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Income Tax Appellate Tribunal, KOLKATA ‘SMC’ BENCH, KOLKATA
Before: Sri J. Sudhakar Reddy
Assessment Year: 2010-11 Sonodyne International Pvt. Ltd…………...........…………..………………………………..….…….......Appellant 98 N B Block New Alipore Kolkata – 700 053 [PAN : AADCS 7562 F] Vs. Income Tax Officer, Ward-10(3), Kolkata.………………………………….…………..…..............Respondent Appearances by: Shri Siddharta Pratim Datta, Advocate, appeared on behalf of the assessee. Shri Sital Chandra Das, Addl. CIT, Sr. D/R. appearing on behalf of the Revenue. Date of concluding the hearing : August 28th, 2018 Date of pronouncing the order : October 5th , 2018 ORDER Per J. Sudhakar Reddy, AM :- This appeal filed by the assessee is directed against the order of the Learned Commissioner of Income Tax (Appeals) – 4, Kolkata, (hereinafter the ‘Ld. CIT(A)’), dt. 23/10/2017, passed u/s 250 of the Income Tax Act, 1961 (hereinafter the ‘Act’), relating to Assessment Year 2010-11.
The assessee is a company and is a manufacturer/exporter of power supplies, inverters, audio equipments. The sole issue that arises for my consideration, was whether the Assessing Officer was right in rejecting the claim of the assessee for adjudication u/s 35(2AB)(1) of the Act, as the assessee failed to produce original copies of duly approved Form 3CK, 3CL and 3CM, from the Department of Scientific & Industrial Research (DSIR).
After hearing rival contentions, I hold as follows:- In the submissions made by the assessee it is stated as follows:- “The petitioner's submission in the line of the original submission made at the assessment stage is that the assessee has been running its in-house research activities Assessment Year: 2010-11 Sonodyne International Pvt. Ltd since the year 2005-06 and such research facility has been approved by the Department of Scientific & Industrial Research (DSIR), New Delhi for the period from 2005-06 to 2017-18 by way of approval and renewal for the periods up to 31.03.2009, 31.03.2012, 31.03.2015 & 31.03.2018 with dates of recognition/renewal being 17.04.2006, 04.06.2010, 30.04.2012 and 19.05.2015 respectively. The assessee also executed Form NO.3CK for the entire period of these years and was granted the approval in Form 3CM except for four years ending on 2012-13 due to circumstances beyond the control of your assessee caused by long absence of the concerned technical person for his illness and due to change in the system from manual to online submission the forms could not be submitted for aforesaid earlier years online. Your assessee then submitted on 05.02.2014 and on 27.03.2014 Form 3CK with all relevant annexures for the year under appeal. Your assessee however has not got any approval or rejection from the authority for such submission. For the period from 01.04.2009 to 31.03.2013 the petitioner have submitted application for such approval vide their letter dated 03.03.2014 received by the department on 19.03.2014 and the petitioner once again sent a letter dated 27.03.2014 for necessary approval in Form 3CM for those years was not received by the petitioner from the department . Delay in submission of application for such approval was due to terminal illness of the concerned person of the assessee”(Emphasis ours) 4. The question is whether under such circumstances, it can be said that the action of the Assessing Officer as upheld by the ld. CIT(A), denying the claim of deduction u/s 35(2AB)(1), is bad in law. The assessee relies on the decision of the Kolkata ‘C’ Bench of the Tribunal in the case of M/s. Texmaco Rail & Engineering vs. PCIT in Assessment Year 2012-13, order dt. 13/09/2017, for the proposition that deduction has to be granted, though the assessee could not produce Form No 3CM for the Assessment Year 2012-13. In my view the facts in the case of M/s. Texmaco Rail & Engineering (supra), is different from the facts of case on hand for the reason, that the M/s Texmaco Rail & Engineering had produced copies of certificate of registration from 1st April, 2010 to 31st March, 2019, issued by DSIR. It had also filed copies of details of approval prescribed in Form 3CM for the subsequent Financial Year 2015-16. In the case on hand, certificate of registration for the impugned Assessment Year has not been produced by the assessee. Thus, this case-law does not apply. Similarly the other case law relied upon by the assessee the decision of the Mumbai Bench of the Tribunal in the case of Zeus Numerix Pvt. Ltd. vs. ITO in ITA No. 3464/Mu/2012, order dt. 21/04/2015. This case-law also does not come to its rescue. The issue therein is whether deduction should be granted when Form 3CM is signed by a Scientist on behalf of the Secretary. The case on hand is different.
Assessment Year: 2010-11 Sonodyne International Pvt. Ltd 4.1. In any event, the Constitutional Bench of the Hon’ble Supreme Court in a recent judgment in the case Commissioner of Customs (Import) vs. Dilip Kumar and Company, [2018]95taxmann.com327(SC) judgement dt. 30-07-2018, held as under:- 52. To sum up, we answer the reference holding as under (1) Exemption notification should be interpreted strictly; the burden of proving applicability would be on the assessee to show that his case comes within the parameters of the exemption clause or exemption notification. (2) When there is ambiguity in exemption notification which is subject to strict interpretation, the benefit of such ambiguity cannot be claimed by the subject/assessee and it must be interpreted in favour of the revenue. (3) The ratio in Sun Export case (supra) is not correct and all the decisions which took similar view as in Sun Export Case (supra) stands overruled. (Emphasis ours)
Respectfully applying the propositions of law laid down by the Hon’ble Supreme Court to the facts of the case on hand we uphold the order of the ld. First Appellate Authority and dismiss this appeal of the assessee.
In the result, appeal of the assessee is dismissed.