2017 (6) TMI 604 - HC - Income Tax

Deduction u/s 80IB (10) - Claim not made in original return or even the revised return - Held that - The claim made by the assessee company does not form part of the original return or even the revised return, it could still be considered, if, the relevant material was available on record, either by the appellate authorities, (which includes both the CIT (A) and the Tribunal) by themselves, or on remand, by the Assessing Officer. In the instant case, the Tribunal, on perusal of the record, found that the relevant material qua the claim made by the assessee company under Section 80IB (10) was placed on record by the assessee company during the assessment proceedings and therefore, it deemed it fit to direct its reexamination by the Assessing Officer. In our opinion, the view taken by the Tribunal is unexceptionable and therefore, does not merit any interference. View taken by the Tribunal is unexceptionable and therefore, does not merit any interference.

Issues Involved:
1. Whether the Tribunal was right in directing the AO to consider the claim made under Section 80IB(10) even though the assessee did not make any such claim in the return of income filed?
2. Whether the Tribunal's direction to the AO to consider the claim afresh in respect of deduction under Section 80IB(10) is against the law laid down by the Apex Court in the case of Goetze India Ltd.?

Detailed Analysis:

Issue 1: Tribunal's Direction to Consider Section 80IB(10) Claim

Background facts:

The assessee company filed its return for AY 2011-12, disclosing a total income of ?3,63,39,110/- and claiming a deduction of ?6,19,525/-. The return was processed, and an assessment order was passed under Section 143(3) of the Act, accepting the income as returned by the assessee company. However, the assessee company did not claim a deduction under Section 80IB(10) in the original return but made the claim during the assessment proceedings by providing the necessary details and Form 10CCB. The AO bypassed this claim, leading the assessee to appeal to the CIT(A), which was dismissed on the grounds that the claim was not part of the original return. The Tribunal reversed the CIT(A)'s order, directing the AO to reconsider the claim based on the documents already filed.

Submissions of counsels:

The Revenue argued that since the claim was not made in the original or revised return, it could not be permitted. The Tribunal's direction was contested as being against the law, citing the Supreme Court's judgment in Goetze India Ltd. The assessee countered by highlighting that the claim was made during the assessment proceedings and should be considered by the appellate authorities based on the material on record.

Reasons:

The court noted that the claim for deduction under Section 80IB(10) was made during the assessment proceedings with all requisite details. The CIT(A) rejected the claim solely because it was not part of the original return, despite the Department accepting similar claims in preceding and succeeding years. The Tribunal's decision was based on the principle that appellate authorities have the power to consider claims based on available material, even if not included in the original return.

The Supreme Court in Goetze India Ltd. ruled that while the AO cannot entertain claims not made in the original return without a revised return, this does not limit the Tribunal's power to consider such claims under its appellate jurisdiction. This principle was supported by other judgments, including National Thermal Power Co. Ltd. and Jute Corporation of India Ltd., which emphasized the appellate authorities' plenary powers to ensure correct tax assessment based on available facts.

Judgments cited by the Revenue, such as Stepwell Industries Ltd. and G.S. Rice Mills, were distinguished as they involved cases where no claim or supporting material was presented at any stage. In contrast, the present case involved a claim made during assessment with supporting documents.

Conclusion:

The Tribunal's direction to the AO to reconsider the claim under Section 80IB(10) was upheld as it was based on the material already on record, aligning with the appellate authorities' powers to ensure correct tax assessment. The appeal was dismissed, affirming the Tribunal's decision.

Issue 2: Tribunal's Direction Against Apex Court's Law in Goetze India Ltd.

Background facts:

The Revenue contended that the Tribunal's direction to reconsider the claim under Section 80IB(10) was against the Supreme Court's judgment in Goetze India Ltd., which restricted the AO's power to entertain claims not made in the original return without a revised return.

Submissions of counsels:

The Revenue relied on Goetze India Ltd., arguing that the AO could not consider the claim since it was not part of the original return. The assessee argued that the Tribunal's power to consider such claims was not restricted by this judgment, as the Supreme Court had clarified that the appellate authorities could entertain claims based on available material.

Reasons:

The court analyzed the Supreme Court's judgment in Goetze India Ltd., which distinguished between the AO's power and the appellate authorities' power. The judgment clarified that while the AO could not entertain claims not made in the original return without a revised return, this did not affect the Tribunal's power to consider such claims under its appellate jurisdiction. This principle was supported by other judgments, including National Thermal Power Co. Ltd. and Jute Corporation of India Ltd., which emphasized the appellate authorities' plenary powers to ensure correct tax assessment based on available facts.

Conclusion:

The Tribunal's direction to reconsider the claim under Section 80IB(10) was not against the law laid down by the Supreme Court in Goetze India Ltd. The appeal was dismissed, affirming the Tribunal's decision.

Final Decision:

The Tax Case Appeal was dismissed, and the Tribunal's direction to the AO to reconsider the claim under Section 80IB(10) based on the material already on record was upheld.

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