M/s. Gaurav Udhyag, Daman V. The Income Tax Officer, Vapi Ward-4, Daman

MA 16/AHD/2014

• Counselvise Citation: [2014] 124 COUNSELVISE.COM (IT) 1754 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 month(s) 18 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 16-05-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 02-05-2014
• Assessment Year: 2006-2007
• Appeal Filed On: 28-01-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: O P BHATEJA
• Assessee Lawyers: TUSHAR HEMANIAR
• Keywords: Principle of natural justice
• Section: 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH AHMADABAD , , , , BEFORE SHRI MUKUL KR. SHRAWAT , JUDICIAL MEMBER AND , SHRI T.R. MEENA, ACCOUNTANT MEMBER .. , ! ! ! ! M.A. NO. 16/AHD/2014 (IN ITA NO. 1452/AHD/2009) ASSESSMENT YEAR :2006-07 M/S. GAURAV UDHYOG, GALA NO-3 & 4, SHAKTI INDUSTRIAL ESTATE, RINGANWADA, DAMAN - 396210 V/S . THE ITO, VAPI, WARD 4, DAMAN PAN NO. A A FFG6626S (APPELLANT) .. (RESPONDENT) ' # $ / BY REVENUE SHRI O. P. BHATEJA, SR.D.R. # $ /BY ASSESSEE SHRI TUSHAR HEMANI, A.R. %& # /DATE OF HEARING 02.05.2014 '() # /DATE OF PRONOUNCEMENT .05.2014 O R D E R PER : SHRI T. R. MEENA, ACCOUNTANT MEMBER THIS MISC. APPLICATION IS FILED BY THE ASSESSEE AGA INST THE TRIBUNALS ORDER DATED 22.02.2013 IN ITA NO. 1452/AHD/2009 FOR A.Y. 2006-07. IN THIS CASE ASSESSEES APPEAL WAS DISMISSED. 2. NOW ASSESSEE FILED M.A. ON 28.01.2014 WHICH ARE REPRODUCED AS UNDER: MA NO. 16/AHD/14 (IN ITA NO. 1452/AHD/09) FOR A.Y. 06-07 IN M/S. GAURAV UDHYOG VS. ITO PAGE 2 M. A. NO. 10/AHD/2014 (ASSESSEES M.A.) 1. THE PRESENT APPLICATION IS FILED BY THE A PPELLANT ABOVE NAMED FOR SETTING ASIDE THE ORDER DATED 22/02/2013 PASSED BY THIS HON'BLE TRIBUNAL DISMISSING THE APPEAL OF THE APPELLANT. 2. IT IS MOST RESPECTFULLY SUBMITTED THAT IN THE SAID ORDER OF THE HON'BLE IT AT, THERE ARE CERTAIN INADVERTENT ERRORS WHICH A RE APPARENT FROM THE RECORD AND GO TO THE VERY ROOT OF THE APPEAL. THERE FORE THE PRESENT APPLICATION. 3. THE SAID APPEAL WAS PREFERRED BY THE APPEL LANT SINCE THE LD. CIT(A) HAD CONFIRMED THE DISALLOWANCE U/S 80IB MADE BY AO ON THE COUNT THAT SINCE THE FACTORY'S LICENSE WAS ISSUED TO THE APPEL LANT BY THE CHIEF INSPECTOR FACTORY ON 19/05/04. THE APPELLANT COULD NOT HAVE STARTED THE MANUFACTURING ACTIVITY ON OR BEFORE 31/03/04 AS REQ UIRED FOR CLAIMING DEDUCTION U/S 80IB AND ACCORDINGLY, THE APPELLANT W AS NOT ELIGIBLE FOR DEDUCTION U/S 80IB. THE GROUNDS OF APPEAL RAISED BY THE APPELLANT BEFORE THE HON'BLE TRIBUNAL ARE REPRODUCED HEREUNDER: '01. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS LAW ON THE SUBJECT, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS-1), SURAT HAS ERRED IN CONFIRMING THE ORDER OF THE ASSE SSING OFFICER ASSESSING (HE INCOME OF THE APPELLANT AT RS.28,58,8 22/-AS AGAINST THE RETURNED INCOME OFRS.NIL. 02. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AS W ELL AS LAW ON THE SUBJECT, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS-1), SURAT HAS ERRED IN CONFIRMING THE ACTION OF THE ASS ESSING OFFICER REJECTING THE CLAIM OF THE APPELLANT FOR DEDUCTION OF RS.28,58,822/- U/S 80IB OF THE ACT EVEN THOUGH YOUR APPELLANT HAS SATISFIED ALL THE CONDITIONS PRESCRIBED U/S 80IB OF THE I. T. ACT, 19 61. 03. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AS W ELL AS LAW ON THE SUBJECT, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS-1), SURAT HAS ERRED IN CONFIRMING THE ACTION OF THE ASS ESSING OFFICER IN CONCLUDING THAT THE FACTORY HAS BEGUN MANUFACTURING ACTIVITY ON 19/05/04 SOLELY ON THE BASIS OF DATE OF ISSUE OF FA CTORY LICENSE OBTAINED UNDER THE FACTORIES ACT. MA NO. 16/AHD/14 (IN ITA NO. 1452/AHD/09) FOR A.Y. 06-07 IN M/S. GAURAV UDHYOG VS. ITO PAGE 3 04. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AS W ELL AS LAW ON THE SUBJECT, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS-1), SURAT HAS ERRED IN CONFIRMING THE DISALLOWANCE OF D EDUCTION U/S 80IB TO THE APPELLANT AS THERE WAS A DELAY IN OBTAI NING FACTORY LICENSE AS THE COMPLIANCE WITH THE PROVISIONS OF FA CTORIES ACT ARE NOT RELEVANT FOR ALLOWING CLAIM OF DEDUCTION U/S 80 IB. 05. FOR SEVERAL REASONS AND ON DIFFERENT GROUNDS , THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPELAS-1) , SURAT, IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER IS E RRONEOUS AND REQUIRES RECONSIDERATION AS THE DISALLOWANCE OF DED UCTION U/S 80IB DESERVES TO BE DELETED. 06. YOUR APPELLANT CRAVES LEAVE TO AMEND, ALTER, DE LETE AND/OR ADD TO FOREGOING GROUNDS OF APPEAL ANY TIME BEFORE THE APPEAL IS DELETED. ' 4. AT THE OUTSET, THE APPELLANT HAD, DURING TH E COURSE OF HEARING, CITED THE DECISION PRONOUNCED BY THE HON'BLE GUJARAT HIGH COURT IN THE CASE OF 'CIT VS. JOLLY POLYMERS - 342 ITR 87 (GUJ)' AND CONTENTED THAT ITS CASE WAS DIRECTLY AND SQUARELY COVERED BY THE SAID DECIS ION SINCE IT HAD MOVED AN APPLICATION BEFORE 31/03/04. ON PERUSAL OF THE S AID DECISION, THE AUTHORIZED REPRESENTATIVE OF THE APPELLANT WAS GIVE N TO UNDERSTAND THAT THE SAID APPEAL SHALL BE SENT BACK TO THE FILE OF A O FOR THE PURPOSE OF VERIFYING AS TO WHETHER THE APPELLANT HAD ACTUALLY MOVED AN APPLICATION FOR OBTAINING FACTORY'S LICENSE ON OR BEFORE 31/03/04 A ND ON THAT BASIS, THE HEARING CAME TO BE CONCLUDED. HOWEVER, ON RECEIPT O F THE ORDER PASSED BY THE HON'BLE TRIBUNAL, THE APPELLANT LEARNT THAT INSTEAD OF SENDING THE MATTER BACK TO THE FILE OF AO, THE SAME WAS DISMISS ED BY THE HON'BLE TRIBUNAL ITSELF. THE SAME IS, THEREFORE A MISTAKE A PPARENT FROM RECORD. 5. AS REGARDS THE SECOND APPARENT ERROR, THE SHORT COUNT ON WHICH THE ID. CIT(A) CONFIRMED THE ACTION OF THE AO IN DENYIN G THE DEDUCTION U/S 80IB WAS THAT SINCE THE FACTORY'S LICENSE WAS ISSUE D TO THE APPELLANT BY THE CHIEF INSPECTOR OF THE FACTORY ON 19/05/04, IT COULD NOT HAVE STARTED THE MANUFACTURING ACTIVITY ON OR BEFORE 31/03/04 AS IS ESSENTIAL FOR CLAIMING DEDUCTION U/S 80IB AND ACCORDINGLY, THE APPELLANT W AS NOT ELIGIBLE FOR DEDUCTION U/S 80IB. IN FACT, THE LD. CIT(A) HAS RECORDED A FACTUAL MA NO. 16/AHD/14 (IN ITA NO. 1452/AHD/09) FOR A.Y. 06-07 IN M/S. GAURAV UDHYOG VS. ITO PAGE 4 FINDING AT PARA 2.3.1 ON PGS.3 & 4 OF HIS ORDER WHI CH HAS BEEN REPRODUCED BY THIS HON'BLE TRIBUNAL ON PAGE 6 OF ITS ORDER THA T THERE WAS NO DISPUTE AS TO NON-COMPLIANCE OF ANY OF THE CONDITIONS PRESCRIB ED U/S 8Q1B. SINCE THERE IS NO CHALLENGE TO THAT FINDING OF LD. CIT(A) BY REVENUE BY PREFERRING ANY CROSS APPEAL, THE SAID FINDING TO THE EFFECT TH AT VARIOUS CONDITIONS OF ELIGIBILITY OF DEDUCTION U/S 80IB OF THE ACT ARE NO T IN DISPUTE HAS BECOME FINAL. THEREFORE THE ONLY ISSUE RAISED IN THE APPEA L PREFERRED BY THE APPELLANT WAS WITH RESPECT TO BELATED ISSUANCE OF F ACTORY'S LICENSE AND ITS IMPACT ON CLAIM OF DEDUCTION U/S 80IB. 6. THE HON'BLE TRIBUNAL HAS NOT GIVEN ANY FAC TUAL FINDING ON THE SAID ISSUE. INSTEAD, THE HON'BLE TRIBUNAL WENT ON DECID ING AS TO WHETHER THE APPELLANT HAD ACTUALLY COMMENCED THE MANUFACTURING ACTIVITY ON OR BEFORE 31/03/04 IN LIGHT OF THE DOCUMENTARY EVIDENCES PLAC ED ON RECORD AND FINALLY CONCLUDED THAT THE APPELLANT HAD NOT STARTE D THE MANUFACTURING ACTIVITY ON OR BEFORE 31/03/04. ACCORDINGLY, THE DI SALLOWANCE OF DEDUCTION U/S 80IB WAS CONFIRMED AND THE APPEAL CAME TO BE DI SMISSED. 7. IT IS A SETTLED LAW THAT HON'BLE TRIBUNAL HAS TO DECIDE ANY ISSUE ON THE BASIS OF THE APPEAL PREFERRED BEFORE IT. IN THE APPEAL SO PREFERRED, THE ONLY GROUND WAS WITH RESPECT TO CLAIM OF DEDUCTION U/S 80IBOF THE ACT IN ABSENCE OF LICENSE UNDER THE FACTORY'S ACT. HON'BL E TRIBUNAL CANNOT STEP INTO THE SHOES OF AO AND MAKE A CASE WHICH IS EVEN GOING BEYOND THE ASSESSMENT ORDER FOR CONFIRMING THE DISALLOWANCE BY ANALYZING THE ISSUE FROM ALTOGETHER A DIFFERENT PERSPECTIVE. THE SAME A MOUNTS TO FRAMING OF AN ASSESSMENT WITHOUT ANY SHOW CAUSE NOTICE. IN THE GIVEN CASE, THE HON'BLE TRIBUNAL HAS GONE BEYOND THE GROUNDS OF THE APPEAL, FINDINGS OF CIT(A) AND OBSERVATIONS MADE BY AO. SUCH AN ACT IS THEREFORE, A MISTAKE APPARENT FROM RECORD. 8. THE APPELLANT MOST RESPECTFULLY SUBMITS TH AT THE CONCLUSIONS OF HON'BLE TRIBUNAL ARE BASED UPON THE ISSUES NEVER AR GUED, RAISED OR DISPUTED DURING THE HEARING AS THE SAME WERE NOT IN DISPUTED AS HELD BY MA NO. 16/AHD/14 (IN ITA NO. 1452/AHD/09) FOR A.Y. 06-07 IN M/S. GAURAV UDHYOG VS. ITO PAGE 5 C1T(A). THE FINDINGS RECORDED BY HON'BLE TRIBUNAL A RE IN GROSS VIOLATION OF PRINCIPALS OF NATURAL JUSTICE AS THE SAME HAVE BEEN RECORDED WITHOUT AFFORDING ANY OPPORTUNITY TO THE ASSESSEE TO REBUT. THE APPELLANT RELIES UPON THE DECISION OF HON'BLE THE SUPREME COURT IN T HE CASE OF 'OMAR SALAY MOHAMED SAIT VS CIT - (1959) 37 ITR 151 (SC)', THE RELEVANT EXTRACT WHEREOF IS REPRODUCED HEREINBELOW FOR READY REFERENCE: 'WE ARE AWARE THAT THE INCOME-TAX APPELLATE TRIBUNA L IS A FACT FINDING TRIBUNAL AND IF IT ARRIVES AT ITS OWN CONCL USIONS OFFSET AFTER DUE CONSIDERATION OF THE EVIDENCE BEFORE IT THIS CO URT WILL INTERFERE. IT IS NECESSARY, HOWEVER, THAT EVERY FACT FOR AND AGAI NST THE ASSESSEE MUST HAVE BEEN CONSIDERED WITH DUE CARE AND THE TRI BUNAL MUST HAVE GIVEN ITS FINDING IN A MANNER WHICH WOULD CLEA RLY INDICATE WHAT WERE THE QUESTIONS WHICH AROSE FOR DETERMINATION, W HAT WAS THE EVIDENCE PRO AND CONTRA IN REGARD TO EACH ONE OF TH EM AND WHAT WERE WAS THE REACHED ON THE EVIDENCE ON RECORD BEFO RE IT. THE CONCLUSIONS REACHED BY THE TRIBUNAL SHOULD NOT BE C OLOURED BY ANY IRRELEVANT CONSIDERATIONS OR MATTERS OF PREJUDICE A ND IF THERE ARE ANY CIRCUMSTANCES WHICH REQUIRED TO BE EXPLAINED BY THE ASSESSEE, THE ASSESSEE SHOULD BE GIVEN AN OPPORTUNITY OF DOING SO . ON NO ACCOUNT WHATEVER SHOULD THE TRIBUNAL BASE ITS FINDI NGS ON SUSPICIONS, CONJECTURES OR SURMISES NOR SHOULD IT A CT ON NO EVIDENCE AT ALL OR ON IMPROPER REJECTION OF MATERIA L AND RELEVANT EVIDENCE OR PARTLY ON EVIDENCE AND PARTLY ON SUSPIC IONS, CONJECTURES OR SURMISES AND IF IT DOES ANYTHING OF THE SORT, ITS FINDINGS, EVEN THOUGH ON QUESTIONS OF FACT, WILL BE LIABLE TO BE SET ASIDE BY THIS COURT. ' THIS LEAD DECISION OF HON'BLE THE SUPREME COURT HAS BEEN FOLLOWED BY THE HON'BLE THE GUJARAT HIGH COURT IN THE FOLLOWING CAS ES: MERCURY METALS (P) LTD VS. ACIT - 257 ITR 297 ( GUJ) RAMESHCHANDRA M LUTHRA VS. ACIT - 257 ITR 460 ( GUJ) MA NO. 16/AHD/14 (IN ITA NO. 1452/AHD/09) FOR A.Y. 06-07 IN M/S. GAURAV UDHYOG VS. ITO PAGE 6 9. FURTHER NON-CONSIDERATION OF DECISION OF S UPREME COURT AND JURISDICTIONAL HIGH COURT DECISION IS ALWAYS A MIST AKE APPARENT FROM RECORD. 10. IT IS RESPECTFULLY SUBMITTED THAT IN THE FA CTS AND CIRCUMSTANCES OF THE CASE, THE ORDER PASSED BY THE HON'BLE TRIBUNAL MAY KINDLY BE RECALLED AND THE APPEAL MAY KINDLY BE RE-FIXED FOR HEARING SO AS TO ENSURE THAT ALL THE GROUNDS RAISED BY THE APPELLANT ARE DEALT WITH PROP ERLY AND A LOGICAL AND SPEAKING ORDER IS PASSED BY THE HON'BLE TRIBUNAL WI TH REQUISITE FACTUAL FINDINGS. IT IS RESPECTFULLY SUBMITTED THAT IN THE LARGER INTEREST OF JUSTICE, THE HON'BLE TRIBUNAL BE PLEASED TO ACCEPT THE PRAYER OF THE APPELLANT AND REHEAR THE MATTER. 3. LD. A.R. CONTENDED THE MATTER WAS TO BE RE-EXAMI NED BY CONSIDERING THE HONBLE GUJARAT HIGH COURT DECISION IN CASE OF CIT VS. JOLLY POLYMERS 342 ITR 87 (GUJ) BY THE A.O. IN THIS CASE, THE APPELLANT HAD APPLIE D FOR LICENSE PRIOR TO 31 ST MARCH, 2004, WHICH WAS GRANTED LATER ON BY THE COM PETENT AUTHORITY WITHIN A SHORT SPAN OF TIME. AS PER ABOV E DECISION, THE ASSESSEE IS FULLY ENTITLED TO GENT DEDUCTION U/S. 80IB OF THE I T ACT. AT THE OUTSET, LD. SR. D.R. HEAVILY RELIED UPON THE ORDER PASSED BY THIS B ENCH AND ARGUED THAT IF THE ASSESSEES CASE IS RE-EXAMINED, THEN IT IS TANTAMOU NT TO REVIEW ITS OWN DECISION, WHICH IS NOT PERMITTED UNDER THE LAW U/S. 254 OF THE IT ACT. 4. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD. IT IS FACT THAT ASSESSEE APPLIED FOR LICEN SE IN MARCH 2004 BUT WAS GRANTED IN THE MONTH OF APRIL 2004. AFTER GOING TH ROUGH THE HONBLE GUJARAT HIGH COURT DECISION IN CASE OF CIT VS. JOLLY POLYMERS (SUPRA), THIS ISSUE IS REQUIRED TO RE-CONSIDERED AS PER THE ABOVE DECISION . ACCORDINGLY, WE ALLOW MA NO. 16/AHD/14 (IN ITA NO. 1452/AHD/09) FOR A.Y. 06-07 IN M/S. GAURAV UDHYOG VS. ITO PAGE 7 THE M.A. OF THE ASSESSEE. THE REGISTRY IS DIRECTED TO FIX THE CASE BEFORE THE REGULAR BENCH. 5. IN THE RESULT, ASSESSEES M. A. IS ALLOWED. THESE ORDERS ARE PRONOUNCED IN OPEN COURT ON 16.05.2014 SD/- SD/- ( MUKUL KR. SHRAWAT ) (T.R. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER TRUE COPY S.K.SINHA * * * * # ## # +, +, +, +, -,) -,) -,) -,) / COPY OF ORDER FORWARDED TO:- 1. ' / REVENUE 2. / ASSESSEE 3. 11 2 / CONCERNED CIT 4. 2- / CIT (A) 5. ,67 +% , , / DR, ITAT, AHMEDABAD 6. 79: ;< / GUARD FILE. BY ORDER/ * , =/ 1' , !