Back
2023 Supreme(Cal) 808
IN THE HIGH COURT OF JUDICATURE AT CALCUTTA
T.S. Sivagnanam, Hiranmay Bhattacharyya, JJ.
M/s. C And E Limited - Appellant
Vs.
The Principal Commissioner Of Income Tax, Kolkata – 4, kolkata - Respondent
ITAT/135/2023 (IA NO: GA/1/2023)
Decided On : 02-08-2023
Advocate Appeared:
For the Appellant : Mr. J.P. Khaitan, Sr. Adv., ,Mr. Saurabh Bagaria, Mr. Rites Goel, Mr. Arindam Halder, Adv.
For the Respondent: Mr. Prithu Dudheria, Adv.
THE ASSESSING OFFICER WOULD HAVE NO JURISDICTION TO REVISIT THE SAME ISSUE IN THE SUBSEQUENT ASSESSMENT YEARS AS LONG AS THE BENEFIT GRANTED UNDER SECTION 80IC FOR THE FIRST YEAR OF SUBSTANTIAL EXPANSION REMAINS UNALTERED.
Headnote:
INCOME TAX ACT, 1961 - DEDUCTION UNDER SECTION 80IC - ASSESSEE CLAIMED 100% DEDUCTION FOR THE 2ND YEAR OF SUBSTANTIAL EXPANSION - PCIT INITIATED PROCEEDINGS UNDER SECTION 263 OF THE ACT ALLEGING THAT THE ASSESSEE DID NOT FILE FORM 10CCB - TRIBUNAL DISMISSED THE ASSESSEE'S APPEAL ON THE SOLE GROUND THAT THE ASSESSEE HAD NOT FILED FORM 10CCB - HELD, THE ASSESSEE WAS ENTITLED TO CLAIM DEDUCTION OF 100% AS IT WAS A CASE OF SUBSTANTIAL EXPANSION AND THE BENEFIT GRANTED UNDER SECTION 80IC FOR THE FIRST YEAR OF SUBSTANTIAL EXPANSION REMAINS UNALTERED, THE ASSESSING OFFICER WOULD HAVE NO JURISDICTION TO REVISIT THE SAME ISSUE IN THE SUBSEQUENT ASSESSMENT YEARS.
Fact of the Case:
THE ASSESSEE FILED ITS RETURN FOR THE ASSESSMENT YEAR UNDER CONSIDERATION, AY 2013-14 ON SEPTEMBER 28, 2013 DECLARING TOTAL INCOME OF RS. 30,38,300/-. THE CASE WAS SELECTED FOR SCRUTINY AND ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) OF THE ACT BY ORDER DATED MARCH 28, 2016 DETERMINING THE TOTAL INCOME OF THE ASSESSEE OF RS. 1,72,45,790/-. THE ASSESSEE CLAIMED A DEDUCTION UNDER SECTION 80IC OF THE ACT IN RESPECT OF ITS UNIT IV BEING THE 7TH YEAR OF SUCH CLAIM AND 2ND YEAR FROM THE DATE WHEN THE ASSESSEE MADE SUBSTANTIAL EXPANSION.
Finding of the Court:
THE TRIBUNAL REJECTED THE ASSESSEE APPEAL SOLELY ON THE GROUND THAT THE ASSESSEE HAD NOT FILED FORM 10CCB WITHOUT TAKING INTO CONSIDERATION THAT THE ASSESSING OFFICER WHILE COMPLETING THE ASSESSMENT DID NOT CALL FOR THE FORM 10CCB FOR THE ASSESSMENT YEAR UNDER CONSIDERATION THOUGH THE SAME WAS FILED CONSIDERED AND RELIEF GRANTED FOR THE ASSESSMENT YEAR 2012-2013.
Issues: 1. WHETHER THE ASSESSEE WAS ENTITLED TO CLAIM DEDUCTION OF 100% AS IT WAS A CASE OF SUBSTANTIAL EXPANSION? 2. WHETHER THE ASSESSING OFFICER WOULD HAVE NO JURISDICTION TO REVISIT THE SAME ISSUE IN THE SUBSEQUENT ASSESSMENT YEARS?
Ratio Decidendi: 1. THE LEGAL POSITION WHICH CAN BE CULLED OUT FROM THE ABOVE DECISIONS WOULD CLEARLY SUPPORT THE CASE OF THE ASSESSEE. IT IS NOT IN DISPUTE THAT IN THE FIRST YEAR OF SUBSTANTIAL EXPANSION NAMELY A.Y 2012-2013, THE ASSESSEE WAS GRANTED THE RELIEF. SIMILARLY FOR THE ASSESSMENT YEARS 2014-2015, 2015- 2016 AND 2016-2017 BEING THE 3RD, 4TH AND 5TH YEARS OF SUBSTANTIAL EXPANSION RELIEF HAS BEEN GRANTED AND THE ONLY SOLITARY YEAR FOR WHICH RELIEF HAD BEEN DENIED IN ITS ENTIRETY IS THE ASSESSMENT YEAR IN 2013-2014. 2. AS LONG AS THE BENEFIT GRANTED UNDER SECTION 80IC FOR THE FIRST YEAR OF SUBSTANTIAL EXPANSION REMAINS UNALTERED, THE ASSESSING OFFICER WOULD HAVE NO JURISDICTION TO REVISIT THE SAME ISSUE IN THE SUBSEQUENT ASSESSMENT YEARS.
Final Decision: THE APPEAL FILED BY THE ASSESSEE IS ALLOWED AND THE ORDER PASSED BY THE LEARNED TRIBUNAL AND THE PCIT ARE SET ASIDE AND THE ASSESSMENT ORDER STANDS RESTORED. CONSEQUENTLY, THE SUBSTANTIAL QUESTIONS OF LAW ARE ANSWERED IN FAVOUR OF THE ASSESSEE.
JUDGMENT :
T.S. Sivagnanam, J.
1. This appeal filed by the assessee under Section 260A of the Income Tax Act, 1961 (the Act) is directed against the order dated December 15, 2022 passed by the Income Tax Appellate Tribunal, C Bench, Kolkata (Tribunal) in ITA No. 636/Kol/2018 for the Assessment Year 2013-14. The assessee has raised the following substantial questions of law for consideration:
(i) Whether the Learned Tribunal failed to consider that where the deduction under Section 801C was granted for substantial expansion for an initial assessment year, the same cannot be rejected for subsequent assessment years unless the relief for the initial year was withdrawn and hence the Order dated February 06, 2018 passed under Section 263 of the Act by the Commissioner was illegal and liable to be set aside?
(ii) Whether the Learned Tribunal was justified in holding that the order of the Commissioner of Income Tax who held the assessment Order dated March 28, 2016 passed by the Assessing Officer under Section 143(3) of the Act is erroneous and prejudicial to the interest of revenue on the ground of lack of proper enquiry for want of submissions of Form 10CCB for the Assessment Year 2013-14 without considering the aspect that the said Assessment Year 2013-14 was the 2nd year of substantial expansion and there was no dispute with respect to the initial year of substantial expansion being Assessment Year 2012-13?
(iii) Whether the Learned Tribunal was justified in upholding the orders passed by the Commissioner of Income Tax under Section 263 of the Act?
(iv) Whether the Learned Tribunal was justified in law in ignoring that the order under Section 263 of the Act was passed beyond the scope of the notice under Section 263 of the Act?
2. We have heard Mr. J.P. Khaitan, learned Senior Advocate assisted by Mr. Saurabh Bagaria, Mr. Rites Goel and Mr. Arindam Halder, learned Advocates for the appellant assessee and Mr. Prithu Dudheria, learned Senior Standing Counsel for the respondent revenue.
3. The appellant assessee filed its return for the Assessment Year under consideration, AY 2013-14 on September 28, 2013 declaring total income of Rs. 30,38,300/-. The case was selected for scrutiny and assessment was completed under Section 143(3) of the Act by order dated March 28, 2016 determining the total income of the assessee of Rs. 1,72,45,790/-. The assessee claimed a deduction under Section 80IC of the Act in respect of its Unit IV being the 7th year of such claim and 2nd year from the date when the assessee made substantial expansion. The date of substantial expansion as mentioned in Form 10CCB is November 13, 2012 relevant to the Financial Year 2011-12 and AY 2012-13. The assessee would state that in the year of substantial expansion they had filed Form 10CCB and other related documents relating to the substantial expansion for the Assessment Year 2012-13 being the initial year of such substantial expansion and the claim of 100% deduction under Section 80IC of the Act was allowed by the department and was never disputed thereafter. The Assessment Year under consideration is 2013-14 which is the 2nd year of substantial expansion, the Assessing Officer while completing the assessment under Section 143(3) for the 2nd year of expansion namely, AY 2013-14 granted 100% deduction under Section 80IC of the Act. It is thereafter the Principal Commissioner of Income Tax, Kolkata (PCIT) issued notice dated December 4, 2017 under Section 263 of the Act alleging that the assessee has claimed 100% deduction under Section 80IC in respect of Unit IV being the 7th year, however they have not filed Form 10CCB in support of their claim during the course of assessment proceedings. According to the PCIT, the assessee was entitled to claim only 30% deduction under Section 80IC (3)(ii) of the Act and that the Assessing officer had allowed excess depreciation. The assessee furnished their written submissions and appeared before the PCIT in person. It was contended that
