Income Tax Appellate Tribunal - Indore
Laxmi Mangal Warehouse, Neemuch vs Deputy Commissioner Of Income Tax, ... on 16 May, 2019
Laxmi Mangal Warehouse
ITA No.612/Ind/2017
आयकर अपील य अ धकरण, इंदौर यायपीठ, इंदौर
IN THE INCOME TAX APPELLATE TRIBUNAL,
INDORE BENCH, INDORE
BEFORE HON'BLE KUL BHARAT, JUDICIAL MEMBER
AND HON'BLE MANISH BORAD, ACCOUNTANT MEMBER
ITA No.612/Ind/2017
Assessment Year 2013-14
M/s. Laxmi Mangal Deputy Commissioner of
Warehouse, Vs. Income Tax,
Vill Rawat Kheda Manasa Ratlam
Road, Neemuch
(Appellant) (Respondent )
PAN No.AACFL2242H
Revenue by Shri R.S. Ambedkar, Sr.DR
Assessee by Shri S.S. Deshpande ,CA
Date of Hearing 08.05.2019
Date of Pronouncement 16.05.2019
ORDER
PER MANISH BORAD, AM.
This appeal is filed at the instance of the assessee pertaining to Assessment Year 2013-14 and is directed against the order of Ld. Commissioner of Income Tax (Appeals) (in short 'CIT(A)'), Ujjain dated 05.06.2017 which is arising out of the order u/s 143(3) of the Income Tax Act 1961(In short the 'Act') dated 31.12.2015 framed by DCIT-Ratlam.
2. The assessee has raised following grounds of appeal;
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1.That, the learned CIT(A) has erred in not allowing the deduction u/s 80IB without appreciating the facts of the case and records that provisions of Section 80AC is directory and not mandatory.
2.The Appellant has got the Tax audit report on 23.09.2013 and also filed on line on 26.09.2013 and also paid complete Self Assessment Tax well before the last date of filing of return. Mistake was occurred by the staff of the Tax Consultant and assessee should not be penalized for the mistake of the staff of the Tax Consultant.
3. Your appellant craves, leave to add, alter, modify any of the grounds of appeal on or before the date of hearing."
4. Brief facts of the case as culled out from the records are that the assessee is a firm engaged in the integrated business of storage, handling and transportation. The assessee firm filed its return of income declaring total income of Rs.37,86,280/- on 22.4.2014 which was processed u/s 143(1). The case selected for scrutiny through CASS and notice u/s 143(2) was served, followed by detailed questionnaire along with notice u/s 142(1). Books of accounts and other documents were produced for verification which have been verified on test check basis. Ld. A.O noticed that the assessee has claimed deduction u/s 80IB of the Act at Rs.12,62,094/- but the return of income tax has been filed on 22.4.2014 which is beyond the date prescribed u/s 139(1) of the 2 Laxmi Mangal Warehouse ITA No.612/Ind/2017 I.T. Act. For claiming deduction u/s 80IB of the Act assessee e-filed report and Form 10CCB and Form 3 CB & 3CD for tax audit u/s 44AB of the Act online on 25.9.2013 and 23.9.2013 respectively.
Ld. A.O giving reference to the various decisions came to the conclusion that as per the provisions of Section 80AC of the Act deduction u/s 80IB is not allowable to the assessee as the return of income has been filed after expiry of due date u/s 139(1) of the Act.
After denying deduction u/s 80IB the income assessed at Rs.50,48,376/-. Aggrieved assessee preferred appeal before Ld. CIT(A) but failed to succeed as Ld. CIT9A) adopted the view taken by Ld. A.O and dismissed the assessee's Grounds of appeal observing as follows;
"4.After taking into consideration the AO's findings and appellant's oral and written submission made in the course of hearing as well as the facts of the case the issues involved in appeal are discussed and decided as under :-
5.Ground No.! & 2:- Through these grounds of appeal the appellant has challenged the addition of Rs.12,62,094/- on account of disallowance out of deduction u/s. 80IB of the Act. The AO made the disallowance on the ground that the appellant filed the return of income on 22-04-2014, beyond the prescribed time limit u/s 139(1) of the 1.T. Act. As per section 80AC of the LT. Act, deduction u/s 80IB(11A) cannot be allowed if the appellant does not file the return of income on or before the due date specified in 3 Laxmi Mangal Warehouse ITA No.612/Ind/2017 section 139(1) of the LT. Act. The appellant in the present case filed the return of income beyond the due date specified in section 139(1) of the LT.
Act. The AO relied on decision of various judicial authorities in support of his claim. Keeping in view of various case laws cited by the AO, the AO is justified in disallowing the claim of the appellant. Therefore, the disallowance made by the AO amounting to Rs. 1 2,62,094/- is Confirmed. Therefore, the appeal on these grounds is Dismissed" .
5. Now the assessee is in appeal before the Tribunal raising various grounds of appeal but the sole grievance is against the denial of deduction u/s 80IB of the Act. Ld. Counsel for the assessee referring to the paper book submitted that audit report for claiming deduction u/s 80IB of the Act was duly filed before the due date i.e. before 30.9.2013. Return of income has been filed after the due date has been accepted by the revenue authorities and assessment has been completed on the basis of I.T. return submitted on 22.4.2014. He placed reliance on the following decisions;
(i) Hansa Dalakoti V/s ACIT ITA No.3352/Del/2011 dated 25.1.2012 (2012) 32 CCH 0211 Del Trib.
(ii) Fiberfill Engineeers Vs ACIT ITA No.1853/Del/2015 dated 25.2.2016 (2016) 46 CCH 0572 Del Trib.
(iii) Symbiosis Pharmaceuticals P Ltd vs DCIT ITA No.501/CHD/2017 dated 4.10.2017 (2017) 51 CCH 0632 4 Laxmi Mangal Warehouse ITA No.612/Ind/2017 Chd. Trib.
(iv) ITO Vs S. Venkataiah ITA No.984/Hyd/2011 dated 31.5.2012 (2012) 32 CCH 0386 Hyd. Trib.
6. Per contra Departmental Representative vehemently argued supporting the orders of both the lower authorities.
7. We have heard rival contentions and perused the records placed before us. The assessee's sole grievance is that the lower authorities erred in denying the deduction u/s 80IB of the Act at Rs. 12,62,094/- just for non filing of income tax return before due date u/s 139(1) of the Act.
8. We observe that the income tax return has been e-filed by the assessee on 22.4.14 whereas u/s 139(1) of the Act the due date for filing of return of income was 30.9.2013. However in support of its claim u/s 80IB of the Act audit report in Form 10CCB has been e filed on 25.9.2013 and tax audit report u/s 44AB and 3CB & 3 CD filed on 23.9.2013. Both these reports were filed before the due date u/s 139(1) of the Act verifiable from the proof of e-portal of the I.T. department placed in the paper book.
9. As per provisions of Section 80AC of the Act for claim u/s 80IB assessee is required to furnish the return of income before the 5 Laxmi Mangal Warehouse ITA No.612/Ind/2017 due date specified u/s 139(1) of the Act. We however find that similar set of facts came up before the Co-ordinate Bench of Chandigarh in the case of Symbosis Pharmaceuticals P Ltd V/s DCIT (supra) wherein deduction u/s 80IC was claimed. Audit report was filed before the due date but income tax return was submitted on 31.3.2014 and deduction u/s 80IC was denied. The Coordinate Bench after considering jurisdictional pronouncements gave following observations holding that the claim of the assessee cannot be outset with, as the return was filed within the extended period stipulated in section 139(4) of the Act and the assessee deserves to succeed in part.
"6.4 We have considered the relevant findings in the assessment order and the impugned order and we find that the relevant documents in Support of its claim of deduction were available before the tax authorities well within time namely Book Audit Report in Form No. 29B and Tax Audit Report in Form No. 3CA/30 on 29.09.2013, Audit Report u/s 80rC along with Balance Sheet etc. Consequently, the occasion to consider the possibility and the opportunity to interpolate and fudge up the claim was admittedly not available to the assessee. We note that the respective corresponding figures qua the claim as per the Reports and Balance Sheets remain the same. The legal position referring to various case laws have been addressed by the authorities which we have elaborately discussed in the earlier part of this order. On consideration thereof, we find that the claim of 6 Laxmi Mangal Warehouse ITA No.612/Ind/2017 the assessee that in the peculiar facts and circumstances of the present case where the filing of the return was delayed for reasons not attributable to the assessee and all other supporting evidences in the form of audit report u/s 80IC, balance sheet prepared for the purpose of income tax and the requirements of various regulatory authorities were prepared and filed well within time whereas we have noted the figures and amounts in these two fully tally in the light of these facts when considered in context of the principles enunciated by the Courts and the Tribunal, we concur with the arguments that literal interpretation is to be given to the procedural requirements in as much as these provisions being machinery provisions and thus being directory, they do not stand as a bar in the facts of a case wherein it can be demonstrated that there was a justifiable and reasonable cause for delay in filing of the return. The return which is well within the extended period as considered under sub section 4 of Section 139 of the Act, it was submitted, stands on a higher footing, then the return which is filed even beyond this period. The arguments of the Revenue that return filed late can only be considered if the delay is attributable to the Revenue, cannot be concurred with. In the face of decisions which hold that the said provision is a machinery provision, then this interpretation cannot apply only to cases where delay is attributable only to the Revenue. The said interpretation would be universally available as per facts to both the Sides. To hold that the cause for delay can be gone into, only if delay is attributable to the Revenue in the facts of the case would necessitate a judicial forum to first require the Department to demonstrate how it can claim itself to be on higher footing qua the tax payer because reasons for delay can be gone into and condoned for inadequate reasons demonstrated by the Revenue then even Where delay occurs for reasons not attributable to the Revenue also. In the absence of any other argument, we do not 7 Laxmi Mangal Warehouse ITA No.612/Ind/2017 see how in the facts as considered by different Courts in the decisions relied Upon by the Id. AR, why they should not be applied. Once it has been held that Section 80AC is a machinery provision, then the issue is to be considered in the light of the facts available. The legal position that the relevant provision is a machinery provision, applying the principles that being directory in nature enables the authorities to consider the reasons, consistently on record for late filing of the return. A perusal of the record shows that the affidavit of Shri Jagbir Singh 5/0 Shri Orn Pal, Managing Director of the assessee company is on record. Perusal of the same shows that it has been explained that on account of collusion of the tax consultant i.e. Chartered Accountant Shri A.S.Malhotra in regard to allotment of shares in another company i.e. Saitec Medical Pv', Ltd. wherein the assessee company had a major share holding resulting in filing of suite before the Company Law Board etc. and in connivance of the Tax Consultant with Mr. Bhalotia and his son who were having minor shareholding in M/s Saitech, the routine exercise normally done by the Tax Consultant without any follow up or supervision as digital signatures had been entrusted to the tax consultant for uploading of documents etc. in the Income Tax Portal, the mischief was occurred. For ready reference, the contents of the affidavit on record are reproduced hereunder:
AFFIDAVIT I, Jagbir Singh s/o Sh. Om Pal, Managing Director of Symbiosis Pharmaceuticals ep) Ltd., having its Regd. office at SCO 4, Ground Floor, 14, Raghunath Puri, Yamuna Nagar, do hereby solemnly affirm and declare as under:
1. That I am Managing Director of the Company Symbiosis Pharmaceuticals ep) Ltd., Yamuna Nagar.8
Laxmi Mangal Warehouse ITA No.612/Ind/2017
2. That, the Balance Sheet along with annexures of Symbiosis Pharamaceuticals P Ltd for the year ending 31.3.2013 was signed by the authorized directors and Auditors on 09.08.2013 and the said balance sheet was adopted by the Board of the company. On this very date i.e. 09.08.2013 we handed over the Digital Signatures of the Deponent to our auditor and Tax.Consultant CA A.S. Malhotra for filing Income Tax return and other reports on the Income Tax portal as returns and all audit reports had to be compulsorily e-filed. We came to know about the fact that Tax Audit report and Balance Sheet with annexures were filed on 29-9-2013 and report u/s 80-IC on Form 10CCB was filed on 28.10.2013 and the return of Income was uploaded only on 31.03.2014.
3. That filing of Income Tax return, audit report etc on Income Tax portal as a matter of routine is handled by Tax Consultant and in our case CA. A.S.Malhotra and as a normal practice digital signatures were also handed over to him alongwith Board Resolution authorizing him to use and affix our Digital Signatures on the documents to be submitted to Income Tax Department.
4. That our aforementioned Company is having 77.30 shares in another Company "Saitech Medicare Private Limited". CA. A.S. Malhotra was Auditor of that Company also. Besides Symbiosis Pharmaceuticals (P) Ltd. and a few other shareholders, this Company is also having two shareholders namely Sh. Rajat Bhalotia and his father Sh. P.D. Bhalotia with 12.66 and 3.82 shares respectively. These shareholders have filed a suit with Company Law Board, Delhi against the major shareholder i.e. Symbiosis Pharmaceuticals (P) Ltd. and other shareholders including the Deponent.
We suspected collusion of our Auditors with these two ·dissenting shareholders as our Auditor was also Auditor and tax consultant of Wonder Products, Nahan Road, Moginand, Kal Amb, Distt. Nahan; a firm 9 Laxmi Mangal Warehouse ITA No.612/Ind/2017 of these two persons/ their family members. The suspicion is on account of the fact that return of Income for the year under consideration was filed late when balance sheet and audit report was filed in time and also he has guided the other directors for filing a suit against the company.
5. That when we received the order of the DCIT in our case for the A.Y. 2013-14 on 16.01.2016; we consulted another CA who told us the intricacies of the order and thereafter we confronted the same with our Tax Consultant CA. A.S. Malhotra; who did not give any satisfactory reply for delay in .filing of Income Tax return and we asked for his resignation and changed our consultants as well as Auditors of both the Companies. 'His replies confirmed our suspicions that he is in hand with glove with jvir. Bhaiotia and the mfschief i.e. non filing of ITR in time was carried on us at the behest of Mr. Bhalotia.
6. That we would also like to add that Bhalotias had filed the case only in July 2015 after we issued Seventy six lakh shares of "Saitech Medicare Private Limited" to Symbiosis Pharmaceuticals (P) Ltd. He was showing his grievances against the allotment since last more than one year before the allotment on some technical grounds which only a professional like a Chartered Accountant is in position to .guide. Due to the case filed with Company Law Board; which case has since been transferred to National Company Law Tribunal, Chandigarh Bench in February, 2017; we had not been able to hold AGM of "Saitech Medicare Private Limited" Since 2015. Whenever we tried to hold AGM; Mr. Bhalotia invoked CLB which restrained us from holding AGM and ultimately we had to give an undertaking to the CLB of not holding any AGM without its permission.
7. That we are not conversant with the Income Tax Act, 1961 hence we had to rely on our consultants. As is a normal practice; Income Tax Consultant prepares and file ITRs on behalf of the assessee. We were also following the instructions of our Tax Consultant and late filing of 10 Laxmi Mangal Warehouse ITA No.612/Ind/2017 ITR was not due to any fault of any of the officer of the Company but due to our Tax Consultant.
6.5 Accordingly, in the peculiar facts and circumstances of the case, as we have discussed at length and seen from the record, we are of the view that the delay in filing of the return in the facts of the present case was for reasons beyond the control of the assessee and in fact, there was reasonable cause in the late filing of the return within the extended period as statutorily available under sub-section (4) of Section 139 of the Act. The decision rendered in the case of P. Bhavani, we find, on facts is not applicable and is entirely distinguishable since we concur with the arguments advanced by the Id. AR thereon same are not being repeated here. Similarly, we find that the decision in the case of M/s Lakshmi Energy & Foods Ltd. also has no role to place as in the facts of that case, not only the return was filed beyond the extended period of time statutorily available under sub-section (4) of Section 139 but even otherwise, the said return was not supported by Tax Audit Report and Audit Report u/s BOIC prior to the filing of the return and in fact they were filed during the assessment proceedings.
6.6 In the facts of the present case, as is evident from the assessment order itself, the Supporting documents for the claim u/s BOIC was filed well within the extended time prescribed u/s 139(4). The said fact is evident from a reading of the assessment order itself. We also note that the principle of law as applicable to claim of exemption u/s 54 as considered by the Hon'ble jurisdictional High Court in the case of CIT V Jagriti Aggarwal is fully applicable to the case at hand also and infact the decision of the Delhi Bench of the ITAT in the case of Hansa Dalakoti and Fiberfill Engineers (cited supra) relying upon the decision of the Apex Court in the case of Bajaj Tempo Ltd. (cited supra) and decision of the Hon'ble Delhi High Court in the case of Poddar Pigments 11 Laxmi Mangal Warehouse ITA No.612/Ind/2017 Ltd. ( cited supra) fully SUpports the claim of the assessee. Mention may also' be made of the order of the Hyderabad Bench of the Tribunal in the case of S. Venktiah, (cited supra) and another order of the Delhi Bench in the case of Dheer Global Industries P.Ltd. (cited supra) also support the view taken. Support may also be drawn by making reference to the order of the Chandigarh Bench of the Tribunal in the case of Rajwinder Kaur Mahal (stated supra) wherein considering the claim of deduction u/s 54 after considering the decision of the Apex Court in the case of Prakash Nath Khanna and also considering the decision of the jurisdictional High Court in the case of Jagriti Aggarwal, the claim made in the extended period available under sub-section (4) of Section 139 was allowed. The order in the case of Heera Moti Agro Industries (cited supra) also deserves a mention.
6.7. Accordingly, considering the peculiar facts and Circumstances of the case and position of law as canvassed by the parties before the Bench, we hold that the claim of the assessee could not be ousted on the fact that the return was filed within the extended period of sub. section( 4) of Section
139. Accordingly, we hold that the assessee deserves to succeed in principle. The matter is remanded to the AO for the purposes of verification. Needless to say that the assessee shall be given a reasonable opportunity of being heard".
10. We therefore respectfully following the above decision of the Co-ordinate Bench, Chandigarh and in the given facts and circumstances of the case wherein the return of income though belated but filed subsequently on 22.4.2014 u/s 139(4) of the Act whereas the audit reports have been e filed before the due date of 12 Laxmi Mangal Warehouse ITA No.612/Ind/2017 filing of return u/s 139(1) of the Act. We direct the Ld. A.O to accept the tax audit reports submitted by the assessee in support of claim for deduction u/s 80IB. However the matter is remanded to the Ld. A.O for the purpose of verification as during the course of assessment proceedings the facts of the alleged claim u/s 80IB of the Act could not be examined on merits by the assessing authority.
We therefore direct the Ld. A.O to examine the claim of the assessee u/s 80IB of the Act and if the conditions of Section 80IB of the Act are fulfilled then the deduction should be allowed and delay in filing of return of income should not affect in claiming the deduction by the assessee u/s 80IB of the Act at Rs.12,62,094/-.
11. In the result appeal of the assessee is allowed for statistical purposes.
The order pronounced in the open Court on 16.05.2019.
Sd/- Sd/-
( KUL BHARAT) (MANISH BORAD)
JUDICIAL MEMBER ACCOUNTANT MEMBER
दनांक /Dated : 16 May, 2019
/Dev
Copy to: The Appellant/Respondent/CIT concerned/CIT(A)
concerned/ DR, ITAT, Indore/Guard file.
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Laxmi Mangal Warehouse
ITA No.612/Ind/2017
By order
Assistant Registrar, ITAT, Indore
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