2014 (12) TMI 975 - HC - Income Tax

Grant of deduction u/s 80IC Whether assessee had failed to make a claim for the same in its return of income nor filed revised return of income Held that - The Tribunal was rightly of the view that the Revenue has not disputed the finding of the CIT(A) that the assessee was eligible for deduction u/s 80IC of the Act - No material was brought to show that the assessee was not eligible for deduction u/s 80IC - the assessee has filed a petition u/s 154 of the Act at the earliest point of time seeking revision of intimation u/s 143(1) of the Act and the matter was pursued by the assessee diligently even before the CIT(A) - when an appeal is a continuation of the original assessment proceedings, the Tribunal was justified in relying upon RAMLAL, MOTILAL AND CHHOTELAL Versus REWA COALFIELDS LTD. 1961 (5) TMI 54 - SUPREME COURT - wherein it is held that the State authorities should not raise technical pleas if the citizens have a lawful right - the authorities under the Act are required to ensure that only legitimate taxes due are assessed and collected Tribunal rightly upheld the findings of the CIT(A) that the assessee is eligible for deduction u/s 80IC thus, the order of the Tribunal is upheld Decided against revenue.

Summary

Issues: Challenge to order of Income Tax Appellate Tribunal regarding deduction under Section 80IC of Income Tax Act, 1961 for assessment year 2007-2008.

Analysis:
1. Issue (i): Whether the Tribunal was right in affirming the decision of the Commissioner of Income Tax (Appeals) to grant deduction under Section 80IC of the Income Tax Act.
- The assessee, engaged in pharmaceutical business, filed a return of income for assessment year 2007-2008 claiming deduction under Section 80IC.
- The Assessing Officer initially ignored the deduction claim, leading to a rectification petition by the appellant.
- The Commissioner of Income Tax (Appeals) allowed the deduction, which was upheld by the Tribunal.
- The Tribunal observed that the Revenue did not dispute the eligibility of the assessee for deduction under Section 80IC.
- Citing the decision in Ram Lal v. Reva Coal Field Ltd., the Tribunal emphasized the duty of authorities to assist taxpayers in legitimate tax assessment.

2. Issue (ii): Whether the Tribunal erred in upholding the deduction claim under Section 80IC when the assessee had not initially made the claim in the return of income.
- The appellant contended that the claim under Section 80IC was not made in the original return but was later rectified.
- The Tribunal justified its decision by referring to the case law emphasizing the importance of assisting taxpayers in legitimate tax assessment.
- The Tribunal dismissed the Revenue's appeal, stating that there was no reason to interfere with the order of the Commissioner of Income Tax (Appeals).

3. Additional Observations:
- The Court highlighted the importance of timely rectification petitions and diligent pursuit of matters before tax authorities.
- Referring to a previous case, it emphasized the acceptance of bona fide errors in tax matters.
- The Court found no infirmity in the Tribunal's decision confirming the eligibility of the assessee for deduction under Section 80IC.
- Ultimately, the Court dismissed the appeal, stating that no substantial question of law arose for consideration.

This detailed analysis of the judgment provides a comprehensive understanding of the issues raised, the arguments presented, and the legal principles applied in the decision-making process.