M/S SHREE GANESH CONCAST GROUP OF INDUSTRIES,KANGRA vs. DCIT, CIRCLE, SHIMLA

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH ‘B’, CHANDIGARH BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND SHRI B.R.R.KUMAR, ACCOUNTANT MEMBER ITA Nos.1716 & 1717/Chd/2017 (Assessment Years : 2012-13 & 2013-14) M/s Shree Ganesh Concast Group Vs. The D.C.I.T., Of Industries, Industrial Area Circle – Shimla. Sansarpur Terrace, Distt. Kangra(H.P.) PAN: ABGFS0856H (Appellant) (Respondent)

Appellant by : Shri Aashre Sarna Respondent by : Shri Manu Malik, CIT DR Date of hearing :06.06.2018 Date of Pronouncement :10.07.2018

ORDER Per Sanjay Garg, Judicial Member :

Both the above captioned appeals have been preferred

by the assessee against the separate orders of Ld.

Commissioner of Income Tax (Appeals), Palampur

(hereinafter referred to as (‘Ld.CIT(Appeals)’ both dated

28.9.2017 passed u/s 250(6) of the Income Tax Act, 1961

(in short ‘the Act’) in Appeal Nos. CIT(A)

Palampur/10127/15-16 and CIT(A) Palampur/10059/16-17

relating to assessment years 2012-13 and 2013-14

respectively.

appeals, the same were heard together and are being

disposed off by this consolidated order.

CIT(Appeals) in rejecting the application moved by the

2 ITA Nos.1716 & 1717/Chd/2017 AYs: 2012-13 & 2013-14

assessee for admitting additional ground and further denial

of claim of deduction to the assessee u/s 80IC of the Act.

our attention to the assessment order of the Assessing

Officer for the year under consideration and has submitted

that the said order of the Assessing Officer is an ex-parte

order passed u/s 144 of the Act, wherein the Assessing

Officer has denied the claim of exemption u/s 10AA of the

Act. The Ld. counsel for assessee has further submitted

that in fact the assessee was entitled to deduction under

the provisions of section 80IC of the Act. However, the

assessee mistakenly had claimed exemption u/s 10AA of the

Act. The Ld. counsel for assessee has further submitted

that the assessee firm was running into heavy losses and

the bank had taken possession of the assets of the assessee

and the partners of the assessee firm were in a state of

shck/depression and hence could not appear before the

Assessing Officer. Further, the jurisdiction of the Assessing

Officer was changed without notice to the assessee. Hence

the assessee could not appear before the Assessing Officer

during the assessment proceedings.

Further, inviting our attention to the impugned order

of the CIT(Appeals), the Ld. counsel for assessee submitted

that the assessee had raised the above plea that the

assessee was entitled to the deduction u/s 80IC of the Act

and further that the copy of Form 3CB/10CCB was also

filed before the Ld.CIT(Appeals) as an additional evidence.

3 ITA Nos.1716 & 1717/Chd/2017 AYs: 2012-13 & 2013-14

However, the Ld.CIT(Appeals) rejected the additional

evidence filed by the assessee observing that the assessee

had not filed the audit report or form 10CCB

online/through internet. The Ld. counsel for assessee has

further submitted that the assessee has fully complied with

all the requirements. That non-filing of the audit report or

form 10CCB, before the Assessing Officer, was not due to

any intentional default but was due to an inadvertent

mistake. The assessee has explained that because it has

mistakenly claimed deduction u/s 10AA of the Act, hence

the required documents for claiming the said deduction

u//s 10AA of the Act were filed. The Ld. counsel for

assessee has submitted that the assessee has already filed

the requisite documents required u/s 80IC of the Act. He

has further submitted that due to delay in filing of form

10CCB, which was not intentional but due to above noted

facts, the legitimate claim of deduction of the assessee

should not be denied to the assessee.

there is considerable delay in filing form 10CCB and that

the claim of the assessee at this stage cannot be

entertained.

assessee in this case, has explained the reasons for non-

filing of form 10CCB as he had mistakenly claimed

deduction u/d 10AA instead of section 80IC of the Act.

However, the assessee had filed the requisite documents

4 ITA Nos.1716 & 1717/Chd/2017 AYs: 2012-13 & 2013-14

before the Ld.CIT(Appeals) under Rule 46A of the Income

Tax Rules. It has been time and again held that the revenue

authorities should charge legitimate tax from the tax

payees. If the assessee is, otherwise, entitled to deduction

under another provisions but had claimed deduction under

the wrong provision, a duty is also cast upon the assessing

authorities to apply the relevant provision while computing

the income. Even the Ld.CIT(Appeals), in our view, has

failed to exercise his appellate jurisdiction u/s 250 of the

Act. As per the provisions, a duty is also cast upon the Ld.

CIT(A) to admit and consider those evidences which are

relevant for the just and proper decision of the case and go

to the root of the case. The Hon'ble Bombay High Court in

the case of "Smt. Prabhavati S.Shah v. CIT" [(1998) 231 ITR

1 (Bom.)] has held that the powers conferred on the first

appellate authority under sub-section (4) of section 250 of

the Act, being a quasi-judicial power, it is incumbent on

him to exercise the same, if the facts and circumstances

justify.

Even otherwise under Rule 46A(4) of the Income tax

Rules, the Ld. CIT(Appeals) has been given power to call for

production of any document or the examination of any

witnesses to enable him to dispose of the appeal. There is

no doubt about the legal position that if any document

furnished by the assessee before the Ld. CIT(Appeals) is in

the nature of clinching evidence which goes to the root of

5 ITA Nos.1716 & 1717/Chd/2017 AYs: 2012-13 & 2013-14

the case then in the interest of justice such types of

evidence should not be rejected.

National Thermal Power Co. Ltd. Vs. CIT, 229 ITR 383 has

held that the Tribunal is not prevented from considering the

question of law arising in assessment proceedings though

not reached earlier. The Hon'ble Supreme Court held that

the Tribunal has jurisdiction to examine a question of law

which arises from the facts as found by the authorities

below and having a bearing on the tax liability of the

assessee.

The full bench of the Hon'ble Bombay High Court in

the cases of "Ahmedabad Electricity Company Ltd. vs. CIT"

and "Godavari Sugar Mills Ltd. vs. CIT" by way of a common

order dated 30.04.1992 (1993) 199 ITR 351 has observed

that the basic purpose of an appeal procedure in an income

tax matter is to ascertain the correct tax liability of the

assessee in accordance with law. Therefore, at both the

stages, either by the Appellate Assistant Commissioner or

before the Appellate Tribunal, the appellate authority can

consider the proceedings before it and the material on

record before it for the purpose of determining the correct

tax liability of the assessee. The appellate authorities, of

course, cannot travel beyond the proceedings and examine

new source of income, for that purpose other separate

remedies are provided to the department under the Income

Tax Act. The Hon'ble full bench of the Bombay High Court

6 ITA Nos.1716 & 1717/Chd/2017 AYs: 2012-13 & 2013-14

observed that apart from the above, there was nothing in

section 254 or section 251, which would indicate that the

appellate authorities are confined to considering only the

objections raised before them or allowed to be raised before

them either by the assessee or by the department, as the

case may be. They can consider the entire proceedings to

determine the tax liability of the assessee.

Pruthvi Brokers and Shareholders Pvt. Ltd." (2012) 349 ITR

336 (Bom.) has observed that the assessee is entitled to

raise not merely additional legal submissions before the

appellate authorities, but is also entitled to raise additional

clams before them. The appellate authorities have

jurisdiction to deal not merely with additional grounds,

which became available on account of change of

circumstances or law, but with additional grounds which

were available when the return was filed. The words 'could

not have been raised' must be construed liberally and not

strictly. There may be several factors justifying the raising

of a new plea in an appeal and each case must be

considered on its own facts.

assessment order and the order of the CIT(Appeals) and

restore the matter back to the file of the Assessing Officer

for de-novo assessment including consideration of claim of

the assessee for deduction u/s 80IC of the Act. It is made

clear that the delay in filing of audit report/form

7 ITA Nos.1716 & 1717/Chd/2017 AYs: 2012-13 & 2013-14

3CD/10CCB, etc. will not be a ground to deny the deduction

to the assessee. Needless to say that the assessee will

participate in the assessment proceedings and furnish the

requisite details to the Assessing Officer and the Assessing

Officer will give proper opportunity of hearing/presentation

of his case to the assessee.

treated as allowed for statistical purposes.

Order pronounced in the open court on ……………

Sd/- Sd/- (B.R.R. KUMAR) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated : 10th July, 2018 *Rati* Copy to: 1. The Appellant 2. The Respondent 3. The CIT(A) 4. The CIT 5. The DR Assistant Registrar, ITAT, Chandigarh