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TMI Blog2012 (8) TMI 221X X X X Extracts X X X X X X X X Extracts X X X X ..... s/responsible persons of our firm. 3. Only on 17th January, 2006, when he returned from leave, did he inform receipt of the order. 4. Immediately thereafter the order of the CIT(A) was forwarded along with the relevant papers to our Chartered Accountant Shri Vijay Kothari for drafting of grounds of appeal. 5. On the basis of the records available, Shri Vijay Kothari drafted the grounds of appeal to be filed before Hon'ble ITAT & returned the papers on 19th January, 2006. 6. Under these facts, which are stated hereinabove, we are now filing this appeal. We have to submit & request that the delay in filing of the appeal be condoned. The lapse on the part of the appellant in not filing the appeal within the prescribed time was unintentional & entirely due to inadvertence. We hence pray that the delay be condoned & the appeal be admitted. For such act of kindness we shall ever be obliged to Your Honours." An affidavit of Shri Girish B. Doshi has also been filed stating that he had a serious chest pain followed with sweating in and around that time and was, therefore, taken for urgent medical treatment. As per the medical advice, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oted that in the balance sheet as on 31.03.1999, relevant to the Assessment Year 1999-2000, the assessee has disclosed a machinery for a value of sum of Rs. 5,25,155/-, installed in factory premises at Silvasa. As per the assessee, the business had started in the Assessment Year 1999-2000 itself, from the premises taken on rent. However, in the return filed for the Assessment Year 2000-01, the assessee had made a claim for deduction u/s. 80IB for the first time. In the Schedule of fixed assets accompanying the balance sheet as on 31.03.2000, there was an addition of Rs. 29,61,117/- which included an addition towards factory, building, land, plant and machinery. From the details of additions made in the fixed assets specifically on plant and machinery, the Assessing Officer took note of the fact that the same have been purchased from August, 1999 till March, 2000. The details of machinery purchased have been elaborately given in a tabular form by the Assessing Officer in para 8 of the assessment order. 6. In order to verify the genuineness of the purchase of the machinery of Rs. 5,25,155/- purchased in the Assessment Year 1999-2000, the Assessing Officer conducted an enquiry from w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... him in paras 9 and 10 of the assessment order is that the assessee may have used the old machinery found during the survey operation, in the period under consideration i.e. Financial Year 1999-2000, however, the new factory building and new machinery purchased were not ready for use before 01.04.2000. 8. Based on the above background, the Assessing Officer observed that it was only after being apprised by the various enquiries conducted in this regard, the assessee came forward and filed a revised return of income on 09.03.2005, withdrawing the claim of Section 80IB as was made in the original return of income. Finally, on the strength of such revised return and the letter accompanying the said return (the contents of which have been reproduced at pages 6 and 7 of the assessment order), the Assessing Officer came to the conclusion that the assessee is not eligible for deduction u/s.80IB of the Act which itself has been withdrawn by the assessee in the revised return. Thus the claim for deduction for a sum of Rs. 69,42,870/- was withdrawn and added to the taxable income of the assessee. 9. Before the CIT(A), the assessee contended that the condition precedent for claiming deducti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .) (c) further it was never the case of the AO that the plant and machineries which were owned by the assessee were either not new or they were previously used for any other purposes; (iii) Lastly, with regard to the last condition, it was submitted that the manufactured product is pre-fabricated building which does not fall in the list of 11 Schedule and it had employed more than 10 workers. Based on above submissions, it was vehemently contended that the assessee firm is eligible for deduction under Section 80IB. 10. So far as the comments given by the AO in the assessment order, the assessee submitted that it has given elaborate rebuttal of each and every finding and enquiry of the AO, which has been discussed at pages 7 & 8 of the appellate order which need not to be reiterated. 11. Finally, on the issue of denial for deduction under Section 80IB on the ground that it has withdrawn the claim through its revised return, it was submitted that the revised return itself was invalid as the return filed in response to the notice under Section 148 cannot be revised as per law and hence, cognizance of revised return cannot be taken for denying the benefit of claim. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atter. Accordingly, the action of the Assessing Officer is upheld and the Appellant's claim u/s. 80IB is rejected." 13. Learned Senior Counsel appearing on behalf of the assessee after taking us through the submissions made before the CIT(A) and the relevant facts of the case, contended that the revised return filed on 9-3-2005 was an invalid return as once the return has been filed in response to notice under Section 148, the same cannot be revised specifically for withdrawing the claim made in the original return. After referring to provisions contained under Sections 139(5) & 139 (9), submitted that only a mistake or defect in the return can be rectified and the withdrawal of the claim is neither an omission nor a wrong statement. In support of this contention, he relied upon the decision in the case of CIT v. Andhra Cotton Mills Ltd., [1996] 219 ITR 404/88 Taxman 176 (AP) & Banshidhar Jalan & Sons case (supra). 14. Most important, he drew our attention to a vital fact on the record that based on same survey operation, reopening under Section 147 was done for the subsequent years i.e. in the assessment year 2001-2002, 2002-2003, 2003-2004 and 2004-2005, wherein the reasons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on record to hold that the assessee was not eligible for deduction under Section 80IB during the year. He drew our attention to various categorical finding given by the Assessing Officer and submitted that the conclusion drawn by the CIT(A) is absolutely correct, even though he has not given any comment on any of the reasoning given by the AO. He, thus, heavily relied upon the findings given by the AO. 18. At the stage of hearing and after a lapse of more than 3 years from the date of the filing of the appeal by the assessee, the department came with a "Cross Objection" challenging the observation of the CIT(A) that "after perusing the Appellant's submissions, I notice that the Appellant seems to fulfill all the conditions stipulated in section 80IB of the I.T. Act, 1961". This Cross Objection has been filed to negate said the observations of the CIT(A), which otherwise goes against the finding of the A.O. 19. The grounds for condonation of delay in filing of Cross Objection as have been given in the affidavit filed by Mr. P. Radhakrishnan DCIT 12 (3), Mumbai, are reproduced herein below :- "Aggrieved by the CIT(A) order the assessee filed appeal before ITAT on 20.01.2006. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3.2005 withdrawing the claim u/s.80IB. In view of the above fact I respectfully say, submit and maintain that the Department have a good case on merits to succeed in the facts and circumstances of the case, I say that the Appellant are public authorities acting in public revenue interest and exercising the powers under the Income-tax Act, and the rules framed thereunder, I say and respectfully submit that the balance of inconvenience is in favour of the Appellant and no prejudice would be caused to the Respondents if the subject appeal is restored to the file and decided on its merits by this Hon'ble Tribunal. In the aforesaid circumstances, I respectfully submit that no prejudice is caused to the assessee by condoning the delay as the issue involves is on facts and therefore the present Affidavit taken out by the appellant for the condonation of delay of the subject appeal may be made absolute." 20. From the contents of the affidavit given above, it is not understood what are the reasons for condonation of delay. What has been given is not an averment for reasons for delay but the grounds for challenging the observation of the CIT(A). We are, therefore, not inclined to acce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pondent, to raise a new point or new contention, provided no new facts are required to be brought on record for disposing of such new point and also an opportunity is given to the other side to meet the point. The said Rule does not in any way circumscribe the powers of the Tribunal to entertain such plea or ground raised by the respondent. Since no new facts are required to be examined in this case and are infact arising from the findings of the Assessing Officer, we, therefore, permit the Senior D.R to canvass the case of the department based on the observations given by the learned CIT(A). Both the parties were, thus, heard on merits and the pleadings on this score raised by the learned DR for Department. 24. Now, the following issues are required to be decided by us :- (i) Firstly, whether, if an assessee has given up or surrendered the claim for deduction under Section 80IB by way of a letter before the Assessing Officer, can be permitted to raise and rake up the issue before the appellate authorities ?, and (ii) Secondly, whether on facts and circumstances of the case, the assessee is eligible for deduction under Section 80IB ? 25. From the facts as have been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Hon'ble Bombay High Court in the case of Nirmala L. Mehta (supra), was referred and relied upon clearly clinches the issue that acquiescence cannot take away from an assessee, the relief which he is entitled to when the tax is levied or calculated without authority of law. If in law, an item is not taxable, no amount of admission can be made taxable. In view of the said principle, we hold that even though the assessee has surrendered its claim before the Assessing Officer, the same can be challenged on merits if it has a strong case for such a claim based on facts and material on record and conditions relevant for claiming such deduction stands fulfilled. The other case laws as relied upon by the Ld. Senior Counsel on the proposition that "Jurisdiction cannot be conferred by consent" will not be applicable as we are not dealing with the issue of Jurisdiction. Hence, they are not discussed and dealt with. 28. Now, we proceed to deal with the merits of the claim of assessee under Section 80IB. In this case, the assessee has come into existence vide partnership deed dated 15-12-1998, to carry on the business of manufacturing of pre-fabricated building material. For the purpose of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at it was installed in the last quarters of the financial year has gone to enhance the capacity of the assessee which is evident from the fact that the assessee's income from such manufacturing activities has increased in this year. Very important fact which deserves our attention is that the Assessing Officer has not denied the fact that income shown by the appellant is from manufacturing of building material only and not from any other sources. There is no such finding while denying the claim under Section 80IB by the AO that the income which has been shown by the appellant are from other business activities and not from manufacturing business carried out from Silvasa. What heavily weighed in the mind of the AO was that the assessee's firm has been formed by reconstruction on splitting of business already in existence i.e. Steelfab Engineering Corporation (SECS), Silvasa, which is a different unit altogether. This premise of the Assessing Officer gets negated from the fact that Steelfab Engineering Corporation (SECS), Silvasa was engaged in a different product altogether with different set up of partners having different statutory registration under various authorities an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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