ITO, New Delhi v. M/s. Indeutsch International, New Delhi

ITA 4853/DEL/2012 | 2009-2010
Pronouncement Date: 25-10-2013 | Result: Dismissed

Appeal Details

RSA Number 485320114 RSA 2012
Bench Delhi
Appeal Number ITA 4853/DEL/2012
Duration Of Justice 1 year(s) 1 month(s) 13 day(s)
Appellant ITO, New Delhi
Respondent M/s. Indeutsch International, New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 25-10-2013
Appeal Filed By Department
Order Result Dismissed
Bench Allotted C
Tribunal Order Date 25-10-2013
Date Of Final Hearing 21-08-2013
Next Hearing Date 21-08-2013
Assessment Year 2009-2010
Appeal Filed On 12-09-2012
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: C: NEW DELHI BEFORE SHRI I. C. SUDHIR JUDICIAL MEMBER AND SHRI S.V. MEHROTRA ACCOU NTANT MEMBER ITA NO. 4853/DEL/2012 ASSESSMENT YEAR 2009-10 THE INCOME TAX OFFICER VS. M/S. INDEUTSCH INTERNATIONAL WARD 33(4) 18 2 ND FLOOR RAJINDRA PARK NEW DELHI. NEW DELHI 110 060 (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SATP AL SINGH SR. DR RESPONDENT BY : SHRI A. B. BANSAL CA ORDER PER I.C. SUDHIR JUDICIAL MEMBER THE REVENUE HAS QUESTIONED FIRST APPELLATE ORDER ON THE FOLLOWING GROUNDS :- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE DISALLOWANCE OF RS. 8 18 39 957/- MADE BY THE ASSESSING OFFICER BY REJE CTED THE CLAIM OF THE ASSESSEE U/S 10AA OF THE I.T. ACT. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE CIT(A) HAS ERRED IN LAW AND ON FACTS INHOLD ING THAT THE ASSESSEE WAS ELIGIBLE FOR DEDUCTION U/S 19AA OF THE I.T. ACT E VEN THOUGH THE ASSESSEE HAD NOT CLAIMED THE SAME IN ITS RETURN OF INC OME. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE CIT(A) HAS ERRED IN LAW IN NOT APPRECIATING THE LEG AL POSITION THAT IN ORDER TO RECTIFY ITS CLAIM THE ASSESSEE SHOULD HAVE FI LED A REVISED RETURN WITHIN THE PRESCRIBED TIME. 4. ON THE FACTS AND IN THE CIRCUMS TANCES OF THE CASE THE ORDER OF THE CIT(A) IS ERRONEOUS AND IS NOT TENABLE ON FACTS AND IN LAW. ITA NO. 4853/DEL/12 2 2. HEARD AND CONSIDERED THE ARGUMENTS ADVANCED BY THE PARTIES IN VIEW OF ORDERS OF THE AUTHORITIES BELOW MATERIAL AVAILABLE ON RECORD AND THE DECISIONS RELIED UPON. 3. THE SOLE ISSUE INVOLVED IN THE ABOVE GROUN DS IS AS TO WHETHER THE CLAIM OF DEDUCTION U/S 10AA SHOULD BE ALLOWED IN THE ABSENCE OF A REVISION OF THE RETURN BY THE ASSESSEE OR NOT. 4. THE ASSESSEE A PARTNERSHIP FIRM IS ENGAGED I N THE BUSINESS OF MANUFACTURING AND EXPORT OF HAND KNITTING NEEDLES CROCHET HOOKS AND HAND KNITTING ACCESSORIES IN ITS FACTORY AT NOIDA. IT EX PORTS 100% OF THE PRODUCTS WHICH IT PRODUCES. IN ITS RETURN OF INCOME THE ASS ESSEE CLAIMED DEDUCTION U/S 10A AS 100% OF PROFITS AND DECLARED NIL INCOME FOR THE ASSESSMENT YEAR UNDER CONSIDERATION. DURING THE COURSE OF ASSESSMENT PROC EEDINGS WHEN THE ELIGIBILITY OF CLAIMING DEDUCTION U/S 10A OF THE ACT WAS QUESTI ONED ON THE BASIS THAT THE ASSESSEE DOES NOT FULFILL THE PRIMARY CONDITION I.E IN SEZ THE ASSESSEE HAD TO BEGIN MANUFACTURING / PRODUCTION DURING THE PREVIOU S YEAR RELEVANT TO THE ASSTT. YEAR 2001-02 OR ANY SUBSEQUENT YEAR BUT BEFORE 1.4 .2005 THE ASSESSEE ADMITTED THAT IT IS NOT ELIGIBLE FOR DEDUCTION U/S1 0A RATHER IT IS ELIGIBLE FOR DEDUCTION U/S 10AA AND FULFILS THE CONDITIONS FOR CLAIMING DEDUCTION U/S 10AA OF THE ACT BUT INADVERTENTLY IT HAS CLAIMED DEDUCTION U/S 10AA WHICH WAS A BONAFIDE MISTAKE. THE AO NARRATING THE PROVISIONS L AID DOWN U/S 139 (5) OF THE ACT AND CITING DIFFERENT DECISIONS INCLUDING DECISI ON OF HONBLE SUPREME COURT IN THE CASE OF GOETZE (INDIA) LTD. VS. CIT (2006) 284 ITR 323 (SC) HELD THAT IF ANY ITA NO. 4853/DEL/12 3 PERSON HAVING FURNISHED A RETURN IN SUB SECTION (1) OR IN PURSUANCE OF A NOTICE ISSUED UNDER SUB SECTION (1) OF SECTION 142 DISCOVE RS ANY OMISSION OR ANY WRONG STATEMENT THEREIN HE MAY FURNISH A REVISED RE TURN AT ANY TIME BEFORE THE EXPIRY OF ONE YEAR FROM THE END OF THE RELEVANT ASS TT. YEAR OR BEFORE THE COMPLETION OF THE ASSESSMENT WHICHEVER IS EARLIER. THE AO ACCORDINGLY HAD REJECTED THE CLAIMED DEDUCTION U/S 10A OF THE ACT W ITH THIS FURTHER FINDING THAT ASSESSEE HAS NOT CLAIMED DEDUCTION U/S 10AA IN THE RETURN OF INCOME FOR THE ASSTT. YEAR 2009-10 HENCE THE CLAIM U/S 10AA ON THE BASIS OF A LETTER WAS DENIED. 5. THE ASSESSEE HAS HOWEVER BEEN GIVEN RELIE F BY THE LD. CIT(A) WHICH HAS BEEN QUESTIONED BY THE REVENUE IN THE PRESENT APPEA L. 6. IN SUPPORT OF THE GROUNDS INVOLVING THE ISS UE THE LD. DR HAS BASICALLY PLACED RELIANCE ON THE ASSESSMENT ORDER. HE HAS REF ERRED CONTENTS OF PARA NO. 3 AT PAGE 2 OF THE ASSESSMENT ORDER. LD. AR ON THE OT HER HAND TRIED TO JUSTIFY THE FIRST APPELLATE ORDER ON THE ISSUE. HE REFERRED PAR A NOS. 5.3 & 5.4 OF THE FIRST APPELLATE ORDER. 7. CONSIDERING THE ABOVE SUBMISSIONS WE FIN D THAT THE DISPUTE AROSE DUE TO NON APPLICATION OF THE CORRECT SECTION FOR CLAIMING THE DEDUCTION. THE ASSESSEE FAIRLY CONCEDED BEFORE THE AO THAT IT WAS NOT ELIGI BLE FOR DEDUCTION U/S 10A BUT FOR THE DEDUCTION U/S 10AA OF THE ACT AND IT FULFIL LS ALL THE CONDITIONS LAID DOWN U/S 10AA FOR THE CLAIM. THE AO DID NOT DISPUTE THAT THE ASSESSEE IS ELIGIBLE FOR CLAIMING DEDUCTION U/S 10AA OF THE ACT BUT DISALLOW ED THE CLAIM ON THE BASIS THAT ITA NO. 4853/DEL/12 4 IN THE ORIGINAL RETURN THERE WAS NO CLAIM U/S 10AA AND IT WAS ACCOMPANIED BY THE AUDITORS REPORT IN A PRESCRIBED PROFORMA 56F. B EFORE LD. CIT(A) IT WAS ARGUED ON BEHALF OF THE ASSESSEE THAT SIMILAR TO TH E WORDING AND SCHEME OF EXEMPTION IN SECTION 10A AND SECTION 10AA THE CERTI FICATE WHICH IS TO BE ISSUED BY THE AUDITOR IS ALSO SIMILAR AND IDENTICAL IN A P RESCRIBED PROFORMA 56F. IT WAS SUBMITTED THAT THERE IS NO SEPARATE PROFORMA FOR C LAIMING DEDUCTION U/S 10AA. IT IS PERTINENT TO MENTION OVER HERE THAT IN THE EARLI ER YEARS ALSO THE ASSESSEE HAD CLAIMED DEDUCTION U/S 10A FOR THE ASSTT. YEAR 2007- 08 AND 2008-09 AND RETURNS FILED WAS ACCOMPANIED WITH AUDITORS REPORT IN THE F ORM OF A CERTIFICATE UNDER PRESCRIBED PROFORMA 56F. WHILE EXAMINING THE ISSUE THE LD. CIT(A) HAS OBSERVED THAT AS PER THE PROVISIONS OF SECTION 10AA (8) THE PROVISION OF SUB SECTION (5) OF SECTION 10A ARE APPLICABLE. IN RESPECT TO THESE PRO VISIONS FORM NO. 56F IS PRESCRIBED U/S 10A AND SAME FORM IS APPLICABLE IN S ECTION 10AA. THE CERTIFICATE TO BE ISSUED BY A CHARTERED ACCOUNTANT IN THE PRESC RIBED FORM NO. 56F REMAINS THE SAME AS FOR SECTION 10A AND DOES NOT SPEAK ABOU T SECTION 10AA. ON PERUSAL OF FORM NO. 56 F IT WAS FOUND THAT IT IS MEANT FOR SECTION 10A AND DOES NOT SPEAK ABOUT SECTION 10AA. THE ONLY BASIC DIFFERENCE IS SECTION 10A IS MEANT FOR INDUSTRIAL UNDERTAKINGS IN EXPORT OF ARTICLES OR TH INGS OR SOFTWARE IN FT EHTP OR STPI SEZ ETC. WHEREAS SECTION 10AA DEDUCTION IS AVA ILABLE FOR THE UNDERTAKINGS MANUFACTURING ANY ARTICLES ONLY IN SEZ. THE SEZ ACT H AS THE SAME BENEFITS U/S 10AA WHICH THE STPI HAS U/S 10A. THE LD. CIT(A) HAS FOUND THAT THERE WAS NO FRESH CLAIM OR NEW CLAIM WHICH WAS NOT BROUGHT ABOU T BY THE ASSESSEE WHETHER ITA NO. 4853/DEL/12 5 IT WAS ONLY CORRECTION OF THE CLAIM IN AN APPROPRIA TE SECTION UNDER THE EXEMPTED INCOME A CLAIM WHICH WAS ALREADY MADE IN THE CATEG ORY OF EXEMPTED INCOME. HE OBSERVED FURTHER THAT THE CLAIM OF THE ASSESSEE IS LEGITIMATE AND IT IS NOT PREJUDICIAL TO THE INTEREST OF REVENUE AND IT IS N OT CLAIMED AFRESH BUT ALREADY MADE IN THE ORIGINAL RETURN BUT UNDER A DIFFERENT S ECTION I.E SECTION 10A WHERE THE PROVISIONS ARE SIMILAR TO THE ONES LAID DOWN IN SECTION 10AA. HE OBSERVED FURTHER THAT THERE IS NO ADDITION OR DISALLOWANCE I N THE CLAIM MADE BY THE ASSESSEE BUT THE ASSESSEE HAS PLEADED FOR CORRECTIO N OF CLAIM UNDER CORRECT SECTION TO BE ALLOWED AS PER LAW. THE AO HAS ALSO A CCEPTED THAT THE ASSESEE HAS THE RIGHT TO REVISE HIS RETURN IN CASE OF ANY MISTA KE IN THE ORIGINAL RETURN OF INCOME BUT THE ONLY GRIEVANCE OF THE AO IS THAT THE ASSESEE HAS CHOSEN TO RECTIFY THE MISTAKE BY FILING A LETTER DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS SINCE BY THE TIME THE ASSESSMENT PROCEEDINGS WERE I NITIATED THE TIME LIMIT FOR FILING THE REVISED RETURN U/S 139(5) HAD LAPSED. T HE LD. CIT(A) HAS NOTED THAT EVEN IF THE ASSESSEE HAD REVISED THE CLAIM IN TIME YET THE CLAIM OF DEDUCTION WOULD BE IN A CERTIFICATE ISSUED BY THE CA IN A PRE SCRIBED PROFORMA 56F WHICH IS MEANT FOR SECTION 10A AND THE LEGISLATURE DID NOT A TTEND INTO THIS TECHNICAL ASPECT AS THERE IS NO SEPARATE PROFORMA PRESCRIBED BY IT TO CLAIM DEDUCTION U/S 10AA. THEREFORE IN SUCH A SITUATION THE AO IN LAW I S DUTY BOUND TO ASSESS THE CORRECT INCOME FOR THIS PURPOSE. THE AO SHOULD HAVE GRANTED RELIEF SUOMOTO OR CAN DO SO ON BEING POINTED OUT BY THE ASSESSEE IN T HE COURSE OF ASSESSMENT PROCEEDINGS FOR WHICH THE ASSESSEE HAD NOT FILED A REVISED RETURN. HE HAS ITA NO. 4853/DEL/12 6 OBSERVED FURTHER THAT THERE IS A DISTINCTION BETWEE N REVISED RETURN AND THE CORRECTION OF RETURN. AN APPLICATION FOR CORRECTING A RETURN ALSO FILED FOR MAKING SOME CORRECTION WILL NOT CHANGE OR ALTER THE CHARAC TER OF THE ORIGINAL RETURN BECAUSE THERE IS NO ADDITION/DISALLOWANCE OR REVISI ON (RE-WRITING AND ALSO EXISTING FACT) ETC. 8. CONSIDERING THE ABOVE SUBMISSIONS WE FIND THAT THERE IS NO DISPUTE ON THE ELIGIBILITY OF THE ASSESSEE CLAIMING DEDUCTION U/S1 0AA OF THE ACT. THE ONLY DISPUTE IS THAT THE ASSESSEE SHOULD HAVE RECTIFY TH IS MISTAKE BY FILING REVISED RETURN WITHIN THE PRESCRIBED TIME LIMIT U/S 139 (5 ) OF THE ACT. ANY WAY EVEN IF IT IS HELD THAT THE AO IN VIEW OF THE DECISION OF HON BLE SUPREME COURT IN THE CASE OF GOETZE (INDIA) LTD. VS. CIT (SUPRA) WAS JUSTIFIE D IN REJECTING THE CLAIM ON THE SAID TECHNICAL GROUND WITHOUT DISPUTING THE ELIGIBI LITY OF THE CLAIM OF THE DEDUCTION U/S10AA OF THE ACT ON ITS MERITS THE LD. CIT(A) IS VERY MUCH EMPOWERED TO ALLOW THE CLAIMED DEDUCTION WITH THIS UN-REBUTTED FINDING THAT THE ASSESSEE WAS ELIGIBLE FOR THE DEDUCTION U/S 10AA OF THE ACT. THE FACTS IN THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF GO ETZE (INDIA) LTD. VS. CIT(SUPRA) ARE DISTINGUISHABLE AS IN THAT CASE BEFO RE THE HONBLE SUPREME COURT THE QUESTION WAS AS TO WHETHER THE ASSESSEE COULD M AKE A FRESH CLAIM FOR DEDUCTION OTHERWISE THAN BY FILING A REVISED RETURN . THE ACTION OF THE AO IN DISALLOWING THE FRESH CLAIM WAS THOUGH UPHELD ON TH E GROUND THAT THERE WAS NO PROVISION UNDER THE INCOME TAX ACT TO MAKE AMENDMEN T IN THE RETURN OF INCOME BY MOVING AN APPLICATION DURING THE COURSE OF ASSES SMENT WITHOUT REVISING THE ITA NO. 4853/DEL/12 7 RETURN BUT IT WAS HELD THAT THERE IS NO RESTRICTIO N ON THE POWER OF THE APPELLATE AUTHORITY TO ENTERTAIN SUCH CLAIM. THE HONBLE P & H HIGH COURT IN THE CASE OF CIT VS. RAMCO INTERNATIONAL (2011)332 ITR 306 (P & H) HAS UPHELD THE ORDER OF THE TRIBUNAL UPHOLDING THE FIRST APPELLATE ORDER TH AT THE LD. CIT(A) HAS CORRECTLY HELD THAT AS PER FORM NO. 10CCB FILED DURING THE AS SESSMENT PROCEEDINGS THE CLAIM MADE BY THE ASSESSEE WAS ADMISSIBLE AND THE S AME REMAINED TO BE ALLOWED. IT WAS HELD THAT THE ASSESSEE WAS NOT MAKI NG ANY FRESH CLAIM AND HAD DULY FURNISHED THE DOCUMENTS AND SUBMITTED FORM FOR CLAIM U/S 80 IB HENCE THERE WAS NO NEED FOR FILING ANY REVISED RETURN. WE THUS DO NOT FIND INFIRMITY IN THE FIRST APPELLATE ORDER IN THIS REGARD. THE ISSUE IS THUS DECIDED IN FAVOUR OF THE ASSESSEE. THE RELATED GROUNDS ARE ACCORDINGLY REJEC TED. 9. CONSEQUENTLY APPEAL IS DISMISSED. ORDER IS PRONOUNCED IN THE OPEN COURT ON 25 TH OCTOBER 2013. SD/- SD/- (S.V. MEHROTRA) ( I.C. SUDHIR ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATE 25 TH OCTOBER 2013 VEENA COPY OF ORDER FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR BY ORDER DEPUTY REGISTRAR ITAT