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Income Tax Appellate Tribunal, DELHI BENCH “D”: NEW DELHI
Before: SHRIR.K.PANDA & SHRI N. K. CHOUDHRY
Date of Hearing: 24/02/2022 Date of pronouncement: 25/02/2022 O R D E R PER N.K. CHOUDHRY, J. M.: 1. This appeal has been preferred by the Assessee against the order dated 10.10.2016 impugned herein passed by the ld. Commissioner of Income Tax (Appeals)–1, Gurgaon {hereinafter called in short as the “ld. Commissioner”} u/s 250(6) of the Income Tax Act, 1961 (in short “the Act”) for the assessment year 2013-14.
In this case the Assessee had filed its return of income declaring an income of Rs. Nil on dated 26.02.2014, which was processed u/s 143(1) of the Act. Thereafter, the case of the Assessee was picked for scrutiny through CASS and AO initiated the assessment proceedings which resulted into addition of Rs. 77,38,729/- on account of deduction u/s 80IC/80IE of the Act as claimed by the Assessee. The Assessee against the Assessment order preferred statutory first appeal before the ld. Commissioner who vide impugned order dismissed the appeal of the Assessee and upheld the addition by observing that it is admitted fact on record that the return filed by the Assessee was well beyond the date of filing of return as specified u/s 139(1) and was late by almost five months. It is settled law now that failure to file the return of income by due date specified in 139(1) will disentitle the Assessee for claiming of deduction u/s 80IC/ 80IE read with section 80AC which is mandatory in nature. The ld. Commissioner while dismissing the appeal of the Assessee relied upon the order dated 30.01.2015 passed by the Hon’ble ITAT, Mumbai bench in case of DwarkadasPanchmatiya Vs.ACIT in (2015) 57 Taxmann.com 2(Mumbai Tribunal).
Aggrieved by the impugned order the Assessee is in appeal before us.
Heard the parties and perused the material available on record. For claiming the deduction u/s 80IC/80IC the Assessee was supposed to file its return of income within the stipulated period i.e. 30.11.2013 however, the same was filed on dated 26.02.2014 and therefore on the basis of delay in filing of return of income both the authorities below declined the deduction as claimed u/s 80IC/80IC of the Act by the Assessee.
The ld. AR has drawn our attention to the reasons for delay in filing of the return of income as per section 139(1) of the Act which also endorsed by the ld. Commissioner in its order vide para No. 5.2. The Assessee claimed that the Assessee is entitled to and has been claiming deduction u/s 80ICregularly and during the year under consideration had got its accounts audited within due date and also filed tax audit report within the due date. However, the only reason for delay was tax liability as AMT u/s 115JC of the Act was introduced newly, therefore the Assessee was unaware of the change and it is also clear from the action of the Assessee that it never deposited any advance tax either.However, only during the visit of its CA for Audit and return filing work, came to know about the new tax liability. Therefore, delay in filing has been occurred.
We observe that though, the Assessee had demonstrated reasonable cause for delay in not filing the return of income within the limitation period, however the ld. Commissioner did not get satisfied with the explanation and therefore, declined to accept the same as a reasonable cause by observing “that a reasonable cause of delay is not relevant to the issue with regard to the claim of deduction in the section discussed above”. The Ld. Commissioner while following the judgment of Mumbai Tribunal in case of DwarkadasPanchmatiyaVs. ACIT (supra) finally dismissed the appeal of the Assessee and affirmed the addition.
It is a fact that the Ld. Commissioner infact relied upon an old judgment, whereas the Jurisdictional Bench in the case of Fiberfill Engineers Vs. CIT, Circle-38(1), New Delhi {Appeal No. 501(CHD) of 2017 decided on 01.10.2017}[(2017) 87 Taxmann.com 32 (Chandigarh-Trib)] dealt with the identical issue and held as under:
“That bare perusal of the section makes it clear that the legislature itself has allowed the Assessee to file return belatedly subject to fulfillment of conditions written in the said section. Therefore, once those conditions are met, then return filed by the Assessee would for all technical purposes be considered being filed u/s 139(1). Thus, keeping in view the various decisions noted earlier, we do not find any reason to deny the claim of Assessee on the ground of filing the return belatedly. “
7.1 The aforesaid judgment of Hon’ble Tribunal,was approved by the Hon’ble DelhiHigh Court in case of Fiberfill Engineers Vs. DICT (WP(C) No. 3935/2015 (2017) decided on 10.08.2017){85 Taxmamann.com 27 (Delhi)} by holding as under:
“Since entitlement of the petitioner to the deduction u/s 80IC of the Act even for Assessment Year 2010-11 has not been questioned by the department on merits, there is no justification for not viewing the delay of 46 days in filing the return to be bana fide. It is not one of those cases where the delay is so extraordinary so as to not be condoned.” Page | 3
Hon’ble High Court of Kerala in the case of Chirakkal Service Co- 8. operative Bank Ltd Kannur Vs. CIT dated 15.02.2016 (2016) taxmann.com 298 (Kerala) also in the identical issueheld as under:
“Areturn filed by the Assessee beyond the period stipulated u/s 139(1)/139(4)/142(1)/148 can also be accepted and acted upon provided further proceedings in relations to such assessment are pending in the statutory hierarchy of adjudication in terms of the provisions of IT Act. In all such situation, it cannot be treated that a return filed at any stage of such proceedings could be treated as non est in law and invalid for the purpose of deciding exemption u/s 80P of the IT Act.”
Hon’ble Tribunal in the case of ITO, Ward-10(2) Vs .GopiConstech 8.1 Pvt. Ltdin the identical case held as under:
“Deduction u/s 80IA of the Act cannot also be denied to the Assessee on the ground that the report initially submitted along with letter dated 16.01.2014 in Form No. 10CCB did not contain complete particulars as the Assessee had submitted complete Form during the course of assessment proceedings itself on 04.03.2014.” It is admitted fact that in this case that the Assessee before the 9. filing the return of income on dated 03.09.2013 filed its audit report on dated 31.10.2013 which was before the stipulated period or due date of filing of return on 30.11.2013 and from the judgments referred above it is clear that even return of income filed belatedly u/s 139(4) of the Act also cannot be denied for claiming the deduction u/s 80IC/ 80IE of the Act. The Hon’ble Jurisdictional High Court in Fiberfill Engineers case (supra) categorically held that when the deduction u/s 80IC of the Act has not been questioned by the department on merits there is no justification for not viewing the delay of 46 days in filing the return to be bona fide.
In this case there is nothing contrary on record on merit qua deduction of claim. Hence, on the basis of aforesaid analyzations and respectfully following the judgmentsreferred above, we are inclined to allow the claim of the Assessee. Consequently, the addition made by the AO and sustained by the ld. Commissioner is deleted.
In the result, appeal filed by the Assessee stands allowed.
Order pronounced in the open court on 25/02/2022.