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TMI Blog2016 (9) TMI 203X X X X Extracts X X X X X X X X Extracts X X X X ..... judice to each other. v. That the appellant craves leave to add, alter, amend or forgo any ground(s) of the appeal raised above at the time of the hearing. 2. Briefly stated facts of the case are that the assessee, an individual, was engaged in the business of manufacturing, processing and packing of food products (Glucon-D etc.) in the name and style of M/s Food and Healthcare Specialties from its factory at Batamondib, Ponta Shahib, Himachal Pradesh during the year under consideration. The profit from this unit by the assessee is subject to the deduction under section 80IC of the Income-tax Act 1961 (in short "the Act"). The assessee filed original return of income declaring total income of Rs. 3,45,80,500/- on 25/09/2009. The case was selected for scrutiny and during the course of scrutiny proceedings, the assessee revised its return of income on 28/09/2011, declaring total income at Rs. 16,29,213/-. In the original return of income deduction under section 80IC of the Act was claimed at the rate of 25% of the profit of the unit, whereas in the revised return filed the assessee claimed deduction under section 80IC of the Act at the rate of 100% of the profit of the unit. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. Accordingly, he submitted the learned Commissioner of Income-tax(Appeals) has rightly allowed the deduction after considering decisions of Hon'ble Apex Court, Hon'ble jurisdictional High Court and various courts and Tribunal on the issue in dispute. 3.3 We have heard the rival submissions and perused the material on record including the paper book filed by the assessee. The Assessing Officer has denied the hundred percent deduction under section 80IC of the Act on the ground that the revised return in which the claim for hundred percent deduction was made, is not valid revised return. On this issue learned Commissioner of Income-tax (Appeals) after considering precedents available opined that the Assessing Officer is dutybound to assess the correct income and allow the claims/deductions as are admissible to the assessee, even if, omitted to be claimed by the assessee. Thus, there are two issues before our consideration. The first issue is whether the claim of hundred percent deduction under section 80IC of the Act is admissible to the assessee as per law. The second issue is whether such claim made through a invalid revised return can be allowed to the assessee. 3.4 As regard ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s including AY 2009-10. I have also noticed that there was extension of power load as well which was increased to 375 K.W. w.e.f. 2.7.2007 as against the existing loan of 175 K.W." 3.5 The learned counsel relied on the finding of the Tribunal in the case of Meetu Jain Vs. JCIT in ITA No. 5130/Del/2013 wherein the Tribunal has followed the ratio laid down in the case of Tirupati LPG Industry Limited Vs. DCIT (2014), 45 taxmann.com 326 (Delhi-Trib), and observed as under: "4. We have heard both the parties and have carefully perused the records of the case. In the case of M/s. Tirupati LPG Industries Ltd. in which one of us was party to the said decision we have held as under:- "10.1 As per sub-section (2) of section 80 IC deduction under this section is available to any undertaking or enterprises in the following two categories:- i. The undertaking or enterprises has begun or begins to manufacture or produce any article or thing during the period 7.1.2003 to 1.4.2012; ii. The undertaking which manufacture or produce any article or thing and undertakes substantial expansion during the period 7.1.2003 to 1.4.2012. 10.2 A bare reading of provisions of sub section (2) wou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inery ie. gross value before taking depreciation into account. If such substantial expansion is completed, then, for the purpose of this section, the Assessment Year relevant to the P.Y. in which such substantial expansion is completed becomes the initial assessment year. Once it becomes the initial Assessment Year consequently under sub section (3) the assessee would be entitled to 100% deduction of profits and gains for a period of 5 years commencing from such initial Assessment Year, and thereafter the % of deduction from profits come down The term "initial year" has been defined, as a year in which substantial expansion is completed. There is nothing to suggest that there cannot be a second initial year if a second substantial expansion is completed. Even if an existing unit which is claiming 80- IC, undertakes first substantial expansion then also the year of completion of the substantial expansion will me "initial year". If the literal meaning of the term "initial assessment year" is to be taken, then there is no requirement of defining this term in the section. We have to go by the language of the section. 10.6 The CIT(A) denies the deduction on the ground that it would a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Y.2004-05." 5. Thus the ratio of the aforesaid decision is that even in case of substantial expansion of an eligible unit claiming deduction u/s 80C is allowable for a maximum period of 10 years from the inception. Therefore the claim of the assessee is valid in the eyes of law and is therefore is allowed." 3.6 We also find that learned Commissioner of Income Tax while disposing the proceedings under section 263 of the Act for assessment year 2010-11 has given finding that during the financial year 2007-08, corresponding to the assessment year 2008-09, the assessee made substantial expansion. The relevant finding of the Commissioner of Income Tax is reproduced as under: "2. Assessing Officer's proposal for rejecting the claim of 100% deduction u/s 80 SC of the IT Act on the ground that the substantial expansion has not been carried out based on the findings given by him in the assessment year 2011-12 are also far from satisfactory and convincing analysis. The definition of substantial expansion has been stated in the section 80IC(8)(IX) which stipulates ''Substantial expansion" means increase in the investment In the plant and machinery by at least fifty percent o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under: "...........Now the only issue and grievance of the appellant is that the Assessing Officer has not allowed 100% deduction u/s 80IC of the Act, on the basis of revised claim u/s. 80IC, as per revised return filed by him during the course of assessment proceedings, which according to the Assessing Officer was out of time, and beyond the period as prescribed under Section 139(5) of the Act. For the sake of convenience these provisions are reproduced as under:- [(5) If any person, having furnished a return under subsection (1), or in pursuance of a notice issued under sub-section (1) of section 142, discovers any omission or any wrong statement therein, he may furnish a revised return at any time before the expiry of one year from the end of the relevant assessment year or before the completion of the assessment, whichever is earlier: Provided that where the return relates to the previous year relevant to the assessment year commencing on the 1st day of April, 1988, or any earlier assessment year, the reference to one year aforesaid shall be construed as a reference to two years from the end of the relevant assessment year.]" A plain reading of the above section expl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... can be denied in any manner. AO is given power to assess and determine the correct income of any assessee being assessed by him as per provisions of the Act. The question remains whether the assessee is entitled to deduction u/s 80IC or not and if deduction is allowable u/ 80IC to the Assessee, then whether the same was to be allowed at 25% or 100%. As discussed supra, it is not the case of the AO that assessee had not carried out substantial expansion during the FY 2007-08. Therefore, even if the assessee would not have revised the claim or would not have revised the return, AO was duty bound to allow the correct claim as admissible to the assessee under the law, as it was not a fresh claim of any deduction claimed but it is a case where the deduction claimed inadvertently at a lower figure and therefore, I find substantial force in the argument of the Ld. AR that the case of the assessee is not affected by case of Goetze (India) Ltd. Vs. CIT 284 ITR 323, as facts of said judgment are different from facts of this case and said judgment is not applicable on this case. Hon'ble Punjab & Haryana High Court in the case of Commissioner of Income Tax Vs. RAMCO INTERNATIONAL (2009) 221 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uch a deduction was not claimed before the Income-tax Officer is not of much importance, if the liability arises then a claim can be made bona fide at any stage before the higher authority, who is competent to grant relief. Hon'ble Allahabad High Court held in the case of CIT vs. Lucknow Public Educational Society 318 ITR 223 (ALL) that the department should not take advantage of the ignorance of the assessee. Hon'ble High Court held that the assessee was an educational institution registered under S.12A. It filed return claiming under s.10(23C). Later, it filed a revised return claiming exemption under s. 11, along with the requisite audit report and is entitled to exemption under section 11 and that exemption was the statutory exemption available to the assessee. The assessee was legally entitled to exemption under s. 11. The exemption could not be denied for the reason that originally it was claimed under s.!0(23C). S.11 and s.lO(23C) of the Income Tax Act 1961. The Assessing Officer has treated the Revised Return as "non est" wrongly for the reason that the Assessing Officer himself has passed the order under section 143(3) on the basis of the Original Return where the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X
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