Income Tax Appellate Tribunal - Chennai
Superfil Products Ltd., Chennai vs Assessee
IN THE INCOME TAX APPELLATE TRIBUNAL
"B" BENCH, CHENNAI
BEFORE SHRI N.S. SAINI, ACCOUNTANT MEMBER AND
SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER
I.T.A. No. 2055/MDS/2011
Asst. Years : 2002-03
M/s. SUPERFIL PRODUCTS LTD, The Asst. Commissioner of
Old No.407/1, New No.808/1, Income Tax, Company
GR Complex, Basement, Anna v. Circle-VI(4), CHENNAI.
Salai, CHENNAI - 600 035
PAN : AAACS8817Q.
(Respondent)
(Appellant)
Appellant by : Shri V.S. Jayakumar, Advocate
Respondent by : Shri S. Moharana, JCIT, D.R.
Date of hearing : 25 Sept. 2012
Date of Pronouncement : 12th Oct. 2012
O R D E R
PER CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER :
This is an appeal filed by the assessee against the order of the Commissioner of Income Tax (Appeals)-VI, Chennai dated 25.10.2011 in ITA No.305/10-11 for the Asst. Year 2002-03 2 I.T.A. No.2055/Mds/11
2. The first issue in the grounds of appeal is that the Commissioner of Income Tax (Appeals) erred in not adjudicating the validity part of re-opening of assessment under sec.147 of the I.T. Act, by the Assessing Officer. The second issue in the grounds of appeal is that the Commissioner of Income Tax (Appeals) erred in confirming the disallowance of deduction under sec.80 IB of the I.T. Act on the ground that the assessee had not filed the audit report in new Form 10CCB.
3. In so far as the first issue is concerned, we see that the assessee has not raised any specific ground before the Commissioner of Income Tax (Appeals) in its grounds of appeal questioning the validity of re-opening of assessee under sec.147 of the Act. The Counsel for the Assessee submits that though no specific ground was raised before the Commissioner of Income Tax (Appeals) in the grounds of appeal, it has been stated in the statement of facts filed before the Commissioner of Income Tax (Appeals). We have perused the statement of facts filed before the Commissioner of Income Tax 3 I.T.A. No.2055/Mds/11 (Appeals) and find that the assessee has simply stated that the assessment was re-opened under sec.147 of the Act for certain reasons. However, the assessee has not questioned the validity of re-opening of assessment under sec.147 of the Act even in the statement of facts. Therefore, since the assessee has not raised specific ground before the Commissioner of Income Tax (Appeals) questioning the validity of re-opening of assessment, we dismiss this ground raised by the assessee before us.
4. With regard to second issue in the grounds of appeal of the assessee, the brief facts are that the assessee filed its return of income on 30.10.2002 for the Asst. Year 2000-01 admitting Nil income after claiming deduction under sec.80 IB of the Act. The assessment was completed under sec.144 of the Act on 31.12.2009 denying deduction under sec.80IB of the Act on the ground that the assessee has not filed audit report as per Rule 18BBB of I.T. Rules. The assessee filed an appeal before Commissioner of Income Tax (Appeals) contending that the Assessing Officer is not justified in making assessment under sec.144 of the Act ie., best judgment 4 I.T.A. No.2055/Mds/11 Assessment. The assessee also contended before the Commissioner of Income Tax (Appeals) that the Assessing Officer is not justified in disallowing deduction claimed under sec.80IB of the Act on the ground that the audit report was not filed as per the amended Rule 18BBB of IT Rules inserted with effect from 06.9.2002. The assessee contended before Commissioner of Income Tax (Appeals) that the assessee had filed Form 10CCB in respect of its claim under sec.80IB as applicable for the Asst. Year 2002-03. It was contended by the assessee that the Form of Audit Report for claiming deduction under sec.80IB, laid down in Rule 18BBB of IT Rules was amended with effect from 06.9.2002, and is applicable for the Asst. Year 2003-04 and not for the Asst. Year 2002-03. Therefore, the assessee contended that since it had filed audit report in Form 10CCB as applicable for the Asst. Year 2002-03, there is no justification in disallowing deduction under sec.80IB of the Act. The Commissioner of Income Tax (Appeals) rejected the contention of the assessee and held that since the assesse did not file audit report as per amended provisions of Rule 18BBB of IT Rules, as introduced with effect from 06.09.2002, the Assessing Officer is correct in denying deduction 5 I.T.A. No.2055/Mds/11 under sec.80IB of the Act. Coming to the best judgement Assessment made under sec.144 of the Act, the Commissioner of Income Tax (Appeals) held that the Assessing Officer has not made out any case for any default by the assessee as provided under sec.144(1)(a),(b) or (c). Therefore, he held that there is no case for passing Assessment Order under sec.144 of the Act and allowed the appeal of the assessee on that ground.
5. The Counsel for the Assessee submits that the assessee filed audit report in Form 10CCB as per the provisions of Rule 18BBB as it stood at that point of time. He submits that Rule 18BBB was amended by IT(23rd amendment)Rule 2002 as amended by the IT (9th amendment) Rules 2003 with effect from 06.9.2002. Therefore, Counsel for the Assessee submits that since Rule 18BBB was amended with effect from 06.9.2002, the assessee was under the bona fide impression that this Rule is applicable from the Asst. Year 2003-04 onwards and not for the Asst. Year 2002-03. The Counsel for the Assessee submits that it is not that the assessee has not filed any audit report for claiming deduction under sec.80IB but it filed in 6 I.T.A. No.2055/Mds/11 Form 10CCCB in old format claiming deduction under sec.80 IB of the Act. Therefore, the Counsel for the Assessee submits that the assessee cannot be denied deduction under sec.80IB for technical default, if any, for not submitting the audit report in new format as prescribed under Rule 18BBB which was introduced with effect from 06.9.2002. He also submits that the matter may be remitted to the file of the Assessing Officer and the assessee would comply with the requirement of filing the audit report in new format as per Rule 18BBB. He prayed that an opportunity may be given to the assessee to comply with the requirement of filing the Audit Report in Form 10CCB in the new format as per amended Rule.
6. The Departmental Representative relied on the orders of lower authorities. On the point of remitting the matter back to the file of the Assessing Officer for the assessee to comply with the requirement of furnishing audit report in the proper format, the Departmental Representative did not seriously object. 7 I.T.A. No.2055/Mds/11
7. We have heard both sides, perused the material on record and the orders of the authorities below. The assessee filed the audit report in Form 10CCB claiming deduction under sec.80IB of the I.T. Act in old format. Rule 18BBB of the I.T Rules was amended with effect from 06.9.2002 for filing a revised form of audit report for claiming deduction under sec.80IB, 80IA etc., along with separate Profit and Loss Account, balance sheet etc., for each unit of the industrial undertaking. The due date for filing the return of income for the Asst. Year 2002-03 was 31.10.2002. It could be seen that the assesses were hardly given time for furnishing the audit report in the revised format along with separate Profit & Loss Account, Balance Sheet etc., for claiming deduction under sec.80IB of the Act for the Asst. Year 2002-03 as the Audit Report is to be filed along with the return of income. Since the provisions were introduced with 06.9.2002, the bona fide belief of the assessee that the provisions are applicable for the Asst. Year 2003-04 and not to the Asst. Year 2002-03 cannot be brushed aside. Deduction under sec.80IB in the assessee's case cannot be denied on the technical ground of non- 8 I.T.A. No.2055/Mds/11 filing of Form 10CCB in the new format when the assessee had complied with the requirement of filing of Form 10CCB in old format for claiming the deduction. Taking into account the totality of facts and circumstances of the case we feel that in the interest of substantial justice this issue should go back to the Assessing Officer for determining the issue afresh. The assessee may file audit report in new format as per Rule 18BBB of I.T. Rules as amended with effect from 06.9.2002 and the Assessing Officer shall consider the Audit Report in allowing deduction claimed under sec.80IB of the Act. With the above directions, we remit the issue to the file of the Assessing Officer for deciding the matter afresh after providing the assessee adequate opportunity in the matter.
8. In the result, the appeal filed by the assessee is partly allowed for statistical purpose.
9 I.T.A. No.2055/Mds/11
10. Order pronounced on Friday, the 12th day of October 2012.
Sd/- sd/-
( N.S. SAINI) (CHALLA NAGENDRA PRASAD)
ACCOUNTANT MEMBER JUDICIAL MEMBER
Chennai,
Dated : 12th October 2012.
Jls.
Copy to :-
1) Assessee
2) Respondent
3) CIT(Appeals)
4) C.I.T. (5) D.R.,
4) Guard File.