$ R-101 * IN HIGH COURT OF DELHI AT NEW DELHI Date of decision: 18th September, 2014 + ITA 261/2002 M/S INFLUENCE ..... Appellant Through Mr. P.N. Monga, Advocate with Mr. Manu Monga, Advocate. versus COMMISSIONER OF INCOME TAX .... Respondent Through Mr. N.P. Sahni, Sr. Standing Counsel with Mr. Nitin Gulati, Advocate. CORAM: HON'BLE MR. JUSTICE SANJIV KHANNA HON'BLE MR. JUSTICE V. KAMESWAR RAO SANJIV KHANNA, J. (ORAL) This appeal by assessee, which relates to assessment year 1993-94, was admitted for hearing vide order dated 7th October, 2002, on following substantial question of law:- Whether on facts and in circumstances of case, Tribunal was correct in law in rejecting claim of assessee for higher deduction under Section 80-HHC of Income Tax Act, 1961, made during course of assessment proceedings for relevant assessment year? 2. facts are in narrow compass and in view of limited issue, ITA 261/2002 Page 1 of 6 which arises for consideration, we need not refer to facts in great detail. 3. appellant-assessee, firm, during relevant period was engaged in business of manufacture and export of goods and merchandise such as leather jackets, shoes, sweaters, jeans, bed sheet etc. In return of income for assessment year 1993-94 filed on 31st October, 1993, taxable income of Rs.64,92,460/- was declared. In computation of taxable income, appellant-assessee had claimed deduction under Section 80HHC of Income Tax Act, 1961 ( Act , for short) of Rs.3,57,90,698/-. return was duly accompanied by audit report duly prepared by Chartered Accountant as required under Section 44AB and Section 80HHC of Act. 4. return was taken up for scrutiny and notice under Section 143(2) was issued. During course of assessment proceedings, but before assessment order could be passed, assessee vide letter dated 25th April, 1995, revised claim under Section 80HHC from Rs.3,57,90,698/- to Rs.3,64,68,255/-. reason given was that due to oversight, sales of manufactured goods amounting to Rs.1,55,02,539/- was wrongly taken as traded goods. Thus, deduction under Section 80HHC required recomputation. In respect of manufacturing goods and trading goods, different formulas have to be applied for computing deduction under Section 80HHC of Act. ITA 261/2002 Page 2 of 6 Along with said letter, appellant-assessee had filed revised report of Chartered Accountant under Sections 80HHC(4) and 80HCC(4A) of Act. 5. Assessing Officer did not examine merits of claim and held that revised computation submitted with letter cannot be taken into consideration as time for filing of revised return under Section 139(5) had lapsed on 31st March, 1995. As noted above, letter written by appellant-assessee revising claim under Section 80HHC was dated 25th April, 1995. 6. aforesaid view has found favour with Commissioner of Income Tax (Appeals) as well as Income Tax Appellate Tribunal. They have relied upon decision of Supreme Court in Goetze (India) Ltd. Vs. Commissioner of Income Tax [2006] 284 ITR 323 (SC). 7. similar controversy had arisen before Delhi High Court in case of Commissioner of Income Tax Vs. Sam Global Securities Ltd. [2014] 360 ITR 682 (Delhi), wherein judgment in case of CIT Vs. Jai Parabolic Springs Ltd. [2008] 306 ITR 42 (Delhi) was quoted. In Jai Parabolic Springs Ltd. (supra), decision in Goetze (India) Ltd. (supra) was distinguished in following words:- In Goetze (India) Ltd. Vs. CIT [2006] 284 ITR 323 (SC) wherein deduction claimed by way of letter before Assessing Officer, was disallowed on ground that there was no provision under Act to make amendment in ITA 261/2002 Page 3 of 6 return without filing revised return. Appeal to Supreme Court, as decision was upheld by Tribunal and High Court, was dismissed making clear that decision was limited to power of assessing authority to entertain claim for deduction otherwise than by revised return, and did not impinge on power of Tribunal. 8. In Sam Global (supra) reference was also made to decision of Supreme Court in National Thermal Power Co. Ltd. Vs. CIT [1998] 229 ITR 383 (SC). Reliance was placed on earlier decision of Supreme Court in Jute Corporation of India Ltd. Vs. CIT, [1991] 187 ITR 688 (SC), in which it has been observed:- appellate authority has all powers which original authority may have in deciding question before it subject to restrictions or limitations, if any, prescribed by statutory provisions. In absence of any statutory provision, appellate authority is vested with all plenary powers which subordinate authority may have in matter. There is no good reason to justify curtailment of power of Appellate Assistant Commissioner in entertaining additional ground raised by assessed in seeking modification of order of assessment passed by Income Tax Officer. This Court further observed that there may be several factors justifying raising of new plea in appeal and each case has to be considered on its own facts. Appellate Assistant Commissioner must be satisfied that ground raised was bona fide and that same could not have been raised earlier for good reasons. Appellate Assistant Commissioner should exercise his discretion in permitting or not permitting assessed to raise additional ground in accordance with law and reason. ITA 261/2002 Page 4 of 6 same observations would apply to appeals before Tribunal also. 9. This High Court in CIT Vs. Natraj Stationery Products (P) Ltd., (2009) 312 ITR 222, had observed that Goetze (India) Ltd. (supra) would not apply if assessee had not made new claim but had asked for re-computation of deduction. Reference can also be made to decision in Commissioner of Income Tax Vs. Rose Services Apartment India P. Ltd., [2010] 326 ITR 100 (Delhi), wherein Division Bench of this Court rejected contention of Revenue that Tribunal could not have entertained plea, holding that tribunal was empowered to deal with issue and was entitled to determine claim raised. 10. In view of aforesaid, question of law is answered in favour of appellant-assessee and against respondent-Revenue, but with order of remand as claim under Section 80HHC will have to be examined by Assessing Officer as is requested by counsel for Revenue. entire claim including question whether assessee was manufacturer and was entitled to claim deduction at higher rate under Section 80HHC can be examined by Assessing Officer. We note that matter relates to assessment year 1993-94 but notwithstanding time gap, assessee will have to produce and prove their claim along with necessary documents. ITA 261/2002 Page 5 of 6 appeal is disposed of without any order as to costs. SANJIV KHANNA, J. V. KAMESWAR RAO, J. SEPTEMBER 18, 2014 NA ITA 261/2002 Page 6 of 6 M/s Influence v. Commissioner of Income-tax