Sesa Goa Limited v. The Additional Commissioner of Income-tax, Range 1, Panaji
[Citation -2020-LL-0312-28]

Citation 2020-LL-0312-28
Appellant Name Sesa Goa Limited
Respondent Name The Additional Commissioner of Income-tax, Range 1, Panaji
Court HIGH COURT OF BOMBAY AT GOA
Relevant Act Income-tax
Date of Order 12/03/2020
Assessment Year 2005-06
Judgment View Judgment
Keyword Tags retrospective effect • claim of deduction • original return • revised return • tax liability • prospective effect
Bot Summary: The Assessing Officer vide assessment order dated 16.12.2008 refused to consider this claim for deduction, on the ground that such claim was not raised by filing the revised returns. The relevant portion of appellate order dated 31.03.2010 is to be found in para 6.7, which reads as follows: 6.7 The AO has also mentioned that the assessee has all along been claiming deduction uls 8OHHC in respect of the exports made by EOUs and it is only in the tenth year that it has chosen to claim deduction u/s 10B. So consistency in claiming deduction is also absent in the appellant s case. Notwithstanding the above facts, the appellant has not claimed the deduction uls 103 in respect of its two 100 EOUs neither in the original return nor in the revised return and subsequent claim for deduction u/s 10B is an after thought which cannot be entertained in view of the reasons given above and relying on various decisions discussed above. Without going into the merits of the appellant s claim that extraction and processing of iron ore amounts to production, the claim is not admissible as the appellant has not made the claim in the original or revised returns. The assessee is entitled for such claim, when the assessee has filed revised return, the assessee has not made this claim. The CIT(A) has not allowed the claim on the decision relying on the decision of Hon'ble Supreme Court in the case of Goetze Ltd. Vs. CIT 284 ITR 323 wherein the Court has held that when an assessee has claimed deduction after return has been filed, the assessing authority has no power to entertain such claim made otherwise than by way of revised return. According to us, both, the Commissioner of Income Tax and the ITAT have erred in relying upon Goetze Ltd. and holding that even the Appellate Authorities under the IT Act could not have entertained the assessee's claim for deduction, inter alia, under Section 10B of the IT Act.


IN HIGH COURT OF BOMBAY AT GOA TAX APPEAL NO. 24 OF 2011 Sesa Goa Limited, Sesa Ghor, 20 EDC Complex, Patto, Panjim, Goa 403 001. Appellant Versus Additional Commissioner of Income-Tax, Range 1, Panaji, Goa. Respondent Mr. R.G. Ramani, Senior Advocate with Mr. Pranav Shenvi Kakodkar, Advocate for Appellant. Ms. Susan Linhares, Standing Counsel for Respondent. Coram:- M.S. SONAK & SMT. M.S. JAWALKAR, JJ. Date:- 12th March, 2020 ORAL JUDGMENT: (Per M. S. Sonak, J.) Heard Mr. Ramani, learned Senior Counsel along with Mr. Pranav Kakodkar, learned Counsel for appellant and Ms. Susan Linhares, learned Standing Counsel for respondent. 2. This Appeal was Admitted vide order dated 25.01.2012 on following substantial questions of law: (1) Whether in facts and in circumstances of case and in law and in light of Circular No. 14 (XL-35) of 1955 dated 11th April, 1955 issued 2 TXA No. 24 of 2011 by Central Board of Direct Taxes, Assessing Officer is duty bound to consider claim for deduction under Section 10B of Act made during assessment proceedings ? (2) Whether on facts and in circumstances of case and in law and without prejudice, Commissioner of Income-tax (Appeals) in exercise of his plenary/co-terminus powers ought to have entertained claim for deduction under Section 10B of Act as all necessary facts were already on record ? (3) Whether on facts and in circumstances of case and in law and without prejudice, Tribunal ought to have entertained claim for deduction under Section 10B of Act as all necessary facts were already on record ? (4) Whether sub-Section (5) of Section 80A of Act as inserted by Finance (No.2) Act, 2009 with retrospective effect from 1st April 2003 should be interpreted so as (i) to have only prospective effect and/or (ii) not to adversely affect vested rights existing on date of enactment of Finance (No.2) Act, 2009 ? 3. In this Appeal, we are concerned with assessment proceedings for assessment year 2005-06. appellant filed income tax returns for this assessment year declaring income of Rs.609,37,94,550/- and revised returns declaring income of 3 TXA No. 24 of 2011 Rs.609,31,94,550/- respectively. However, it is case of appellant that appellant inadvertently omitted to make claim for deduction under Section 10B of Income Tax Act, 1961 (IT Act) in respect of two 100% of Export Oriented Undertakings referred to as Cudnem Unit and Gadia Sodo Codli Unit , which according to them, was eligible for deduction under Section 10B of IT Act. 4. appellant, during assessment proceedings, filed letters dated 22.10.2008 and 01.12.2008, claiming for deduction under Section 10B of IT Act in respect of aforesaid units. Assessing Officer vide assessment order dated 16.12.2008, however, refused to consider this claim for deduction, on ground that such claim was not raised by filing revised returns. 5. assessee appealed to Commissioner of Income Tax (Appeals), who, called for remand report from Assessing Officer. This remand report was furnished by Assessing Officer on 23.03.2010. Commissioner of Income Tax (Appeals) after affording opportunity of hearing to parties, passed judgment and order dated 31.03.2010, upholding order made by Assessing Officer regards non consideration of claim for deduction under Section 10B of IT Act. 4 TXA No. 24 of 2011 6. relevant portion of appellate order dated 31.03.2010 is to be found in para 6.7, which reads as follows: 6.7 AO has also mentioned that assessee has all along been claiming deduction uls 8OHHC in respect of exports made by EOUs and it is only in tenth year that it has chosen to claim deduction u/s 10B. So consistency in claiming deduction is also absent in appellant s case. Notwithstanding above facts, appellant has not claimed deduction uls 103 in respect of its two 100% EOUs neither in original return nor in revised return and subsequent claim for deduction u/s 10B is after thought which cannot be entertained in view of reasons given above and relying on various decisions discussed above. Hence, without going into merits of appellant s claim that extraction and processing of iron ore amounts to production, claim is not admissible as appellant has not made claim in original or revised returns. Accordingly, appellant s claim uls 10B is rejected. 7. appellant-assessee, then, appealed to Income Tax Appellate Tribunal (ITAT), which too, vide judgment and order dated 10.03.2011upheld order of Appellate Authority. 8. relevant discussion in ITAT's order dated 10.03.2011 is to be found in para 11, which reads as follows: 11. We have heard rival contentions of both parties. learned Authorised Representative submitted that extraction and processing of iron ore amounting to 5 TXA No. 24 of 2011 production prior to A.Y. 2005-06, deduction under Section 10B was not claimed by assessee. assessee was claiming deduction under Section 8OHHC. learned Authorised Representative submitted that claim of 100% EOU has not been mentioned in original return. assessee is entitled for such claim, when assessee has filed revised return, assessee has not made this claim. CIT(A) has not allowed claim on decision relying on decision of Hon'ble Supreme Court in case of Goetze (India) Ltd. Vs. CIT 284 ITR 323 wherein Court has held that when assessee has claimed deduction after return has been filed, assessing authority has no power to entertain such claim made otherwise than by way of revised return. Respectfully following decision of Hon'ble Supreme Court, we are of view that CIT(A) is justified in not allowing claim of deduction otherwise by then revised return. Therefore in our opinion, learned CIT(A) is justified in his action and our interference is not required. This ground of appeal raised by assessee is dismissed. 9. first substantial question of law, to certain extent, can be said to be covered by decision of Hon'ble Apex Court in case of Goetze (India) Ltd. Vs. Commissioner of Income Tax [2006] 284 ITR 323 (SC). However, according to us, both, Commissioner of Income Tax (Appeals) and ITAT have erred in relying upon Goetze (India) Ltd. (supra) and holding that even Appellate Authorities under IT Act could not have entertained assessee's claim for deduction, inter alia, under Section 10B of IT Act. 6 TXA No. 24 of 2011 10. According to us, approach of Commissioner of Income Tax (Appeals) and ITAT is contrary to law laid down by this Court in Commissioner of Income Tax Vs. Pruthvi Brokers & Shareholders P. Ltd., [2012] 349 ITR 336 (Bom), which decision has been followed in Tax Appeal No. 17 of 2013 and Tax Appeal No. 18 of 2013 decided on 28.02.2020, wherein it has been held thus: 39. In CIT Vs Pruthvi Brokers & Shareholders Pvt. Ltd. 349 ITR 336, one of questions of law which came to be framed was whether on facts and circumstances of case, ITAT, in law, was right in holding that claim of deduction not made in original returns and not supported by revised return, was admissible. Revenue had relied upon Goetze (supra) and urged that ITAT had no power to allow claim for deduction. However, Division Bench, whilst proceeding on assumption that Assessing Officer in terms of law laid down in Goetze (supra) had no power, proceeded to hold that Appellate Authority under IT Act had sufficient powers to permit such deduction. In taking this view, Division Bench relied upon Full Bench decision of this Court in Ahmedabad Electricity Co. Ltd Vs CIT 199 ITR 351 to hold that Appellate Authorities under IT Act have very wide powers while considering appeal which may be filed by Assessee. Appellate Authorities may confirm, reduce, enhance or annul assessment or remand case to Assessing Officer. This is because, unlike ordinary appeal, basic purpose of tax appeal is to ascertain correct tax liability of Assessee in accordance with law. 7 TXA No. 24 of 2011 40. decision in Goetze (supra) upon which reliance is placed by ITAT also makes it clear that issue involved in said case was limited to power of assessing authority and does not impinge on powers of ITAT under section 254 of said Act. This means that in Goetze (supra), Hon'ble Apex Court was not dealing with extent of powers of appellate authorities but observations were in relation to powers of assessing authority. This is distinction drawn by division Bench in Pruthvi Brokers (supra) as well and this is distinction which ITAT failed to note in impugned order. 11. Accordingly, substantial questions of law at (2) and (3) are required to be answered in favour of Assessee and against Revenue. 12. According to us, substantial question no. (4) as framed in our order dated 25.01.2012 does not arise or in any case, is not required to be decided at present stage. This is because neither Commissioner of Income Tax (Appeals) nor ITAT have adverted to provisions of Section 80A(5) of IT Act. There is no discussion as to whether this provision is required to be interpreted in order to have prospective effect and/or not to adversely affect vested rights existing on date of enactment of Finance (No. 2) Act of 2009. 8 TXA No. 24 of 2011 13. Similarly, at this stage, we are really not required to go into issue as to whether activities undertaken by appellant -assessee amounts to production or not, under Section 10B of I.T. Act. 14. Both aforesaid issues along with other issues, which may arise in context of entitlement of appellant/assessee's claim for deduction under Section 10B of I.T. Act will have to be decided by Commissioner of Income Tax (Appeals), which, in our opinion, has undoubted power to consider claim for deduction in terms of law laid down by this Court in Pruthvi Brokers (supra). 15. circumstance that we have observed that Appellate Authorities have power to consider claim for deduction in terms of Section 10B of IT Act, is not to be construed as some observations in context of provisions of Section 80A(5) of IT Act. All that we have said is that generally, Appellate Authorities may not be justified in refusing to even consider assessee's claim for deduction on ground that such claim was not made in original returns or revised returns filed before Assessing Officer. If any contention based upon provisions of Section 80A(5) of IT Act is raised by Revenue, then, obviously, such contention will have to be considered by Appellate Authority 9 TXA No. 24 of 2011 in accordance with law. Further appellant-assessee will have liberty to meet such contentions, including by way of urging very grounds raised in present Appeal on aspect of prospectivity etc. We, therefore, clarify that we leave all such issues open for decision of Commissioner of Income Tax (Appeals) and thereafter, if need be, ITAT. 16. Accordingly, we answer first substantial question of law against appellant and in favour of respondent-Revenue. Further, we answer second and third substantial questions of law in favour of appellant-assessee and against respondent- Revenue. However, for reasons indicated earlier, we refrain from answering fourth substantial question of law, leaving same open for present. 17. Based upon aforesaid, however, we set aside judgments and orders dated 31.03.2010 and 10.03.2011, made by Commissioner of Income Tax (Appeals) and ITAT respectively, insofar as they concern issue of deductions under Section 10B of IT Act and we restore appellant-assessee's Appeal bearing ITA No. 158/PNJ/08-09 to file of Commissioner of Income Tax (Appeals) for fresh adjudication on issue of deductions under Section 10B of IT Act, in accordance with law and on its own 10 TXA No. 24 of 2011 merits. 18. We request Commissioner of Income Tax (Appeals) to dispose off Appeal, which we have now restored to its file, as expeditiously as possible and in any case, within period of four months from date parties appear and file authenticated copy of this judgment and order. 19. We direct parties to appear before Commissioner of Income Tax (Appeals) on 07.04.2020 at 11:00 a.m. and file authenticated copy of this judgment and order. 20. Appeal is disposed off in aforesaid terms. There shall be no order as to costs. 21. All concerned to act on basis of authenticated copy of this Order. SMT. M. S. JAWALKAR, J. M. S. SONAK, J. EV Sesa Goa Limited v. Additional Commissioner of Income-tax, Range 1, Panaji
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