Nuchem Limited v. Commissioner Of Income Tax Haryana At Rohtak And Others

IN THE HIGH COURT OF PUNJAB AND HARYANA ATCHANDIGARH CM No.2797 of 2011 and CWP No.2262 of 1994 (O&M) Date of Decision: 25.5.2011 Nuchem Limited ....Petitioner Versus Commissioner of Income Tax Haryana at Rohtak and others ….Respondents CORAM:- HON'BLE MR. JUSTICE ADARSH KUMAR GOELACTING CHIEF JUSTICE HON'BLE MR. JUSTICE AJAY KUMAR MITTAL. PRESENT: Mr. P.C.Goyal, Advocate for the petitioner. Ms. Urvashi Dhugga, Sr.Standing Counsel for the revenue. Adarsh Kumar Goel, ACJ. 1.Heard. Order dated 14.1.2011 dismissing the writ petition fornon-prosecution is recalled. 2.This petition seeks quashing of orders dated 25.9.1991 and5.7.1993 under section 264 of the Income Tax Act, 1961 (‘the Act’)rejecting the claim of the petitioner for deduction under Section 80MM ofthe Act in respect of income from royalty. The petitioner put forward thesaid claim before the assessing authority which was not allowed againstwhich revision petition was filed which has been dismissed with thefollowing observations:- “The conditions for claiming deduction under section80MM are that there should be agreement with the abovecompanies duly approved by the Central Board of DirectTaxes. The Assessing Officer therefore, required theassessee to file copy of the agreements, duly approved bythe CBDT, with these concerns in support of its claim ofdeduction under section 80MM of the Income Tax Act,1961. The documents which were called by theAssessing Officer vide her letters dated 2.3.1990 andagain on 13.3.1990 as such documents were not filed bythe assessee during the course of assessmentproceedings. The assessee did not comply with therequirement. The Assessing Officer then issued noticeunder section 154 on 26.4.1990 proposing to withdrawdeduction wrongly allowed under section 80MM of theIncome Tax Act, 1961 at the time of assessment undersection 143(3) of the Act. The case was fixed for30.4.1990 but none attended. However, on 16.8.1990Shri V.Talwar C.A. attended on behalf of the assesseebut no reply was filed. Therefore, the assessee was againasked to show cause as to why deduction under section80MM be not withdrawn under section 154 being amistake apparent from the records as neither copy ofagreement is filed nor is there any evidence that theagreement is approved. The case was fixed for 17.8.90when Shri Talwar C.A. attended but no evidence, ascalled for, had been furnished. In such circumstances, theAO held that the assessee has nothing to say in thisregard. The mistake being apparent from records wasaccordingly rectified vide order under section 154 dated6.9.1990 by withdrawing the deduction under section80MM amounting to Rs.4,07,037/- which was wronglyallowed at the time of assessment.” 3.In the writ petition, it has been pointed out that though theagreement under which royalty was received had been duly approved by theCBDT and the benefit had been given in the earlier assessment order, thepetitioner could not produce the said documents. Reference has been madeto documents annexed as Annexure P.9 collectively in support of the case ofthe petitioner. 4.We find that documents which have been now filed do showthat the agreements in questions were duly approved by the CBDT. It is alsoclear from the record that the petitioner had been earlier given benefit underSection 80MM of the Act. The petitioner has given a valid reason for thedocuments not being produced at the time of assessment as the approval ofthe CBDT was itself subsequent to assessment order though prior to therevisional order. 5.We are the view that the documents relied upon by thepetitioner which are documents of the department itself need to be takeninto account by the revisional authority. 6.Accordingly, we allow this petition, set aside the impugnedorders and remand the matter to the revisional authority for a fresh decision `in accordance with law. The petitioner may appear before the revisionalauthority for further proceedings on 25.7.2011. 5.We are the view that the documents relied upon by thepetitioner which are documents of the department itself need to be takeninto account by the revisional authority. 6.Accordingly, we allow this petition, set aside the impugnedorders and remand the matter to the revisional authority for a fresh decision `in accordance with law. The petitioner may appear before the revisionalauthority for further proceedings on 25.7.2011. (Adarsh Kumar Goel)Acting Chief Justice (Ajay Kumar Mittal)Judge