Ahmedabad Dist.Co.Op.Milk Producrers ... vs Assessee

Ahmedabad District Co- Asst. Commissioner of operative Milk Producers Income Tax, Circle-II, Unions Ltd. C/o Uttam Vs Ahmedabad Dairy, Sukhram Nagar, (Respondent) Gomtipur, Ahmedabd PAN: AAAJA 0783 E(Appellant)

Assessee by: Shri. Manish J. Shah, AR Revenue by: Smt. Sonia Kumar, Sr. D.R.

Date of hearing : 29-01-2015 Date of pronouncement : 13-02-2015

आदे श/ORDER

PER : ANIL CHATURVEDI, ACCOUNTANT MEMBER:-

This appeal is filed by the assessee against the order of CIT(A)-XVI, Ahmedabad dated 12-02-2009 for A.Y. 2004-05.

I.T.A No. 1898/Ahd/2010 A.Y. 2004-05 Page No 2 Ahmedabad District Co-op. Milk Producers Unions Ltd vs. ACIT

2. The registry has informed that the appeal has been filed belatedly by 409 days. Before us, Ld. AR has filed the Affidavits of the Managing director, the Practicing Chartered Accountant wherein the reason for delay has been explained. He therefore submitted that in view of the reasons stated in the affidavits the delay in filing of the appeal be condoned. He also relied on the various decisions of Supreme Court and High Courts. Ld. DR on the other hand submitted that there has been inordinate delay in filing the appeal and therefore the same should not be condoned.

3. We have heard the rival submissions and perused the material on record. Considering the averments made by the Chartered Accountant and the Managing Director and relying on the decision of Hon'ble Apex Court in the case of N. Balakrishanan Vs. N. Krishnamurty (1998) 7 SCC 123, we are of the view that there was sufficient cause for delay in filing of appeal and therefore the delay is condoned and the appeal is admitted.

4. The facts as culled out from the material on record are as under.

5. Assessee is a co-operative society stated to be engaged in the business of manufacturing milk, butter milk, cheese and other dairy products. Assessee filed its return of income for A.Y. 2004-05 on 30-10- 2004 declaring total income at Rs. 72,12,591/-. The case was selected for scrutiny and thereafter the assessment was framed u/s. 143(3) vide order dated 21-12-2006 and the total income was determined at Rs. 89,84,520/-. Aggrieved by the order of AO, Assessee carried the matter before Ld. CIT(A) who vide order dated 12-02-2009 granted partial relief to the assessee. Aggrieved by the aforesaid order of Ld. CIT(A), Assessee is now in appeal before us and has filed the following ground.

I.T.A No. 1898/Ahd/2010 A.Y. 2004-05 Page No 3 Ahmedabad District Co-op. Milk Producers Unions Ltd vs. ACIT

"1. The CIT(A) erred in disallowing the amount of Rs. 20,70,811/- claimed towards interest income under section 80P(2)(d)."

6. During the course of assessment proceedings, AO noticed that Assessee has filed revised return of income on 19-09-2006 wherein assessee has claimed deduction u/s. 80P(2)(d) of the Act and had also claimed higher depreciation. AO was of the view that since the revised return was filed by the assessee after expiry of one year from the end of relevant assessment year, the revised return cannot be accepted u/s. 139(5) of the Act and therefore the claim of deduction u/s. 80P and higher depreciation cannot be allowed and accordingly denied the claim of deduction u/s. 80P(2)(d) of the Act. Aggrieved by the order of AO, Assessee carried the matter before Ld. CIT(A) who upheld the order of AO by holding as under:-

"3.3 I have considered the rival submissions. In view of sec 139(5), the revised return could have been filed by the appellant on or before 31-03-2006. Since the revised return of income was not filed within statutory time limit and the Assessing Officer has no power to condone the delay, the revised return of income cannot be treated as a valid return. The Hon'ble Supreme Court in the case of Goetze India Ltd reported in 284 ITR 323 (SC) held that for claiming any deduction, the appellant has to file a revised return. Claim for deduction by way of application given during assessment proceedings cannot be entertained by the Assessing Officer. Since in this case the revised return of income was not a valid return within the meaning of sec. 139(5) of the IT Act, the action of the Assessing Officer in not entertaining the revised return of income is confirmed. The reliance on the judgement of Gujarat Gas Co 275 ITR 84 (Guj] is of no help to the appellant as it was in connection of a refund and the validity of the Circular No. 549 dated 31-10-1989. In fact the case of the appellant is covered by the judgement of Hon'ble Supreme Court 284 ITR 323 (SC) Goetze India Ltd. A revised return of income is valid only if it is filed within the meaning of section 139(5) of the Act. Section 139(5) says that a revised return of income can be filed within one year from the end of the relevant assessment year or before the completion of the assessment I.T.A No. 1898/Ahd/2010 A.Y. 2004-05 Page No 4 Ahmedabad District Co-op. Milk Producers Unions Ltd vs. ACIT

whichever is earlier. In this case, the period of one year from the end of relevant assessment year i.e. by 31-3-2006 expired earlier, therefore, the return filed after 31-3-2006 is not a valid revised return of income. The Assessing Officer was therefore, justified in not allowing the deduction of additional depreciation and deduction u/s. 80P(2)(d) as claimed in the revised return. The first ground of the appellant is therefore dismissed.

7. Aggrieved by the aforesaid order of Ld. CIT(A), Assessee is now in appeal before us. Before us, Ld. AR reiterated the submissions made before AO and Ld. CIT(A) and further submitted that Ld. CIT(A), while denying the claim of the assessee, has relied on the decision of Hon'ble Apex Court in the case of Goetze India Ltd reported in 284 ITR 323. Before us, Ld. AR submitted that the decision of Hon'ble Apex Court in the case of Goetze India Pvt. Ltd (supra) is confined to the powers of the AO and that the appellate authority and the Tribunal have power to entertain new ground, legal contention or claim and for this proposition he placed reliance on the decision of Hon'ble Gujarat High Court in the case of CIT vs. Mitesh Impex in Tax Appeal No. 2562 of 2009 order dated 02-04-2014. He also placed on record the copy of the aforesaid decision. Ld. AR further fairly submitted that since the issue has not been decided by Ld. CIT(A) on merits, the matter may be remitted back to the file of CIT(A) with necessary directions. Ld. DR on the other hand, relied on the order of AO.

8. We have heard the rival submission and perused the material on record. It is an undisputed fact that in the revised return of income filed by the assessee, claim of deduction u/s. 80P was made but the claim was denied by the AO only for the reason that the revised return was not filed within the prescribed time prescribed under the Act. We find that Ld. CIT(A) while upholding the order of AO and dismissing the appeal of Assessee had relied on the decision of Apex Court in the case of Goetze I.T.A No. 1898/Ahd/2010 A.Y. 2004-05 Page No 5 Ahmedabad District Co-op. Milk Producers Unions Ltd vs. ACIT

India (supra). We find that Hon'ble Gujarat High Court in the case of Mitesh Impex (supra) with respect to entertaining new ground before appellate authorities and after considering the various decisions had noted as under:-

"38. It thus becomes clear that the decision of the Supreme Court in the case of Goetze (India) Ltd. vs. Commissioner of Income-tax (supra) is confined to the powers of the assessing officer and accepting a claim without revised return. This is what Supreme Court observed in the said judgment while distinguishing the judgment in the case of National Thermal Power Co. Ltd. vs. Commissioner of Income-tax (supra) and that is how various High Courts have viewed the dictum of the decision in the case of Goetze (India) Ltd. vs. Commissioner of Income-tax (supra). When it comes to the power of Appellate Commissioner or the Tribunal, the Courts have recognised their jurisdiction to entertain a new ground or a legal contention. A ground would have a reference to an argument touching a question of fact or a question of law or mixed question of law or facts. A legal contention would ordinarily be a pure question of law without raising any dispute about the facts. Not only such additional ground or contention, the Courts have also, as noted above, recognized the powers of the Appellate Commissioner and the Tribunal to entertain a new claim for the first time though not made before the assessing officer. Income Tax proceedings are not strictly speaking adversarial in nature and the intention of the Revenue would be to tax real income.

39. This is primarily on the premise that if a claim though available in law is not made either inadvertently or on account of erroneous belief of complex legal position, such claim cannot be shut out for all times to come, merely because it is raised for the first time before the appellate authority without resorting to revising the return before the assessing officer.

40. Therefore, any ground, legal contention or even a claim would be permissible to be raised for the first time before the appellate authority or the Tribunal when facts necessary to examine such ground, contention or claim are already on record. In such a case the situation would be akin to allowing a pure question of law to be raised at any stage of the proceedings. This is precisely what has happened in the present case. The Appellate Commissioner and the I.T.A No. 1898/Ahd/2010 A.Y. 2004-05 Page No 6 Ahmedabad District Co-op. Milk Producers Unions Ltd vs. ACIT

Tribunal did not need to nor did they travel beyond the materials already on record, in order to examine the claims of the assessees for deductions under section 80IB and 80HHC of the Act.

41. In the decisions that we have noted above, the Courts have considered such questions when a legal contention or a claim was based on material already on record but raised at an appellate stage. On such premise we wholeheartedly agree that the appellate authority and the Tribunal would have the power to entertain any such new ground, legal contention or claim."

9. In the present case and after placing reliance of the aforesaid decision of Hon'ble Gujarat High Court, we are of the view that the claim of Assessee should have been considered on merits but since CIT(A) had dismissed the ground of Assessee without considering the issue on merits, we are of the view that the issue needs to be reexamined on merits. We therefore restore the issue to the file of Ld. CIT(A) to decide the issue afresh on merits and in accordance with law. Needless to state that before deciding the issue, the Ld. CIT(A) shall grant adequate opportunity of hearing to both the parties. The assessee is also directed to cooperate by promptly furnishing all the required details called for by the authorities for deciding the issue. Thus this ground of Assessee is allowed for statistical purposes.

10. In the result, the appeal of the assessee is allowed for statistical purpose.

Order pronounced in open court on the date mentioned hereinabove at caption page

Sd/- Sd/-

(MUKUL KR. SHRAWAT) (ANIL CHATURVEDI) JUDICIAL MEMBER ACCOUNTANT MEMBER Ahmedabad : Dated 13/02/2015 I.T.A No. 1898/Ahd/2010 A.Y. 2004-05 Page No 7

Ahmedabad District Co-op. Milk Producers Unions Ltd vs. ACIT

ak आदे श क ूितिल प अमे षत / Copy of Order Forwarded to:-

1. Assessee

2. Revenue

3. Concerned CIT

4. CIT (A)

5. DR, ITAT, Ahmedabad

6. Guard file.

By order/आदे श से,

उप/सहायक पंजीकार आयकर अपीलीय अिधकरण, अहमदाबाद.