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Income Tax Appellate Tribunal, DELHI BENCH, ‘G’: NEW DELHI
Before: SHRI SHAMIM YAHYA & SHRI CHANDRA MOHAN GARG
ORDER PER BENCH
These appeals by the Revenue and Cross objections by the assessee arising out of the common order of the Ld. CIT(A)-IV, Kanpur, dated 30.08.2018 pertains to Assessment Years 2011-12 to 2015-16, respectively.
The grounds of appeal are common in all these appeals, therefore, we are referring the grounds of appeal for Assessment Year 2011-12, which reads as under:-
1. Whether on facts and circumstances of the case and in law, the Ld. CIT(A) has erred in law by deleting the disallowance of claim u/s 80IC of the I.T. Act, 1961 on grounds that no disallowance was made in A.Y. 2010-11 by A.O. u/s 143(3)/153A which is factually incorrect as the asseesee had not at all claimed any deduction w/s 80IC in A.Y. 2010-11 and therefore the adverse inference drawn by Ld. CIT(A) on this basis suffers from perversity.
2. Whether on facts and circumstances of the case and in law, the Ld. CIT(A) erred in law by deleting the disallowance of claim u/s 80IC of the IT. Act, 1961 on grounds that no disallowance was made in A.Y. 2010-11 by A.O. u/s 143(3)/153A, without appreciating that before the A.O. the assessee did not furnish any details in support of the claim u/s 80IC and it was incumbent upon the assessee to prove the genuineness of eligible activity and the correctness of the claim on a year to year basis. 3. Whether on facts and circumstances of the case and in law, the Ld. CIT (A) erred in deleting the disallowance of claim u/s 80IC of the IT. Act, 1961 on grounds that the A.O. did not point out specific defects in financial statements, when the A has categorically recorded the finding in the asstt. order that in absence of any specific reply on the issue of 80IC deduction, the AO was precluded from verifying the fulfillment of pre- requisite conditions of deduction us 80IC from year to year basis. 4. The order of the Ld. CIT (A) is erroneous in law and on facts of the case and is liable to be set aside and the order of the A.O. be restored.
3 M/s Tirupati Medicare Pvt. Ltd.
Brief facts of the case are that a search and seizure operation u/s132 of the Act was conducted on 11.11.2014 at the premises of the assessee. Accordingly, notices u/s 153A for A.Y. 2011-12 to A.Y. 2014-15 & u/s 142(1) for A.Y. 2015-16 of the Act were issued on 22.12.2016, for AY. 2011-12 to A.Y. 2014-15 & Assessment Year 2015-16. In response, assessee filed its return of showing income of Rs.1,97,46,865/-, Rs.2,68,80,567/-, Rs.2,81,26,793/-, Rs.4,75,66,911/- and Rs.8,38,39,740/- for A.Y. 2011-12 to A.Y. 2015-16 respectively. Later on, notices u/s 143(2) & 142(1) were also issued and A.O. completed the assessment by making disallowance of Rs.1,97,46,865/-, Rs.2,68,80,567/-, Rs.1,20,54,340/-, Rs.2,03,85;819/- and Rs. 3,59,31,318/-deduction claimed u/s 80IC of the Act, for A.Y. 2011-12 to A.Y. 2015-16 respectively. In assessment order, the Assessing Officer noted that the assessee has submitted complete books of accounts, ledger accounts with supporting bills and vouchers, copy of bank statement etc. No defect whatsoever was noted therein. In the concluding portion of the order, the Assessing Officer observe that the assessee has claimed deduction amounting to Rs.1,97,46,865/- u/s 80IC of the Act. The assessee has been asked to explain the same. No reply was furnished by the assessee, hence, he held that pre-requisite conditions for availing deduction u/s 80IC cannot be testify. We may gainfully refer the said portion of the order.
“5. During the course of assessment proceedings, it has been seen that the assessee has claimed deduction amounting to Rs.1,97,46,865/- u/s 80IC of the Income Tax Act, 1961. The assessee has been asked to explain the same. No reply was furnished by the assessee in this regard. Under such circumstances all the pre-requisite conditions for availing
4 M/s Tirupati Medicare Pvt. Ltd. deduction u/s 80IC of the Act cannot be testify. In the absence of any information given by the assessee, the said deduction claimed by the assessee u/s 80IC is disallowed.”
Upon assessee’s appeal, the Ld. CIT(A) decided the issue in favour of the assessee on merit by noting that no defect has been pointed out by the Assessing Officer for disallowing the same. We may gainfully refer the order of the Ld. CIT(A) in this regard as under:-
“6.3. The undersigned has carefully gone through the assessment order, written submission as well as verbal arguments of the Ld. A.R.. It is seen that, Assessing Officer has disallowed the deduction u/s 80IC of the Act on the only ground that, no details of the deductions were furnished. The observation of the Assessing Officer cannot be accepted because of the following reasons; i) Assessment order does not reveal that, the Assessing Officer has specifically requisitioned the details of deduction u/s 80IC of the Act from the appellant, during the course of proceedings u/s 153A/143(3) of the Act. ii) Appellant's claim of deduction u/s 80IC of the Act was backed by the specified audit report and the other financial statements, which were submitted by the appellant, during the course of the assessment proceedings. iii) Assessing Officer has not pointed out any specific defects in the financial statements and the specified audit report furnished by the appellant, during the course of the assessment proceedings. In fact, the Assessing Officer has himself admitted the fact that, the complete details, books of accounts and vouchers were furnished which, were test checked by him in the assessment proceedings. iv) In the regular scrutiny assessment made u/s 143(3) of the Act for A.Y.2010-11 the claim of the deduction u/s 80IC of the Act was duly examined and allowed by the Assessing officer. Further, even, in assessment framed u/s 153A of the Act for A.Y. 2010-11 the claim of deduction u/s 8OIC of the Act has been duly allowed by the Assessing Officer. The facts and circumstances of the deduction us 80IC of the Act for the years under this appeal is no different from A.Y. 2010-11.
5 M/s Tirupati Medicare Pvt. Ltd.
6.4 In view of the above detailed discussion, the addition made by the Assessing Officer u/s 80IC of the Act cannot be sustained. The same is therefore, deleted and grounds of appeal of the appellant are allowed.”
5. Against the above order, the Revenue has filed appeal and the assessee has filed Cross Objection.
6. As regards Revenue’s appeal is concerned, we note that the assessment was framed u/s notice u/s 153A of the Act. In the assessment order, no specific reason has been given by the Assessing Officer for making disallowance. He has not pointed out the defect if any noted in the books of accounts of the assessee warranting the said disallowance. In our considered opinion, the Ld. CIT(A) has taken a correct view of that matter. Without pointing out any shortcoming in the claim of the assessee in terms of section 80IC of the Act, no disallowance is sustainable. More so when the AO himself noted that the assessee has furnished complete details and no defect has been pointed out. In this view of the matter, in our considered opinion, there is no infirmity in the order of the Ld. CIT(A), hence, we uphold the same.
Cross Objection for Assessment Year 2011-12
In the Cross objection, challenge made by the assessee is that the addition has been made de-hors incriminating material found during search. The assessee had also relied upon Hon’ble jurisdictional High Court decision in the case of Kabul Chawla (2016) 380 ITR 573 (Del.).
The Ld. CIT(A) has dismissed this ground of the assessee. We find that the same is only of academic interest. As, we have upheld the Ld. CIT(A)’s order on merits and the Revenue’s appeals are liable to be dismissed.
6 M/s Tirupati Medicare Pvt. Ltd.
Accordingly, the Cross Objections of the assessee are also dismissed as infructuous.
Our above order applies mutatis mutandis to all the Assessment Years under appeal.
In the result, all appeals of the Revenue as well as all Cross Objection of the assessee are dismissed.
Order pronounced in the open court on 23rd December, 2022.