9911796707
TMI Blog2017 (9) TMI 311X X X X Extracts X X X X X X X X Extracts X X X X ..... the subject approval of DSIR along with all the material/documentary evidences, which he deems fit to produce before the first appellate authority for examination and decision.appeal of Assessee is allowed for statistical purposes. . X X X X Extracts X X X X X X X X Extracts X X X X ..... n Form 3CM 3 is purely due to special circumstances of our cases wherein our application for sanction u/s 35 (2AB) remained pending for over four years with DSIR, despite our R&D unit being duly recognised by DSIR, as the DSIR did not have any precedence of sanctioning benefit u/s 35 (2AB) to any Software R&D facility due to a policy ambiguity (DSIR's reply to our RTI application (Right to Information Act) dt 06 Apr 2015 refers; copy attached). This was due to the ambiguity arising from the fact that software products can be considered a service as well as a manufactured product in its different forms. Our attempts to get this 'policy' ambiguity resolved with the Ministry of Science & Technology took extensive efforts over a prolonged period of four years. This involved multiple resubmissions of our application to DSIR for approval u/s 35(2AB), 'Right to Information' (RTI) requests, and policy level intervention with the DSIR and the Ministry of Science & Technology under Prime Minister Modi's 'Make in India Initiative'. We are thus the first instance in the country of a software company, that too a small scale company (MSME), that has been given app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le. The Court in ibid case quoting other case law further states: ..... Technicalities of law should not be permitted to hamper the Courts in the administration of justice between the parties. Amendments are allowed in the pleadings to avoid uncalled for multiplicity of litigation. a) The Bombay High Court in Malani Trading Co. vs. CIT (2001) 252 ITR 670 (Bom) have held that merely because there is defect in the memo of appeal, dismissal of appeal without giving opportunity to cure said defect will be improper. b) The Supreme Court in CIT vs. Calcutta Discount Co. Ltd., (1973) 91 ITR 8 (SC) observed that in considering an appeal the Appellate Authority should deal with the substance of the matter at issue and not be unduly influenced by mere procedural technicalities, for example, whether the memo of appeal was or was not in proper form etc. c) In a case involving mistake in Appeal Memo in Form 35, the judgement in case of Cairn Energy India West B.V.,... vs Assessee (ITA No.86/Ahd/2010) refers, wherein the Appellate Tribunal in its 5 order has stated that "The defect in filing the appeal is a curable defect and in view of the provisions of section 292B of the I.T, A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry note on the above case law is attached as Annexure. 9. In view of the above, it is requested that the above referred AO order u/s 143(3) dt.17.03.2015 as amended by Order u/s 154 dt 16.07.2015 and Notice of Demand No 1580 dt 20.07.2015 u/s 156 of the IT Act 1961 for the assessment year 2012-2013 be quashed on merit being wrong and bad in Law, and the benefit of 200% weighted deduction of expenditure for our DSIR recognized R&D facility u/s 35 (2AB) of the IT Act be restored to us." 2. The brief facts of the case are that the assessee filed return of income declaring a loss of ₹ 45,14,305/-. The assessment u/s. 143(3) of the Act was completed on 17.03.2015 at an income of ₹ 2,14,02,059/-, thereby disallowing the deduction u/s. 35(2AB) of ₹ 2,59,16,364/- representing to 200% of the expenditure incurred on R & D, as claimed by the assessee. The assessee filed application u/s. 154 before the AO, on which the AO restricted the disallowance to ₹ 1,29,58,182/- representing to 100% of the expenditure incurred on R & D on the premise that the expenses to the tune of ₹ 1,29,58,182/- stood already disallowed by assessee itself for claiming the weighted de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y was brought on record by signing the order sheet by CIT(A) and us. 06/09/2015 Within a span of 24 hours, CIT(A) on insignificant technical reason dismissed the appeal by a blanket (12-line) order u/s 250(6) of Income Tax Act 1961. Even after consenting to rectify the mistake during the hearing the previous day, the CIT(A) revoked for the reason best known. Such a dejected act by CIT(A): * Revenue minded decision, even though the sanction u/s 35 (2AB) is taken on record by the CIT(A) as well as the associated case law, he fails to pass a judgement on this core issue of our Appeal that was in front to him. * For not providing appropriate opportunity to rectify the mistake apparent from record * Revoking the commitment to file the rectification * Acting as one above the law of natural justice and by own accord * Ignoring to deal with the core matter. * Getting unduly influenced by mere procedural technicalities of defect and rejecting the appeal. 13/09/2015. The Assessee submited a letter to CIT(A) for rectification of mistake. 21/09/2015. We file an amended memo of appeal rectifying the mistake regarding applicability of section 143(3) vs section 154 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... & Technology vide letter No. TU/IV-15 (1372)/2016 dated 21.07.2016 during the pendency of appeal with ld. CIT(A). This approval lays down a cut-off date from 01.04.2015 to 31.03.2017. The contention of the assessee is that this is despite the fact that the assessee applied for and received approval for their R&D facility as an in-house R& D facility from DSIR from the F.Y. 2011-12 and renewed till 31.03.2017. However, since the issue based on this approval from DSIR, has not been addressed by the ld. CIT(A) on merits in the impugned order, which has been passed on technical aspect of the case, we deem it expedient in the interest of justice to remit the case back to the file of ld. CIT(A) to decide the appeal afresh on merit of the core issue, i.e., disallowance u/s. 35(2AB) after giving reasonable opportunity of being heard to the assessee. The Assessee is directed to submit the subject approval of DSIR along with all the material/documentary evidences, which he deems 11 fit to produce before the first appellate authority for examination and decision. Accordingly, the appeal of the assessee deserves to be allowed for statistical purposes. 7. In the result, the appeal is allowed f ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
