2015 (9) TMI 1684 - AT - Income Tax

Tribunal remits tax appeals for fresh assessment, emphasizes assessee's submissions

The Tribunal condoned the delay in filing appeals, admitted the appeals, and remitted the matter back to the Assessing Officer for fresh adjudication. It ... Assessment made u/s 144 - AO disbelieved the correctness of loss returned by the assessee and rejected such loss stating that assessee has not produced books of accounts - HELD THAT:- Commissioner of Income Tax (Appeals) stated that books of accounts were not produced even before him for verification. However the contention of the assessee was that CD was produced before the Commissioner of Income Tax (Appeals) containing the books of accounts. Taking the totality of the facts and circumstances into consideration, in the interest of justice, we are of the opinion that the assessment has to be redone afresh by the Assessing Officer. Thus, we set aside the orders of lower authorities and restore the assessment back to the file of the Assessing Officer with a direction to complete the assessment de novo and in accordance with law, after providing adequate opportunity to the assessee. Denial of exemption u/s 10B/10A - since the approval was not given by the Board set up under Industries (Development & Regulation) Act, 1951 approval obtained by the assessee cannot be accepted as approval under section 10B of the Act for the purpose of claiming deduction - HELD THAT:- Refering to submission of the assessee that the assessee started its business in the year 1999 as a manufacturer and exporter hydraulic cylinder and its components and since then they have been filing their return claiming exemption under section 10B of the Act and the same was allowed the Department upto the assessment year 2008-09 we do not see any reason as to why the assessee should not be allowed deduction under section 10A if it is proved that assessee is entitled for deduction under section 10A instead of section 10B of the Act. Therefore, we are of the view that in case the assessee is not entitled for deduction under section 10B of the Act, the assessee’s claim shall be considered under section 10A of the Act, subject to fulfilling of the conditions therein. Therefore, we set aside the issue to the file of the Assessing Officer for de novo consideration and decide the issue refering to cases TECHNOVATE E SOLUTIONS PVT LTD [2013 (3) TMI 372 - DELHI HIGH COURT] and REGENCY CREATIONS LTD., VALIANT COMMUNICATIONS LTD. [2012 (9) TMI 627 - DELHI HIGH COURT] - Appeals of the assessee are allowed for statistical purposes. Issues Involved:1. Condonation of delay in filing appeals.2. Determination of total income for the assessment year 2008-09.3. Denial of exemption under section 10B for the assessment year 2009-10.Issue-wise Detailed Analysis:1. Condonation of Delay in Filing Appeals:The assessee's appeals were delayed by eight days due to the authorized signatory's continuous travel and preoccupation with other business matters. The Tribunal found the reasons satisfactory and condoned the delay in the interest of justice, thereby admitting the appeals.2. Determination of Total Income for the Assessment Year 2008-09:The assessee's appeal contested the Commissioner of Income Tax (Appeals)'s decision, which determined the total income as Nil against a reported loss of Rs. 2,20,26,369/-. The assessment was completed under section 144 because the assessee failed to produce books of accounts due to labor unrest and management changes. The Tribunal noted that the assessee had submitted various details and a CD containing the books of accounts before the Commissioner of Income Tax (Appeals). It found that the lower authorities erred in not considering these submissions. Consequently, the Tribunal set aside the orders of the lower authorities and remitted the matter back to the Assessing Officer for fresh adjudication, ensuring the assessee is given adequate opportunity to present their case.3. Denial of Exemption under Section 10B for the Assessment Year 2009-10:The Assessing Officer denied the exemption under section 10B, stating that the assessee's approval was not from the Board appointed under the Industries (Development & Regulation) Act, 1951, but from the Development Commissioner, which was not sufficient for section 10B purposes. The Commissioner of Income Tax (Appeals) upheld this decision, noting that the recognition as a 100% Export Oriented Unit (EOU) was only effective from 23.03.2010, not covering the assessment year 2009-10.The assessee argued that they had been recognized as a 100% EOU since 2005, with renewals up to 2015, and that the approval by the Development Commissioner should suffice. The Tribunal referred to the Delhi High Court's decisions in the cases of CIT Vs. Regency Creations Ltd. and CIT Vs. Technovate E Solutions P. Ltd., which addressed similar issues. It concluded that the matter should be reconsidered by the Assessing Officer, allowing the assessee to present evidence of their continuous recognition as a 100% EOU. Furthermore, if the exemption under section 10B is not applicable, the Assessing Officer should consider the assessee's eligibility for deduction under section 10A, provided the conditions are met.Conclusion:The Tribunal allowed both appeals for statistical purposes, directing the Assessing Officer to reassess the issues afresh, considering the assessee's submissions and the relevant legal precedents, and ensuring the assessee is given adequate opportunity to present their case.