TMI Blog2023 (3) TMI 1099X X X X Extracts X X X X X X X X Extracts X X X X ..... number of employees were less than ten, as some of them were absent on account of leave etc. These facts have not been appreciated by the AO while passing the assessment order as it was not the case of the AO that the Department has undertaken an independent enquiry to find out as to whether ten or more workers were working and have found that the actual numbers of workers were actually less than ten. The sole reliance on the report of PF department is not tenable. AO had not pointed out any specific defect in the salary register, wages register attendance register and payment of wages register produced before him during the assessment proceedings to rebut the claim of the appellant assessee that 10 or more workers were working in the factory unit of the assessee. Thus the matter is remanded to the AO on the limited issue whether, there were 10 or more workers employed in the factory unit of the assessee to qualify for claim of deduction u/s 80IB(iv) - Appeal of the assessee is allowed for statistical purposes. - I.T. A. No. 613/Asr/2017 - - - Dated:- 14-3-2023 - DR. M. L. MEENA , ACCOUNTANT MEMBER AND SH. ANIKESH BANERJEE , JUDICIAL MEMBER For the Appellant : Sh. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has been filing PF Returns and whether any inspection was carried out by the PF office in the case of the assessee. It was informed by the PF office that on two occasions the Inspections were carried out in the premises of the assessee and it was found out that 7 to 8 employees were working in the factory unit. The AO, therefore, held that the assessee was not fulfilling the mandatory conditions of keeping at least 10 workers to get the benefit u/s. 80IB of the Income Tax Act. It was also noticed by the AO that as per the form 10 CCBB submitted by the assessee it was found that in col. no. 18 no figures have been given about the number of employees engaged in the unit. The AO, therefore, disallowed the claim of deduction made by the assessee u/s. 80IB of the Income tax Act on the ground that it has not fulfilled the prescribed conditions under section 80IB of the Act. 4. Aggrieved by the Assessment Order, the assesse filed appeal before the CIT(A) who has granted relief by deleting the addition by observing as under: 5. Determination: I have considered the facts of the case and submission made by the appellant stated as above. During the appellate proceedings ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ein it has held that the provisions of PF Act and those of Income tax Act are set out in different background with different purposes. It was also submitted that the report of PF department nowhere states that the appellant was not employing ten workers for the purpose of claiming deduction u/s. 80IB; at the most it throws light on the number of workers present on that particular day when the said inspection was carried out by the PF Department. It was also submitted by the appellant that department had not conducted an independent enquiry to find out the actual numbers of workers. The appellant has further claimed that in the immediate preceding year i.e., A.Y 2012-13 and immediate succeeding year i.e., A.Y 2014-15 the deduction u/s. 80IB was allowed by the Department and to apply the rule of consistency the Department should not change its stand. The appellant has then placed the reliance on the two decisions of the Hon'ble Supreme Court in the case of Radhasoami Satsang 193 ITR 321 and CIT Central vs. M/s. Excel Industries Ltd in support of its contentions. I have considered the above submission and also the judicial decision on which the appellant has placed rel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tment, which makes it clear that assessee did not have 10 workers during the year under consideration. He pleaded that the impugned order may be set aside and the assessment order be restored. 6. Per contra, the defendant Ld. counsel strongly supported the impugned order. He reiterated the submissions made before the Ld. CIT(A) as under: Submissions of the Appellant : 1. At the outset, it is submitted that during the assessment proceedings for the A.Y 2013-14, the case could not be presented in proper way as during that time, agitation on account of JAT reservation was going on in Haryana, and the erstwhile counsel belonged to Haryana and therefore could not frequently travel between Haryana and Jammu for representing the case. Hence the facts of the case were not presented in a proper manner before the then AO and for that matter the facts were also not appreciated by the then AO. The issue under consideration has been examined during the assessment proceedings for the A.Y 2012-13 and also for the A.Y 2014-15 under scrutiny proceedings U/s 143(3) of the Act and the appellant has been granted deduction U/s 80IB of the Act. The, the then AO has therefore carefully e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cases of CIT Vs. Prithviraj Bhoorchand [2005] 280 ITR 94 (Guj) and CIT Vs. Jyoti Plastic Works (P) Ltd. 203 Taxman 546/16 Taxmann.com 172 (Bom) that contract labourers must also be counter as 'workers' in terms of section 80IB (iv). The ratio decidendi of the same was that, since under the provisions of the 80 IB (iv) of the Act, the term 'workers' has not been defined, the same inter alia include casual, contractual and temporary workers also for the purpose of granting deduction U/s 80IB (iv). 5. For the sake of clarity it is one again clarified that in the case of the Appellant the actual numbers of workers (i.e. excluding any causal, contractual and temporary workers) for the year under consideration was ten or other words not less than ten. The Appellant has already furnished the necessary details in regard to the same before your goodself for the year under consideration. 6. The fact of the matter is that for the A. Y 2013-14, the Appellant has employed ten or more persons for the purpose of production the poultry feed and the same did not included any workers of the security guards etc. The same can be verified from the assessment records of the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IB. 9. WITHOUT PREJUDICE TO THE ABOVE, the appellant has been granted deduction U/s 80IB consistently for the A.Y 2012-13 and 2014-15, therefore applying the rule of consistency upheld by the Apex Court in the case of Radhasoami Satsang 193 ITR 321 the judicial discipline therefore demands the view already accepted should not be changed if there are no changes in facts. It is very important to note that the Hon'ble Supreme Court in its latest judgment in CIT Central vs. M/s. Excel Industries Limited delivered on 08.10.2013 has endorsed its own judgment in Radhasoami Satsang (supra) and it has held as follows: It appears from the record that in several assessment years, the Revenue accepted the order of the Tribunal in favour of the assessee and did not pursue the matter any further but in respect of some assessment years the matter was taken up in appeal before the Bombay High Court but without any success. That being so, the Revenue cannot be allowed to flip-flop on the issue and it ought let the matter rest rather than spend the tax payers money in pursuing litigation for the sake of it The Appellant has tried to encompass the submissions which are applicab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the purpose of claiming deduction U/s 80IB(iv), at the most it throws light on the number of workers present on that particular day when the alleged inspection was carried out by the PF department. 9. It is evident from the attendance register of the appellant, that on that particular day the number of employees were less than ten, as some of them were absent on account of leave etc. These facts have not been appreciated by the AO while passing the assessment order as it was not the case of the AO that the Department has undertaken an independent enquiry to find out as to whether ten or more workers were working and have found that the actual numbers of workers were actually less than ten. The sole reliance on the report of PF department is not tenable. Further, the AO had not pointed out any specific defect in the salary register, wages register attendance register and payment of wages register produced before him during the assessment proceedings to rebut the claim of the appellant assesse that 10 or more workers were working in the factory unit of the assessee. It is pertinent to mention that the issue under consideration has been examined during the assessment proceedings f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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