Income Tax Appellate Tribunal - Kolkata
Magnum Exprort, Kolkata vs Assessee on 19 December, 2012
आयकर अपीलीय अधीकरण, Ûयायपीठ - " B" कोलकाता,
IN THE INCOME TAX APPELLATE TRIBUNAL "B" BENCH: KOLKATA
(सम¢)Before ौी ूमोद कुमार,
मार लेखा सदःय एवं/and ौी महावीर िसंह, Ûयायीक सदःय)
[Before Shri Pramod Kumar, AM & Shri Mahavir Singh, JM]
आयकर अपील संÉया / I.T.A No. 1111/Kol/2012
िनधॉरण वषॅ/Assessment Year: 2003-04
Magnum Export Vs. Assistant Commissioner of Income-tax,
(PAN: AAEFM5108M) Circle-35, Kolkata.
(अपीलाथȸ/Appellant) (ू×यथȸ/Respondent)
Date of hearing: 19.12.2012
Date of pronouncement: 08.02.2013
For the Appellant: Shri Ishwer Prasad Rathi, FCA
For the Respondent: Shri K. N. Jana, JCIT, Sr. DR
आदे श/ORDER
Per Mahavir Singh, JM ( महावीर िसंह, Ûयायीक सदःय)
सदःय This appeal by assessee is arising out of order of CIT(A)-XXII, Kolkata in Appeal No. 36/CIT(A)-XXII/ACIT, Circle-35/06-07 dated 16.11.2006. Assessment was framed by ACIT, Circle-35, Kolkata u/s. 143(3) of the Income-tax Act, 1961 (hereinafter referred to as "the Act") for Assessment Year 2003-04 vide his order dated 23.03.2006.
2. At the outset, it is noticed that the appeal filed by assessee is delayed by 2078 days. The assessee alongwith condonation petition has filed an affidavit stating the following reasons:
"1. That for the assessment year 2003-04, the appellant firm was assessed by the Asstt. Comm. Of Income Tax, Circle-35, Kolkata.
2. The assessment has resulted into a demand of Rs.4,12,221 due to the rejection of our claim for deduction u/s. 80HHC for Rs.10,55,000.
3. The appeal was filed before the Commissioner of Income Tax (A)-XXII, Kolkata. The aforesaid appeal was dismissed by an order dt. 16.11.2006 and the order of the aforesaid appeal served upon us on 17.11.2006.
4. In this appeal before CIT(A) we had challenged disallowance of deduction u/s. 80HHC as arbitrary, excessive and bad in law based on constitutional validity of amendment, discriminating deduction u/s. 80HHC based on export turnover with retrospective effect. However, the CIT(A) has not entertained this issue and mentioned as "Since the undersigned has no authority or jurisdiction to examine the validity of the said amendments, the ground of appeal in this regard is not entertained." And further on merit also our claim of deduction u/s. 80HHC was rejected since we were not in a position to fulfill those conditions prescribed in third proviso to section 80HHC(3). Hence the CIT(A) has confirmed the entire disallowance of deduction u/s. 80HHC.2 ITA No. 1111/K/2012 Magnum Export
A.Y. 2003-04
5. On receipt of the aforesaid order of the learned Commissioner of Income Tax (appeals) the partners of the firm has discussed this issue. Also since appellant is members of Indian Exporters Grievances Forum (Regd.) who has filed writ petition in Bombay High Court on behalf of their members challenging the same issue, it was decided not to file second appeal, since the amendment cannot be challenged before ITAT.
6. That the appeal was due for filing on or before 15.01.2007 i.e. 60 days from date of service of the 1st appeal's order. But as we are filing this today there is a delay of 2017 days. The delay in filing of this appeal is fully on account of the misunderstanding of the legal provisions and pendency of the writ petition.
7. The issues involved is purely an legal issue and under the aforesaid circumstances we pray to your honour to condone the genuine delay as otherwise it would lead to great hardship to the appellant firm."
3. Ld. counsel for the assessee argued that the assessee being a member of Indian Exporters Grievances Forum (regd.), who filed Writ Petition before Hon'ble Bombay High Court and Hon'ble Gujarat High Court wherein the amendment was quashed by Hon'ble Gujarat High Court in Civil Application No. 7926 of 2006 and others (copy of the judgment of Hon'ble Gujarat High Court dated 07.02.2012 placed on record) wherein Hon'ble Gujarat High Court considered the issue in entirety and quashed the amendment in section 80HHC of the Act as under:
'25. In the case before us, it is not one where the executive has failed to carry out the object of the Parliament necessitating exercise of control retrospective amendment what the executive ought to have achieved.
In the present case, according to the Finance Minister presenting the Bill, a valid piece of legislation has been wrongly interpreted by the Tribunal. We have already pointed out that according to the existing law, if a valid piece of legislation is wrongly interpreted by the Tribunal, the aggrieved party should move higher judicial forum for correct interpretation. As pointed by the Apex Court in the case of Pritvi Cotton Mills Ltd (supra), the legislature does not possess or exercise power to reverse the decision in exercise of judicial power. Thus, we are of the view that the principles laid down in the case of R. C. Tobacco (P) Ltd. (supra) has no application to the facts of the present case.
The impugned amendment granting benefit restricting it to a class of assessee whose turnover is less than Rs.10 Crore is permissible prospectively but the way it has been enacted, it takes away an enjoyed rifht of a class of citizen who availed of the benefit by complying with the requirements of the then provisions of law.
26. On consideration of the entire materials on record, we, therefore, find substance in the contention of the learned counsel for the petitioners that the impugned amendment is violative for its retrospective operation in order to overcome the decision of the Tribunal, and at the same time, for depriving the benefit earlier granted to a class of the assessees whose assessments were still pending although such benefit will be available to the assessees whose assessments have already been concluded. In other words, in this type of substantive amendment, retrospective operation can be given only if it is for the benefit of the assessee but not in a case where it affects even a fewer section of the assessees.
27. We, accordingly, quash the impugned amendment only to this extent that the operation of the said section could be given effect from the date of amendment and not in respect of earlier assessment years of the assessees whose export turnover is above Rs.
3 ITA No. 1111/K/2012 Magnum ExportA.Y. 2003-04 10 Crore. In other words, the retrospective amendment should not be detrimental to any of the assessees."
4. In view of this fact, Ld. counsel for the assessee fairly stated that once Hon'ble High Courts of Gujarat and Bombay have quashed the amendment and which is affirmed by Hon'ble Supreme Court and the assessee being member of the Association was under the impression that it is pursuing the alternative remedy and hence, this being a reasonable cause delay should be condoned and the appeal be heard on merits. We find from the order of CIT(A) that this issue on merits regarding benefit u/s. 80HHC of the Act is subject matter of challenge i.e. the amendment made in section 28 and section 80HHC of the Act by the Taxation Law Amendment Act 2005 and CIT(A) has considered this issue in para 3 and 4 of its order as under:
"3. In grounds of appeal it is contended by the appellant that the order of the Assessing Officer is arbitrary, excessive and bad in law and also the Assessing Officer erred in completing the assessment by disallowing the benefit under section 80HHC. It is also contended by the appellant that they have filed a Writ Petition before the Hon'ble Mumbai High Court challenging the validity the amendment made in section 28 and 80HHC by the Taxation Laws (Amendment), 2005 and so the matter may be kept in abeyance till the disposal of the Writ Petition.
4. I have gone through the contention of the appellant and also the facts available on record. The Writ Petition has been filed by the Indian Exporters Grievances Forum (Regd.) and another against the Chief Commissioner of Income Tax and the Union of India. At the outset, the Hon'ble High Court has not granted any stay order either against operation of assessment order or against the hearing and disposal of this appeal. Hence, the appeal is being decided on its merit."
In such circumstances, we feel that the delay be condoned and appeal be admitted. Hence, we condone the delay and admit the appeal.
5. As regards to merits of the case, necessary details in respect to deduction u/s. 80HHC of the Act are not available on records and are also to be verified by the AO. Hence, this issue be remitted back to the file of AO, who will decide the claim of the assessee after verifying the details. We order accordingly.
6. In the result, appeal of assessee is partly allowed for statistical purposes.
7. Order pronounced in the open court on 08th Feb., 2013 Sd/- Sd/-
ूमोद कुमार,
मार लेखा सदःय महावीर िसंह, Ûयायीक सदःय
(Pramod Kumar) (Mahavir Singh)
Accountant Member Judicial Member
तारȣख)
तारȣख) Dated: 08th February, 2013
(तारȣख
वǐरƵ िनǔज सिचव Jd.(Sr.P.S.)
4 ITA No. 1111/K/2012 Magnum Export
A.Y. 2003-04
आदे श कȧ ूितिलǒप अमेǒषतः- Copy of the order forwarded to:
1. अपीलाथȸ/APPELLANT - Magnum Export,16, Mangoe Lane, Kolkata-700
001. 2 ू×यथȸ/ Respondent -ACIT, Circle 35, Kolkata.
3. आयकर किमशनर (अपील)/ The CIT(A), Kolkata
4. आयकर किमशनर/ CIT Kolkata
5. ǒवभािगय ूितनीधी / DR, Kolkata Benches, Kolkata स×याǒपत ूित/True Copy, आदे शानुसार/ By order, सहायक पंजीकार/Asstt. Registrar.