SH. RAJINDER PRASHAD KAPUR ,MANDI vs. DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE, MANDI

At the outset, it is noted that the appeal is barred by limitation period of 30 days. The Counsel of the Assessee brought to the notice of the Bench the condonation application as well as the Affidavit of the Assessee i.e., Shri Rajendar Parsad Kapur S/o Shri Parma Nand

48-Chd-2024 – Kanta Rani, Chandigarh 2 Kapur r/o H.No. 255/2, Purani Mandi, Distt. Mandi wherein, the Assessee has explained the reasons attributable to late filing of appeal by 30 days. It was submitted by the ld. Counsel that he hired a legal advisor in Chandigarh for filing appeal and sent the relevant documents to him but due to some clerical error it was not delivered on time, which led to delay in filing the appeal. The ld. DR did not have objection to the submissions made by the Counsel of the Assessee.

After hearing both the parties and perusing the material on record including the affidavit of the Assessee, I find that the delay in filing the appeal was on account of some clerical error which caused non-delivery of documents sent by the Assessee to the legal advisor. In the light of above and examination of the facts of the present case, it would reveal that there was a bonafide lapse at the end of the assessee because the assessee will not gain anything by making his appeal time barred. Considering the bonafide mistake, we condone the delay and proceed to decide the appeal on merit.

At the time of hearing of appeal, only Ground No.2, which is a legal issue, was pressed by the Counsel of the Assessee and the same is extracted below:

48-Chd-2024 – Kanta Rani, Chandigarh 3 “2. That on law, facts and circumstances of the case, the Worthy CIT(A) has erred in confirming the action of the ld. Assessing Officer in issuing notices u/s 148 by invoking provisions of section 147 of the Income Tax Act, 1961.”

The facts of the case in brief are that the Assessee filed the return of income electronically declaring total income at Rs. 62,98,071/-. Subsequently, the return was revised on 6.4.2011 declaring total income at Rs. 2,07,087/-. Pertinent to state that the Assessee claimed deduction u/s VIA of the Income Tax Act, 1961 (in short 'the Act') at Rs. 1,76,51,676/- against Rs. 1,15,58,842/- as claimed in the original return. The return was processed u/s 143(1) of the Act on 7.5.2012. The Assessee is engaged in the business of producing industrial & medical oxygen and industrial nitrogen at Plot No.12, Phase-1, Industrial Area, Sauli-Khad, Mandi. The Assessee claimed deduction u/s 80IC of the Act on the basis of substantial expansion in A.Y. 2006-07. Further the Assessee installed some machinery and fitted the same in the premises and the commissioning was completed in A.Y. 2008-09. It was claimed that the new unit was referred to as IU-II in accounts and deduction u/s 80IC was claimed accordingly. Another Unit (Unit II) was set up in Village Mathyani, P.O. Nasioh, Distt. Mandi producing dissolved acetylene gas in which the installation was completed in F.Y. 2009-10 and the Assessee

The ld. Counsel of the Assessee, at the outset, submitted that the reopening of the assessment has been made by the Assessing Officer without their being any material on record to come to 48-Chd-2024 – Kanta Rani, Chandigarh 5 conclusion that income has in fact escaped assessment. The ld. Counsel stated that the Assessee has claimed the deduction u/s 80IC in respect of the impugned unit for A.Y. 2008-09 when the unit was commissioned and started. The assessment was framed u/s 143(3) of the Act vide order dated 29.3.2017 in respect of A.Y. 2008-09, which stood undisturbed by the Revenue till date and the deduction allowed u/s 80IC of the Act for the said unit attained finality. The ld. AR submitted that during the year the Assessing Officer during the course of scrutiny for A.Y. 2012-13 observed that the unit was formed and constituted by splitting / re-construction of the existing business and disallowed the deduction claimed u/s 80IC in respect of both the units. The ld. AR further contended that the CIT(A) has already allowed the appeal of the Assessee by holding that the Assessee has in fact carried out a substantial expansion which qualifies for deduction u/s 80IC of the Act as it was not formed by splitting up / re- construction of the existing business vide order dated 15.9.2016. The notice was issued u/s 148 of the Act on 29.3.2017 for the impugned assessment year whereas, the CIT(A) has decided the issue in favour of the Assessee vide order dated 15.9.2016, therefore, on the date of reopening of the assessment, no substantial material was available before the Assessing Officer and, therefore, the re-assessment was bad in law. Moreover, assessment for A.Y. 2012-13 is done in favour of the Assessee and the Revenue has not filed any appeal against such order

The ld. AR relied on the order of the CIT(A).

After hearing the rival submissions and perusing the material available on record, an undisputed fact, as are coming out from the appeal folder before me, it is noted that the Assessee has set up Unit No. I, which was completed and commissioned in A.Y. 2008-09 and deduction was claimed u/s 80IC of the Act. The assessment was framed u/s 143(3) of the Act vide order dated 29.3.2017 accepting the said claim of the Assessee meaning thereby that claim has been accepted in the initial assessment year when the substantial expansion was completed and the commercial production was started. Thereafter, during the course of assessment proceedings in 2012-13, the A.O. noted that the unit has been formed by splitting up / re- construction of the existing business and on that basis recorded reasons u/s 148 sub section (2) on 29.3.2017 that the Assessee claimed deduction to the tune of Rs. 1,76,13,005/- for A.Y. 2010-11, which need to be disallowed. I note that ld. CIT(A) has already allowed

In the result, appeal of the Assessee stands allowed. Order pronounced on 31.12.2024.