DCIT, CC-1(2), CHENNAI vs. M/S. CORONET LABS PVT. LTD., CHENNAI

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ITA 3117/CHNY/2019Status: DisposedITAT Chennai28 September 2022AY 2013-145 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The ITAT condoned the 5-day delay in filing the appeal. It upheld the CIT(A)'s decision that belated filing of Form 10CCB does not deny the deduction if filed before assessment completion. However, the ITAT remanded the issue of non-maintenance of separate books of accounts back to the CIT(A) for fresh examination.

What were the facts?

The assessee claimed deduction u/s 80IC for its manufacturing unit, which the Assessing Officer disallowed for two reasons: failure to maintain separate books of accounts and belated filing of Form 10CCB. The CIT(A) subsequently allowed the deduction, considering the audit report was filed before assessment completion.

What were the issues?

The key legal issues were whether a deduction u/s 80IC can be denied solely due to belated filing of Form 10CCB and if the non-maintenance of separate books of accounts is a valid ground for disallowing the deduction.

Which sections of the Income-tax Act were involved?

Section 80IC,Section 139(1),Section 143(1)

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Cases cited in this judgment(2)Show list

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Income Tax Appellate Tribunal, ‘D’ BENCH, CHENNAI

Before: SHRI MAHAVIR SINGHAND SHRI MANOJ KUMAR AGGARWAL

Hearing: 28.09.2022Pronounced: 28.09.2022

आयकरअपीलसं./ITA No.: 3117/CHNY/2019 िनधा�रण वष�/Assessment Year: 2013 - 14 The DCIT, M/s. Coronet Labs Pvt. Ltd., Corporate Circle 1(2), vs. No.23, Diwan Rama Road, Chennai. Chennai – 600 084. PAN: AACCC 7118A (अपीलाथ�/Appellant) (��यथ�/Respondent) अपीलाथ� क� ओर से/Appellant by : Shri D. Hema Bhupal, JCIT ��यथ� क� ओर से/Respondent by : None सुनवाई क� तार�ख/Date of Hearing : 28.09.2022 घोषणा क� तार�ख/Date of Pronouncement : 28.09.2022 आदेश /O R D E R

PER MAHAVIR SINGH, VICE PRESIDENT:

1.

This appeal by the Revenue is arising out of the order of Commissioner of Income Tax (Appeals)-4, Chennai, in dated 28.08.2019. The assessment was framed by the DCIT, Corporate Circle 1(2), Chennai for the assessment year 2013-14 u/s.143(1) of the Income Tax Act, 1961 (hereinafter the ‘Act’) vide order dated 30.03.2016.

2.

At the outset, it is noticed that this appeal is barred by limitation by 5 days and the Revenue has filed condonation petition stating the fact that the CIT(A) order dated 28.08.2019 was received in the office of the Principal Commissioner of Income Tax on 09.09.2019 and thereby the due date of filing of appeal before ITAT was 08.11.2019. However, finally the appeal was filed before ITAT on 13.11.2019 thereby there is a delay of 5 days. The Revenue submitted the reason that the appeal papers i.e., Form No.35 and grounds of appeal could not be prepared as the submissions were not readily available for filing of appeal and hence, there is a delay. We find the cause as reasonable and hence, condone the delay and admit the appeal.

3. The only issue in this appeal of Revenue is against the order of CIT(A) allowing the claim of deduction u/s.80IC of the Act even though the assessee has (i) not maintained separate books of accounts as mandated u/s.80IC of the Act in term of Hon’ble Supreme Court decision in the case of Arisudana Spinning Mills Ltd., vs. CIT, [2012] 348 ITR 385 and (ii) erred in allowing deduction though the assessee had not filed Form No.10CCB along with the return of income.

4. Brief facts are that the assessee is engaged in the business of manufacture of pharmaceutical formulations and having a manufacturing unit at Roorkee. The assessee claimed deduction u/s.80IC of the Act amounting to Rs.1,57,88,044/-. But the AO disallowed the claim by noting that the assessee is required to maintain separate books of accounts, which the assessee failed to do so and assessee neither submitted Form No.10CCB before the due date of filing of return of income nor maintained separate books of accounts, hence he disallowed the deduction claimed by the assessee u/s.80IC of the Act. Aggrieved, assessee preferred appeal before CIT(A). The CIT(A) allowed the claim of assessee by following the decision of Hon’ble Madras High Court in the case of CIT vs. AKS Alloys P Ltd., 205 Taxman 11 by observing as under:-

“I have considered the submissions. It is not in dispute that the appellant had claimed deduction u/s 801C of Rs. 1,57,88,044 in the return of income filed on 23/09/2013 before the due date of filing of the return. The audit report in Form No.10CCB was also submitted before completion of the assessment to the assessing officer. There are decisions to the effect that the audit report though not filed by the due date u/s 139(1) can be accepted if filed before the completion of the assessment. The appellant in this case has undisputedly submitted the audit report before completion of the assessment and the deduction claimed was in conformity with the audit report. Therefore i am of the view that the appellant should not be denied the deduction which is otherwise admissible to it simply on technical ground that the audit report was not filed before the due date. It is not the case of non filing of audit report but belated filing of audit report. I therefore hold that the AO was not justified in denying the deduction claimed u/s 801C and the appellant may be allowed the deduction of Rs.1,57,88,044 after due verification of the correctness of the computation made. The Assessing officer is accordingly directed to verify the claim and allow the deduction u/s 801C. The ground is allowed for statistical purposes.”

Aggrieved, Revenue is in appeal before us.

4.

We have heard ld. Senior DR and gone through facts and circumstances of the case. There is no dispute about the audit report in Form No.10CCB which was filed before the completion of assessment and CIT(A) by following the decision of Hon’ble Madras High Court in the case of AKS Alloys P. Ltd., supra, allowed the claim of assessee. The only issue remains adjudication is whether the assessee has maintained separate books of accounts, which was never examined by CIT(A) because the objection of the AO was also as regards to maintenance of separate books of accounts in term of decision of Hon’ble Supreme Court in the case of Arisudana Spinning Mills Ltd., supra. In term of the above, we set aside the order of CIT(A) on this issue of non-maintenance of books of accounts by the assessee, not adjudicated, and hence, we remand this issue partly to the file of the CIT(A) to examine whether the assessee has maintained separate books of accounts or not. Hence, the appeal of Revenue is partly allowed for statistical purposes.

5.

In the result, the appeal filed by the Revenue is partly-allowed for statistical purposes.

Order pronounced in the open court on 28th September, 2022 at Chennai.

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