The Ahmedabad Bench of Income Tax Appellate Tribunal ( ITAT ) allowed the appeal filed by the assessee challenging the incorrect rejection of the Section 80IC of Income Tax Act,1961 deduction claim due to a village name discrepancy.
Acacia Biotech Limited, appellant-assessee, challenged the order dated 30.10.2023 passed by Commissioner of Income Tax (Appeals) [CIT(A)] for the Assessment Year ( AY ) 2009 -10. The Assessing Officer ( AO ) rejected the claim for a deduction under Section 80IC, stating that the unit was not in the eligible location as per the Central Board of Direct Taxes ( CBDT ) notification.
The assessee had submitted a 10CCB report with the address “Khasra No.373, Village Rudrapur, Dist. Udham Singh Nagar, Uttranchal,” but the actual location was Village Kalyanpur. The assessee dissatisfied by the AO order appealed before the CIT (A) who later dismissed the appeal and then appealed before the tribunal.
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The assessee’s counsel stated that the issue for AY 2011-12 to 2013-14 was pending before the CIT ( A ) and involved the disallowance of the Section 80IC claim due to a name difference between Rudrapur and Kalyanpur.
The Revenue counsel upheld the AO’s and CIT ( A )’s decisions, pointing out that the claim had been rejected in those years. The counsel clarified that the name should have been Rudrapur, as both villages are part of the same area.
The two member bench comprising Siddhartha Nautiyal (Judicial Member) and Dr.BRR Kumar (Vice President) reviewed the submissions from the assessee and the records from the Revenue. It found that the distance between Rudrapur Centre and Kalyanpur was 6.1 km. Referring to CBDT notification No. 283/2006, it confirmed that Kalyanpur and Kichha were eligible areas for the Section 80IC deduction.
The assessee also provided a certificate from State Infrastructure and Industrial Development Corporation of Uttarakhand ( SIDCUL ) showing the plot in Kalyanpur. It concluded that the confusion stemmed from the assessee incorrectly listing Rudrapur instead of Kalyanpur in Form 10CCB. As Kalyanpur was eligible, the tribunal allowed the appeal.
The appellate tribunal pointed out that the case highlighted poor judgment by officials, affecting the fairness and efficiency of the tax system. This caused delays, higher litigation costs, and frustration for both the assessee and the Revenue.
It highlighted that tax officials should rely on facts and focus on the key aspects of tax collection. The tribunal also stated that the actions of the AO and CIT (A) should be reviewed to hold the responsible officials accountable.
In short,the appeal filed by the assessee was allowed.
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