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2017 (11) TMI 1198 - AT - Income TaxDeduction under section 80-IA - Non serving the notice to the Assessing Officer as required by the provision of sub-sections (1) and (2) of section 250, thus denial of natural justice - Held that:- The claim of the assessee for deduction under section 80-IA was allowed by the CIT(Appeals) initially in the assessment year 2006-07 without serving the notice to the Assessing Officer as required by the provision of sub-sections (1) and (2) of section 250 and there was thus a denial of natural justice to the Revenue as found by the Tribunal. The Tribunal accordingly held that the order passed by the Assessing Officer and the learned Commissioner of Income-tax (Appeals) for assessment year 2006-07 giving relief to the assessee on the issue of deduction under section 80-IA was in violation of the principles of natural justice and the matter was accordingly set aside by the Tribunal to the learned Commissioner of Income-tax (Appeals) with a direction to give the Assessing Officer proper and sufficient opportunity of being heard and to decide the issue afresh in accordance with law. Since the order passed by the learned Commissioner of Income-tax (Appeals) for the assessment year 2006-07 was followed by him to give relief to the assessee on the issue of deduction under section 80-IA for the assessment years 2004-05, 2005-06, 2007-08 and 2008-09, the orders of the learned Commissioner of Income- tax (Appeals) for the said years were also set aside by the Tribunal with a direction to the learned Commissioner of Income-tax (Appeals) to decide the matter afresh after deciding the appeal of the assessee for the assessment year 2006-07. When the opportunity given to him by the learned Commissioner of Income-tax (Appeals) in the second round as per the direction of the Tribunal was availed of by the Assessing Officer by submitting a remand report putting forth the case of the Revenue on the issue and the rejoinder was also filed by the assessee in response to the said remand report, we are of the view that the action of the learned Commissioner of Income-tax (Appeals) in allowing the claim of the assessee for deduction under section 80-IA by simply relying on the order of the learned Commissioner of Income-tax (Appeals) dated October 30, 2009 passed by his predecessor in the first round, which was set aside by the Tribunal and without applying his mind to the issues raised by the Assessing Officer in the remand report and without making any discussion whatsoever thereon is totally untenable as the same has not only ignored the clear direction given by the Tribunal but has also defeated the very purpose for which the matter was remitted back to the Tribunal by the learned Commissioner of Income-tax (Appeals). We, therefore, set aside the impugned orders of the learned Commissioner of Income-tax (Appeals) for the assessment years 2004-05 to 2008-09 as well as that of 2009-10 and remit the matter back to the learned Commissioner of Income-tax (Appeals) for deciding the same afresh Penalty for late safety arrangement - allowable business expenditure - Held that:- The penalty for late safety arrangement imposed on the assessee is not an expenditure incurred by the assessee for any purpose, which is an offence and which is prohibited by law and the same not being covered by Explanation 1 to section 37, we find no infirmity in the impugned order of the learned Commissioner of Income-tax (Appeals) allowing the same as business expenditure of the assessee. - Decided in favour of assessee.
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