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Income Tax Appellate Tribunal, GUWAHATI BENCH, GUWAHATI
Before: DR. MANISH BORAD, HON’BLE & SHRI SONJOY SARMA, HON’BLE
O R D E R
PER SONJOY SARMA, JM:
This appeal of the assessee for the assessment year 2012-13 is directed against the order dated 27.10.2021 passed by the ld. Commissioner of Income-tax Appeals, NFAC, Delhi [hereinafter referred to as ‘the ld. CIT(A)’]. The assessee has raised the following grounds of appeal: “i. For that both the ld. CIT(A), NFAC as well as ld. J.A.O. are not justified in confirming/rejecting the petition filed u/s. 154 of I.T. Act 1961 claiming deduction u/s. 80(IE) in respect of VAT Remission claimed as revenue receipt in the facts and circumstances of the case ii. For that the ld. CIT(A), NFAC was not justified also in not considering the CBDT Circular No. 39/2016 (F. No.279/misc/140/2015/ITJ dated 29.11.2016 & No.
68. (F. No.245/17/71-A & PAC) dated 17.11.1971 as submitted by the appellant online firstly on 16.01.2016 & secondly on 05.10.2021 vide ANNEXURES - 5 & 6 in the appellant's written submission dated 16.01.2021 while passing the appellate order u/s. 250 of I.T. Act 1961 iii. For that the ld. A.O. has not considered in right perspective rectification petition dated 21.04.2016, 09.04.2019 16.03.2020 submitted online vide ANNEXURE - 3 of appellant's written submission dated 16.01.2021.
Priyanshu Boiragi A.Y. 2014-15 iv. For that the other grounds of law as well as of facts, the appellant may be allowed to raise on or before the hearing of the case.”
Brief facts of the case are that the assessee filed its return of income for the assessment year 2014-15 by declaring total income of Rs. 15,68,73,064/- and claimed deduction of Rs. 10,11,41,141/- under Chapter VIA u/s 80-IE of the Act being profit derived from manufacturing activities which included a deduction of Rs. 84,53,370/- in respect of VAT Remission as part of profit derived from the industry running under the name and style of M/s. Purbashree Printing House. While framing the assessment u/s 143(3) of the Act dated 18.3.2016, ld. AO disallowed an amount of Rs. 84,53,370/- in the hands of assessee on the ground that such VAT Remission cannot said to be core activity or for the purpose of the manufacturing business carried on by the assessee. Subsequent to the assessment order, assessee had filed rectification petition u/s 154 of the Act on various dates i.e. 21.04.2016, 09.04.2019 and 16.09.2020 respectively by which assessee requesting the AO to rectification of the mistake in the assessment order passed u/s 143(3) due to the various decisions rendered by Supreme Court as well as Hon’ble High Court in favour of the assessee on the same issue involved in the case of the assessee. However, ld. AO vide order dated 24.06.2020 rejected the prayer for such rectification petition filed by the assessee stating that the alleged issue was not a mistake apparent from the record. Since the issue involved was purely a matter of litigation and same did not come under the purview of section 154 of the Act.
Dissatisfied with the above, assessee preferred an appeal before the ld. CIT(A) where the ld. CIT(A) sustained the order passed by the ld. AO and dismissed the appeal of the assessee.
Priyanshu Boiragi A.Y. 2014-15
Aggrieved by the above order of ld. CIT(A), assessee preferred an appeal before this Tribunal.
At the time of hearing, ld. AR for the assessee stated that the present issue involved relating to the rejection of claim of assessee u/s 80-IE of the Act in respect of VAT Remission is covered in favour of the assessee. Keeping in view of the CBDT Circular No. 39/2016 dated 29.11.2016 wherein it is stated that various subsidies received from the Govt. towards reimbursement of cost of production or for sale of manufactured goods are part of the profits and gains of the business derived from industrial undertaking/eligible business and accordingly admissible for deduction under Chapter VIA of the Act. The ld. AR to substantiate his argument, he placed before us various decisions rendered by the Hon’ble Supreme Court as well as various High Courts on this issue by citing as follows: “CIT vs Meghalaya Steel Limited in Civil Appeal No. 7622/2014 (2016) 132 DTR (SC) 273 & Hon’ble Rajasthan High Court in the case of CIT vs Sunil Kumar (1996) 212 ITR 238 (Rajasthan)” And prayed that the instant appeal may be allowed in view of the above decision in favour of the assessee.
On the other hand, ld. DR supported the order passed by the authorities below. He further stated that the present issue involved in the appeal is a purely legal issue which assessee may have to be raised before ld. CIT(A) by challenging the assessment order dated 18.03.2016 passed u/s 143(3) of the Act by the ld. AO. However, assessee has failed to avail such remedy by filing the appeal before the ld. CIT(A), therefore, the instant issue challenged by the assessee may be rejected at this juncture.
Priyanshu Boiragi A.Y. 2014-15 7. We after hearing the rival submission of the parties and on perusal of the material available on record. We notice that although prima facie, the issue goes in favour of the assessee in view of the various judgements rendered by the Hon’ble Supreme Court as well as Hon’ble High Court and subsequently even CBDT has also issued a circular no. 39/2016 dated 29.11.2016 by clarifying the issue for admissibility of various subsidies under Chapter VIA of the Act and regarding allowability of various subsidies in the hands of the assessee. However, those aspects were never examined by the authorities below as the assessee did not file any appeal against the order dated 24.06.2020 passed u/s 143(3) of the Act, therefore, we are inclined to sustain the order passed by the authorities below. However, the assessee may prefer an appeal before the ld. CIT(A) against the assessment order dated 24.06.2020 passed by the ld. AO along with an appropriate petition for condonation of delay and in by specifying the reason for such delay that event ld. CIT(A) may sympathetically consider such application filed by the assessee and decide such issues on the merits of the case. In terms of above observation, the instant appeal of the assessee is hereby dismissed.
In the result, the appeal of the assessee is dismissed. Order pronounced in the open court on 24.07.2023