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Income Tax Appellate Tribunal, DELHI BENCH “B” NEW DELHI
Before: SHRI S.V. MEHROTRA : & MS. SUCHITRA KAMBLE :
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “B” NEW DELHI BEFORE SHRI S.V. MEHROTRA : ACCOUNTANT MEMBER AND MS. SUCHITRA KAMBLE : JUDICIAL MEMBER ITA no. 4644/Del/2009 U/s 2001-02
Claas India Pvt. Ltd., Vs. ACIT Circle 3(1), [Formerly known as Escorts New Delhi. Claas Ltd.], A-39, First Floor, New Friends Colony, New Delhi. 110025 PAN: AAACE 0762 A (Appellant) ( Respondent)
Appellant by : Shri Alkesh Babbar CA Respondent : Shri Anil Kumar Saroha Sr. DR
Date of hearing : 14/09/2016. Date of order : 20/09/2016. O R D E R PER S.V. MEHROTRA, A.M:
This is assessee’s appeal against the order dated 11.05.2009 passed by the ld. CIT(Appeals)-VI, New Delhi in appeal no. 68/08-09 relating to AY 2001-02.
At the outset we may point out that as per Registry’s report, there was delay of 111 days in filing the appeal before the ITAT. The assessee in its
application dated 4.12.2009 for condonation of delay submitted as under: “December 4.2009 The Hon'ble Member Income Tax Appellate Tribunal 10th Floor, Lok ayak Bhawan Khan Market New Delhi 110003 Dear Sir, Re: Condonation of delay - Appeal for Assessment Year 2001- 02 The order of the learned Commissioner of Income Tax (Appeals) – VI, New Delhi was passed on 11.5.2009 and was received by the assessee in June 2009.
The assessee decided not to file the appeal in view of conflicting judgments of the Courts. The appeal is being filed now as a result of a favourable judgment of the Delhi High Court dated 18th August, 2009 reported in 318 ITR 295. It has been published in Part 3 dated 9th November, 2009.
The case of the assessee is exactly similar to the abovementioned case decided by the Delhi High Court. As such, the above judgment fully applies to the assessee. It lays down that the notice issued u/s 148 is not valid as the action taken by the Assessing Officer amounted to change of opinion.
It is humbly requested that the delay in filing the appeal be kindly condoned in the light of above.
Thanking you, Yours faithfully, For Claas India Private Limited
2.1. In support of aforementioned contention the assessee also filed affidavit of Pradeep Kumar Malik, Managing Director of the company, as under: I, Pradeep Kumar Malik do hereby solemnly affirm and declare as under: 1. That the order of CIT (Appeal) - VI for assessment year 2001-02 relating to proceedings initiated u/s 147 of the Income Tax Act, 1961 was received in May, 2009 by the assessee.
That the issue on which the case was reopened was in regard to reliefs u/s 80-HHC and u/s 80-1 B of the Income Tax Act, 1961 having been given by the Assessing Officer on the same profit figure instead of Section 80-HHC relief being given on profits remaining after granting the deduction u/s 80-18 of the Act. 3. That the assessee was advised on 22nd June 2009 that no appeal be filed to ITAT as the favourable High Court decisions on the issue involved had been reversed by an ITAT decision in which the amendment to the Act had been fully discussed and that the said amendment had not been gone into by the High Courts 4. That in early December, 2009, the assessee was informed that a Delhi High Court decision in the case of Carlton Overseas Private Limited [31 r ITR 2951 had been reported which fully applied to the case of the assessee and therefore the assessee was advised to file all appeal to the Hon'ble ITAT. The said judgment was published in Part 3 of 318 ITR on 9th November, 2009.
That the assessee thereafter, without any loss of time filed the appeal on 9th December, 2009 with an application for condonation of delay.”
2.2. In reply, ld. DR filed written submissions stating that there was no
reasonable cause for condonation of delay. Ld. DR has also relied on various case
laws as mentioned in the written submissions.
2.3. Having considered the submissions of both the parties, we are of the opinion
that since delay in filing the appeal was on account of legal advice, therefore, there
being reasonable cause for the delay, we condone the delay in filing the appeal.
Brief facts of the case are that the assessee had filed return of income
declaring income of Rs. 8,10,12,600/-. Regular assessment u/s 143(3) was
completed on 24.2.2004 at an income of Rs. 8,91,11,357/-. Subsequently,
the AO noticed that assessee had claimed and was allowed deduction of Rs.
3,02,00,144/- u/s 80IA on the total profit of business of Rs. 126557837/- and
further claimed and was allowed deduction of Rs. 70,73,012/- u/s 80HHC
on the same profit of business of Rs. 3,02,00,144/- without reducing the
profit by Rs. 3,02,00,144/-, attributed to manufacturing business. He noted
that u/s 80IA(9) of the I.T. Act, it was provided that w.e.f. AY 1999-2000
where any amount of profits and gains of an industrial undertaking or
enterprise in the case of an assessee was claimed and allowed under any
other provisions of Chapter VI-A under the heading “C-Deductions in
respect of certain incomes” and in no case would exceed the eligible profit
of the industrial undertaking or enterprises, as the case may be. He,
therefore, concluded that deduction u/s 80HHC had been excess claimed and
allowed. Accordingly, the case was reopened u/s 147, after recording
reasons and after obtaining approval from Commissioner. The assessment
was, accordingly, completed at a total income of Rs. 9,08,21,207/-. Ld.
CIT(A) confirmed the action of AO. Aggrieved, the assessee is in appeal
before the Tribunal and has taken following grounds of appeal: 1. That the learned Commissioner of Income Tax [Appeals] VI has grossly erred in law and on facts.
(a) In confirming the order passed u/s 147 of the Income Tax Act by the Assessing Officer though the assessee had taken the ground that the order passed u/s 147 is bad in law and on facts.
(b) in not quashing the order of' the Assessing Officer u/s 147 when no new facts had come on record and the notice merely based on change of opinion on the basis of the same material which was already available with the Assessing Officer at the lime of making the initial assessment u/s 143(3) of the Income Tax Act. 1961.
That any consequential relief to which the assessee may be entitled under the foregoing grounds of appeal may be kindly granted to the assessee.
At the outset ld. counsel submitted that under the given facts the
reassessment proceedings cannot be initiated because it amounts to change
of opinion. He pointed out that the issue of simultaneous claim of deduction
u/s 80HHC and u/s 80IA of the Act and subsequent reopening of the
assessment has been dealt by the Hon’ble Delhi High Court in a number of
cases and the Court has held as under: “CARLTON OVERSEAS PVT. LTD. [318 ITR 295]- the case was 100% similar to that of the Appellant. However, in this case a writ was filed. The assessee had claimed deduction under sections 80HHC and 80-IB. Assessing Officer after making necessary queries passed an order of assessment allowing deductions claimed. Subsequently, on the basis of an objection of audit party, he issued a notice under section 147/148 to assessee on the ground that deduction allowed to it under section 80-IA was not deducted from profit of business for purpose of calculating deduction under section 80HHC. The court held that it is settled law that mere change of opinion cannot form the basis for issuing of a notice under Section 147/148 of the Act and the Court quashed the notice issued u/s 148 on the ground that it constituted change of opinion. Date of Decision: August 9, 2009 ii. . SATNAM OVERSEAS [329 ITR 237] - the court held that new opinion formed by the AO based on the existing facts was nothing but a change of opinion and was not a valid ground for reassessment. This case is also similar to the case of the Appellant. Date of Decision: December 11, 2009 iii. RAJKUMAR MAHAJAN [340 ITR 570] - The asssessee claimed deduction under sections 80HHC and 80-IAlIB. Subsequently, Assessing Officer issued notice under section 148 on the ground that assessee had claimed excess deduction under section 80HHC The court held that reassessment on the ground of deduction u/s 80
HHC/80 IA wrongly claimed was nothing but a change of opinion and was not a valid ground for reassessment. This case is also similar to the case of the Appellant. Date of Decision: January 4, 2012 iv. Purolator India Ltd. [343 ITR 155] The assessment was completed under section 143(3) . Subsequently, reassessment proceedings were initiated after expiry of four years from end of relevant assessment year on the ground that deduction under section 80HHC was allowed without reducing deduction claimed and allowed under section 80-lB. The Tribunal held that there was no failure on part of assessee to disclose fully and truly all material facts, opined that reassessment proceedings were hit by proviso to section 147. The high court held that since it was not revenue's case that assessee had suppressed, misrepresented or falsified record/facts, the order passed by Tribunal was upheld and the appeal by the revenue was dismissed. This case is also similar to the case of the Appellant. Date of Decision: November 28, 2011
Ld. DR submitted that no ground challenging the reassessment
proceedings was taken before the CIT(A).
We have considered the submissions of both the parties and perused
the material available on record. We find that before ld. CIT(A) the assessee
had, inter alia, taken a ground that the order of ld. ACIT passed u/s
147/143(3) was bad in law and on facts. It is true that no specific ground was
taken but assessee had challenged the assessment order being bad in law. Be
that as it may, this being a legal ground, can be taken at any stage of
proceedings being jurisdictional in nature. Further, we find that the issue is
squarely covered by the decisions relied upon by ld. counsel for the assessee,
wherein it has been held that where assessee had claimed deduction u/s 80HHC and 80IA and, AO, after making necessary queries, passed the
assessment order allowing deduction, then subsequently reassessment proceedings cannot be initiated on the ground that deduction allowed to it u/s 80IA was not deducted from profits of business for purpose of calculating of
deduction u/s 80HHC. We, therefore, respectfully following the decision of Hon’ble Jurisdictional High Court, noted supra, allow the assessee’s appeal. 7. In the result, assessee’s appeal is allowed. Order pronouncement in open court on 20/09/2016.
Sd/- Sd/- (SUCHITRA KAMBLE) (S.V. MEHROTRA) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 20/09/2016. *MP* Copy of order to: 1. Assessee 2. AO 3. CIT 4. CIT(A) 5. DR, ITAT, New Delhi.