Income Tax Appellate Tribunal - Delhi
Gitwako Farms (India) Pvt. Ltd., New ... vs Department Of Income Tax on 15 November, 2011
IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH 'C' DELHI
BEFORE SHRI I.P. BANSAL & AND SHRI K.G. BANSAL
ITA No. 771(Del)/2011
Assessment year: 2001-02
Assistant Commissioner of Income Gitwako Farms (India) Pvt.
Tax, Circle 12(1), New Delhi. Vs. Ltd., 42, Birbal Road,
Jangpura Extension,
New Delhi.
C.O. No. 215(Del)/2011
(Arising out of ITA No. 771(Del)/2011)
Assessment year: 2001-02
Gitwako Farms (India) Pvt. Ltd., Assistant Commissioner of
42, Birbal Road, Jangpura Extn., Vs. Income-tax, Circle 12(1),
New Delhi. New Delhi.
ITA No. 772(Del)/2011
Assessment year: 2003-04
Assistant Commissioner of Income Gitwako Farms (India) Pvt.
Tax, Circle 12(1), New Delhi. Vs. Ltd., 42, Birbal Road,
Jangpura Extension,
New Delhi.
C.O. No. 216(Del)/2011
(Arising out of ITA No. 772(Del)/2011)
Assessment year: 2003-04
Gitwako Farms (India) Pvt. Ltd., Assistant Commissioner of
42, Birbal Road, Jangpura Extn., Vs. Income-tax, Circle 12(1),
New Delhi. New Delhi.
(Appellant) (Respondent)
Contd. Page 2
2 ITA Nos. 771 & 772(Del)/2011&
C.O.Nos. 215 & 216(Del)/2011
Department by : Smt. Srujani Mohanty, Sr. DR
Assessee by : Shri R.S. Singhvi, C.A.
Date of Hearing : 15.11.2011
Date of Pronouncement : 25 .11.2011
ORDER
PER BENCH These appeals and the cross objections were argued in a consolidated manner by the ld. Senior DR and the ld. counsel for the assessee. Therefore, a consolidated order is passed.
2. The revenue has taken up three grounds in the appeal for assessment year 2001-02. The real grievance is projected in ground no. 2 that on the facts and in the circumstances of the case and in law, the ld. CIT(Appeals) has erred in deleting the disallowance of Rs. 28,39,956/- made by the AO on account of claim u/s 80IB of the Income-tax Act, 1961 ('the Act' for short). In the cross objection, the assessee has taken two grounds that the proceedings of re-assessment are not in conformity with the proviso to section 147 as no omission or failure has been shown on the part of the assessee in disclosing relevant facts for the assessment. This proviso is applicable as the assessment was made u/s 143(3) of the Act and the notice u/s 148 was issued after expiry of four years from 3 ITA Nos. 771 & 772(Del)/2011& C.O.Nos. 215 & 216(Del)/2011 the end of the assessment year. The grounds taken in the appeal for assessment year 2003-04 are similar except that the claim u/s 80IB amounted to Rs. 61,44,456/-. The grounds taken in the cross objection by the assessee in this year are the same as in assessment year 2001-02.
3. The cross objections for both the years have been filed beyond the limitation period and there is a delay of 111 days in both the years. The objections are accompanied by applications for condonation of delay, which have been worded similarly and an affidavit dated 23.08.2011 from Shri R.K. Mittal, director in the assessee-company. In the application, it is mentioned that the director, dealing with the tax matters was not well and, therefore, no legal consultant was appointed. The matter could not be properly examined in absence of guidance and legal assistance. The delay in this letter has been mentioned to be of 105 days. In the affidavit, it is stated that he is looking after finance and tax matters. He was not well in the months of February and March, 2011 as he was suffering from depression and high blood pressure. Therefore, he could not attend to the day-to-day affairs of the assessee-company. Because of this reason, he could not consult or appoint a consultant to represent. The delay in filing cross objections is on account of his illness. 4 ITA Nos. 771 & 772(Del)/2011&
C.O.Nos. 215 & 216(Del)/2011
4. In the course of hearing before us, no evidence could be produced regarding illness of the director or the delay occurring on account of his illness. The ld. Senior DR has also objected to condonation of delay by stating that averments in the application and the affidavit have not been corroborated. Having considered the submissions from both the sides, we are of the view that substantial delay of 105 days cannot be condoned in absence of filing any corroborative evidence regarding illness by way of depression and high blood pressure of the director. Therefore, the objections are dismissed in limine.
4.1 The ld. counsel has also taken another plea that even de-hors cross objections, the assessee-company, as a respondent, may raise any other plea to show that the order of assessment is bad in law. In such an eventuality, it will be able to argue on the issue of lack of jurisdiction to issue notice u/s 148 only to the extent that it supports the order of the ld. CIT(Appeals). In this connection, reliance has been placed on the decision of 'A' Bench of Delhi Tribunal in the case of ITO Vs. Smt. Gurinder Kaur, (2006) 102 ITD 189. It has been held that even de-hors rule 27 of the Tribunal Rules, it is open to the respondents in appeals to raise a 5 ITA Nos. 771 & 772(Del)/2011& C.O.Nos. 215 & 216(Del)/2011 new ground in defence of the order appealed against. This view finds support from the decision in the case of Hukam Chand Mills Ltd. Vs. CIT, (1967) 63 ITR 232; New India Life Assurance Co. Ltd., (1957) 31 ITR 844; and CIT Vs. Gilbert & Barkar Manufacturing Co. , (1978) 111 ITR 529. The findings are contained in paragraph no. 11, which is reproduced below:-
"11. Even de hors Rule 27 of the Appellate Tribunal Rules, it is open to the respondent in an appeal before the Tribunal to raise a new ground in defence of the order appealed against. It has been so held by the Supreme Court in Hukam Chand Mills Ltd. v. CIT of the report it was held that even assuming that Rule 27 is not strictly applicable, the Tribunal has inherent powers under Section 254(1) to entertain the argument of the respondent which amounted to a new ground. It was further held by the Supreme Court as follows:
It is necessary to state that Rules 12 and 27 are not exhaustive and the powers of the Appellate Tribunal. The rules are merely procedural in character and do not, in any way, circumscribe or control the power of the Tribunal under Section 33(4) of the Act.
It is significant to note that in the case before the Supreme Court, the department which was the respondent sought to raise a new plea in defence of the order appealed against. Earlier, in New India Life Assurance Co. Ltd. v. CIT , the Bombay High Court while pointing out the difference between an appellant and respondent before the appellate court, observed at page 55 that the respondent "may support the decision of the trial court, not only on the ground contained in the judgment of the trial court, but on any other ground". Later, in the case of B.R. Bamasi v. CIT , the Bombay High Court which was dealing with the case of right of the respondent to defend the order appealed against held that the respondent would be entitled to raise a new ground in defence of the order appealed against, provided it is a ground of law and does not necessitate any other evidence to be recorded, the nature of which would not only be a defence to the appeal itself, but may also affect the validity of the entire assessment proceedings. It was further held that the ground served as a weapon of defence against the appeal and, if accepted 6 ITA Nos. 771 & 772(Del)/2011& C.O.Nos. 215 & 216(Del)/2011 should not place the appellant in a worse than he would have been, had he not appealed. In CIT v. Gilbert and Barkar Mfg. Co. , the Bombay High Court made no distinction between the appellant and respondent in an appeal before the Tribunal and held that both were entitled to raise new points or contentions subject only to the condition firstly that no new facts are required to be brought on record is capable of being disposed of on the facts on record and secondly that an opportunity is given to the other side to meet that point which is allowed to be raised for the first time in the appeal. This was also a case of the respondent. To the same effect are the decisions of the Allahabad, Gauhati, Kerala and Gujarat High Courts cited on behalf of the assessee. Therefore, whether it is the appellant or the respondent before the Tribunal, new points or contentions can be raised provided they did not involve investigation into facts (as contrasted with the record) and that an opportunity is given to the other side to meet the contentions. Applying these principles to the present case, we overrule the preliminary objection of the Ld. Sr. DR and permit the assessee to raise the new points before us as a respondent."
4.2 The case of the ld. counsel is that the plea regarding invalidity of 147 proceedings can be raised as the assessee-company is respondent in both the years. If such a plea succeeds, the effect would be that the order of the ld. CIT(Appeals) stands. On the other hand, the ld. senior DR opposed the plea on the ground that Rule 27 of the Income Tax Appellate Tribunal Rules is not applicable as the issue has not been decided by the ld. CIT(Appeals) against the assessee as no such ground was taken before him. In the alternative, it is argued that if the plea is admitted, the matter may be restored to the file of the ld. CIT(Appeals) to examine facts as to whether the AO had or did not have jurisdiction to issue notice u/s 148. It is her case that the issue has been decided in favour of the 7 ITA Nos. 771 & 772(Del)/2011& C.O.Nos. 215 & 216(Del)/2011 revenue on merits by the Hon'ble Delhi High Court in CIT Vs. Gitwaco Farms (India) Pvt. Ltd., (2011) 10 Taxman.com 261 (Del), a copy of which has been placed on record. It has been held that the assessee is engaged only in processing and not manufacturing and as such it is not eligible for deduction u/s 80IB. Paragraph no. 17 of the judgment in this regard is reproduced below:-
"17. In the light of facts and circumstances of the assessee's activities as described in the preceding paragraph and also in the order of the AO and in the light of the settled legal position as discussed above, it is held that the assessee is engaged in processing and not manufacturing and as such is not eligible for deduction under section 80-IB. In view of the findings, we answer question (ii) in favour of the revenue and against the assessee in the sense that the activities undertaken by the assessee did not amount to production or manufacturing and so is not eligible for deduction under section 80-IB. Consequently, question no.
(i) is answered in negative in favour of the revenue and against the assessee."
5. We have considered the facts of the case and submissions made before us. On the basis of the decision in the case of Smt. Gurinder Kaur and other cases, it can be said that the assessee as a respondent can raise any legal plea including the plea of lack of jurisdiction to pass the order provided all relevant facts are on record. If the assessee succeeds, the result would be that the order of CIT(Appeals) stands as it is. The facts regarding the expiry of the period of four years and disclosure of relevant facts for deciding the claim u/s 80IB are stated to be on record. However, 8 ITA Nos. 771 & 772(Del)/2011& C.O.Nos. 215 & 216(Del)/2011 the objection regarding lack of jurisdiction u/s 148 has not been examined by the ld. CIT(Appeals) as no ground was raised before him in this behalf. In such circumstances, we remand this matter to the ld. CIT(Appeals) for deciding the plea of the assessee. It is made abundantly clear that the plea shall be decided on the basis of facts on record and no fresh evidence shall be taken in the matter.
5.1 We also need not go into other cases regarding the merits of the case as it stands decided against the assessee in its own case in assessment year 2004-05.
6. The result of aforesaid discussion is that the appeals of the revenue are treated as allowed for statistical purpose and the cross objections of the assessee are dismissed.
Sd/- sd/-
(I.P. Bansal) (K.G.Bansal)
Judicial Member Accountant Member
SP Satia 25/11/2011.
Copy of the order forwarded to:-
1. Gitwako Farms (India) Pvt. Ltd., New Delhi.
2. ACIT, Circle 12(1), New Delhi.
3. CIT
4. CIT(A)
5. The DR, ITAT, New Delhi. Assistant Registrar.