AUTOTEX PRIVATE LIMITED,COIMBATORE vs. ASSISTANT COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE 1, COIMBATORE

The Appellant Company is engaged in the business of manufacture and sale of Textile accessories and generation of Electricity through Windmill division. The appellant had filed its return of income admitting an income of Rs. 3, 04, 97, 580/- on 31.10.2017 as per the provisions of the Income Tax Act, 1961. The return of income has been processed u/s. 143(1) of the Income Tax Act, 1961 as per intimation dated 09.11.2018 and later rectified as per order u/s. 154 dated 14.05.2019 making the following disallowance which is being disputed in this appeal. Disallowance of deduction u/s. 80 IA of Rs. 91, 31, 409/-. The brief of the case is that the appellant had filed its return of income at Rs. 3, 04, 97, 580/-. The return was processed u/s. 143(1) of the Act and disallowance of deduction claimed u/s. 80IA of the Act to the tune of Rs. 91, 31, 409/- was made. Subsequently, the appellant filed rectification application u/s. 154 of the Act, the disallowance was again confirmed. Aggrieved by the above order, the appellant has filed this present appeal.

We have gone through the intimation issued u/s. 143(1) and 154 of the Act vide dated 09.11.2018 and 14.05.2019 respectively along with the order of the Ld. CIT (A). Here, it is pertinent to mention that the assessee under consideration is claiming deduction u/s.

For ready reference and better analysis of the matter before us we deem it fit to reproduce the relevant provisions of the Act as under: Section - 80-IA, Income-tax Act, 1961 - FA, 2026 Deductions in respect of profits and gains from industrial undertakings or enterprises engaged in infrastructure development, etc. 80-IA. (1) Where the gross total income of an assessee includes any profits and gains derived by an undertaking or an enterprise from any business referred to in sub-section (4) (such business being hereinafter referred to as the eligible business), there shall, in accordance with and subject to the provisions of this section, be allowed, in computing the total income of the assessee, a deduction of an amount equal to hundred per cent of the profits and gains derived from such business for ten consecutive assessment years. (4) This section applies to— (iv) an undertaking] which,— (a) is set up in any part of India for the generation or generation and distribution of power if it begins to generate power at any time during the period beginning on the 1st day of April, 1993 and ending on the 31st day of March,2017

We have gone through the provisions of section 80IA(4)(iv)(a) of the Act along with the information about the assessee tabulated above and in our considered opinion, the section is beneficial in nature and submission of Form No.10CCB is a procedural requirement on yearly basis. But, it does not mean that the procedural requirement (if not

Therefore, left with no option, the assessee approached CPC, Bengaluru again by filing the Form No. 10CCB vide dated: 04.02.2019 to allow its claim and also filed the rectification application u/s. 154 of the Act. The reason for not filing Form 10CCB on time was usually on account of the inadvertence/over sight by the Chartered Accountants. On this we rely on a judgment of the Hon’ble Apex Court in CIT v. G. M. Knitting Industries Private Limited [2016] 71 taxmann.com 35/ [2015] (SC), wherein it was held that filing Form No. 10CCB is directory and not mandatory. Reliance was also placed on the Circular No. 689 dated 24th August 1994 and Circular No. 669 dated 25th October 1993 issued by CBDT as per which, AO/CPC is bound to consider Form No. 10CCB and decide the application for rectification. The assessee’s application was rejected by the CPC most probably on the ground that the reasons stated by petitioner, i.e., inadvertence on the part of the Auditors/Chartered Accountants of the assessee in uploading Form No.10CCB was very general in nature and no reasonable cause was shown to justify the genuine hardship being faced by petitioner. This is in utter violation of the decision of the Hon’ble Apex Court in the case of G. M. Knitting Industries Private Limited.

In the present facts, the necessary evidence entitling the assessee to claim deduction under section 80-IA of the Act are on record in the form of previous ITRs and deduction allowed to the assessee for the subject assessment year. In addition to the above, it’s a settled position of law on the issues pertaining to the deductions claimed under Chapter VI-A that as long as benefit granted under section 80-IA for first year remained unaltered, Assessing Officer would have no jurisdiction to revisit same issue in subsequent assessment years on some technical issue, as in this case. On this issue we draw strength from the decision of the Hon’ble Calcutta High Court in the case of [2023] 154 taxmann.com 226 (Cal.) C and E Ltd. v. PCIT, where in the Hon’ble Court held as under: The assessee pointed out that the show cause notice was issued under section 263 on the ground that Form 10CCB was not filed, the relevant assessment year being the 7th year of assessment, only 30 per cent deduction should be allowed instead of 100 per cent deduction and therefore observed that the Assessing Officer has allowed excess depreciation. It was contended that though the Principal Commissioner stated that 100 per cent deduction could not be given as Form 10CCB was not filed agreed that 30 per cent deduction can be given even though Form 10CCB was not filed. The assessee specifically pointed out that along with the reply to the show cause notice, they had filed Form 10CCB before the Principal Commissioner and the Principal Commissioner has not even referred to the said Form nor dealt with the submissions made by the assessee in that regard. Further the assessee submitted that before granting 100 per cent deduction for the assessment year 2012-13, being the first year of substantial expansion and the 6th year, the Assessing Officer had made detailed enquiry and thereafter accepted the claim of the assessee. Before completing the assessment, notice dated 18-11-2013 was issued under section 142(1) to which the assessee submitted their reply dated 3-7-2014 enclosing all relevant documents, thereafter another show cause notice was issued on 10-3-2015 for which the assessee submitted their reply dated 15-3-2015 enclosing all the requisite documents and after thorough enquiry and being satisfied that the claim of deduction was genuine, the Assessing Officer had granted the benefit of such deduction and the said order has attained finality. [Para 6] It was pointed out by the assessee before the Tribunal that during the course of the assessment for the year under consideration, assessment year 2013-14, the Assessing Officer will have no power to revisit the genuineness of the claim for the substantial expansion which was already settled in the first year of substantial expansion namely assessment year 2012-13. Though such detailed contention was raised by the assessee, it is found that the Tribunal has not dealt with the same. More importantly, the Tribunal has not noted the crucial and important facts that the assessment year under consideration is the second year of substantial expansion and for the first year of substantial expansion namely for the assessment year 2012-13, the claim made by the assessee for deduction at 100 per cent was accepted by the Assessing Officer after conducting a detailed enquiry and examining all the documents which were produced by the assessee. Thus, what the Tribunal ought to have noted is that whether the Assessing Officer/Principal Commissioner can revisit the claim which was accepted for the assessment year 2012-13 while completing the assessment for the year 2013-14 being the second year of substantial expansion. This aspect of the matter has not been dealt with by the Tribunal. [Para 7] It is not in dispute that in the first year of substantial expansion namely assessment year 2012-13, the assessee was granted the relief. Similarly for the assessment years 2014-15, 2015-16 and 2016-17 being the 3rd, 4th and 5th years of substantial expansion relief has been granted and the only solitary year for which relief had been denied in its entirety is the assessment year in 2013-14. As long as the benefit granted under section 80-IC for the first

In view of the above facts and the judicial pronouncements by Hon’ble Apex Court and High Courts, it can be concluded safely that the claim of the assessee cannot be rejected. As the assessee furnished Form No.10CCB along with rectification application u/s. 154 of the Act on 04.02.2019 and legally also a settled claim since assessment year 2014- 15 and even in subsequent years, cannot be disturbed merely on a technical ground i.e. late filing / non-filing of Form No.10CCB. In view of this the grounds taken by the assessee are allowed. 9. In the result, the appeal of the assessee, based on the facts and law discussed (supra), is allowed.