L.K. TEA COMPANY PRIVATE LIMITED,DIBRUGARH vs. INCOME TAX OFFICER, WARD-2(1), DIBRUGARH

आदेश /O R D E R PER BENCH:- These two assessee’s appeals for assessment year(s) 2015-16 & 2016- 17 arise against the Commissioner of Income Tax (Appeals)-Dibrugarh’s common order dated 23.08.2018 passed in case No. CIT(A), Dibrugarh/10012/2017-18 & CIT(A), Dibrugarh/10013/2017-18, involving proceedings u/s 154 of the Income Tax Act, 1961; in short ‘the Act’. Case(s) called twice. None appears at the assessee’s behest. Case file suggests that the earlier co-ordinate bench had also adjourned the hearing on 13.05.2019. We therefore proceed ex parte against the assessee.

ITA No.306-307/Kol/2018 A.Ys. 15-16 & 16-17 L.K. Tea Co.Pvt. Ltd Vs. ITO Wd-2(1), Dibrugarh Page 2 2. For the reason stated therein assessee’s condonation petition dated 12.01.2019, we condone the impugned eight days’ delay in filing of latter appeal ITA No.307/Gau/2018. 3. Coming to the merits of the former issue, we notice that the CIT(A) has affirmed the Assessing Officer’s action denying sec. 80IE deduction of ₹1,20,13,510/- vide following detailed discussion:- “3. Ground Nos. 1,,3,4 for AY 2015-16 and Ground Nos. 1 to 6 for the AY 2016-17 In these grounds, appellant is challenging the denial by the AO of deduction u/s.80- IE of the Act. 3.1 For AY 2015-16, return of income was filed on 01.11.2015 in which deduction u/s. 80-IE amounting to Rs.1,20,13,510/- was claimed. The same was processed u/s. 143(1) by CPC in which deduction claimed was denied. Assessee filed rectification petition u/s. 154. By an order dated 11.07.2017, assessee’s application was rejected. According to the Assessing Officer, return was due by 31.10.2015. But the same was filed only on 01.11.2015. In accordance with provision of Section 80AC, unless return was filed within due date prescribed u/s.139(1) deduction u/s 80-IE could no be allowed. Time limit prescribed u/s.139(1) was 31.10.2015. Since return was filed only on 01.11.2015, the AO denied benefit of deduction u/s.80-IB to assessee. 3.1.1 Similarly, for AY 2016-17, return was filed on 18.10.2017 u/s 139(1), the same was due by 30.09.2017. The time limit was extended to 17.10.2017 by the Board. Return was not filed within prescribed time period. Deduction u/s 80-IE amounting to Rs.1,28,84,573/- was denied to assessee. Application u/s 154 wherein assessee prayed for allowance of deduction u/s 80-IE was rejected by the AO. Hence, this appeal. 3.2 In the written submission filed, the assessee stated that for AY 2015-16, the return was uploaded in the IT system at 12.29 AM on 01.11.2015. Due to internet connectivity problem, the return could be uploaded half an hour after stipulated period. Similarly, for the next year, he return could be uploaded on 18.10.2016 instead of 17.10.2016. A/R argued that Tax Audit Report was filed on time. He pleaded that token delay of a day has to be condoned. He stated that assessee was legally entitled for deduction u/s 80-IE. Assessee's failure to file return in time due to technical problem should not disentitle it from claiming deduction due to it. 3.3 I have carefully considered the matter. According to section 80-AC of the Act, assessee will be entitled to various deductions, like deduction u/s 80-IE if return of income is filed within the due date prescribed u/s 139(1) of the Act. Some benches of Hon'ble Tribunal and even Hon'ble High Courts have taken the view that even if return is filed after due date prescribed u/s 139(1), assessee will be eligible for various deductions under Chapter VIA in view of the fact that provision of section 80- AC being directory in nature. 3.3.1 It will be in the fitness of things if some important judicial decisions in the matter are referred to 3,3.2. In tile case of 5affire Garments vs. ITO 140 ITO 6 Rajkot (SB), assessee filed return on 31.01.2007 which was due on 31.12.2006. It claimed deductions u/s10A of the Act. According to proviso to section 10A(IA) of the Act, the deduction could be

ITA No.306-307/Kol/2018 A.Ys. 15-16 & 16-17 L.K. Tea Co.Pvt. Ltd Vs. ITO Wd-2(1), Dibrugarh Page 3 claimed only if return of income was filed within due date prescribed u/s 139(1) of the Act. Before the Special Bench of Hon'ble Tribunal, it was contended that provision of Section 10A(1A) was directory ill nature. After consideration of the case, Hon'ble Special Bench took the view that proviso to Section 10A(1A) is mandatory in nature. It held that unless return of income was filed within due date prescribed u/s 139(1), deduction u/s 10A would not be available to assessee. 3.3.3 However, contrary view was taken by Hon'ble Delhi Tribunal in case of ITO Vs. Gopi Cohstech Pvt. Ltd. ([TA No. 2384/Del/2016) decided on 22.01.2018. In this case, Hon'ble Delhi Tribunal, relying on decisions of Hon'ble Kerala High Court in case of Chirakal Service Cooperative Bank Ltd., Kannur Vs. CIT [2016] 384 ITR 490 (Kerala) as well as decision of Honble Delhi High Court in case of Church Auxiliary for Social Action Vs. DGIT (Exemption) 2010 324 ITR 362 (Del) held that deduction u/s80O-IA would be available to assessee even if return was filed beyond due date prescribed u/s 139(1) of the Act. 3.3.4 Decision favourable to assessee was taken by Hon'ble Chandigarh Tribunal in case of Symbiosis Pharmaceuticals Pvt. Ltd. Vs. DCIT (Yamunanagar) (decided on 04.10.2117). In this case, return was filed only within extended period allowed u/s 139(4) of the Act. The AO and CIT(A) denied benefit of deduction u/s 80-IE. However, claim of assessee was allowed by Honble Tribunal. Hon'ble Tribunal held that assessee fulfilled all requirements for claiming deduction u/s 80-IC Only shortcoming was that return was not filed within due date prescribed u/s 139(1). It was held that assessee was unable to file the said return due to circumstances beyond its control. 3.3.5 Latest decision on the issue I came across is that of Hon'ble Kolkatta Tribunal in the case of Mount Distilleries Ltd. Vs. ITO, Ward-2(4), Gangtok [MA No. 209/Kol/2017) in ITA No. 191K/2014 decided on 01.03.2018. In the above case, assessee was claiming deduction u/s 80-IE. But return for AY 2010-11 was filed only on 31.03.2011. Deduction was denied by the AO and CIT(A). Hon'ble Tribunal. relying on decision of Hon'ble Calcutta High Court in case of CIT Vs. Shelnon Properties (P) Ltd. [G.A. No. 3069 of 2013 decided on 16.01.2014] took the view that deduction u/s 80-IE would not be admissible unless return was filed within the due date prescribed u/s 139(1) of the Act. Hon'ble tribunal also alluded to decision of Han'ble Apex court in case of Prakash Nath Khanna Vs. CIT [266 ITR 01 (SC)] wherein it was held that tiling of return within time allowed u/s 139(4) of IT Act, 1961 cannot dilute the infraction in not furnishing return on due time as prescribed u/s 13(1)of the Act. 3.3.6 The provision of section 80-AC is very clear. It speaks of return being filed within time allowed u/s 139(1). It does not say anything about section 139(4). A claim of deduction has to be filed within a specified period. The period prescribed is within time allowed u/s 139(1). Assessee had failed to file the claim of exemption within time allowed by the statute. There is no need to give interpretation to what is specifically stated by the statute. The law does not permit me to interpret the Act by taking a view that assessee will be illegible for deduction even if returns were filed after statutory limitation of time. Assessee is therefore not eligible for deduction u/s 80-IE of the Act, Decisions of Hon'ble Special Bench in case of Sapphire Garments (supra), Hon'ble Kolkata Tribunal in case of Mount Distilleries Ltd.(supra) & decision of Hon'ble Kolkata High Court in case of Shelcom Properties are squarely applicable in assessee's case. Ground Nos. 1,2,3 & 4 for AY 2015-16 and ground Nos. 1 to 6 for AY 2016-17 are dismissed.”

ITA No.306-307/Kol/2018 A.Ys. 15-16 & 16-17 L.K. Tea Co.Pvt. Ltd Vs. ITO Wd-2(1), Dibrugarh Page 4 4. There is no denial coming from the assessee side about the clinching fact of its return us/.139(1) of the Act having being filed beyond the prescribed time limit. The CIT(A)’s detailed discussion extracted hereinabove has taken into consideration all the factual matrix as well as various judicial precedents (supra) on the very issue. We therefore affirm the same mutatis mutandis.