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A Malik International Trading Vs. Department of Income Tax - Court Judgment

LegalCrystal Citation
CourtIncome Tax Appellate Tribunal ITAT Delhi
Decided On
Case NumberITA No.1124 & 1125/Del of 2013
Judge
AppellantA Malik International Trading
RespondentDepartment of Income Tax
Excerpt:
.....matter has been set aside to the file of assessing officer for verification and examination of the claim of assessee. 5. at the outset, we observe that the commissioner of income tax(a) enjoys coterminous powers with the assessing officer but the commissioner of income tax(a) is not legally empowered to set aside or restore the issue to the file of assessing officer. accordingly, we hold that the direction of commissioner of income tax(a) to assessing officer were not based as per letter and spirit of the provisions of the act. therefore, we also hold that the commissioner of income tax(a) grossly erred in setting aside and restoring the issue to the file of assessing officer about the claim of the assessee for deduction u/s 80hhc of the act. therefore, impugned order up to this extent.....
Judgment:

Chandra Mohan Garg, Judicial Member

1. These appeals have been preferred by the Revenue against the order of Commissioner of Income Tax(A)-XXV, New Delhi both dated 20.12.2012 for AY 2002-03 and 2003-04 in Appeal No. 115/2011-12 and 122/2011-12 respectively.

2. The revenue has raised similar sole ground of appeal in both these appeals which reads as under:-

"1. The ld. CIT(A) has erred in law as well as fact in directing the Assessing Officer to examine the case and recomputed the deduction u/s 80-HHC after giving 2 ITA No.1124 and 1125/Del/2013 Asstt.Year: 2002-03 and 2003-04 full opportunity to the assessee which amounts to setting aside the matter which is not permissible in law."

3. Briefly stated the facts giving rise to these appeals are that the original assessments were completed u/s 143(3) of the Act, 1961 (for short the Act) vide order dated 10.05.2007 after making disallowance of deduction u/s 80HHC of the Act amounting to Rs. 39,89,187 and Rs. 20,10,594/- respectively in both the years. In AY 2003-04, the Assessing Officer also made disallowance of Rs.18,017 on account of personal expenses (Telephone + Vehicle maintenance) and another disallowance of Rs.20,099 on account of vehicle depreciation and car insurance expenses. Being aggrieved by the above assessment order, the assessee preferred appeals before the Commissioner of Income Tax(A) which were allowed by the impugned orders. The Commissioner of Income Tax(A) held that the assessee is eligible for deduction u/s 80HHC of the Act in view of the decision of Hon'ble Supreme Court in the case of Topman Exports vs CIT 18 Taxman 120 (SC) and Commissioner of Income Tax(A) directed the Assessing Officer to examine the case and recomputed the deduction u/s 80HHC of the Act on the issue of DEPB after providing due opportunity of hearing to the assessee. Now, the aggrieved revenue is before this Tribunal with the sole ground as mentioned hereinabove in both the appeals. 3 ITA No.1124 and 1125/Del/2013

4. We have heard rival arguments of both the parties and carefully perused the record placed before us. We have also perused assessment orders as well as impugned orders in the light of submissions and contentions of both the parties. Ld. DR submitted that the Commissioner of Income Tax(A) is not empowered to set aside the issue to the file of the Assessing Officer as per provisions of the Act. The DR further contended that although the powers of the Commissioner of Income Tax(A) are coterminous with the Assessing Officer but the Commissioner of Income Tax(A) cannot set aside the issue to the file of Assessing Officer for fresh adjudication. On the other hand, ld. assessee's representative submitted that the claim of the assessee for deduction u/s 80HHC of the Act is squarely covered in favour of the assessee by the decision of Hon'ble Supreme Court in the case of Topman Exports vs Commissioner of Income Tax(supra). The AR further contended that the Commissioner of Income Tax(A) rightly directed the Assessing Officer to examine the claim of the assessee and to recompute the deduction u/s 80HHC of the Act on the issue of DEPB. The AR supported the impugned order and submitted that the Commissioner of Income Tax(A) has not granted any relief for the assessee and the matter has been set aside to the file of Assessing Officer for verification and examination of the claim of assessee.

5. At the outset, we observe that the Commissioner of Income Tax(A) enjoys coterminous powers with the Assessing Officer but the Commissioner of Income Tax(A) is not legally empowered to set aside or restore the issue to the file of Assessing Officer. Accordingly, we hold that the direction of Commissioner of Income Tax(A) to Assessing Officer were not based as per letter and spirit of the provisions of the Act. Therefore, we also hold that the Commissioner of Income Tax(A) grossly erred in setting aside and restoring the issue to the file of Assessing Officer about the claim of the assessee for deduction u/s 80HHC of the Act. Therefore, impugned order up to this extent is not sustainable and we set aside the same only up to this extent. At the same time, we also observe that the assessee's claim and eligibility for deduction u/s 80HHC of the Act was not examined at the end of Assessing Officer as per ratio laid down by the Hon'ble Apex Court in the case of Topman Export vs Commissioner of Income Tax (supra). Hence, we are of the considered opinion that the claim of the assessee deserves to be examined and verified at the end of Assessing Officer in the light of decision of Hon'ble Apex Court in the case of Topman Export vs Commissioner of Income Tax(supra). Thus, we hold that the Assessing Officer did not examine and verify the claim of the assessee for deduction u/s 80HHC of the Act as per provisions of the Act as well as ratio of the decision of Hon'ble Apex Court in the case of Topman Export vs Commissioner of Income Tax(supra). We, therefore, restore the issue to the file of Assessing Officer with a direction that the Assessing Officer shall examine and verify the claim of the assessee for deduction u/s 80HHC of the Act and recompute the deduction u/s 80HHC of the Act on the issue of DEPB after affording due opportunity of hearing to the assessee. Accordingly, appeal of the revenue is deemed to be allowed for statistical purposes in the manner as indicated above.

6. In the result, appeals of the revenue are disposed of and deemed to be treated as allowed for statistical purposes. Order pronounced in the open court on 31.01.2014.


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