TaxTMI 
TaxTMI 
2018 (2) TMI 1092
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....and in the circumstances of the case and in law, the Ld CIT(A) has erred in directing the Assessing Officer to allow the assessee's claim u/s.80IC as reopening was not valid being only change of opinion, without appreciating that the case was reopened on the basis of material which was brought on record that the same was wrongly allowed to the assessee as no claim was made in the original return and the failure of the AO to take notice of this fact constitutes a new information/tangible material on the basis of which the assessment can be reopened. 3. For these and other grounds that may be urged at the time of hearing, the decision of the CIT(A) may be set aside and that of the AO restored." 3. The assessee is engaged in the business of development of software and sale and import of computer hardware cards mainly used for videography and photography. The assessee has two units, one at Mumbai and the other at Haridwar. The assessee filed return of income with Revenue u/s 139(1) on 30.09.2008, declaring total income of Rs. 8,14,50,880/-. Thereafter the assessee filed revised return of income with Revenue on 25.02.2010 declaring total income of Rs. 62,02,600/-. In the revised ....
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....rification of the records, it is seen that:- (a) Assessee Company had not claimed deduction u/s. 80IC in the original return of income filed u/s 139(1), as mandatorily required under the provision of Sec 80AC. (b) Section 139(5) of the Act permits filing of revised return if assessee discovers any bona-fide omission or wrong statement. In this case revised return was filed in view of change of opinion expressed by another accountant that too at a later date. (c) The mandatory certificate required in Form 10CCB was also obtained on 22.02.2010. From this, it is obvious that deduction claimed cannot be construed as claimed within the due date specified u/s 139(1). Accordingly, the assessee had failed to fulfil mandatory condition of filing return of income within lime limit stipulated u/s 139(1) and entertaining the claim of deduction with reference to revised return. In the scenario cited above was against the provision of Section 80IC as well as the legislative intent behind it Thus, the deduction u/s 80IC is needed to be withdrawn. In view of the above, I have reason to believe that income has escaped assessment far A Y.2008- 09 and the same is required to be brought to t....
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.... learned CIT-A rejected contentions of the assessee by holding as under, vide appellate orders dated 18-04-2016:- "3.3 I have considered the appellant's submissions. In this case appellant had filed Return of income for A.Y. 2008-09 on 30.9.2008 in which he had declared total income of Rs. 8,14,50,880/-. Later Appellant filed revised return on 25.2.2010 declaring total income of Rs. 62,02,600/. The appellant's account was re-audited by Chartered Accountant firm M/s Kaushik Das and Associates on 22.2.2010 and obtained revised 3CD report and certificate in Form No. 10CCB and claimed deduction u/s 80IC of Rs. 7,52,48,285/-. Appellant has two units, one in Haridwar and second one in Mumbai. Appellant had maintained separate account books for both units. For Haridwar unit appellant had claimed deduction u/s 80IC. However, AO after raising various queries and considering the revised return had allowed the 80IC claim of the appellant for Rs. 6,90,45,684/-. However, after the original assessment order was passed on 29.11.1010, AO had reopened the assessment after recording the following reasons: In this case, the assessment was completed u/s 143(3) on 29.10.2010 determining the....
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....g to the AO appellant is not eligible to claim 80IC benefit as appellant had not filed the mandatory certificate required in the Form No.10CCB while filing the original return of income u/s 139(1) of the Act on 30.9.2008. According to the AO, appellant should have filed Form No.10CCB with the original return of income. As appellant had not filed Form No.10CCB with the original return of income u/s 139(1), appellant is not eligible to claim the deduction u/s 80IC of the Act. Hence in the reopened assessment order AO has withdrawn the appellant's claim of Rs. 6,89,97,805/- which was allowed earlier u/s 80IC of the Act. 3.4 In the submissions of the appellant, appellant states that the facts mentioned in the reasons recorded were, already existing while considering the appellant's claim u/s 80IC based on the revised return filed along with Form No. 10CCB was considered during the assessment proceedings and this reopening of assessment without any tangible material is not permissible in law. According to the appellant, this reopening was based on merely change of opinion. To examine the claim of the appellant, original assessment order was perused. In the original assessment ....
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....id. 3.6 Further on the merits of the case AO reopened the assessment on the ground that appellant had filed Form No.10CCB alongwith the revised return. This issue was considered by Gujarat High Court in the case of ITO v.VXL India Ltd.[2009] 312 ITR 187 where it is held that non-furnishing of such report at the time of filing of return of income but at a subsequent stage before the assessment proceedings get completed, would not result in denial of such benefit. It is clear from the above Gujarat High Court case that Form No. 10CCB can be filed later. In this case Form No. 10CCB was filed alongwith revised return, hence appellant is eligible to claim 80IC benefit. Further even AO is of the opinion that Form No. 10CCB has to be filed only with original return of income. This issue was considered in the case of Parmeshwar Cold Storage (P) Ltd. v ACIT(2011) B ITR 172(Ahm} (Trib.) where it is held that only condition for claiming the benefit as per 80IC is that original return should be filed in time and if a claim is not made in original return, it can be made subsequently. In the present case, the original return was filed in time but claim of 80IC was made while filing the revised....
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....e u/s 139(1) was not deliberated by the AO in the assessment framed u/s 143(3) as this aspect was never looked into by the AO and hence this is not a case of change of opinion. The Ld. DR submitted written submissions which are duly taken on record and placed in the file. In the said written submissions, the learned DR relied upon following case laws:- a) Eleganza Jewellery Limited v. CIT (20140 62 taxmann.com 46(Bom HC). b) CIT v. National Tyre & Rubber Tyres Co. Of India Limited (2011) 15 taxmann.com (ker.) (c) ITO v. Lakmani Mewal Das (1976) 103 ITR 437(SC) (d) Phool Chand Bajrang Lal v. ITO (1993) 203 ITR 456(SC) (e) Raymond Woolen Mills v. ITO (1999) 236 ITR 34(SC) (f) Desh Raj Udyog v. ITO (2009) 318 ITR 6(All.) The Ld. AR on the other hand submitted that originally return of income was filed in time by the assessee with the Revenue as stipulated u/s. 139(1). It was submitted that conditions of Section 80IC is to file return of income in time u/s 139(1) as stipulated u/s. 80AC which return of income u/s 139(1) was duly filed on 30.09.2008 which is placed in paper book page no. 1 . It was submitted by learned counsel for the assessee that revised return of income ....
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....ji), decision of ITAT in the case of Ramesh Kumar Rathi (2005) 143 Taxman 33 (Kol) (Magadh) . The assessee also relied upon the decision of ITAT- Ahmedabad in the case of Parmeshwar Cold Storage Pvt. Ltd. v. ACIT (2012) 49 SOT 67 (Ahm). It was submitted that claim for deduction u/s 80IC can be made at any time before the completion of assessment . Our attention was also drawn to page no.66- 68 of the paper book wherein the AO has disposed of the objections raised by the assessee to the reopening of the assessment u/s 147, vide orders dated 20-01-2013. It was submitted that filing of audit report within time stipulated under the provisions of the 1961 Act is directory in nature and the same can be filed even during assessment stage . It was submitted by learned counsel for the assessee that revised return of income is an extension of original return of income and no tangible incriminating material is in the possession of the Revenue to reopen concluded assessment. The assessee relied upon the decision of Hon'ble Bombay High Court vide orders dated 28-01-2015 in ITA No. 285 of 2013 in the case of CIT v. Jet Speed Audio Pvt. Ltd. Bombay High Court. The assessee also relied upon the de....
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....Ld. DR submitted in the rejoinder that query with respect to compliance of claiming deduction u/s 80IC in the return of income filed u/s. 139(1) was not raised during the original assessment. The Ld DR relied upon the decision of Hon'ble Supreme Court in the case of Kalyanji Mavji & Co. V. CIT reported in (1976) 102 ITR 287(SC). It was also submitted that this is Revenue's appeal and no grounds of appeal challenging the issue on merits has been raised by the Revenue and the grievance of the Revenue is that since the claim of deduction u/s 80IC was not filed by the assessee in return of income filed u/s 139(1) thereby infringing 80AC of the 1961 Act and was raised later in the revised return of income filed u/s 139(1), the said claim of deduction u/s 80IC cannot be allowed. 6. We have considered rival contentions and perused the material on record including orders of authorities below and case laws relied upon by both the parties. We have observed that the assessee is engaged in the business of development of software and sale and import of computer hardware cards mainly used for videography and photography. The assessee has two units, one at Mumbai and the other at Haridwar. The a....
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....d 29-11-2010 has dealt with the allowability of deduction u/s 80IC in details after duly considering the revised return of income filed by the assessee on 25-2-2010 which led to partial allowability of claim of deduction u/s 80IC wherein the AO allowed deduction u/s 80IC to the tune of Rs. 6,89,97,805/- as against the claim of deduction to the tune of Rs. 7,52,48,284/- filed by the assessee u/s 80IC leading to denial of deduction to the tune of Rs. 62,50,479/- on the grounds of apportionment of the common expenses between eligible and non eligible unit. The detailed discussions w.r.t. allowability of claim for deduction u/s 80IC found mentioned in the assessment order framed by Revenue u/s 143(3). Thereafter revenue audit team raised an objection that since the claim of deduction u/s 80IC was never raised in the return of income filed u/s 139(1) , the same cannot be allowed keeping in view express provisions of Section 80AC of the 1961 Act. The AO accepted the contentions of the revenue audit team and moved proposal dated 15-3-2013 before learned CIT for reopening of the concluded assessment u/s 147 which stood accepted by learned CIT vide approval dated 22-03-2013. Thereafter , Re....
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....riginal assessment u/s 143(3), the AO partially disallowed the deduction u/s 80IC on the grounds of allocation of common expenses between eligible and non eligible unit. Provisions of Section 80AC contemplates that for allowing deduction u/s 80IC, the assessee is required to file return of income u/s 139(1). The assessee did file return of income u/s 139(1) within stipulated time albeit no claim of deduction u/s 80IC was filed in the said return of income, which claim of deduction u/s 80IC was later filed for the first time for the impugned assessment year vide revised return of income filed by the assessee with revenue u/s 139(5).The said revised return of income u/s 139(5) was filed by the assessee with the Revenue within stipulated time as prescribed under the statute. The provisions of Section 80AC did not lay down condition that deduction u/s 80IC to be allowed must be claimed in the return of income filed u/s 139(1) rather it stipulates that return of income is required in these cases to be filed u/s 139(1) and if the assessee filed belated return u/s 139(4) or did not file any return at all will disentitle assessee for the claim of deduction u/s 80IC as was applicable for th....
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....ction u/s 80IC in the return of income filed u/s 139(1) as filing claim of deduction u/s 80IC in violation of tax-audit report could had triggered severe consequences in the form of liabilities towards tax, interest and penalties as well criminal liability by way of prosecution, but once the revenue after scrutinising the claim for AY 2007-08 in scrutiny proceedings u/s 143(2) r.w.s. 143(3) had allowed deduction u/s 80IC vide assessment orders dated 24-12-2009 passed u/s 143(3), then there remains nothing for the assessee to have not lodged its claim for AY 2008-09 which triggered assessee to obtain fresh tax audit report dated 22-02-2010 in form no. 3CA/3CD u/s 44AB and certificate in form no. 10CCB to lodge its claim for deduction u/s 80IC vide by filing revised return of income u/s 139(5) which was filed on 25-02-2010 and hence filing of revised return of income u/s 139(5) was supported by a bonafide reasons and is in fact extension of the original return of income filed by the assessee on 30-09-2008.Section 139(5) allows assessee to file revised return of income wherein the assessee finds some bonafide mistake and error in the return of income filed u/s 139(1) which return of i....
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....imited(supra) supports the contention of the assessee. The reliance of Revenue on the decision of Hon'ble Supreme Court in the case of Kalyanji Mavji & Co(supra) is not correct as on this aspect of the oversight in passing assessment order will give AO the jurisdiction to issue notice u/s 148 was held by Hon'ble Supreme Court in the case of Indian and Eastern Newspaper Society v. CIT (119 ITR 996) to be not a correct view . The Hon'ble High Court of Bombay in Jet Speed Audio Private Limited(supra) in para 11 has dealt with this in details. This position was reiterated by Hon'ble Supreme Court in the case of ALA Firms v. CIT (183 ITR 285) . The decision of Hon'ble Supreme Court in the case of Kelvinator of India Limited(Supra) as well following decisions of Hon'ble Bombay High Court in the case of GKN Sinter Metals Limited(supra) and decision in the case of Asteroid Trading and Investments Private Limited (supra) and Asian Paints Limited(supra)supports the contentions of the assessee that powers u/s 147/148 is to reassess and not to review the decisions of the AO as change of opinion is not permissible for reopening of the concluded otherwise there will be no end to litigation. The ....