2021 (2) TMI 849 - AT - Income Tax

Disallowance of Section 80-IB deduction - assessee s case all along appears to be that the alleged eligible unit(s) at Yanam had stopped production during the period from 7th November, 1996 to 21st December, 1996 - factual position is no different in the other years as well as pin-pointed from the departmental side - HELD THAT - We find in this backdrop that the taxpayer has also sought to place on record a certificate coming from the office of the Superintendent of Customs and Central Excise, Yanam range dt.11-07-2014 regarding its above stated unit(s) having stopped production by way of additional evidence. As argued in favour of the lower authorities findings that this assessee has not co-operated all along from assessment till date. The fact, however, remains that clinching fact has prima-facie emerged as per the excise authorities certificate giving an altogether a new direction to the case . We thus deem it appropriate to restore the assessee s identical solitary substantive grievance raised in all these appeals back to the CIT(A) than the Assessing Officer keeping in mind the relevant assessment year involved herein is 1998- 99 onwards. It is made clear that the assessee or its authorised representative shall appear before the CIT(A) on or before 31st July, 2021 along with all the relevant evidence for necessary factual verification; at its own risk and responsibility, to be followed by three effective opportunities of hearing failing which our instant remand directions shall be deemed to have been vacated. Appeals of assessee are treated as allowed for statistical purposes.

Issues Involved
1. Disallowance of Section 80-IB deduction claimed by the assessee.
2. The applicability of Section 80-IA read with Section 33B of the Income Tax Act, 1961.
3. The factual verification of production stoppage due to a cyclone.
4. Consideration of additional evidence submitted by the assessee.

Detailed Analysis

Issue 1: Disallowance of Section 80-IB Deduction
The primary issue in these appeals is the disallowance of the Section 80-IB deduction claimed by the assessee. The Commissioner of Income Tax (Appeals) [CIT(A)] denied the deduction on the grounds that the provisions of Section 80-IB read with Section 33B were not applicable to the assessee's case. The CIT(A) noted that the assessee did not produce sufficient documents/accounts to support its claim, except for a paper book, which was dismissed as insufficient.

Issue 2: Applicability of Section 80-IA read with Section 33B
The assessee argued that it was eligible for the deduction under Section 80-IA read with Section 33B due to the extensive damage caused to its factory by a cyclone on 6th November 1996. The factory experienced a complete stoppage of production from 6th November 1996 to 20th December 1996. The assessee provided various documents, including surveyor reports, production details, and financial statements, to substantiate the claim of extensive damage and subsequent reconstruction.

Issue 3: Factual Verification of Production Stoppage
The assessee's case hinges on the factual verification of the production stoppage due to the cyclone. The assessee submitted a certificate from the Superintendent of Customs and Central Excise, Yanam range, dated 11th July 2014, as additional evidence to support its claim that the production was halted from 7th November 1996 to 21st December 1996. This certificate was pivotal as it provided a new direction to the case, indicating that the production stoppage was indeed due to the cyclone.

Issue 4: Consideration of Additional Evidence
The Tribunal noted that the assessee had not cooperated fully during the assessment proceedings. However, the additional evidence provided by the excise authorities' certificate necessitated a fresh examination. The Tribunal decided to restore the matter to the CIT(A) for a thorough factual verification of the evidence provided by the assessee. The assessee was directed to present all relevant evidence before the CIT(A) by 31st July 2021, with three effective opportunities for hearing to be provided.

Conclusion
The Tribunal allowed the assessee's appeals for statistical purposes, directing the CIT(A) to re-examine the case in light of the new evidence. The assessee or its authorized representative is required to appear before the CIT(A) with all relevant evidence for factual verification. If the assessee fails to comply, the remand directions will be vacated. The Tribunal's decision emphasizes the need for a detailed factual verification to determine the eligibility for the Section 80-IB deduction under the specific circumstances of the case.

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