- (1.) This order shall dispose of ITA Nos.454 and 475 of 2015 as according to the learned counsel for the appellant-assessee, the issues involved in both the appeals are identical. However, the facts are being extracted from ITA No.475 of 2015.
(2.) Ita No.475 of 2015 has been preferred by the appellantassessee under Section 260A of the Income Tax Act, 1961 (in short, "the Act") against the order dated 3.8.2015, Annexure A.3 passed by the Income Tax Appellate Tribunal, Division Bench, Chandigarh (in short, "the Tribunal") in ITA No.679/CHD/2013, for the assessment year 2009-10, claiming following substantial questions of law:- "A. Whether the requirement of sub section (2) of section 263 that "no order shall be made under sub section (1) after the expiry of two years from the end of the financial year in which the order sought to be revised was passed" simply mean passing of the order and keeping it in the file" B. Whether the requirement of passing/making the order within the period of limitation means effectively passing/making the order so as to be beyond the control of the authority, for any possible change or modification therein" C. Whether on the facts and circumstances of the case and in law, the Tribunal was right in law in holding that order under section 263 was passed on 20.3.2013 though the same was dispatched on 4.4.2013 i.e. after the limitation which expired on 31.3.2013 D. Whether on the facts and circumstances of the case, the ITAT was justified in law in upholding the action of the CIT under section 263 on the basis that the AO has allowed claim of assessee under section 80IB without making any enquiry or investigation without appreciating complete assessment record, the query letter Annexure A.6 and its reply Annexure A.7, order sheet entry Annexure A.11 and office note to assessment order Annexure A.12 and the material and evidences on record and the fact that AO had taken one possible and prevalent view at the time of making the original assessment in view of judgment of Hon'ble Supreme Court of India in the case of Malabar Industrial Co. Limited vs. CIT, 2000 243 ITR 83 (SC) E. Whether on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was justified in law in upholding the action of the CIT under section 263 in holding that the claim of the appellant under section 80IB of the Income Tax Act was wrongly allowed by blindly relying upon the judgment of this Hon'ble Court in the case of National Legguard Works vs. CIT and another, 2007 288 ITR 18 (P&H) which is distinguishable on facts itself and rather favours the present appellant's case F. Whether, under the facts and circumstances of the case, the findings of ITAT are perverse and unsustainable in law being against the evidences on record wherein it is a trite law that no action under section 263 of the Income Tax Act, 1961 lies in view of audit objection G. Whether, on the facts and circumstances of the case, the findings of ITAT are perverse and against the evidences on record thus unsustainable in law -
(3.) A few facts relevant for the decision of the controversy involved as narrated in ITA No.475 of 2015 may be noticed. The appellantassessee is a private limited company engaged in the business of manufacturing of rolling mill machinery and its parts based at Mandi Gobindgarh. Survey was conducted under section 133A of the Act in the appellant's case on 24.7.2008. The appellant company surrendered a sum of Rs. 06 crores on account of right off of business sundry creditors, outstanding since long due to some dispute with the said parties. The same were written back as income of the appellant for the year under appeal which were shown as business advances forfeited in the cash book as on 25.7.2008 and thereafter utilised in the business of manufacturing and on the income thereof, deduction under section 80IB of the Act was claimed as per the provisions of law. Return of income for the assessment year in question was filed declaring income of Rs. 7,02,02,910/-. Notice for scrutiny of assessment was issued to the appellant. The appellant appeared and its accounts were checked. Addition of Rs. 80,529/- was made under section 80IB of the Act on account of DEPB receipts of Rs. 2,68,430/- after scrutiny. The assessment was completed by the Assessing Officer under section 143 (3) of the Act on 29.10.2010, Annexure A.1. On 14.11.2012, notice was issued by the Commissioner of Income Tax, Ludhiana (CIT) under section 263 of the Act wherein it was observed that the assessee had been allowed deduction under section 80IB of the Act on various items. The appellant filed objections vide reply dated nil Annexure A.5 stating that the judgment in the case of M/s Friends Castings was not applicable to it since the assessment was made on 29.10.2010 when the impugned judgment was not available. On the basis of subsequent judgment, the assessment could not be reopened under section 263 of the Act in view of the judgment of this Court in CIT vs. Saluja Exim Limited, 2010 329 ITR 603 . On merits, it was submitted that even during the course of search, nothing was recovered to show that the appellant was engaged in any other business or activity except manufacturing. Therefore, the income as surrendered on account of writing back off of business sundry creditors having utilized for normal business activities of the appellant was from manufacturing business only and also the job work activities carried on by the appellant company were entitled for the impugned deduction under section 80IB of the Act. Reliance was placed on judgment of this Court in CIT vs. Vallabh Yarns (P) Limited,2011 51 DTR 236 wherein deduction under section 80IB of the Act was allowed on job work. The CIT held that deduction under section 80IB of the Act was not allowable on the income surrendered/declared. It was further held that the Assessing Officer had not made any inquiry and had not disallowed the deduction under section 80IB of the Act on the aforesaid income. Aggrieved by the order, the appellant filed appeal before the Tribunal pleading that the revisional order was barred by limitation and the appellant was entitled to deduction under section 80IB of the Act on the surrendered income as well as on job work. The appeal was dismissed vide order dated 3.8.2015, Annexure A.3. According to the appellant, the order under section 263 of the Act was time barred having not been served on it within two years from the end of the financial year in which the impugned order was passed which expired on 31.3.2013 while the impugned order was issued on 4.4.2013 and received by the assessee on 06.04.2013. Hence the instant appeals by the appellant-assessee.;