Shree Ram Enterprises, New Delhi vs Assessee

The assessee has filed this appeal against the order dated 11/12/2013 of CIT(A)- XXVI, New Delhi, in Appeal No. 403/2011-12

2. The assessee firm, in the relevant assessment year, was engaged in the business of manufacturing and trading of corrugated boxes and plastic containers. The assessee was running its business from Pant Nagar, Tehsil, Distt Uttrakhand and commenced its business on 17th August 2005 and this is the fourth year of the business of the assessee. The assessee had filed return of income declaring NIL income. The Assessing Officer denied the assessee's claim u/s 80 IC on the ground that the audit report in Form 10CCB was not submitted, he observed that the certificate submitted by the auditor vide reply dated 19/12/2011 was not in the specified format and bereft of the details required to be submitted in the specified 2 ITA No. 778/DEl/14

report. Ld. CIT(A) dismissed the assessee's appeal ex-parte. Being aggrieved the assessee has taken following grounds of appeal:-

"1. That on the facts and circumstances of the case, the Ld. CIT(A)-XXVI, New Delhi was not justified in passing ex-parte order particularly when the cause and reason was given by the assessee's authorized person appeared for adjournment.

2. That the Ld. CIT(A) was not justified in confirming disallowances of claim u/s 80IC of Rs.1484868/- on account of non filing of Audit Report in prescribed from 10CCB stating that the same was mandatory to file.

3. That the assessee crave leave to add or delete any ground of appeal before the appeal is heard and disposed off."

3. Ld. Counsel for the assessee submitted that appellate proceedings are continuation of assessment proceedings and, therefore, since the assessee's appeal was decided ex-parte, the assesses may be permitted to file the report in form 10CCB before Tribunal or the matter may be restored back to the file of Ld. CIT(A) to provide opportunity to assessee. He further submitted that the observations made in Para 5.2 by Ld. CIT(A) may be expunged because they have no relevance with the current assessment years proceedings.

4. I have considered the submissions of both the parties and find that Ld. CIT(A) has decided the appeal ex-parte and has denied the assessee's claim for deduction u/s 80IC solely on the ground of non-submission of Auditors Report in specific Form 10CCB. It is the fourth year in which the assessee had claimed deduction u/s 80IC. The deduction was denied purely on technical ground.

5. Under such circumstances, I set aside the order of Ld. CIT(A) and restore the matter to his file for de novo adjudication of appeal after affording reasonable opportunity of being heard to assessee. Further I find that in Para 5.2 the Ld. CIT(A) has directed the Assessing Officer to take immediate actions as per law for preceding and subsequent year observing as under:-

3 ITA No. 778/DEl/14 "5.2 Nothing has been brought on the record by the appellant to controvert the finding of the AO. In view of above, it is held that the AO has rightly rejected the claim u/s 80IC on the fact that the appellant has filed to comply with the eligibility conditions required for claiming deduction u/s 80IC as it is engaged in the manufacturing of article or things specified in Schedule XIII of the Income-tax Act and also on the facts that the audit report was not in proper format. Taking into account the facts as mentioned above and in impugned order and decision cited above, I am of the considered view that the action of the AO is justified. Accordingly, the disallowance of deduction u/s 80IC is sustained. The AO may consider taking remedial action as per the law in proceeding and subsequent years to withdraw the deduction u/s 80-IC as prima-facie it is not admissible."

6. These observations, in bold noted above were wholly uncalled for because the assessee's appeal was decided ex-parte and moreover, the observations did not pertain to the year under consideration. I, therefore, expunge these observations from para 5.2 of Ld. CIT(Appeal) order.

7. In the result, the assessee's appeal is allowed for statistical purpose. The order is pronounced in the open court on 30th of June 2015.

Sd/-

(S. V. MEHROTRA) ACCOUNTANT MEMBER Dated:- 30 /06/2013

*R. Naheed*

Copy forwarded to:

1. Appellant

2. Respondent

3. CIT

4. CIT(Appeals)

5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI 4 ITA No. 778/DEl/14

Date

1. Draft dictated on 25.06.2015 PS

2. Draft placed before author PS 26.06.2015

3. Draft proposed & placed before the JM/AM second member

4. Draft discussed/approved by Second JM/AM Member.

5. Approved Draft comes to the .06.2015 PS/PS Sr.PS/PS

6. Kept for pronouncement on PS

7. File sent to the Bench Clerk .06.2015 PS

8. Date on which file goes to the AR

9. Date on which file goes to the Head Clerk.

10. Date of dispatch of Order.

5 ITA No. 778/DEl/14