REPORT IN AMENDED FORM 10CCB ALONG WITH FORWARDING LETTER ON 9.11.2004. COPY OF THE SAID LETTER ALONG WITH THE FORM 10CCB EVIDENCING THE SAM E IS ENCLOSED AT PAGE NO 40 OF THE PAPER BOOK. THUS, IT IS NOT THE CASE THAT THE ASSES SEE FAILED TO FILE THE AUDIT REPORT IN FORM NO 10CCB. THE SAID INCOME-TAX RETURN FILED BY THE ASSESSEE ALONG WITH FORM 10CCB AS WELL AS THE AMENDED FORM 10CCB WERE DULY A CCEPTED BY THE ASSESSING OFFICER AND ASSESSMENT COMPLETED U/S 143(3) OF THE INCOME-TAX ACT, 1961 AND DEDUCTION UNDER SECTION 801B DULY GRANTED. HE ALSO CITED VARIOUS CASE LAWS IN SUPPORT OF HIS SUBMISSIONS SUCH AS I) CIT VS. PUNJAB FINANCIAL CORPORATION 254 ITR 00 6, II) BAJAJ TEMPO LTD. VS. CIT 1196 ITR 1881, III) CIT VS. GUJARAT OIL & ALLIED INDUSTRIES 201 ITR 325, IV) MURALI EXPORT HOUSE VS. CIT 238 ITR 257, V) CIT VS. PANAMA CHEMICALS WORKS 292 ITR 147, VI) CIT VS. PUNJAB FINANCIAL CORPORATION 254 ITR 6 , VII) RAMESH P. MODI VS. CIT 122 TTJ 566, VIII) TOYOTA MOTOR CORPORATION VS. CIT 306 ITR 52 IX) CIT VS. GABRIEL INDIA LTD. 203 ITR 108 , X) CIT VS. ASHISH RAJPAL 23 DTR 266 WHILE CONCLUDING HIS ARGUMENTS THE LD. COUNSEL SUMM ARIZED THE FACTS OF THE ASSESSEES CASE AS UNDER : I. THE ASSESSEE FILED AUDIT REPORT IN FORM 10CCB A LONG WITH THE RETURN BUT IN OLD FORMAT. II. THE ASSESSEE WAS NOT AWARE OF THE AMENDMENT BRO UGHT IN RULE 18BBB AND SIMULTANEOUS CHANGE OF FORM 10CCB III. AS SOON AS THE ASSESSEE BECAME AWARE, HE FILED THE AUDIT REPORT IN AMENDED FORM 10CCB ON 9.11.2004 DURING THE COURSE OF ASSESSMENT PROCEEDINGS. IV. THE PROVISIONS OF SECTION 80IB (13) ARE NOT MAN DATORY AND THE ASSESSING OFFICER HAS DISCRETION TO ENTERTAIN THE AUDIT REPORT EVEN THOUG H IT WAS NOT FILED ALONG WITH THE RETURN FOR GRANT OF BENEFIT OF DEDUCTION TO THE ASS ESSEE V. ALL THE OTHER DOCUMENTS SUPPORTING THE CLAIM FOR DEDUCTION U/S 80IB WERE DULY FILED BEFORE THE ASSESSING OFFICER. 4 VI. THE ASSESSING OFFICER VERIFIED ALL THE DOCUMENT S AS EVIDENT FROM THE ASSESSMENT ORDER PASSED. VII. AFTER BEING SATISFIED, THE A.O. GRANTED DEDUCT ION U/S 80IB TO THE ASSESSEE. VIII. PROPER ENQUIRY HAD BEEN MADE BY THE A.O. AND THE ASSESSMENT PROCEEDINGS WERE COMPLETED ONLY AFTER SEVERAL ROUNDS OF HEARINGS, DI SCUSSIONS AND SUBMISSION OF DOCUMENTS. IX. IF THE INCOME-TAX OFFICER ACTING IN ACCORDANCE WITH LAW MAKES A CERTAIN ASSESSMENT IT CANNOT BE BRANDED AS ERRONEOUS SIMPLY BECAUSE AC CORDING TO THE COMMISSIONER OF INCOME-TAX, THE ORDER SHOULD HAVE BEEN WRITTEN MORE ELABORATELY. IN THE LIGHT OF THE ABOVE FACTS AND THE JUDICIAL PR ONOUNCEMENTS RELIED ON BY HIM, HE CONCLUDED THAT THE LD. CIT WAS NOT JUSTIFIED IN HOL DING THAT THE A.O. FAILED TO CONDUCT PROPER INVESTIGATION AND VERIFICATION AND THAT THE ORDER OF THE A.O. IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE AND, THE REFORE, THE SAME MAY KINDLY BE CANCELLED. 4. ON THE OTHER HAND, THE LD. DR RELIED ON THE ORDE R OF THE LD. CIT AND URGED BEFORE THE BENCH TO CONFIRM THE SAME. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED TH E MATERIAL AVAILABLE ON RECORD AND THE CASE LAWS CITED BY THE LD. COUNSEL FOR THE ASSESSEE. WE FIND THAT THERE IS NO DISPUTE ABOUT THE FACT THAT FOR GRANTING DEDUCTION U/S. 80IB AUDIT REPORT IN AMENDED FORM NO. 10CCB WAS REQUIRED. THE ASSESSEES CASE I S THAT THE SAME WAS FILED ON 9.11.2004 DURING THE ASSESSMENT PROCEEDINGS AND THE AO HAS GRANTED DEDUCTION U/S. 80IB AFTER ENTERTAINING THE SAME. THE LD. CIT, ON THE OTHER HAND, HAS HELD THE ORDER OF THE AO ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE, AS ACCORDING TO HIM, NO SUCH REPORT WAS AVAILABLE IN THE RECORD. TO VERIFY THE SAME ASSESSMENT RECORDS WERE CALLED FOR AND SEEN IN THE OPEN COURT AND THE CONT ENTION OF THE LD. CIT THAT AUDIT REPORT IN AMENDED FORM NO. 10CCB WAS NOT AVAILABLE ON RECO RD WAS FOUND TO BE CORRECT. IN VIEW OF THIS, WE FIND NO INFIRMITY IN THE ORDER OF THE LD. CIT IN PASSING ORDER U/S. 263 OF THE I. T. ACT AND THE SAME IS HEREBY UPHELD. THE AP PEAL OF THE ASSESSEE IS, THEREFORE, DISMISSED. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DI SMISSED. 7. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 30. 6.2010 SD/- (B. C. MEENA ) SD/- (D. K. TYAGI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 30TH JUNE, 2010 PRONOUNCED BY SD/- (CDR) SD/-(DKT) AM JM 5 COPY TO : 1. SRI ASHOK GARG, C/O EVEREST PLYWOOD INDUSTRIES, GOP AL BHAWAN, CHURCH ROAD, SILIGURI 2. CIT, SILIGURI, 3. ACIT, 4. D.R., ITAT, KOLKATA. TRUE COPY BY ORDER DEPUTY REGISTRAR JD.(SR.P.S.) I.T.AT., KOLKATA