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2012 (8) TMI 221 - AT - Income TaxDeduction under section 80-IB - assessee has withdrawn its claim of deduction under Section 80IB, which was accompanied by revised return assessee again claimed deduction - Held that - Conditions required for claiming deduction under Section 80IB stands fully satisfied and all such evidences and enquiry as done by the AO will not render the claim of the assessee infructuous - Once these conditions are fulfilled, the assessee is entitled for statutory deduction or claim to which he is entitled to. Mere consent or acquiescence by the assessee cannot take away the otherwise a legitimate claim to which he is entitled to - assessee has been held to be carrying on manufacturing activities of pre-fabricated steel buildings in the subsequent years for which the claim under Section 80IB has been allowed by the Assessing Officer himself in the order passed under Section 143(3) read with Section 148 - direct the Assessing Officer to allow the claim for deduction under Section 80IB in the impugned year also as have been allowed in the subsequent years by the Department, as there is no change of facts and circumstances.
Issues Involved:
1. Condonation of delay in filing the appeal. 2. Denial of deduction under Section 80-IB of the Income Tax Act, 1961. 3. Validity of the revised return filed by the assessee. 4. Department's Cross Objection and its condonation of delay. 5. Applicability of Rule 27 of the Income Tax Tribunal Rules, 1963. Detailed Analysis: 1. Condonation of Delay in Filing the Appeal: The appeal was barred by a delay of 91 days. The appellant filed a petition for condonation of delay, accompanied by an affidavit citing reasons such as the order not being communicated due to an employee's unscheduled leave and subsequent medical issues. The Tribunal condoned the delay, acknowledging the reasons provided and the supporting medical files. 2. Denial of Deduction under Section 80-IB: The main contention was the denial of deduction under Section 80-IB amounting to Rs. 69,32,870/-. The assessee had initially claimed the deduction in its return for the Assessment Year 2000-01, which was later withdrawn through a revised return. The Assessing Officer (AO) conducted detailed inquiries, questioning the genuineness of machinery purchases and the commencement of business activities. The AO concluded that the assessee did not fulfill the conditions for deduction under Section 80-IB, particularly focusing on the timing and authenticity of machinery purchases and the commencement of manufacturing activities. Before the CIT(A), the assessee argued that it met all conditions for the deduction, including not being formed by reconstruction or splitting of an existing business and not using previously used machinery. Despite agreeing that the assessee seemed to fulfill the conditions, the CIT(A) upheld the AO's decision based on the assessee's withdrawal of the claim in the revised return. 3. Validity of the Revised Return Filed by the Assessee: The assessee contended that the revised return filed in response to the notice under Section 148 was invalid, as such returns cannot be revised under the law. The Tribunal noted that the revised return was filed to withdraw the deduction claim due to difficulties in substantiating the claim and to avoid litigation. However, the Tribunal emphasized that statutory claims should not be denied based on procedural admissions if the conditions for such claims are met. The Tribunal allowed the assessee to challenge the withdrawal and claim the deduction under Section 80-IB. 4. Department's Cross Objection and its Condonation of Delay: The Department filed a Cross Objection challenging the CIT(A)'s observation that the assessee fulfilled the conditions of Section 80-IB. The Cross Objection was filed after a delay of 728 days, and the reasons provided for the delay were deemed insufficient by the Tribunal. Consequently, the Cross Objection was dismissed. 5. Applicability of Rule 27 of the Income Tax Tribunal Rules, 1963: The Tribunal addressed whether the Department could challenge the CIT(A)'s findings under Rule 27, which allows a respondent to support the order appealed against on any grounds decided against them, even if no appeal or Cross Objection was filed. The Tribunal clarified that Rule 27 applies to both the Department and the assessee, allowing the Department to defend the order based on grounds decided against it. Conclusion: The Tribunal concluded that the assessee met all the conditions for deduction under Section 80-IB. It reversed the findings of the AO and CIT(A), directing the AO to allow the deduction for the impugned year, consistent with subsequent years where the deduction was granted. The Tribunal dismissed the Department's Cross Objection due to insufficient reasons for delay and did not adjudicate the issue of the revised return's validity, deeming it academic after allowing the deduction on merits.
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