DCIT, Circle - 4, Kolkata, Kolkata v. M/s. Tide Water Oil Co. (India) Ltd., Kolkata

ITA 850/KOL/2010 | 2004-2005
Pronouncement Date: 07-01-2011

Appeal Details

RSA Number 85023514 RSA 2010
Assessee PAN AABCT1122C
Bench Kolkata
Appeal Number ITA 850/KOL/2010
Duration Of Justice 8 month(s) 8 day(s)
Appellant DCIT, Circle - 4, Kolkata, Kolkata
Respondent M/s. Tide Water Oil Co. (India) Ltd., Kolkata
Appeal Type Income Tax Appeal
Pronouncement Date 07-01-2011
Appeal Filed By Department
Bench Allotted C
Tribunal Order Date 07-01-2011
Assessment Year 2004-2005
Appeal Filed On 29-04-2010
Judgment Text
1 C IN THE INCOME TAX APPELLATE TRIBUNAL BENCH- C KO LKATA [ . . . . . .. . . .. . ! ! ! !. .. . '# ] BEFORE SHRI B.R.MITTAL JUDICIAL MEMBER & SRI C.D. RAO ACCOUNTANT MEMBER $ $ $ $ / ITA NOS. 850 TO 852 (KOL) OF 2010 %& '( / ASSESSMENT YEARS 2004-05 TO 2006-07 DY.COMMISSIONER OF INCOME-TAX CIRCLE-4 KOLKATA. TIDE WATER OIL CO.(INDIA) LTD. KOLKATA. (PAN-AABCT1122C) (+ / APPELLANT ) - % - - VERSUS - (/0+ / RESPONDENT ) + 1 2 '/ FOR THE APPELLANT: / SRI S.S. GAUTAM /0+ 1 2 ' / FOR THE RESPONDENT: / SRI A.K. TULSYAN '3 / ORDER ( . . . . . .. . ) (B.R.MITTAL) JUDICIAL MEMBER : THESE THREE APPEALS ARE FILED BY THE DEPARTMENT A GAINST THREE SEPARATE ORDERS OF LD. C.I.T.(A) ALL DATED 28/8/2009 FOR ASSESSMENT YE ARS 2004-05 TO 2006-07. SINCE THE FACTS AND THE GROUNDS IN ALL THE THREE APPEALS ARE IDENTICAL WE HEARD THESE APPEALS TOGETHER AND DISPOSE OF THE SAME BY THIS COMMON ORD ER. FOR THE SAKE OF BREVITY WE TAKE UP THE GROUNDS FOR ASSESSMENT YEAR 2004-05 WH ICH READ AS UNDER: 1. THAT LD. CIT(A) HAS ERRED IN LAW AS WELL AS ON FACTS IN ALLOWING DEDUCTION U/S 80IB WITHOUT CONSIDERING THAT THE RETURN O INCOME WAS FI LED ON 29.10.2004 AND THE STATUTORY AUDIT REPORT IN FORM NO. 10CCB WAS FILED ON 26.12.2006 I.E. MORE THAN TWO YEARS AFTER FILING OF RETURN. 2. THAT LD. CIT(A) HAS ERRED IN LAW AS WELL AS ON FACTS IN ALLOWING DEDUCTION U/S 80IB WITHOUT CONSIDERING THAT SUCH CLAIM MADE IN THE RE TURN WAS NOT BASED ON THE STATUTORY AUDIT REPORT IN FORM NO. 10CCB. 2. IN ALL THE THREE APPEALS THE BASIC ISSUE INVO LVED IS THE DENIAL TO THE ASSESSEE THE DEDUCTION U/S. 80-IB OF THE ACT ON THE GROUND THAT THE ASSESSEE FAILED TO SUBMIT AUDIT REPORT AS REQUIRED IN FORM-10CCB UNDER RULE 10BBB A LONG WITH THE RETURN FILED FOR ALL THE THREE ASSESSMENT YEARS UNDER CONSIDERATION. 2 3. THERE IS NO DISPUTE TO THE FACT THAT THE ASSESS EE FILED THE REQUISITE AUDIT REPORT IN FORM-10CCB AT THE TIME OF ASSESSMENT PROCEEDINGS FO R ALL THE THREE ASSESSMENT YEARS UNDER CONSIDERATION. 4. THE LD. C.I.T.(A) CONSIDERING THE FACT THAT THE ASSESSEE FILED THE AUDIT REPORT IN FORM-10CCB BEFORE FINALIZING THE ASSESSMENT AND ALS O CONSIDERING THE DECISIONS OF HONBLE MADHYA PRADESH HIGH COURT IN THE CASE OF CI T VS. PANAMA CHEMICALS WORKS [292 ITR 147] HONBLE GUJARAT HIGH COURT IN THE CA SE OF CIT VS. GUJARAT OIL & ALLIED INDUSTRIES [201 ITR 325] HONBLE BOMBAY HIG H COURT IN THE CASE OF CIT VS. SHIVANAND ELECTRONICS [209 ITR 63] AND ORDER OF I.T .A.T. A BENCH KOLKATA IN THE CASE OF ACIT VS. HIMGIRI CASTING PVT. LTD. [ITA NO. 338 & 339/KOL/2008 ORDER DATED 5/6/2009] HAS HELD THAT THE FILING OF AUDIT REPORT WITH THE RETURN IS NOT MANDATORY BUT IS DIRECTORY IN NATURE. THE LD. C.I.T.(A) HAS ALSO ST ATED THAT THE INITIAL CLAIM OF THE ASSESSEE FOR DEDUCTION U/S. 80-IB OF THE ACT WAS FO R ASSESSMENT YEAR 1998-99. THE TRIBUNAL IN ITA NOS. 1791 TO 1793 (KOL)/2007 WHILE DECIDING THE APPEALS FOR ASSESSMENT YEARS 1998-99 TO 2000-01 HAS ALLOWED TH E CLAIM OF THE ASSESSEE U/S. 80-IB OF THE ACT. THE LD. C.I.T.(A) BY FOLLOWING THE EAR LIER ORDER OF THE TRIBUNAL HAS ALLOWED THE DEDUCTION TO THE ASSESSEE U/S. 80-IB OF THE ACT . HENCE THE DEPARTMENT IS IN APPEALS FOR ALL THE THREE ASSESSMENT YEARS UNDER CONSIDERAT ION. 5. THE LD. DEPARTMENTAL REPRESENTATIVE SUPPORTED T HE ORDERS OF THE ASSESSING OFFICER. THE LD. A/R OF THE ASSESSEE SUBMITTED THA T THE FILING OF AUDIT REPORT IN FORM- 10CCB ALONG WITH THE RETURN IS NOT MANDATORY. HE R ELYING ON THE FOLLOWING DECISIONS SUBMITTED THAT EVEN WHEN THE AUDIT REPORT IS FILED IN REQUISITE FORM BEFORE FINALIZATION OF ASSESSMENT PROCEEDINGS IT IS COMPLIANCE OF THE PROVISIONS OF SEC. 80-IB OF THE ACT IN REGARD TO THE SUBMISSION OF AUDIT REPORT :- 1) CIT VS RAMCO INTERNATIONAL (2009) 221 CTR (P&H) 491 2) MURALI EXPORT HOUSE & ORS. VS CIT (1999) 238 ITR 257 (CAL) 3) CIT VS BERGER PAINTS (INDIA) LTD. (2002) 254 ITR 503 (CAL) 4) CIT VS PANAMA CHEMICALS WORKS (2007) 292 ITR 147 (MP) 5) CIT VS SHIVANAND ELECTRONICS (1994) 209 ITR 63 ( BOM). 6) CIT VS GUJARAT OIL & ALLIED INDUSTRIES (1993) 20 1 ITR 325 (GUJ.) 7) CIT VS PANAMA CHEMICALS WORKS (2000) 245 ITR 684 (MP) 8) N.A.N. WOOLEN MILLS VS ACIT (1956) 56 LTD (DEL) 268. 9) DCIT VS B. V. ASWATHAIAH & BROS. (2001) 72 TTJ ( BANG.) 714 3 THE LD. A/R FURTHER SUBMITTED THAT IN RESPECT OF AS SESSMENT YEAR 2006-07 THE ASSESSEE FILED THE RETURN IN ELECTRONIC FORM AND THEREFORE THE AUDIT REPORT COULD NOT BE FILED ALONG WITH THE SAID RETURN AND WAS REQUIRED TO BE F ILED ONLY AT THE TIME OF ASSESSMENT PROCEEDINGS. THE ASSESSEE UNDISPUTEDLY FILED THE A UDIT REPORT AT THE TIME OF ASSESSMENT PROCEEDINGS FOR ALL THE THREE ASSESSMENT YEARS UNDE R CONSIDERATION. THE LD. A/R FURTHER SUBMITTED THAT THE LD. C.I.T.(A) HAS ALSO A LLOWED DEDUCTION TO THE ASSESSEE U/S. 80-IB OF THE ACT BY FOLLOWING IN THE ASSESSEES OWN CASE THE I.T.A.TS ORDER FOR ASSESSMENT YEARS 1998-99 TO 2000-01. HE SUBMITTED THAT THE FACTS ARE IDENTICAL IN THE ASSESSMENT YEARS UNDER CONSIDERATION. THEREFORE T HE ORDERS OF THE LD. C.I.T.(A) FOR ALL THE THREE ASSESSMENT YEARS UNDER CONSIDERATION SHOU LD BE CONFIRMED. 6. WE HAVE HEARD THE PARTIES AND PERUSED THE ORDER S OF THE AUTHORITIES BELOW AND EVIDENCE ON RECORD. THE A.O. DENIED THE ASSESSEE T HE DEDUCTION CLAIMED BY IT U/S. 80- IB OF THE ACT WHILE COMPUTING THE TOTAL BUSINESS IN COME ON THE GROUND THAT THE ASSESSEE FAILED TO SUBMIT THE AUDIT REPORT IN FORM- 10CCB AS REQUIRED UNDER RULE 18BBB OF THE RULES ALONG WITH THE RETURNS FOR ALL T HE THREE ASSESSMENT YEARS UNDER CONSIDERATION. IT IS AN ADMITTED POSITION THAT ALTH OUGH THE ASSESSEE DID NOT FILE THE REQUISITE AUDIT REPORTS ALONG WITH THE RETURNS OF R ESPECTIVE ASSESSMENT YEARS UNDER APPEAL BUT THE SAME WERE DULY FILED DURING COURSE OF ASSESSMENT PROCEEDINGS AND THE ASSESSMENTS WERE COMPLETED AFTER TAKING INTO CONSID ERATION THOSE AUDIT REPORTS. THERE IS CATENA OF JUDGMENTS OF SEVERAL HIGH COURTS INCLU DING JURISDICTIONAL HIGH COURT WHEREIN IT HAS BEEN HELD THAT FILING OF AUDIT REPOR T IN FORM-10CCB WITH THE RETURN IS NOT MANDATORY BUT IS DIRECTORY IN NATURE. 6.1. WE FIND THAT THE ISSUE IS SQUARELY COVERED B Y THE DECISIONS OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASES OF CIT VS. M AGNUM EXPORTS (P) LTD. [262 I.T.R. 10 (CAL)] MURLI EXPORT HOUSE & ORS. VS. CIT (SUPRA ) AND CIT VS. BERGER PAINTS (INDIA) LTD. (SUPRA). WE FURTHER OBSERVE THAT THE L D. C.I.T.(A) APART FROM RELYING ON SEVERAL JUDICIAL PRONOUNCEMENTS HAS ALSO ALLOWED TH E DEDUCTION TO THE ASSESSEE U/S.80- IB FOR THE ASSESSMENT YEARS UNDER CONSIDERATION ON IDENTICAL FACTS AND SITUATION BY FOLLOWING THE ORDER OF I.T.A.T. IN THE ASSESSEES O WN CASE FOR ASSESSMENT YEARS 1998- 4 99 TO 2000-01 VIDE ITA NOS. 1791 TO 1793/KOL/2007. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THEREFORE WE FIND THAT THE COMMON ISSUE IN THESE APPEALS BEFORE US IS SQUARELY COVERED BY THE DECISIONS OF H ONBLE JURISDICTIONAL HIGH COURT REFERRED TO ABOVE. IT IS AN ADMITTED POSITION THAT PREPARATION OF ACCOUNT IS MANDATORY BUT FILING OF THE SAME IS A PROCEDURAL MATTER. THE RATIO OF THE AFORESAID DECISIONS OF HONBLE JURISDICTIONAL HIGH COURT IS THAT THE BENEF IT OF DEDUCTION U/S. 80-IB OF THE ACT IS AVAILABLE WHERE THE AUDIT REPORT HAS BEEN FILED BEFORE THE COMPLETION OF THE ASSESSMENT INASMUCH AS FILING OF AUDIT REPORT IN F ORM NO.10CCB IS DIRECTORY IN NATURE AND NOT MANDATORY. IN THIS CASE THE ASSESS EE DID NOT ENCLOSE THE AUDIT REPORT IN FORM NO.10CCB ALONG WITH THE RETURNS OF INCOME BUT FILED THE SAME DURING ASSESSMENT PROCEEDINGS BEFORE THE A.O. I.E. BEFORE THE COMPLETION OF ASSESSMENTS. 6.2. FURTHER THE PROVISIONS OF SEC. 80-IB OF THE ACT SPEAK ABOUT DEDUCTION IN RESPECT OF PROFITS AND GAINS FROM CERTAIN INDUSTRIA L UNDERTAKINGS OTHER THAN INFRASTRUCTURE DEVELOPMENT UNDERTAKINGS. THE HONBL E GAUHATI HIGH COURT IN THE CASE OF CIT VS. RAJESH KUMAR JALAN [286 ITR 274 (GAU)] H AD AN OCCASION TO INTERPRET THE BENEFICIAL PROVISION IN A TAXING STATUTE. IT HAS B EEN HELD AS UNDER :- WHILE CONSTRUING A BENEFICIAL ENACTMENT THE VIEW T HAT ADVANCES THE OBJECT OF THE BENEFICIAL ENACTMENT AND SERVES ITS PURPOSE MUS T BE PREFERRED TO THAT WHICH OBSTRUCTS THE OBJECTS AND PARALYSES THE PURPOSE OF THE BENEFICIAL ENACTMENT. FURTHER THE HONBLE SUPREME COURT IN A SIMILAR SI TUATION IN THE CASE OF BAJAJ TEMPO LTD. VS. CIT [196 ITR 188 (SC)] HAS HELD AS UNDER:- A PROVISION IN A TAXING STATUTE GRANTING INCENTIVE S FOR PROMOTING GROWTH AND DEVELOPMENT SHOULD BE CONSTRUED LIBERALLY; AND SINC E A PROVISION FOR PROMOTING ECONOMIC GROWTH HAS TO BE INTERPRETED LIBERALLY THE RESTRICTION ON IT TOO HAS TO BE CONSTRUED SO AS TO ADVANCE THE OBJECTIVE OF THE PROVISION AND NOT TO FRUSTRATE IT. IN THIS VIEW OF THE MATTER AND RESPECTFULLY FOLLOWI NG THE AFORESAID DECISIONS OF HONBLE SUPREME COURT JURISDICTIONAL HIGH COURT GAUHATI H IGH COURT AND THE TRIBUNAL RELIED ON BY THE LD. C.I.T.(A) WE ARE OF THE CONSIDERED O PINION THAT THE REQUIREMENT OF FILING THE AUDIT REPORT IN FORM-10CCB ALONG WITH THE RETUR N IS NOT MANDATORY IN THE STRICT SENSE OF THE TERM BUT IS ONLY DIRECTORY. WE THERE FORE DECLINE TO INTERFERE WITH THE 5 ORDERS OF LD. C.I.T.(A) ON THIS ISSUE FOR ALL THE T HREE ASSESSMENT YEARS UNDER CONSIDERATION AND REJECT THE GROUNDS OF APPEAL OF T HE REVENUE. 7. FURTHER IN RESPECT OF GRANT OF DEDUCTION U/S. 80-IB OF THE ACT FOR ALL THE THREE ASSESSMENT YEARS UNDER CONSIDERATION WE OBSERVE TH AT THE LD. C.I.T.(A) HAS DIRECTED THE A.O. TO ALLOW DEDUCTION U/S. 80-IB OF THE ACT B Y FOLLOWING EARLIER ORDER OF THE TRIBUNAL IN THE ASSESSEES OWN CASE FOR ASSESSMENT YEARS 1998-99 TO 2000-01 IN ITA NOS. 1791 TO 1793/KOL/2007. THE LD. DEPARTMENTAL R EPRESENTATIVE HAS NOT DISPUTED THE ABOVE FACTUAL POSITION. THEREFORE WE HOLD THA T THE LD. C.I.T.(A) HAS RIGHTLY DIRECTED THE A.O. TO ALLOW DEDUCTION TO THE ASSESSE E U/S. 80-IB OF THE ACT. 8. IN THE RESULT APPEALS OF THE DEPARTMENT FOR AL L THE THREE ASSESSMENT YEARS ARE DISMISSED. 4 '3 #5' 6 5% 7 48 THIS ORDER IS PRONOUNCED IN THE OPEN COURT ON 07.01 .2011. SD/- SD/- ( . .. . ! ! ! !. .. . ) '# ( . . . . . .. . ) (C.D.RAO) ACCOUNTANT MEMBER (B.R.MITTAL) JUDICIAL MEMBER ( (( (!# !# !# !#) )) ) DATE: 07-01-2011 '3 1 /9 :'9';- COPY OF THE ORDER FORWARDED TO: 1. + / THE APPELLANT : D.C.I.T. CIRCLE-4 KOLKATA. 2 /0+ / THE RESPONDENT : M/S.TIDE WATER OIL CO. (INDIA) LTD. 8 DR. RAJENDR A PRASAD SARANI KOLKATA-700 001. 3. 3% () : THE CIT(A)-IV KOLKATA. 4. 3%/ THE CIT KOL- 5 ?7 /% / DR ITAT KOLKATA BENCHES KOLKATA 6 GUARD FILE . 09 // TRUE COPY '3%5/ BY ORDER (DKP) @ A / DEPUTY REGISTRAR .