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Income Tax Appellate Tribunal, “B” BENCH, MUMBAI
Before: SHRI KULDIP SINGH, JM &
IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, MUMBAI BEFORE SHRI KULDIP SINGH, JM & MS PADMAVATHY S, AM I.T.A. No. 2912/Mum/2023 (Assessment Year: 2018-19)
Nitco Paints Ltd. DCIT, Circle-5(2)(1), 5th Floor, Aayakar Bhavan, Recondo Compound, S.K. Ahire Vs. Marg, Worli, Mumbai- 400030 M.K. Road, Mumbai-400020. PAN : AAACN2593G Appellant) : Respondent) Appellant/Assessee by : Shri Vimal Punmiya & Shri Himanshu Gandhi, CA Revenue/Respondent by : Shri Ashok Kumar Ambastha, Sr. DR : 06.02.2024 Date of Hearing : 06.02.2024 Date of Pronouncement O R D E R Per Padmavathy S, AM: This appeal is against the order of the Commissioner of Income Tax (Appeals) / NFAC [for short 'the CIT(A)] dated 01.12.2022 for the AY 2018-19. The assessee raised the following grounds of appeal:
“1. On the facts and circumstances of the case and law, the Ld. CIT(A) erred in confirming disallowance of deduction under section 801A(4)(iv) of Income Tax Act, 1961 amount Rs. 54,18,557/-. 2. On the facts and circumstances of the case and law, the Id. CIT(A) failed to appreciate that audit report in form 10CCB duly digitally signed and verified by
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Auditor through Income Tax E filling portal in which name and membership of auditor is duly reflected. 3. On the facts and circumstances of the case and law, the Id. CIT(A) failed to appreciate that deduction cannot be disallow without issuing show cause notice or calling information from appellant. 4. On the facts and circumstances of the case and law, the Ld. CIT(A) failed to appreciate that deduction cannot be disallow when the audit report filed before completion of assessment proceeding. 5. On the facts and circumstances of the case and law, the Ld. CIT(A) erred in confirming invocation of penalty provision under section 270A (9) of Income Tax Act, 1961 on addition made on account of interest income Rs. 25492 which was due to oversight not added in computation of total income and agreed by the appellant vide reply dated 17.01.2021. 6. On the facts and circumstances of the case and law, the Ld. CIT(A) erred in confirming charging of interest under section 234A 234B and 234C of the Income Tax Act 1961. 7. Appellant craves leave to add further grounds or to amend or alter the existing grounds of appeal on or before the date of hearing.” 2. The assessee is a company engaged in the business of generation and distribution of Windmill energy and investment business. The assessee filed the income tax return for the AY 2018-19 on 24.10.2018. The case was selected for scrutiny under CASS on the issue that "deduction claimed for industrial undertaking under section 80IA (4)(i) of the Income Tax Act, 1961 (for short 'the Act') is significantly high vis a vis turnover of the undertaking". The AO noticed that the assessee has claimed against the income from sale of windmill energy a deduction under section 80IA(4)(iv) amounting to Rs. 54,18,557/-. The AO called on the assessee to furnish details with regard to generation and sale windmill energy along with justification for claiming deduction under section 80IA(4)(iv) of the Act. The assessee submitted before the AO that windmill energy to the tune of
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Rs. 76,34,950/- was sold to M/s Maharashtra State Electricity Distribution Company Ltd. and submitted the supporting documents in this regard. With regard to the claim of 80IA(4)(iv) of the Act the assessee submitted the relevant document issued by the M/s Maharashtra State Electricity Distribution Company Ltd. along with the workings of deduction claimed and the details of expenses with evidences thereof.
The AO after perusing the details filed by the assessee noticed that the assessee has uploaded the audit report in Form 10CCB not while filing the return of income but separately later electronically uploaded on 09.01.2019. The AO further noticed that the said report does not contain the name and details of the Chartered Accountant and Membership Number of the person who has audited the accounts and furnished report in From 10CCB.The AO therefore, denied the claim of section 80IA(4)(iv) to the assessee for the reason that the assessee failed to file Form 10CCB along with the return of income and that the audit report was not duly signed and verified by the Accountant.
Aggrieved, the assessee filed further appeal before the CIT(A). The assessee made a detailed written submission along with the various judicial pronouncements to support the claim that the deduction under section 80IA(4)(iv) of the Act cannot be denied merely for the technical reason that Form 10CCB was not furnished along with the return of income. The CIT(A) confirmed the disallowance made by the AO for the reason that Form 10CCB was not properly signed and that the assessee has failed to provide the details of Chartered Accountant (CA) who audited and certified Form 10CCB. Aggrieved, the assessee is in appeal before the Tribunal.
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There is a delay of 203 days in filing the appeal before the Tribunal. In this regard the ld. AR filed an affidavit stating that the person who was accessing the email Id of the assessee Mr. Anuj Jain has left the job without properly handing over the matters handled by him. The ld. AR further submitted that therefore the appellate order which was received the said email Id was not noticed by the assessee. However, once the assessee came to know that the CIT(A) has passed the order, the assessee immediately filed the appeal before the Tribunal. The ld. AR also brought to our attention that in the case of one of the assessee's group companies Jayam Realty Management Pvt. Ltd. Vs. PCIT (ITA No. 2216/Mum/2023 dated 13.12.2023) under similar circumstances, the co-ordinate bench has condoned the delay. Accordingly, the ld. AR prayed that the delay is caused due to the employee leaving the organization and not due to any intentional delay on the part of the assessee. The ld. AR therefore, prayed that the delay may be condoned.
The ld. DR on the other hand vehemently opposed the condonation of delay. The ld. DR argued that the email Id was that of the assessee and was active. Therefore the reason that the employee who was accessing the email has left the organization cannot be the reason for delay in filing the appeal before the Tribunal.
We have heard the parties and perused the material on record. The Hon’ble Supreme Court, in the case of Collector, Land Acquisition v. Mst. Katiji and Ors. (167 ITR 471), has explained the principles that need to be kept in mind while considering an application for condonation of delay. The Hon’ble Apex Court has emphasized that substantial justice should prevail over technical considerations. The Court has also explained that a litigant does not stand to benefit by lodging the
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appeal late. The Court has also explained that every day’s delay must be explained does not mean that a pedantic approach should be taken. The doctrine must be applied in a rational common sense and pragmatic manner. In the case of Shakuntala Hegde, L/R of R.K. Hegde v. ACIT, ITA No.2785/Bang/2004 for the A.Y. 1993-94, the Tribunal condoned the delay of about 1331 days in filing the appeal wherein the plea of delay in filing appeal due to advice given by a new counsel was accepted as sufficient. The Hon’ble Karnataka High Court in the case of CIT v. ISRO Satellite Centre, ITA No. 532/2008 dated 28.10.2011 has condoned the delay of five years in filing appeal before them which was explained due to delay in getting legal advice from its legal advisors and getting approval from Department of Science and PMO. In the aforesaid decision, the Hon’ble Court found that the very liability of the assessee was non-existent and therefore condoned the delay in filing appeal. In condoning the delay in filing the appeals, the expression ‘sufficient cause’ should receive liberal construction and advancement of substantial justice is of prime importance. Discretion of condoning the delay has to be exercised on the facts of each case. Keeping in mind the aforesaid principles, we find that the explanation of the assessee for delay in filing the appeals are bonafide and genuine reasons which constitute ‘sufficient cause’ for the delay. The number of days of delay cannot be looked in isolation and the reasons or explanation of the assessee for the delay have to be considered in the light of the test of bonafide reasons constituting sufficient cause for the delay in a pragmatic manner. We therefore condone the delay in filing the appeal and admit the appeal for further adjudication.
On merits the ld. AR submitted that the assessee has uploaded the Form 10CCB well before the case was selected for scrutiny and that the AO failed to
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consider the same on the ground that the same was not filed along with the return of income. The ld. AR further submitted that it is a settled position that mere failure on the part of the assessee to file Form 10CCB along with the return of income cannot be the reason for denial of deduction under section 80IA(4)(iv) of the Act. The ld AR also submitted that the assessee has correctly followed the E- filing procedure for filing Form 10CCB whereby the form is electronically assigned by the assessee to the CA and therefore the AO and CIT(A) are not correct in denying the deduction on the ground that the details of CA is not provided. The ld AR also drew our attention to the assessment order passed in assessee's case for AY 2017-18 where the deduction under section 80IA(4)(iv) has been allowed.
The ld. DR on the other hand supported the orders of the lower authorities.
We have heard the parties and perused the material on record. The AO and the CIT(A) has denied the claim of the assessee for deduction under section 80IB(4)(iv) for the reason that the same is not filed along with the return of income and that the same is not signed by the CA. The AO in the assessment order has admitted that the assessee has filed the relevant documents with regard to the claim of the deduction and this fact is not controverted by the CIT(A) also. The fact that the assessee has not been denied the deduction under section 80IB which is claimed since AY 2011-12 except in the year under consideration goes to substantiate that the revenue is not disputing that the assessee is eligible for deduction under section 80IB. Therefore it is clear that the grievance of the revenue is only with regard to the fulfillment of conditions as the certificate / audit report in the Form No. 10CCB has not been filed along with the return of income
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and that the same is not properly signed. In other words the revenue has raised only a technical objection and has not disputed the eligibility of assessee’s for deduction u/s 80IB. It is a settled position that the assessee cannot be denied the claim of deduction u/s 80IB for the reason that Form 10CCB was not filed along with the return of income when the assessee has otherwise had already complied with the requirements of claim of deduction u/s 80IB. On the issue of Form 10CCB not being signed by the CA, we notice that the filing of Form 10CCB electronically involves steps whereby the assessee first needs to add the details including the membership number etc., of the CA so that the Form gets assigned to the concerned CA for certification in Form 10CCB. It is also noticed that the forms are digitally signed and without digital signature the submission would not happen. Therefore in our considered view, the denial of deduction under section 80IB(4)(iv) on the ground that the details of the CA are not furnished and that the CA has not signed the form is not tenable. In view of these discussions we hold that the AO is not correct in disallowing the claim of deduction under section 80IB(4)(iv) and accordingly the addition made in this regard is hereby deleted.
In the result, the appeal of the assessee is allowed.
Order pronounced in the open court on 06-02-2024.
Sd/- Sd/- (KULDIP SINGH) (MS. PADMAVATHY S) Judicial Member Accountant Member *SK, Sr. PS Copy of the Order forwarded to : 1. The Appellant 2. The Respondent
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DR, ITAT, Mumbai 4. Guard File 5. CIT BY ORDER, (Dy./Asstt. Registrar) ITAT, Mumbai