TMI Blog2017 (9) TMI 311X X X X Extracts X X X X X X X X Extracts X X X X ..... ellate authority. The contention of the assessee is that this is despite the fact that the assessee applied for and received approval for their R&D facility as an in-house R& D facility from DSIR from the F.Y. 2011-12 and renewed till 31.03.2017. CIT(A) deem it expedient in the interest of justice to remit the case back to the file of ld. CIT(A) to decide the appeal afresh on merit of the core issue, i.e., disallowance u/s. 35(2AB) after giving reasonable opportunity of being heard to the assessee. The Assessee is directed to submit the subject approval of DSIR along with all the material/documentary evidences, which he deems fit to produce before the first appellate authority for examination and decision.appeal of Assessee is allowed for statistical purposes. . - ITA No.5896/Del./2016 - - - Dated:- 31-8-2017 - Shri I.C. Sudhir, Judicial Member And Shri L.P. Sahu, Accountant Member For The Appellant : Sh. Ashish Sonal, A.R. For The Respondent : Ms. Gudrun Nehar, Sr. DR ORDER Per L.P. Sahu, A.M.: This appeal is filed by the assessee against the order of ld. CIT(A)-I, Gurgaon dated 06.09.2016 for the assessment year 2012-13 on the following grounds ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... during the pendency of our said appeal with the CIT (Appeals), Gurgaon. This approval came after a delay of over four years from our initial application subsequent to the recognition by DSIR of our facility as an approved R D unit. (A copy of approval in the Form 3CM is attached). 5. The said approval for our R D facility in Form 3CM u/s 35 (2AB) lays down a cut-off date from 01.04.2015 to 31.03.2017. This is despite the fact that we applied for and consequently received approval for our R D facility as an in-house R D facility from DSIR from the FY 2011-12 (AY 2012-13) and renewed till 31.03.2017. The delay in approval in Form 3CM 3 is purely due to special circumstances of our cases wherein our application for sanction u/s 35 (2AB) remained pending for over four years with DSIR, despite our R D unit being duly recognised by DSIR, as the DSIR did not have any precedence of sanctioning benefit u/s 35 (2AB) to any Software R D facility due to a policy ambiguity (DSIR's reply to our RTI application (Right to Information Act) dt 06 Apr 2015 refers; copy attached). This was due to the ambiguity arising from the fact that software products can be considered a service as wel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is a settled matter of law that a curable mistake that is not mala fide in intent, and does not change the facts or circumstances of the case should be dealt with liberally. a) In Remfry Sons vs. CIT [2005] 276 ITR 1 (Del) the High Court held that: ..... Procedural defects which do not go to the root of the matter should not be permitted to defeat a just cause. There is sufficient power in the courts, under the Code of Civil Procedure, to ensure that injustice is not done to any party who has adjust case. As far as possible a substantive right should not be allowed to be defeated on account of a procedural irregularity which is curable. The Court in ibid case quoting other case law further states: ..... Technicalities of law should not be permitted to hamper the Courts in the administration of justice between the parties. Amendments are allowed in the pleadings to avoid uncalled for multiplicity of litigation. a) The Bombay High Court in Malani Trading Co. vs. CIT (2001) 252 ITR 670 (Bom) have held that merely because there is defect in the memo of appeal, dismissal of appeal without giving opportunity to cure said defect will be improper. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y has been initially recognized by DSIR as an in-house R D facility. The Act nowhere suggests or implies that the cut-off date mentioned in the 3CM certificate issued by the DSIR will be the cut-off date for eligibility of weighted deduction on the R D expenditure incurred. We produce the following case law in the support of our prayer: CIT v. Claris Lifesciences Ltd. [2010] 326ITR 251 (Gujarat High Court) CIT v. Sandan Vikas (India) Ltd. (ITA No. 348 of 2011) (Delhi High Court) 6 ACIT v. MECO Instruments Pvt. Ltd. [2010-TIOL-563-IT] (IT Appellate Tribunal, Mumbai] Sri Biotech v. Asst. CIT (ITA No. 385 of 2014 (IT Appellate Tribunal, Hyderabad) Note: An explanatory note on the above case law is attached as Annexure. 9. In view of the above, it is requested that the above referred AO order u/s 143(3) dt.17.03.2015 as amended by Order u/s 154 dt 16.07.2015 and Notice of Demand No 1580 dt 20.07.2015 u/s 156 of the IT Act 1961 for the assessment year 2012-2013 be quashed on merit being wrong and bad in Law, and the benefit of 200% weighted deduction of expenditure for our DSIR recognized R D facility u/s 35 (2AB) of the IT Act be restored to us. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on highlighting mistakes apparent from records in the original Assessment Order. 05/09/2015. The first hearing was fixed on this date before Hon. Commissioner of Income Tax (Appeals-1), Gurgaon. The matter was explained with written submission and in brief CIT (A) pointed out the technical defect in Appeal with respect to filing of appeal u/s 154 instead of u/s 143(3). The Appeal filed by us (the assessee) u/s 154 instead of u/s 143(3) 8 is a curable defect, which in no way alters the facts on record or the merit of appeal. As this defect can be cured we requested CIT(A) to provide us short time to rectify the defect by filling rectification. This was purely a technical defect. The concurrence to rectify was brought on record by signing the order sheet by CIT(A) and us. 06/09/2015 Within a span of 24 hours, CIT(A) on insignificant technical reason dismissed the appeal by a blanket (12-line) order u/s 250(6) of Income Tax Act 1961. Even after consenting to rectify the mistake during the hearing the previous day, the CIT(A) revoked for the reason best known. Such a dejected act by CIT(A): * Revenue minded decision, even though the sanction u/s 35 (2AB) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e order sheet noted on the date of hearing of first appeal, i.e., 05.09.2015, duly signed by assessee, shows the concurrence to decide the appeal after getting the technical defect rectified by the assessee. However, the record shows that the appeal was disposed of the very next day, i.e., 06.09.2015 without giving 10 any opportunity to rectify the technical defect by filing the revised Form No. 35, thereby revoking the alleged concurrence therefor. No contrary material is placed on record on behalf of the Revenue. Such an act of the ld. CIT(A), in our opinion, is not appreciable under law. 6. The contention of the ld. AR has further been that the appellant was in receipt of approval in Form 3CM u/s. 35(2AB) of the IT Act issued by DSIR, Ministry of Science Technology vide letter No. TU/IV-15 (1372)/2016 dated 21.07.2016 during the pendency of appeal with ld. CIT(A). This approval lays down a cut-off date from 01.04.2015 to 31.03.2017. The contention of the assessee is that this is despite the fact that the assessee applied for and received approval for their R D facility as an in-house R D facility from DSIR from the F.Y. 2011-12 and renewed till 31.03.2017. However, since t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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