Vilas Polymers Limited, Hyderabad V. CIT III, Hyderabad

ITA 961/HYD/2009

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 3417 (ITAT-HYDERABAD)
• Duration Of Justice: 7 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-04-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 25-03-2010
• Assessment Year: 2004-2005
• Appeal Filed On: 24-08-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A PATRA
• Assessee Lawyers: PVVS PRASAD
• Keywords: Assessment record; Revised return
• Section: 80IB; 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A, HYDERABAD BEFORE SHRI G.C. GUPTA, VICE PRESIDENT AND SHRI AKB ER BASHA, ACCOUNTANT MEMBER . ITA NO.961/HYD/09 : ASSESSMENT YEAR 2004-05 VILAS POLYMERS LIMITED, HYDERABAD. VS THE ACIT, CIR-3(3) HYDERABAD., (APPLICANT) (RESPONDENT) APPELLANT BY : SHRI PVVS PRASAD RESPONDENT BY : SHRI A. PATRA- CIT DR O R D E R PER AKBER BASHA, ACCOUNTANT MEMBER THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE CIT-III, HYDERABAD DATED 17-2-2009 UNDER SECTIO N 263 OF THE ACT AND IT RELATES TO THE ASSESSMENT YEAR 2004-0 5. THERE WAS A DELAY OF 121 DAYS IN FILING THE APPEAL. WE ARE CON VINCED WITH THE EXPLANATION AND REASONS FOR THE DELAY SUBMITTED BY T HE ASSESSEE IN THE AFFIDAVIT FILED. ACCORDINGLY, WE CONDONE THE DELAY AND ADMIT THE APPEAL. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A REGISTERED COMPANY, ENGAGED IN THE BUSINESS OF MANUFACTURING OF RUBBER 2 FLAPS. THE ASSESSEE FILED ITS RETURN OF INCOME FOR T HE YEAR UNDER CONSIDERATION ON 28-10-2004 WITH THE DCIT, CIR-3(3), HYDERABAD ADMITTING AN INCOME OF RS.2,22,23,251 AFTER CLAIMING DEDUCTION U/S 80IB FOR RS.89,10,009. THE RETURN WAS PROCESSED U/S 1 43(1) ON 22-2-2005 AND THE ASSESSEE SUBSEQUENTLY FILED A REVISED RETURN DECLARING A TAXABLE INCOME OF RS.2,19,62,248 ON 6-10 -2006 AND ASSESSEE FILED THE REVISED RETURN TO CLAIM A DEDUCTIO N TOWARDS INCOME FROM SALE OF FIXED ASSETS WHICH WAS INCLUDED IN THE P & L ACCOUNT. THIS CASE WAS SELECTED FOR SCRUTINY. THE A SSESSING OFFICER HAS STATED THAT SINCE THE ASSESSEE COMPANY H AD NOT FILED THE REVISED RETURN WITHIN ONE YEAR FROM THE END OF T HE ASSESSMENT YEAR OR BEFORE COMPLETION OF ASSESSMENT WHICHEVER IS EARLIER AS PER SECTION 139(5), THE CLAIM FOR DEDUCTION FOR INCOME FROM SALE OF FIXED ASSETS COULD NOT BE ALLOWED AND THEREFORE THE A SSESSMENT WAS COMPLETED ON THE BASIS OF THE ORIGINAL RETURN FIL ED AND DEDUCTION CLAIMED UNDER SECTION 80IB WAS ALLOWED. BY VIRTUE OF THE POWERS VESTED UNDER SECTION 263 OF THE ACT, THE CIT CALLED FOR THE ASSESSMENT RECORDS OF THE ASSESSEE-COMPANY AND OBSE RVED THAT THE ASSESSEE COMPANY HAD NOT FILED FORM NO.10CCB CERT IFIED BY AN ACCOUNTANT FOR CLAIMING DEDUCTION U/S 80IB ALONG WIT H RETURN OF INCOME THE CIT ISSUED A SHOW CAUSE NOTICE UNDER SECT ION 263 OF THE ACT. DURING THE COURSE OF REVISION PROCEEDINGS, T HE ASSESSEE COMPANY SUBMITTED THAT THE CLAIM OF DEDUCTION U/S 80 IB WAS EXAMINED IN THE COURSE OF ASSESSMENT PROCEEDINGS AND THE FORM 10CCB WAS FURNISHED AND THE ASSESSEE SUBMITTED TO T HE ASSESSING OFFICER THAT IN THE RUSH OF FILING THE INCOME TAX RETU RNS, THE FORM NO.10CCB WAS INADVERTENTLY NOT ENCLOSED. IT WAS SUB MITTED BY 3 THE ASSESSEE THAT A COPY OF FORM NO.10CCB WAS FILED ALONG WITH THE ANNEXURE TO TAX AUDIT REPORT, FILED WITH THE INCO ME TAX RETURN OF THE ASSESSEE-COMPANY. IT WAS SUBMITTED BY THE AS SESSEE THAT IN RESPONSE TO A QUERY FROM THE ASSESSING OFFICER ON 5TH J UNE 2008 AGAIN SUBMITTED A COPY OF FORM NO.10CCB WHICH WAS AL READY SUBMITTED DURING THE COURSE OF ASSESSMENT PROCEEDINGS . THE CIT NOT CONVINCED WITH THE EXPLANATIONS OF THE ASSESSEE DIRECTED THE ASSESSING OFFICER TO DISALLOW THE DEDUCTION ALLOWED U/S 80IB ON THE GROUND THAT IT IS MANDATORY ON THE PART OF THE ASSESSE E TO FURNISH THE REQUIRED CERTIFICATE IN FORM NO.10CCB ALONG WITH T HE RETURN OF INCOME. AGGRIEVED BY HIS ORDER, THE ASSESSEE IS IN AP PEAL BEFORE US. 3. WE HAVE CONSIDERED THE SUBMISSIONS OF THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IT IS THE CONTENTION OF THE ASSESSEE THAT HE FILED A COPY OF CERTIFICATE IN FORM NO.10CCB WHICH WAS SUBMITTED DURING THE COURSE OF ASSESSMENT PROCEED INGS. AS PER THE ORDER OF THE CIT UNDER SECTION 263 OF THE AC T, THE ASSESSEE FILED FORM 10CCB ONLY AFTER THE COMPLETION OF THE REGU LAR ASSESSMENT UNDER SECTION 143 [3] ON 27.12.2006 I.E. , ON 11-06- 2008 WHEREAS THE SHOW CAUSE NOTICE ISSUED IN TERMS O F SECTION 263 WAS ISSUED TO THE ASSESSEE BY THE DEPARTMENT ON 01-12-2008 HOLDING THAT THE ORDER PASSED BY THE ASSESSING OFFICE R FOR ASSESSMENT YEAR 2004-05 IS ERRONEOUS AND PREJUDICIAL T O THE INTERESTS OF REVENUE ON THE GROUND THAT THE ASSESSEE N OT FILED REQUIRED CERTIFICATE IN FORM 10CCB ALONG WITH THE RETUR N OF INCOME. HENCE, THE ENTIRE CLAIM OF DEDUCTION UNDER SEC TION 80IB OF 4 THE ACT TO BE DISALLOWED. SINCE THE COPY OF THE CER TIFICATE LATER FURNISHED BY THE ASSESSEE IN PURSUANCE TO THE LETTER I SSUED BY THE ASSESSING OFFICER ON 5TH JUNE 2008, THE SAME WAS AVAI LABLE BEFORE THE CIT. AS PER THE EXPLANATION TO SUB-SECTION [1] OF SECTION 263 OF THE ACT, CLAUSE [B] CLARIFIES, THAT 'RECORD' SHALL INCLUDE AND SHALL BE DEEMED TO BE ALWAYS TO HAVE INCLUDED ALL RECORDS RELATING TO ANY PROCEEDING UNDER THIS ACT AVAILABLE AT THE TIME O F THE EXAMINATION BY THE COMMISSIONER. THIS EXPLANATION I S APPLICABLE FOR ALL TIMES EVEN FOR THE PERIOD PRIOR TO 1-6-1998. THE REFORE, THE COMMISSIONER COULD MAKE USE OF THE MATERIAL GATHERED BY HIM ON THE DATE WHEN HE ISSUED NOTICE UNDER SECTION 263 OF THE ACT. IN VIEW OF THE ABOVE, EVEN ASSUME THAT THE ASSESSEE FI LED ITS REQUIRED CERTIFICATE IN FORM 10CCB ON 11-06-2008; THIS CERTI FICATE IS VERY MUCH AVAILABLE BEFORE THE COMMISSIONER BEFORE THE ISSU E OF NOTICE UNDER SECTION 263 OF THE ACT. EVEN THE REASSESSMENT UNDER SECTION 263 OF THE ACT IS ONLY A CONTINUATION OF TH E ASSESSMENT PROCEEDINGS, HENCE, THEREFORE, IT CAN BE SAID THAT FI LING OF REQUIRED CERTIFICATE IN FORM 10CCB TO CLAIM DEDUCTION 80IB IS MANDATORY, BUT TIME OF FILING CERTIFICATE IS ONLY DIRECTORY IN NA TURE AND IT CAN BE FILED AT ANY TIME DURING THE ASSESSMENT PROCEEDINGS. UNDER THESE CIRCUMSTANCES, THE CIT IS NOT JUSTIFIED IN ASSUMING HIS JURISDICTION UNDER SECTION 263 OF THE ACT. IN VIEW OF THE ABOVE , WE CANCEL THE ORDER OF THE CIT. 5 4. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. THE ORDER WAS PRONOUNCED IN THE COURT ON 16-4-2010. SD/- (G.C.GUPTA) SD/- (AKBER BASHA) VICE PRESIDENT ACCOUNTANT MEMBER. DT/- 16-4-2010. COPY FORWARDED TO: 1. PRASAD & PRASAD, CAS, REDDY HOSTEL SHOPPING COMPLEX, TILAK ROAD, ABIDS, HYDERABAD. 2. 3. THE ACIT, CIR-3(3), HYDERABAD. CIT-III, HYDERABAD. 4. THE D.R., ITAT, HYDERABAD JMR