COMMISSIONER OF INCOME TAX--V vs. RESISTOFLEX DYNAMICS (P)LTD.

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ITA/872/2016HC DelhiDLHC01116883201619 December 2016Bench: HON'BLE MR. JUSTICE S. RAVINDRA BHAT,HON'BLE MR. JUSTICE NAJMI WAZIRI2 pages
AI SummaryDismissed

What did the High Court hold?

The High Court dismissed the appeal. Firstly, it held that the delay of 646 days was inordinate and the explanation provided by the Revenue, citing procedural compliances for e-filing and an overload of work, was insufficient to warrant condonation of delay. Secondly, on merits, the Court noted that the ITAT had concluded, after detailed analysis, that the specialized nature of assembling air springs for railways constituted a process of manufacture. The ITAT had also relied on clearances from Central Excise Authorities and a previous year's finding in favor of the assessee. The High Court found no reason to interfere with the ITAT's order on both grounds. The operative direction was dismissal of the appeal.

What were the facts?

The Revenue, Commissioner of Income Tax-V, filed an appeal under Section 260A of the Income Tax Act, 1961, challenging an order dated 06.12.2013 passed by the Income Tax Appellate Tribunal (ITAT) in ITA No. 2554/Del/2013 for Assessment Year 2009-10. The appeal was filed with an inordinate delay of 646 days. The Revenue's explanation for the delay cited procedural compliances for e-filing and an overload of work, which the High Court found insufficient. The core dispute concerned whether the assembling of air springs for railways, conforming to exact specifications, constituted a process of manufacture or amounted to manufacture.

What were the issues?

1. Whether the appeal filed by the Revenue is barred by limitation due to an inordinate delay of 646 days, and if the explanation provided for the delay is sufficient to warrant condonation? (Question of law). The Revenue argued that the delay was due to procedural compliances for e-filing and an overload of work. The High Court did not record specific arguments from the Revenue on the merits of the ITAT's order but noted the ITAT's findings. The Respondent (assessee) was not represented. 2. Whether the assembling of air springs for use by the railways, conforming to exact specifications, amounted to a process of manufacture or amounted to manufacture? (Question of mixed law and fact, concerning Section 2(29B) of the Income Tax Act, 1961, and the definition of 'manufacture'). The ITAT concluded that the specialized nature of the task constituted manufacture, relying on clearances from Central Excise Authorities and a favorable finding for the previous year.

Which sections of the Income-tax Act were involved?

Section 260A,Section 2(29B)

AI-generated summary — verify with the full judgment below

$~3 * IN THE HIGH COURT OF DELHI AT NEW DELHI + ITA 872/2016, CM No.45075/2016 COMMISSIONER OF INCOME TAX--V ..... Appellant Through: Mr. N.P. Sahni, Sr. St. Counsel with Mr. Nitin Gulati, Jr. St. Counsel. Versus RESISTOFLEX DYNAMICS (P)LTD. ..... Respondent Through: None. CORAM: HON'BLE MR. JUSTICE S. RAVINDRA BHAT HON'BLE MR. JUSTICE NAJMI WAZIRI O R D E R % 19.12.2016 The present appeal under Section 260A of the Income Tax Act, 1961 seeks to impugn an order of the Income Tax Appellate Tribunal (ITAT) dated 06.12.2013 in ITA No. 2554/Del/2013 for the Assessment Year (AY) 2009-10. At the outset, we notice that the Revenue has filed this appeal after an inordinate delay of 646 days. The reason for the delay has not been properly explained. A general explanation that the process of e-filing required several procedural compliances which could not be fulfilled within the time and that the defects pointed out by the Registry too could not cured since there was overload of work on the part of the Revenue, is not sufficient cause to warrant condonation of delay.

Besides, on merits too, the Court notices that the question of law urged - whether assembling of the ultimate product i.e. air springs - for use by the railways, which conformed to exact specifications - amounted to process of manufacture or amounted to manufacture. The ITAT concluded on detailed analysis that specialised nature of the task showed that the process was manufacture. It also relied upon the clearances given by various other authorities including the Central Excise Authorities on the self saying issue. Furthermore, the ITAT took note of the fact that for the previous year, same question had been gone into and a finding was rendered in favour of the assessee. For the above reasons as well as on the ground of delay, no interference is called for with the order of the ITAT. The appeal is dismissed. S. RAVINDRA BHAT, J. NAJMI WAZIRI, J. DECEMBER 19, 2016/acm

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