ACIT, Hyderabad v. M/s Vartica Wire Products P.Ltd.,, Hyderabad

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A HYDERABAD BEFORE SHRI N.R.S. GANESAN JUDICIAL MEMBER AND SHRI AKBER BASHA ACCOUNTANT MEMB ER ITA NO.1083/HYD/2010 : ASST. YEAR: 2005-06 ACIT CIR-3(3) HYDERABAD. VS M/S.VARTICA WIRE PRODUCTS PVT. LTD. NACHARAM HYDERABAD. (PAN:AAACV 8149 G) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI KVN CHARYA RESPONDENT BY : SHRI K.A. SAI PRASAD O R D E R PER AKBER BASHA ACCOUNTANT MEMBER: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE OR DER OF THE CIT (A)-V HYDERABAD DATED 25-5-2010 AND IT PER TAINS TO THE ASSESSMENT YEAR 2005-06. 2. THE REVENUE RAISED THE FOLLOWING GROUNDS BEFORE US:- 1. THE ORDER OF THE CIT (A) IS ERRONEOUS BOTH ON FACT S AND IN LAW. 2. THE CIT (A) OUGHT TO HAVE CONSIDERED DECISIONS OF HON BLE APEX COURT IN THE CASES OF SUN ENGG. WORKS PVT. LTD. [1 98 ITR 297] CHETTINAD CORPORATION PVT. LTD. (200 ITR 300) AND GOEETZE (INDIA) LTD. (284 ITR 323). 3. ANY OTHER GROUND THAT MAY BE RAISED AT THE TIME O F HEARING. ITA NO. 1083/HYD/2 010 M/S. VARTICA WIRE PRODU CTS PVT. LTD. HYD. =========================== 2 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FILED IT S RETURN OF INCOME ON 26-10-2005 DECLARING INCOME AT RS.6 30 39 0/-. THE SAME WAS PROCESSED UNDER SECTION 143(1) OF THE ACT ON 21-8-200 6. SINCE THE ASSESSEE HAD NOT ENCLOSED FORM NO.10CCB TO THE RETURN OF INCOME THE ASSESSING OFFICER LATER FELT THAT THE CLAIM MADE UNDER SECT ION 80IB WAS ALLOWED TO THE ASSESSEE WRONGLY AND AS SUCH THE ASSESSMENT WA S REOPENED OPINING THAT THE INCOME TO THE EXTENT OF CL AIM OF RS.2 70 167/- HAD ESCAPED ASSESSMENT. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSEE FILED AUDIT REPORT IN FORM NO.10CCB ON 10-2-2009 AND REQUESTED TO GIVE CREDENCE T O THE SAME AND ALLOW DEDUCTION UNDER SECTION 80IB. HOWEVER THE A SSESSING OFFICER DID NOT ACCEPT THE REQUEST OF THE ASSESSEE HOLDING THAT THE SECTION 80IB (7) CLEARLY STIPULATES THE CLAUSE TO FILE THE AUDITED FO RM IN 10CCB ALONG WITH THE RETURN. DRAWING FURTHER SUPPORT FROM THE D ECISION IN THE CASE OF SONY INDIA VS. CIT (285 ITR 213) (DEL) THE ASSESSI NG OFFICER DISALLOWED THE CLAIM UNDER SECTION 80IB OF THE ACT AND COMPLETED THE ASSESSMENT ACCORDINGLY. AGGRIEVED BY THE ORDER OF THE A SSESSING OFFICER THE ASSESSEE WENT IN APPEAL BEFORE THE CIT (A). ON APPEAL THE CIT (A) FOLLOWING THE DECISION OF THE JURISDICTIONAL H IGH COURT IN THE CASE OF CIT VS. HEMSONS INDUSTRIES (251 ITR 623) WHEREIN IT WAS HELD THAT THE ASSESSEES FAILURE TO ENCLOSE THE AUDIT REPORT ALONG W ITH THE RETURN ITSELF WOULD NOT DISENTITLE HIM TO CLAIM THE BENEFIT AND THE CIT (A) ALLOWED THE APPEAL OF THE ASSESSEE HOLDING THAT REASSESSMEN T PROCEEDINGS ARE CONTINUATION OF THE ASSESSMENT PROCEEDINGS I TSELF AND HENCE ALLOWED THE CLAIM OF DEDUCTION UNDER SECTION 80IB OF THE ACT. AGGRIEVED AGAINST THE FINDINGS AND THE DECISION OF THE CIT (A) THE REVENUE IS IN APPEAL BEFORE US. ITA NO. 1083/HYD/2 010 M/S. VARTICA WIRE PRODU CTS PVT. LTD. HYD. =========================== 3 4. THE LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE CIT(A) SHOULD HAVE CONSIDERED THE DECISION OF THE HONBLE APEX COURTS DECISIONS IN THE CASE OF SUN ENGINEERING WORKS PVT. LTD . (198 ITR 297) CHETTINAD CORPORATION PVT. LTD. (200 ITR 320) AND GOETZE (INDIA) LIMITED (284 ITR 323) AND WRONGLY ALLOWED THE DEDUCT ION UNDER SECTION 80IB OF THE ACT. 5. ON THE OTHER HAND THE LEARNED COUNSEL FOR THE ASSE SSEE RELIED ON THE ORDERS OF THE CIT (A). 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. IT IS WELL SETTLED LAW THAT THE PROVISIONS RELATING TO SUBMISSION OF AUDIT REPORT ALONG WITH RET URN ARE NOT MANDATORY BUT ONLY A DIRECTORY ONE AS HELD BY THE CAL CUTTA HIGH COURT IN THE CASE OF CIT VS. BERGER PAINTS INDIA LIMITED (NO.2) (254 ITR 503). IN THE CASE UNDER CONSIDERATION THE ASSESSEE HAS STILL ST RONG FOOTING AS THE FORM NO.10CCB IN ITS CASE WAS FILED DURING THE REASSE SSMENT PROCEEDINGS ITSELF. THE CIT(A) RIGHTLY RELIED ON THE DECISION OF JURISDICTIONAL HIGH COURT IN THE CASE OF HEMSONS INDS (SUPRA ) AND HELD THAT THE ASSESSEE FAILED TO ENCLOSE AUDIT REPORT ALONG WI TH RETURN WOULD NOT DISENTITLE THE ASSESSEE TO CLAIM THE BENEFIT AND AL SO IT WAS RIGHTLY HELD THAT THE REASSESSMENT PROCEEDINGS ARE IN CONTINUATION OF THE ASSESSMENT PROCEEDINGS AND RIGHTLY DIRECTED THE ASSESSING OFF ICER TO CONSIDER THE FORM NO.10CCB FILED DURING THE REASSESSMENT PROCEEDINGS AND ALLOW THE CLAIM OF DEDUCTION UNDER SECTION 80IB OF THE ACT AS PER LAW. AFTER CONSIDERING THE FACTS AND THE CIRCUMSTANCES OF T HE CASE WE DO NOT SEE ANY INFIRMITY IN THE ORDER OF THE CIT (A) AND ACCORDINGLY THE SAME IS UPHELD AND THE GROUNDS RAISED BY THE REVENUE AR E REJECTED. ITA NO. 1083/HYD/2 010 M/S. VARTICA WIRE PRODU CTS PVT. LTD. HYD. =========================== 4 7. IN THE RESULT THE APPEAL FILED BY THE REVENUE STANDS DISMISSED. ORDER PRONOUNCED IN THE COURT ON -01-2011. (N.R.S. GANESAN) (AKBER BASHA) JUDICIAL MEMBER. ACCOUNTANT MEMBER. DT/- -01-2011. COPY FORWARDED TO: 1. ACIT CIR-3(3) HYDERABAD. 2. 3. 4.. 5. JMR* M/S. VERTICA WIRE PRODUCTS LTD. PLOT NO. A-8 ROAD NO. 9 IDA NACHARAM HYDERABAD. CIT (A)-IV HYDERABAD. CIT AP. HYDERABAD. THE DR ITAT HYDERABAD.