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2017 (4) TMI 472 - AT - Income TaxCondonation of delay - Held that - It can be seen from the said order of the Hon ITAT that the assessee company s grievance about the quantum of deduction under chapter VIA in respect of 80HH, 80I & 80IA continues and had remained to be addressed. We found that the assessee company was prevented by a sufficient and reasonable cause for the delay on account of pursuit of the alternative remedy up to the date of receipt of the Hon ble ITAT s order on 08.02.2012 involving the adjudication of the same issue that was under dispute and was under a bonafide belief that it had not to file a separate appeal against order dt. 27.03.2003 for giving effect to appellate order. If delay is not condoned, the assessee company will have no other option to seek remedy under law and would be deprived of natural justice. Even if appeal is admitted the same would be decided on the merits of the case and therefore admission of the same would not prejudice the interest of the revenue department.
Issues:
1. Condonation of delay in filing appeal before CIT(A) 2. Income not considered and expenses deducted for calculation of profits eligible for deduction u/s 80HH, 80I & 80IA Issue 1: Condonation of Delay in Filing Appeal Before CIT(A): The appeal was filed by the assessee against the order of CIT(A) for the assessment year 1998-99, challenging the order passed under section 154 r.w.s. 250 of the IT Act. The primary contention was the condonation of delay in filing the appeal. The assessee argued that the delay was due to pursuing an alternative remedy before a higher forum against a related order. The delay was attributed to a bonafide belief that no separate appeal was required until the ITAT passed an order on a related issue. The appellant pleaded that the delay should be condoned as there was a reasonable cause for not filing the appeal in time. The Tribunal, after considering the circumstances and legal precedents, found that the pursuit of an alternative remedy was a valid reason for the delay. Therefore, the delay was condoned, and the matter was restored back to the file of the CIT(A) for a decision on merits. Issue 2: Income Not Considered and Expenses Deducted for Calculation of Profits Eligible for Deduction u/s 80HH, 80I & 80IA: The second issue revolved around the computation of profits eligible for deduction under sections 80HH, 80I, and 80IA. The appellant contended that certain expenses, such as corporate expenses and interest on corporate funds, were not related to the new industrial undertaking and should not have been deducted from the profits derived from such undertakings. Additionally, the appellant argued that income from specific sources, like profit on the sale of assets and insurance claims, should have been included in the profits eligible for deduction. The Tribunal noted that the appellant's profits eligible for deduction were reduced due to the allocation of expenses and exclusion of certain receipts. The appellant pleaded that these expenses and income should not have been deducted from the income of the new industrial undertaking. The Tribunal, considering the arguments and evidence presented, allowed the appeal in part for statistical purposes, directing a review of the matter on merits by the CIT(A). In conclusion, the judgment by the Appellate Tribunal ITAT Mumbai addressed the issues of condonation of delay in filing the appeal before CIT(A) and the computation of profits eligible for deduction under sections 80HH, 80I, and 80IA. The Tribunal, after thorough analysis, decided to condone the delay based on valid reasons and allowed the appeal in part for further review on merits regarding the computation of profits for deduction purposes.
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