2014 (1) TMI 1265 - AT - Income Tax

Condonation of delay Deduction u/s 80HHC of the Act profit on sale of DEPB licence - Held that - The assessee was not guilty of negligence or such attributes in not filing the appeals before the Tribunal in time - In fact, the assessee-company has earnestly made a follow-up of its claim of deduction under section 8OHHC in respect of the DEPB - This is clear from the fact that the assessee has claimed deduction Thus, it would be just and proper to condone the delay caused in filing the appeals Delay condoned. The quantum of deduction available to the assessee under section 8OHHC in the light of DEPB is to be recomputed by the assessing authority as decided Topman Exports vs. CIT 2012 (2) TMI 100 - SUPREME COURT OF INDIA - The assessee is entitled for the benefit to the extent explained by the Hon ble Supreme Court the matter is remitted back to the AO for re-computation quantum of deduction u/s. 80HHC of the Act Decided in favour ofAssessee.

Summary

Issues:
1. Deduction under section 80HHC of the Income-tax Act on profit from the sale of DEPB license.
2. Delay in filing appeals before the Tribunal.
3. Condonation of delay.
4. Interpretation of the judgment of the Hon'ble Supreme Court in the case of Topman Exports vs. CIT, 342 ITR 49.
5. Recomputation of deduction under section 80HHC.

Analysis:

Issue 1: Deduction under section 80HHC
The Appellate Tribunal dealt with the issue of deduction under section 80HHC of the Income-tax Act on the profit from the sale of Duty Entitlement Pass Book (DEPB) license. The Assessing Officer had withdrawn the benefit of deduction under section 80HHC as the turnover of the assessee exceeded Rs. 10 crores. The Commissioner of Income-tax(Appeals) upheld this decision, relying on the judgment of the Hon'ble Bombay High Court. However, the assessee appealed, citing the subsequent judgment of the Hon'ble Supreme Court in the case of Topman Exports vs. CIT, 342 ITR 49, which supported the assessee's claim. The Appellate Tribunal, after considering the arguments, held that the assessee was entitled to the benefit of deduction under section 80HHC as per the Supreme Court's judgment.

Issue 2: Delay in filing appeals
There was a delay of 432 days in filing the appeals before the Tribunal. The assessee provided detailed reasons for the delay, stating that based on advice from tax consultants and subsequent legal developments, they initially decided not to appeal the Commissioner of Income-tax(Appeals)'s decision. However, following the reversal of the Bombay High Court's decision by the Supreme Court in favor of the assessee, the appeals were filed without further delay. The Tribunal, after considering the circumstances, condoned the delay and admitted the appeals for hearing and disposal.

Issue 3: Condonation of delay
The Tribunal, after examining the reasons provided by the assessee for the delay in filing the appeals, concluded that the assessee had not been negligent and had diligently pursued their claim for deduction under section 80HHC. Considering the legal developments and advice received, the Tribunal found it just and proper to condone the delay caused in filing the appeals.

Issue 4: Interpretation of the Supreme Court's judgment
The Appellate Tribunal analyzed the judgment of the Hon'ble Supreme Court in the case of Topman Exports vs. CIT, 342 ITR 49, and interpreted that an assessee with an export turnover exceeding Rs. 10 crores could still benefit from the exclusion of a smaller figure from profits of the business under Explanation(baa) to section 80HHC. The Tribunal found merit in the assessee's argument that the Supreme Court's judgment supported their claim for deduction under section 80HHC.

Issue 5: Recomputation of deduction
In light of the Supreme Court's judgment, the Appellate Tribunal remitted all files back to the Assessing Officer for the recomputation of the quantum of deduction available to the assessee under section 80HHC. The Tribunal directed the assessing authority to recompute the deduction in accordance with the law and the Supreme Court's judgment in the case of Topman Exports vs. CIT, 342 ITR 49. As a result, the appeals filed by the assessee were treated as allowed for statistical purposes.

This comprehensive analysis of the judgment highlights the key issues addressed by the Appellate Tribunal and the detailed reasoning behind their decisions.