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Income Tax Appellate Tribunal, CHANDIGARH
Before: SMT. DIVA SINGH, JM & Dr. B.R.R.KUMAR, AM
आदेश/ORDER PER BENCH The present appeals have been filed by the assessee assailing the correctness of the consolidated order dated 27.03.2018 of CIT(A) Shimla pertaining to 2012-13, 2013-14 and 2014-15 assessment year. As the facts and circumstances in all the appeals are similar, therefore, all the appeals heard together are being decided by a common order for the sake of convenience. 2. For ready reference, identical issues raised in ITA 785/CHD/2018 are being taken up for adjudication at the request of the parties. These read as under: 1. The impugned order is both against facts and erroneous in law. 2. On the facts and circumstances of the case the Ld.GT(Appeals) has erred in having upheld the disallowance of Rs.14,28,125/- made by the Ld.AO u/s 801C of the Income Tax Act. 3. On the facts and circumstances of the case the Ld.ClT(Appeals) has erred in having held that the assessee did not satisfy the requirements as laid down in the Act for claim of deduction u/s 801C of the Income Tax Act. 3. It is relevant to note that at the time of hearing, an adjournment application was moved on behalf of the assessee. However, considering the material available on record, the ld. AR ultimately chose to withdraw the same. The appeal was passed over in order to afford time to the parties to go through the facts.
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In the second round, the ld. AR inviting attention to the order of the AO submitted that in the facts of the present case the assessee is doing its manufacturing activity in Baddi. Referring to the record, it was his submission that no doubt assessee started commercial production in 2002- 03 assessment year, however, it is an accepted fact that the assessee never claimed any deduction u/s 80IB or 80IC till 2008-09 assessment year. It was his submission that substantial expansion was carried out by the assessee in 2009-10 assessment year and exemption u/s 80IC was claimed for the very first time in 2009-10 assessment year. Thus, the initial assessment year in the facts of the present case admittedly was 2009-10 assessment year. In the facts of the present case, it is not the case that for the purposes of deduction, the assessee has been claiming initial assessment year as 2002-03. It is only for the first time the deduction was claimed under the Act in 2009-10 assessment year. Despite this in an incorrect appreciation of position of law, the department is insisting to hold and thrust upon the assessee that the deduction should have been claimed from 2003-04 assessment year knowing fully well that it has never been claimed in that year nor has it been allowed. The claim of the assessee, it was submitted, is supported by relevant and appropriate documents in Form No. 10CCB etc. 5. The ld. Sr.DR, on the other hand, submitted that the claim of the assessee has not been rejected only on this ground, even otherwise the assessee has been found to be manufacturing a banned item. For ready reference, attention was invited to para 5.2.5 of the impugned order. Same is reproduced hereunder : 5.2.5 The appellant is the proprietor of M/s. Arora Polymers which is into the manufacture of polythene bags. A perusal of the schedule reproduced above shows that manufacture of inorganic chemicals, organic chemicals and plastics and articles thereof are specifically prohibited under the list of articles, the manufacture of which could be eligible for deduction u/s 80IC. The appellant does not even otherwise satisfy the requirements as laid down in the Act for claim of deduction u/s 80IC. Thus, the appeal of the appellant is dismissed. 6. The ld. AR in reply submitted that the said finding has been given by the CIT(A) without confronting the assessee or requiring the assessee to address it. The assessee, it was submitted, is not making a banned item and infact the assessee is producing packaging material. Since no specific opportunity was given to the assessee by the CIT(A) to address the entirely new line of reasoning and conclusions have been drawn without providing an opportunity to address these issue, it is because of this reason, the relevant facts being not available on record, the assessee had initially sought an opportunity to place them on record. Ld. Sr.DR referring to the record was
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required to address whether an opportunity on facts to support the conclusion draw was provided to the assessee. In all fairness, it was stated that it appears that no specific opportunity was provided to the assessee by the CIT(A). 7. We have heard the rival submissions and perused the material available on record. In the light of the aforementioned peculiar facts and circumstances, we set aside the impugned order back to the file of the AO directing the assessee to place full facts and evidences qua its manufacturing activities at the relevant point of time before the AO so as to enable him to consider and decide whether the assessee is manufacturing a banned item or is the assessee's manufacturing permissible items in terms of Schedule-13 of the Statute. The AO, at the same time is also directed to address the other issues raised by him and verify whether any deduction u/s 80IB, 80IC has been claimed by the assessee in 2002-03 assessment year when the manufacturing activity is stated to have begun. The point for consideration which may then arise is by what authority, the tax authority can thrust a claim of deduction which was never made. However, it is first necessary to address the full and correct facts and it is only after that the position of law comes into play. The issue, accordingly, is restored back to the file of the AO in terms of the above directions. The AO shall decide the same by way of a speaking order after giving the assessee a reasonable opportunity of being heard. 8. In the result, appeals of the assessee are allowed for statistical purposes. Order Pronounced in the Open Court on 01.11. 2018.
Sd/- Sd/- ( डा. बी.आर.आर. कुमार) (�दवा �संह ) (Dr. B.R.R. KUMAR) (DIVA SINGH) लेखा सद�य/ Accountant Member �या�यक सद�य/Judicial Member “पूनम” आदेश क� ��त�ल�प अ�े�षत/ Copy of the order forwarded to : अपीलाथ�/ The Appellant - 1. ��यथ�/ The Respondent - 2. आयकर आयु�त/ CIT 3. आयकर आयु�त (अपील)/ The CIT(A) 4. �वभागीय ��त�न�ध, आयकर अपील�य आ�धकरण, च�डीगढ़/ DR, ITAT, CHANDIGARH 5. गाड� फाईल/ Guard File 6.
आदेशानुसार/ By order, सहायक पंजीकार/ Assistant Registrar ITAT,Chandigarh.