M/s Apotex Pharmachem India Private Limited , Bangalore v. Deputy Commissioner of Income Tax Circle-11(1), Bangalore

MA 108/BANG/2019 | 2009-2010
Pronouncement Date: 28-11-2019 | Result: Allowed

Appeal Details

RSA Number 10821124 RSA 2019
Assessee PAN AACCB1658E
Bench Bangalore
Appeal Number MA 108/BANG/2019
Duration Of Justice 2 month(s) 29 day(s)
Appellant M/s Apotex Pharmachem India Private Limited , Bangalore
Respondent Deputy Commissioner of Income Tax Circle-11(1), Bangalore
Appeal Type Miscellaneous Application
Pronouncement Date 28-11-2019
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted A
Tribunal Order Date 28-11-2019
Last Hearing Date 01-11-2019
First Hearing Date 01-11-2019
Assessment Year 2009-2010
Appeal Filed On 30-08-2019
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : BANGALORE BEFORE SHRI ARUN KUMAR GARODIA ACCOUNTANT MEMBER AND SHRI PAVAN KUMAR GADALE JUDICIAL MEMBER M.P. NOS. 108 & 109/BANG/2019 (IN IT(TP)A NOS. 249/BANG/2014 & 2200/BANG/2016 ) ASSESSMENT YEAR S : 2009 - 10 & 2011 - 12 M/S. APOTEX PHARMACHEM INDIA PRIVATE LIMITED PLOT NO. 1A 4 TH PHASE BOMMASANDRA INDUSTRIAL AREA BANGALORE 560 099. PAN: AACCB1658E VS. THE DEPUTY COMMISSIONER OF INCOME TAX CIRCLE 11 (1) BANGALORE. APPELLANT RESPONDENT ASSESSEE BY : SHRI DHANESH BAFNA CA REVENUE BY : SHRI G. ELAMURUGU JCIT (DR) DATE OF HEARING : 15 . 1 1 .2019 DATE OF PRONOUNCEMENT : 28 . 1 1 .2019 O R D E R PER SHRI A.K. GARODIA ACCOUNTANT MEMBER THESE TWO M.PS. ARE FILED BY THE ASSESSEE AND IT IS CONTENDED IN THESE M.PS. THAT THERE ARE CERTAIN APPARENT MISTAKES IN THE COMBINED TRIBUNAL ORDER DATED 08.02.2019 FOR ASSESSMENT YEARS 2009-10 AND 2011-12. BOTH THESE M.PS. WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY WAY OF THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. FIRST WE TAKE UP THE M.P. FOR ASSESSMENT YEAR 2009-10 I.E. M.P. NO. 108/BANG/2019. IN THIS M.P. THIS IS THE CONTENTION RAISED BY THE ASSESSEE THAT THE ASSESSEES CLAIM FOR DEDUCTION U/S. 10B OF THE IT ACT WITH REGARD TO MANUFACTURE ACTIVITIES WAS REJECTED BY THE AO ON THE GROUND THAT THE BOARDS RATIFICATION TO THE PERMISSION GRANTED BY DEVELOPMENT COMMISSIONER IS GIVEN ON 18.01.2011 AND THEREFORE THE SAME WOULD BE EFFECTIVE ONLY FROM FINANCIAL YEAR 2011-12 AND HENCE IT DOES NOT APPLY TO ASSESSMENT YEAR 2009-10. IN PARA NO. 5.2 OF THIS M.P. IT IS STATED BY THE ASSESSEE THAT AS PER PARA 29 OF THE IMPUGNED TRIBUNAL ORDER IT IS HELD BY THE TRIBUNAL THAT ONCE PERMISSION HAS BEEN GRANTED BY THE DEVELOPMENT COMMISSIONER (DC) ITS RATIFICATION BY M.P. NOS. 108 & 109/BANG/2019 (IN IT(TP)A NOS. 249/BANG/2014 & 2200/BANG/2016) PAGE 2 OF 4 THE BOARD IS MERELY A FORMALITY AND THEREFORE WOULD RELATE BACK TO THE DATE OF ACTUAL GRANT AS THE ASSESSEE CANNOT BE PERMITTED TO WAIT TILL ETERNITY IF THERE IS A DELAY / LATCH ON THE PART OF THE BOARD FOR NOT RATIFYING WITHIN THE TIME SANCTIONED BY THE DC. IT IS CONTENDED IN PARA 5.3 OF THE M.P. THAT THE GROUND ON WHICH THE DEDUCTION WITH REGARD TO MANUFACTURING ACTIVITIES WAS DENIED BY THE AO HAS BEEN ALREADY DECIDED IN FAVOUR OF THE ASSESSEE BY THE TRIBUNAL AND THEREFORE THE TRIBUNAL SHOULD HAVE ADJUDICATED GROUND NO. 5.4 RAISED BY THE ASSESSEE BEFORE THE TRIBUNAL AS HAS BEEN REPRODUCED BY THE TRIBUNAL ON PAGE NO. 4 OF THE IMPUGNED TRIBUNAL ORDER. 5.4 WITHOUT PREJUDICE TO THE ABOVE THE LEARNED AO AND LEARNED PANEL ERRED IN DISALLOWING THE DEDUCTION UNDER SECTION 10B OF THE ACT ON THE MANUFACTURING SERVICES CARRIED OUT BY THE APPELLANT. 3. IN COURSE OF HEARING BEFORE US IT WAS SUBMITTED BY LD. AR OF ASSESSEE THAT SINCE GROUND NO. 5.4 RAISED BY ASSESSEE BEFORE THE TRIBUNAL WAS NOT DECIDED BY THE TRIBUNAL THE IMPUGNED TRIBUNAL ORDER SHOULD BE RECALLED FOR THE LIMITED PURPOSE OF DECIDING GROUND NO. 5.4 RAISED BY ASSESSEE BEFORE THE TRIBUNAL. AS AGAINST THIS IT WAS SUBMITTED BY LD. DR OF REVENUE THAT THERE IS NO APPARENT MISTAKE IN THE IMPUGNED TRIBUNAL ORDER. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. FIRST OF ALL WE REPRODUCE PARA NO. 29 OF THE IMPUGNED TRIBUNAL ORDER WHICH IS AS UNDER. 29. WITH RESPECT TO THE RATIFICATION BY THE BOARD GIVING EFFECT FROM 31.08.2004 IN OUR VIEW THERE SHOULD NOT BE ANY QUARREL AS THE ISSUE STANDS COVERED IN FAVOUR OF THE ASSESSEE BY THE AUTHORITATIVE PRONOUNCEMENT BY THE BOARD. IN OUR VIEW INITIAL PERMISSION IS REQUIRED TO BE GRANTED BY THE DC IN ACCORDANCE WITH THE RULES FRAMED FOR THE PURPOSE OF SECTION 2. ONCE THE SAID PERMISSION HAS BEEN GRANTED THEN THE RATIFICATION BY THE BOARD IS MERELY A FORMALITY AND THEREFORE WOULD RELATE BACK TO THE DATE OF ACTUAL GRANT AS THE ASSESSEE CANNOT BE PERMITTED TO WAIT TILL ETERNITY IF THERE IS A DELAY / LATCH ON THE PART OF THE BOARD FOR NOT RATIFYING WITHIN THE TIME SANCTIONED BY THE DC. 5. WE ALSO REPRODUCE PARA 44 OF THE IMPUGNED TRIBUNAL ORDER WHICH IS AS UNDER. 44. THE RATIO LAID DOWN BY THE COORDINATE BENCH IN THE MATTER OF SYNGENE INTERNATIONAL LTD (SUPRA) IS NOT APPLICABLE TO THE ACTIVITIES OF THE ASSESSEE AS THE ASSESSEE IS DOING TWO ACTIVITIES AND TWO -ACTIVITIES ARE NOT PERMISSIBLE. IN VIEW OF THE ABOVE THIS ISSUE ON SECTION 10B RAISED BY THE ASSESSEE IS REQUIRED TO BE DISMISSED. WE DO SO. HENCE GROUND NOS. 5.L TO 5.4 RAISED BY THE ASSESSEE ARE DISMISSED. 6. WE FIND THAT IN PARA 29 AS REPRODUCED ABOVE IT IS HELD BY THE TRIBUNAL THAT RATIFICATION BY THE BOARD RELATES BACK TO THE DATE OF ACTUAL GRANT. FROM PARA M.P. NOS. 108 & 109/BANG/2019 (IN IT(TP)A NOS. 249/BANG/2014 & 2200/BANG/2016) PAGE 3 OF 4 NO. 30 THE TRIBUNAL IS DISCUSSING ABOUT OTHER ASPECT I.E. THE ASSESSEES CLAIM OF DEDUCTION U/S. 10B WITH REGARD TO R&D ACTIVITIES AND TILL PARA NO. 43 THE DISCUSSION IS ONLY ABOUT R&D ACTIVITIES AND THEREAFTER IN PARA 44 OF THE IMPUGNED TRIBUNAL ORDER AS REPRODUCED ABOVE IT WAS HELD THAT GROUND NOS. 1 TO 5.4 RAISED BY THE ASSESSEE ARE DISMISSED. HENCE IN OUR CONSIDERED OPINION THERE IS APPARENT MISTAKE IN THE TRIBUNAL ORDER BECAUSE GROUND NO. 5.4 RAISED BY THE ASSESSEE IN RESPECT OF DEDUCTION CLAIMED BY THE ASSESSEE U/S. 10B OF THE IT ACT ON THE MANUFACTURING SERVICES CARRIED OUT BY THE ASSESSEE WAS NOT DECIDED SPECIFICALLY AND THIS GROUND WAS DISMISSED IN SPITE OF THIS FINDING IN PARA NO. 29 OF THE TRIBUNAL ORDER THAT RATIFICATION BY THE BOARD RELATES BACK TO THE DATE OF ACTUAL GRANT OF PERMISSION. HENCE WE RECALL THIS TRIBUNAL ORDER FOR ASSESSMENT YEAR 2009-10 FOR LIMITED PURPOSE FOR DECIDING GROUND NO. 5.4 OF THIS APPEAL FOR ASSESSMENT YEAR 2009-10. 7. NOW WE TAKE UP THE SECOND M.P. FILED BY THE ASSESSEE FOR ASSESSMENT YEAR 2011-12 IN M.P. NO. 109/BANG/2019. IN THIS M.P. THIS IS THE ONLY CONTENTION RAISED THAT IN THIS YEAR THE CLAIM OF THE ASSESSEE WAS ONLY FOR DEDUCTION U/S. 10B WITH REGARD TO MANUFACTURING ACTIVITIES AND SINCE IT IS ALREADY HELD BY THE TRIBUNAL IN PARA 29 OF THE TRIBUNAL ORDER THAT BOARD RATIFICATION RELATES BACK TO THE DATE OF ACTUAL GRANT BY DC THIS ISSUE SHOULD BE DECIDED IN FAVOUR OF THE ASSESSEE. ON PAGE NO. 53 OF THE IMPUGNED TRIBUNAL ORDER THIS APPEAL WAS DISMISSED BY THE TRIBUNAL BY SIMPLY FOLLOWING THE TRIBUNAL ORDER FOR ASSESSMENT YEAR 2009-10 AND HENCE THIS MISTAKE SHOULD BE RECTIFIED. THE LD. DR OF REVENUE SUBMITTED THAT THERE IS NO APPARENT MISTAKE IN THE IMPUGNED TRIBUNAL ORDER. 8. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. FIRST OF ALL WE REPRODUCE THE RELEVANT PARA FROM PAGE NO. 53 OF THE IMPUGNED TRIBUNAL ORDER. THIS READS AS UNDER. 20. IN THIS APPEAL THE GROUNDS NO.1 TO 6 PERTAINS TO THE ISSUE OF 10B. AS WE HAVE DISMISSED THE GROUND OF THE ASSESSEE FOR THE ASSESSMENT YEAR 2009-10 IN THE SUPERSEDING PARAGRAPHS FOLLOWING THE SAME THE GROUNDS RAISED BY THE REVENUE FOR AY 2011-12 ARE ALLOWED. 9. FROM THE ABOVE PARA REPRODUCED FROM THE IMPUGNED TRIBUNAL ORDER WE FIND THAT THE APPEAL OF THE REVENUE FOR ASSESSMENT YEAR 2011-12 WAS DECIDED IN FAVOUR OF THE REVENUE SIMPLY ON THIS BASIS THAT IN ASSESSEES APPEAL FOR M.P. NOS. 108 & 109/BANG/2019 (IN IT(TP)A NOS. 249/BANG/2014 & 2200/BANG/2016) PAGE 4 OF 4 ASSESSMENT YEAR 2009-10 THE ISSUE REGARDING DEDUCTION U/S. 10B WAS DECIDED AGAINST THE ASSESSEE. WE HAVE ALREADY HELD IN THE ABOVE PARA THAT FOR ASSESSMENT YEAR 2009-10 THE MATTER HAS TO BE HEARD AGAIN FOR THE LIMITED PURPOSE FOR DECIDING GROUND NO. 5.4 RAISED BY THE ASSESSEE IN THAT YEAR. THIS WAS THE SUBMISSION OF ASSESSEE BEFORE US THAT FOR ASSESSMENT YEAR 2011- 12 DEDUCTION ALLOWED BY LD. CIT(A) WAS ONLY REGARDING MANUFACTURING ACTIVITIES AND SINCE THE ISSUE REGRADING ALLOWABILITY OF DEDUCTION U/S. 10B FOR MANUFACTURING ACTIVITY IS TO BE DECIDED AGAIN BY THE TRIBUNAL THE APPEAL OF THE REVENUE FOR ASSESSMENT YEAR 2011-12 SHOULD ALSO BE DECIDED SIMULTANEOUSLY. HENCE WE RECALL THE IMPUGNED TRIBUNAL ORDER FOR DECIDING THE APPEAL OF THE REVENUE FOR ASSESSMENT YEAR 2011-12 SIMULTANEOUSLY WHILE DECIDING GROUND NO. 5.4 IN ASSESSEES APPEAL FOR ASSESSMENT YEAR 2009-10. THE REGISTRY IS DIRECTED TO FIX BOTH THESE APPEALS FOR HEARING IN REGULAR COURSE FOR DECIDING GROUND NO. 5.4 IN ASSESSEES APPEAL FOR ASSESSMENT YEAR 2009- 10 AND FOR DECIDING REVENUES APPEAL FOR ASSESSMENT YEAR 2011-12. NOTICE TO BE ISSUED TO BOTH PARTIES. 10. IN THE RESULT BOTH THE M.PS. FILED BY THE ASSESSEE ARE ALLOWED IN THE TERMS INDICTED ABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE. SD/- SD/- (PAVAN KUMAR GADALE) (ARUN KUMAR GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER BANGALORE DATED THE 28 TH NOVEMBER 2019. /MS/ COPY TO: 1. APPELLANT 4. CIT(A) 2. RESPONDENT 5. DR ITAT BANGALORE 3. CIT 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL BANGALORE.