ACIT, New Delhi v. M/s. Gitwako Farms (India) Pvt. ltd., New Delhi

ITA 771/DEL/2011 | 2001-2002
Pronouncement Date: 25-11-2011 | Result: Allowed

Appeal Details

RSA Number 77120114 RSA 2011
Bench Delhi
Appeal Number ITA 771/DEL/2011
Duration Of Justice 9 month(s) 17 day(s)
Appellant ACIT, New Delhi
Respondent M/s. Gitwako Farms (India) Pvt. ltd., New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 25-11-2011
Appeal Filed By Department
Order Result Allowed
Bench Allotted C
Tribunal Order Date 25-11-2011
Date Of Final Hearing 05-08-2011
Next Hearing Date 05-08-2011
Assessment Year 2001-2002
Appeal Filed On 07-02-2011
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH C DELHI BEFORE SHRI I.P. BANSAL & AND SHRI K.G. BANSAL ITA NO. 771(DEL)/2011 ASSESSMENT YEAR: 2001-02 ASSISTANT COMMISSIONER OF INCOME GITW AKO FARMS (INDIA) PVT. TAX CIRCLE 12(1) NEW DELHI. VS. L TD. 42 BIRBAL ROAD JANGPURA EXTENSION NEW DELHI. C.O. NO. 215(DEL)/2011 (ARISING OUT OF ITA NO. 771(DEL)/2011) ASSESSMENT YEAR: 2001-02 GITWAKO FARMS (INDIA) PVT. LTD. A SSISTANT COMMISSIONER OF 42 BIRBAL ROAD JANGPURA EXTN. VS. INC OME-TAX CIRCLE 12(1) NEW DELHI. NEW DELHI. ITA NO. 772(DEL)/2011 ASSESSMENT YEAR: 2003-04 ASSISTANT COMMISSIONER OF INCOME GITW AKO FARMS (INDIA) PVT. TAX CIRCLE 12(1) NEW DELHI. VS. L TD. 42 BIRBAL ROAD JANGPURA EXTENSION NEW DELHI. C.O. NO. 216(DEL)/2011 (ARISING OUT OF ITA NO. 772(DEL)/2011) ASSESSMENT YEAR: 2003-04 GITWAKO FARMS (INDIA) PVT. LTD. A SSISTANT COMMISSIONER OF 42 BIRBAL ROAD JANGPURA EXTN. VS. INC OME-TAX CIRCLE 12(1) NEW DELHI. NEW DELHI. (APPELLANT) (RESPONDENT) CONTD. PAGE 2 ITA NOS. 771 & 772(DEL)/2011& C.O.NOS. 215 & 216(DEL)/2011 2 DEPARTMENT BY : SMT. SRUJANI MOHANTY SR. DR ASSESSEE B Y : SHRI R.S. SINGHVI C.A. DATE OF HEA RING : 15.11.2011 DATE OF PRO NOUNCEMENT : 25 .11.2011 ORDER PER BENCH THESE APPEALS AND THE CROSS OBJECTIONS WERE ARG UED IN A CONSOLIDATED MANNER BY THE LD. SENIOR DR AND TH E LD. COUNSEL FOR THE ASSESSEE. THEREFORE A CONSOLIDATED ORDER IS PASSED . 2. THE REVENUE HAS TAKEN UP THREE GROUNDS IN TH E APPEAL FOR ASSESSMENT YEAR 2001-02. THE REAL GRIEVANCE IS P ROJECTED IN GROUND NO. 2 THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(APPEALS) HAS ERRED IN DELETING THE DISALLOWAN CE OF RS. 28 39 956/- MADE BY THE AO ON ACCOUNT OF CLAIM U/S 80IB OF THE INCOME-TAX ACT 1961 (THE ACT FOR SHORT). IN THE CROSS OBJECTION THE ASSESSEE HAS TAKEN TWO GROUNDS THAT THE PROCEEDINGS OF RE-ASSESSMENT ARE NOT IN CONFORMITY WITH THE PROVISO TO SECTION 147 AS NO OMISSION O R FAILURE HAS BEEN SHOWN ON THE PART OF THE ASSESSEE IN DISCLOSING RELEV ANT FACTS FOR THE ASSESSMENT. THIS PROVISO IS APPLICABLE AS THE ASSESSMENT WA S MADE U/S 143(3) OF THE ACT AND THE NOTICE U/S 148 WAS ISSUED AFTER E XPIRY OF FOUR YEARS FROM ITA NOS. 771 & 772(DEL)/2011& C.O.NOS. 215 & 216(DEL)/2011 3 THE END OF THE ASSESSMENT YEAR. THE GROUNDS TAKEN IN THE APPEAL FOR ASSESSMENT YEAR 2003-04 ARE SIMILAR EXCEPT TH AT THE CLAIM U/S 80IB AMOUNTED TO RS. 61 44 456/-. THE GROUNDS TAKEN I N THE CROSS OBJECTION BY THE ASSESSEE IN THIS YEAR ARE THE SAME AS IN ASSESSMENT YEAR 2001-02. 3. THE CROSS OBJECTIONS FOR BOTH THE YEARS HAVE B EEN FILED BEYOND THE LIMITATION PERIOD AND THERE IS A DELAY OF 111 DAYS IN BOTH THE YEARS. THE OBJECTIONS ARE ACCOMPANIED BY APPLICATIONS FOR C ONDONATION OF DELAY WHICH HAVE BEEN WORDED SIMILARLY AND AN AFFIDA VIT DATED 23.08.2011 FROM SHRI R.K. MITTAL DIRECTOR IN THE ASSESSEE -COMPANY. IN THE APPLICATION IT IS MENTIONED THAT THE DIRECTOR DEALING WITH THE TAX MATTERS WAS NOT WELL AND THEREFORE NO LEGAL CONSULTANT WAS APPOINTED. THE MATTER COULD NOT BE PROPERLY EXAMINED IN ABSENC E OF GUIDANCE AND LEGAL ASSISTANCE. THE DELAY IN THIS LETTER HAS BEEN MENTIONED TO BE OF 105 DAYS. IN THE AFFIDAVIT IT IS STATED THAT HE IS LOOKI NG AFTER FINANCE AND TAX MATTERS. HE WAS NOT WELL IN THE MONTHS OF FEBRUA RY AND MARCH 2011 AS HE WAS SUFFERING FROM DEPRESSION AND HIGH BLOOD P RESSURE. THEREFORE HE COULD NOT ATTEND TO THE DAY-TO-DAY AFFAIRS OF T HE ASSESSEE-COMPANY. BECAUSE OF THIS REASON HE COULD NOT CONSULT OR APPOINT A CONSULTANT TO REPRESENT. THE DELAY IN FILING CROSS OBJECTIONS I S ON ACCOUNT OF HIS ILLNESS. ITA NOS. 771 & 772(DEL)/2011& C.O.NOS. 215 & 216(DEL)/2011 4 4. IN THE COURSE OF HEARING BEFORE US NO EVIDENCE COULD BE PRODUCED REGARDING ILLNESS OF THE DIRECTOR OR THE DELAY OCCURRING ON ACCOUNT OF HIS ILLNESS. THE LD. SENIOR DR HAS ALSO OBJECTED TO CONDONATION OF DELAY BY STATING THAT AVERMENTS IN THE APPLICATION AND T HE AFFIDAVIT HAVE NOT BEEN CORROBORATED. HAVING CONSIDERED THE SUBMISSIONS FROM BOTH THE SIDES WE ARE OF THE VIEW THAT SUBSTANTIAL DELAY OF 105 DAY S CANNOT BE CONDONED IN ABSENCE OF FILING ANY CORROBORATIVE EVIDENCE RE GARDING ILLNESS BY WAY OF DEPRESSION AND HIGH BLOOD PRESSURE OF THE DIRECTO R. THEREFORE THE OBJECTIONS ARE DISMISSED IN LIMINE. 4.1 THE LD. COUNSEL HAS ALSO TAKEN ANOTHER PLEA THAT EVEN DE-HORS CROSS OBJECTIONS THE ASSESSEE-COMPANY AS A RESPONDEN T MAY RAISE ANY OTHER PLEA TO SHOW THAT THE ORDER OF ASSESSMENT IS BAD I N LAW. IN SUCH AN EVENTUALITY IT WILL BE ABLE TO ARGUE ON THE ISSU E OF LACK OF JURISDICTION TO ISSUE NOTICE U/S 148 ONLY TO THE EXTENT THAT IT SUPPORTS THE ORDER OF THE LD. CIT(APPEALS). IN THIS CONNECTION RELIANCE HAS BE EN PLACED ON THE DECISION OF A BENCH OF DELHI TRIBUNAL IN THE CASE OF I TO VS. SMT. GURINDER KAUR (2006) 102 ITD 189. IT HAS BEEN HELD THA T EVEN DE-HORS RULE 27 OF THE TRIBUNAL RULES IT IS OPEN TO THE RESPONDE NTS IN APPEALS TO RAISE A ITA NOS. 771 & 772(DEL)/2011& C.O.NOS. 215 & 216(DEL)/2011 5 NEW GROUND IN DEFENCE OF THE ORDER APPEALED AGAI NST. THIS VIEW FINDS SUPPORT FROM THE DECISION IN THE CASE OF HUKAM CHAND MILLS LTD. VS. CIT (1967) 63 ITR 232; NEW INDIA LIFE ASSURA NCE CO. LTD. (1957) 31 ITR 844; AND CIT VS. GILBERT & BARKAR MANUFACTURIN G CO. (1978) 111 ITR 529. THE FINDINGS ARE CONTAINED IN PARAGRAPH NO. 11 WHICH IS REPRODUCED BELOW:- 11. EVEN DE HORS RULE 27 OF THE APPELLATE TRIBUNAL RULES IT IS OPEN TO THE RESPONDENT IN AN APPEAL BEFORE THE TRIBUNAL TO RAISE A NEW GROUND IN DEFENCE OF THE ORDER APPEALED AGAINST. IT HAS BEEN SO HELD BY THE SUPREME COURT IN HUKAM CHAND MILLS LTD. V. CIT OF THE REPOR T IT WAS HELD THAT EVEN ASSUMING THAT RULE 27 IS NOT STRICTLY APPLICAB LE THE TRIBUNAL HAS INHERENT POWERS UNDER SECTION 254(1) TO ENTERTAIN T HE ARGUMENT OF THE RESPONDENT WHICH AMOUNTED TO A NEW GROUND. IT WAS F URTHER HELD BY THE SUPREME COURT AS FOLLOWS: IT IS NECESSARY TO STATE THAT RULES 12 AND 27 ARE N OT EXHAUSTIVE AND THE POWERS OF THE APPELLATE TRIBUNAL. THE RULES ARE MER ELY PROCEDURAL IN CHARACTER AND DO NOT IN ANY WAY CIRCUMSCRIBE OR C ONTROL THE POWER OF THE TRIBUNAL UNDER SECTION 33(4) OF THE ACT. IT IS SIGNIFICANT TO NOTE THAT IN THE CASE BEFORE T HE SUPREME COURT THE DEPARTMENT WHICH WAS THE RESPONDENT SOUGHT TO RAISE A NEW PLEA IN DEFENCE OF THE ORDER APPEALED AGAINST. EARLIER IN NEW INDIA LIFE ASSURANCE CO. LTD. V. CIT THE BOMBAY HIGH COURT WHILE POINTING OUT THE DIFFERENCE BETWEEN AN APPELL ANT AND RESPONDENT BEFORE THE APPELLATE COURT OBSERVED AT PAGE 55 THA T THE RESPONDENT 'MAY SUPPORT THE DECISION OF THE TRIAL COURT NOT ONLY O N THE GROUND CONTAINED IN THE JUDGMENT OF THE TRIAL COURT BUT ON ANY OTHER G ROUND'. LATER IN THE CASE OF B.R. BAMASI V. CIT THE BOMBAY HIGH COURT WHICH WAS DEALING WITH THE CASE OF RIGHT OF THE RESPONDENT TO DEFEND THE O RDER APPEALED AGAINST HELD THAT THE RESPONDENT WOULD BE ENTITLED TO RAISE A NEW GROUND IN DEFENCE OF THE ORDER APPEALED AGAINST PROVIDED IT IS A GROUND OF LAW AND DOES NOT NECESSITATE ANY OTHER EVIDENCE TO BE RECOR DED THE NATURE OF WHICH WOULD NOT ONLY BE A DEFENCE TO THE APPEAL ITSELF B UT MAY ALSO AFFECT THE VALIDITY OF THE ENTIRE ASSESSMENT PROCEEDINGS. IT W AS FURTHER HELD THAT THE GROUND SERVED AS A WEAPON OF DEFENCE AGAINST THE AP PEAL AND IF ACCEPTED ITA NOS. 771 & 772(DEL)/2011& C.O.NOS. 215 & 216(DEL)/2011 6 SHOULD NOT PLACE THE APPELLANT IN A WORSE THAN HE W OULD HAVE BEEN HAD HE NOT APPEALED. IN CIT V. GILBERT AND BARKAR MFG. CO. THE BOMBAY HIGH COURT MADE NO DISTINCTION BETWEEN THE APPELLANT AND RESPONDENT IN AN APPEAL BEFORE TH E TRIBUNAL AND HELD THAT BOTH WERE ENTITLED TO RAISE NEW POINTS OR CONTENTIO NS SUBJECT ONLY TO THE CONDITION FIRSTLY THAT NO NEW FACTS ARE REQUIRED TO BE BROUGHT ON RECORD IS CAPABLE OF BEING DISPOSED OF ON THE FACTS ON RECORD AND SECONDLY THAT AN OPPORTUNITY IS GIVEN TO THE OTHER SIDE TO MEET THAT POINT WHICH IS ALLOWED TO BE RAISED FOR THE FIRST TIME IN THE APPEAL. THIS WAS ALSO A CASE OF THE RESPONDENT. TO THE SAME EFFECT ARE THE DECISIONS OF THE ALLAHABAD GAUHATI KERALA AND GUJARAT HIGH COURTS CITED ON BE HALF OF THE ASSESSEE. THEREFORE WHETHER IT IS THE APPELLANT OR THE RESPO NDENT BEFORE THE TRIBUNAL NEW POINTS OR CONTENTIONS CAN BE RAISED P ROVIDED THEY DID NOT INVOLVE INVESTIGATION INTO FACTS (AS CONTRASTED WIT H THE RECORD) AND THAT AN OPPORTUNITY IS GIVEN TO THE OTHER SIDE TO MEET THE CONTENTIONS. APPLYING THESE PRINCIPLES TO THE PRESENT CASE WE OVERRULE T HE PRELIMINARY OBJECTION OF THE LD. SR. DR AND PERMIT THE ASSESSEE TO RAISE THE NEW POINTS BEFORE US AS A RESPONDENT. 4.2 THE CASE OF THE LD. COUNSEL IS THAT THE PLEA R EGARDING INVALIDITY OF 147 PROCEEDINGS CAN BE RAISED AS THE ASSESSEE-CO MPANY IS RESPONDENT IN BOTH THE YEARS. IF SUCH A PLEA SUCCEEDS THE EFF ECT WOULD BE THAT THE ORDER OF THE LD. CIT(APPEALS) STANDS. ON THE OTHER HAN D THE LD. SENIOR DR OPPOSED THE PLEA ON THE GROUND THAT RULE 27 OF THE INCOME TAX APPELLATE TRIBUNAL RULES IS NOT APPLICABLE AS THE ISSUE HA S NOT BEEN DECIDED BY THE LD. CIT(APPEALS) AGAINST THE ASSESSEE AS NO SUC H GROUND WAS TAKEN BEFORE HIM. IN THE ALTERNATIVE IT IS ARGUED TH AT IF THE PLEA IS ADMITTED THE MATTER MAY BE RESTORED TO THE FILE OF THE LD. CI T(APPEALS) TO EXAMINE FACTS AS TO WHETHER THE AO HAD OR DID NOT HAVE JURISDICTION TO ISSUE NOTICE U/S 148. IT IS HER CASE THAT THE ISSUE HAS BEEN DECIDED IN FAVOUR OF THE ITA NOS. 771 & 772(DEL)/2011& C.O.NOS. 215 & 216(DEL)/2011 7 REVENUE ON MERITS BY THE HONBLE DELHI HIGH COU RT IN CIT VS. GITWACO FARMS (INDIA) PVT. LTD. (2011) 10 TAXMAN.COM 261 (DEL) A COPY OF WHICH HAS BEEN PLACED ON RECORD. IT HAS BEEN HELD THAT T HE ASSESSEE IS ENGAGED ONLY IN PROCESSING AND NOT MANUFACTURING AND AS SUCH IT IS NOT ELIGIBLE FOR DEDUCTION U/S 80IB. PARAGRAPH NO. 17 OF THE JUD GMENT IN THIS REGARD IS REPRODUCED BELOW:- 17. IN THE LIGHT OF FACTS AND CIRCUMSTANCES OF T HE ASSESSEES ACTIVITIES AS DESCRIBED IN THE PRECEDING PARAGRAPH AND A LSO IN THE ORDER OF THE AO AND IN THE LIGHT OF THE SETTLED LEGAL POSITION AS DISCUSSED ABOVE IT IS HELD THAT THE ASSESSEE IS ENGAGED IN PROCESSING AND NOT MANUFACTURING AND AS SUCH IS NOT ELIGIBLE FOR DEDUCTION UNDER SECTION 80-IB. IN VIEW OF THE FINDINGS WE ANSWER QUESTION (II) IN FAVOU R OF THE REVENUE AND AGAINST THE ASSESSEE IN THE SENSE THAT THE ACTI VITIES UNDERTAKEN BY THE ASSESSEE DID NOT AMOUNT TO PRODUCTION OR MANUFA CTURING AND SO IS NOT ELIGIBLE FOR DEDUCTION UNDER SECTION 80-IB. CON SEQUENTLY QUESTION NO. (I) IS ANSWERED IN NEGATIVE IN FAVOUR OF THE REVEN UE AND AGAINST THE ASSESSEE. 5. WE HAVE CONSIDERED THE FACTS OF THE CASE AN D SUBMISSIONS MADE BEFORE US. ON THE BASIS OF THE DECISION IN THE C ASE OF SMT. GURINDER KAUR AND OTHER CASES IT CAN BE SAID THAT THE ASSESSEE AS A RESPONDENT CAN RAISE ANY LEGAL PLEA INCLUDING THE PLEA OF LACK OF JURIS DICTION TO PASS THE ORDER PROVIDED ALL RELEVANT FACTS ARE ON RECORD. IF T HE ASSESSEE SUCCEEDS THE RESULT WOULD BE THAT THE ORDER OF CIT(APPEALS) ST ANDS AS IT IS. THE FACTS REGARDING THE EXPIRY OF THE PERIOD OF FOUR YEARS AND DISCLOSURE OF RELEVANT FACTS FOR DECIDING THE CLAIM U/S 80IB ARE STATED TO BE ON RECORD. HOWEVER ITA NOS. 771 & 772(DEL)/2011& C.O.NOS. 215 & 216(DEL)/2011 8 THE OBJECTION REGARDING LACK OF JURISDICTION U/S 148 HAS NOT BEEN EXAMINED BY THE LD. CIT(APPEALS) AS NO GROUND WAS RAISED B EFORE HIM IN THIS BEHALF. IN SUCH CIRCUMSTANCES WE REMAND THIS MATTER TO THE LD. CIT(APPEALS) FOR DECIDING THE PLEA OF THE ASSESSEE. IT IS MADE ABUNDANTLY CLEAR THAT THE PLEA SHALL BE DECIDED ON THE BASIS OF FACTS O N RECORD AND NO FRESH EVIDENCE SHALL BE TAKEN IN THE MATTER. 5.1 WE ALSO NEED NOT GO INTO OTHER CASES REGA RDING THE MERITS OF THE CASE AS IT STANDS DECIDED AGAINST THE ASSESSE E IN ITS OWN CASE IN ASSESSMENT YEAR 2004-05. 6. THE RESULT OF AFORESAID DISCUSSION IS THAT THE APPEALS OF THE REVENUE ARE TREATED AS ALLOWED FOR STATISTICAL PURPOSE A ND THE CROSS OBJECTIONS OF THE ASSESSEE ARE DISMISSED. SD/- SD/- (I.P. BANSAL) (K.G.BANSAL) JUDICIAL MEMBER ACCOUNTANT MEMBER SP SATIA 25/11/2011. COPY OF THE ORDER FORWARDED TO:- 1. GITWAKO FARMS (INDIA) PVT. LTD. NEW DE LHI. 2. ACIT CIRCLE 12(1) NEW DELHI. 3. CIT 4. CIT(A) 5. THE DR ITAT NEW DELHI. ASSISTANT REGISTRAR.