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Income Tax Appellate Tribunal, ‘SMC‘ BENCH
आदेश / O R D E R PER M. BALAGANESH (A.M):
This appeal in A.Y.2019-20 arises out of the order by the ld. Commissioner of Income Tax (Appeals) National Faceless Appeal Centre (NFAC) in appeal No.NFAC/2018-19/10017757 dated 02/12/2021 (ld. CIT(A) in short) against the order of assessment passed u/s.143(1) of the Income Tax Act, 1961 (hereinafter referred to as Act) dated 11/01/2021 by the ld. Asst. Director of Income Tax, CPC (hereinafter referred to as ld. AO).
At the outset, there is a delay of 11 days in filing of appeal by the assessee before us. We find that the said delay has been properly
M/s. Lekha Pariksha Vibhag Karmchari Sahakari Patsanstha Ltd., explained by the assessee and hence the delay is condoned and appeal is admitted for adjudication.
The only issue to be decided in this appeal is as to whether the assessee is entitled for claiming deduction u/s 80P of the Act in terms of section 80AC of the Act, when the return of income was not filed within the due date prescribed u/s 139(1) of the Act.
We have heard the rival submissions and perused the materials available on record. We find that the assessee is a Co-operative Credit Society of employees of a Government Department engaged in the activity of providing credit facilities to its members. It had filed its return of income for the Asst Year 2019-20 on 30.9.2020, which is much beyond the due date prescribed u/s 139(1) of the Act but well within the due date prescribed u/s 139(4) of the Act. The assessee in the said belated return had claimed deduction u/s 80P of the Act in the sum of Rs 22,61,165/- . The ld. AO observed that the due date of filing the return of income u/s 139(1) of the Act was 31.8.2019 and since the return was filed belatedly by the assessee, it is not eligible for claiming deduction u/s 80P of the Act in view of express provisions of section 80AC of the Act. We find from the provisions of section 80AC of the Act as amended from 1.4.2018 (applicable from Asst Year 2018-19 onwards) in clause (ii) reads as under:- Section 80AC – Deduction not to be allowed unless return furnished Where in computing the total income of an assessee of any previous year relevant to the assessment year commencing on or after – (i) ………. (ii) The 1st day of April 2018 , any deduction is admissible under any provision of this Chapter under the heading “C.-Deductions in respect of certain incomes”.
M/s. Lekha Pariksha Vibhag Karmchari Sahakari Patsanstha Ltd.,
No such deduction shall be allowed to him unless he furnishes a return of his income for such assessment year on or before the due date specified under sub- section(1) of section 139.
4.1. A perusal of provisions of section 80AC of the Act reveals that mandate of this section is very clear that to avail the benefit of deduction u/s 80P of the Act, the assessee is required to file the return within the due date prescribed u/s 139(1) of the Act. It is noted that section 139(4) of the Act was existing when section 80AC of the Act was brought in the statute and thus, the legislature was conscious of this fact that return could be filed within the extended time as prescribed u/s 139(4) of the Act, but the legislature chose to grant the benefit of deduction only when the return is filed u/s 139(1) of the Act. If the intention was to grant benefit of deduction, even in those cases when the return is filed u/s 139(4) of the Act, then the same would have been mentioned by the legislature in section 80AC of the Act itself that return is filed u/s 139(1) of the Act or within the time extended u/s 139(4) of the Act. It appears that the whole objective of bringing section 80AC of the Act was to encourage the assessees to file the return within time as stipulated u/s 139(1) of the Act and to discourage them from late filing of return. Section 80AC of the Act was brought into the statute by Finance Act 2006. The Explanatory Notes to the provisions relating to direct taxes were as given in Circular No. 14/2006 dated 28.12.2006 which read as follows:- “10. Benefits of certain deductions not to be allowed in cases where return is not filed within the specified time limit
10.1 Section 139(1) casts an obligation on every assessee to furnish the return of income by the due date. With a view to enforce the compliance in this regard by the assessees who are entitled for deduction under section 10B from their income, a proviso (fourth proviso) to sub-section (1) of section 10B has been inserted so as to provide that no deduction under section 10B shall be allowed to an assessee who does not furnish a return
M/s. Lekha Pariksha Vibhag Karmchari Sahakari Patsanstha Ltd., of his income on or before the due date specified in sub-section (1) of section 139. Similarly, with a view to enforce the compliance for furnishing the return of income by the due date by the assessees who are entitled for deductions under section 80-IA or section 80-IAB or section 80-IB or section 80-IC from their income, a new section 80AC has been inserted so as to provide that no deduction under section 80-IA or section 80-IAB or section 80-IB or section 80-IC shall be allowed to an assessee who does not furnish a return of his income on or before the due date specified in sub-section (1) of section 139.
10.2 This amendment takes effect retrospectively from 1-4-2006 and applies in relation to the assessment year 2006-07 and subsequent years.”
4.2. Perusal of the above shows that the legislature has clearly intended that benefit of aforesaid deductions should not be allowed in the cases where return is not filed within the specified time limit as prescribed u/s 139(1) of the Act. The whole idea of bringing this piece of legislation on the statute was to streamline and bring efficiency in the system of filing of returns, issuing refunds and carrying out assessment proceedings etc in an efficient and time bound manner. This obligation has been cast upon the assessee by the legislature for a valid purpose. Under these circumstances, it would not be fair, justified and legally permissible on our part to add other section i.e. 139(4) of the Act as is requested by the ld. AR before us, since it may amount to dilution of the object of the section. It is further noted by us that the Special Bench of Rajkot Tribunal in the case of Saffire Garments reported in 140 ITD 6 had taken a similar view wherein it has been opined that filing of return within the time limit prescribed u/s 139(1) of the Act is mandatory to claim the benefit of deduction u/s 80IB(10) of the Act. Infact similar view was also taken by the Hon’ble Calcutta High Court in the case of CIT vs Shelcon Properties (P) Ltd reported in 370 ITR 305 (Cal). Similar view has also been taken by the Hon’ble Uttarakhand High Court in the case of Umesh Chandra Dalakoti vs ACIT in IT Appeal No. 7 of 2012 dated 27.8.2012.
M/s. Lekha Pariksha Vibhag Karmchari Sahakari Patsanstha Ltd., 4.3. We further find that similar view was taken by the Hon’ble Jurisdictional High Court in the case of EBR Enterprises vs Union of India reported in 266 taxman 15 (Bom). For the sake of convenience, the relevant operative portion of the order of Hon’ble Jurisdictional High Court is reproduced hereunder:- “5. As per this provision, where the assessee fails to make a claim in his return of income for any deduction under Section 10A or Section 10AA or Section 10B or Section 10BA or under any provision of the said Chapter - VI A under the heading "C.-Deduction in respect of certain incomes", no deduction would be allowed to him under the said provision. In plain terms, this Sub Section (5) of Section 80A of the Act imposes an additional condition for claim of deduction in relation to income under any of the provisions mentioned therein. Apart from the requirement of fulfillment of individual set of respective conditions for the purpose of claiming the concerned deduction, this plenary condition requires that the claim ought to have made in the return of income by the assessee and if the assessee fails to make such claim in the return of income, such deduction shall not be allowed to him under the relevant provision. Admittedly, in the present case, the Petitioners had not raised any such claim in the return of income. In plain terms, the claim of the Petitioners under Section 80-IB (10) of the Act would be hit by Sub Section (5) of Section 80A of the act.
We are conscious that in absence of the provision contained in Section 80A (5) of the Act, the Petitioners could have maintained the claim of deduction even before the CIT for the first time in Revision Application, though no such claim was made before the Assessing Officer, if from the facts on record, the Petitioners could sustain the said claim in law. This is very clear from the series of Judgments of various High Courts. Reference can be made to the decision of High Court of Gujarat in case of C. Parikh & Co. v. CIT [1980] 4 Taxman 224/122 ITR 610 In the said decision, the Court held that: 'it is clear that under Section 264, the CIT is empowered to exercise revisional powers in favour of the assessee. In exercise of this power, the CIT may, either of his own motion or on an application by the assessee, call for the record of any proceeding under the Act and pass such order thereon not being an order prejudicial to the assessee, as the thinks fit. Sub - ss. (2) and (3) of Section 264 provide for limitation of one year for the exercise of this revisional power, whether suo motu, or at the instance of the assessee. Power is also conferred on the CIT to condone delay in case he is satisfied that the M/s. Lekha Pariksha Vibhag Karmchari Sahakari Patsanstha Ltd.,
assessee was prevented by sufficient cause from making the application within the prescribed period. Sub-s. (4) provides that the CIT has no power to revise any order under S. 264 (1) : (i) while an appeal against the order is pending before the AAC, and (ii) when the order has been subject to an appeal to the Tribunal. Subject to the above limitation, the revisional powers conferred on the CIT under S. 264 are very wide. He has the discretion to grant or refuse relief and the power to pass such order in revision as he may think fit. The discretion which the CIT has to exercise is undoubtedly to be exercised judicially and not arbitrarily according to his fancy. Therefore, subject to the limitation prescribed in S. 264, the CIT in exercise of his revisional power under the said section may pass such order as he thinks fit which is not prejudicial to the assessee. There is nothing in S. 264 which places any restriction on the CIT's revisional power to give relief to the assessee in a case where the assessee detects mistakes on account of which he was over assessed after the assessment was completed. We do not read any such embargo in the CIT's power as read by the CIT in the present case. It is open to the CIT to entertain even a new ground not urged before the lower authorities while exercising revisional powers. Therefore, though the Petitioner had not raised the grounds regarding under-totalling of purchases before the ITO, it was within the power of the CIT to admit such a ground in revision. The CIT was also not right in holding that the over-assessment did not arise from the order the assessment. Once the Petitioner was able to satisfy that there was a mistake in totaling purchases and that there was under- totalling of purchases to the tune of Rs.20,000, it is obvious that there was over-assessment. In other words, the assessment of the total income of the assessee is not correctly made in the assessment order and it has resulted in over- assessment The CIT would not be acting de hors the IT Act, if he gives relief to the assessee in a case where it is proved to his satisfaction that there is over-assessment, whether such over- assessment is due to a mistake detected by the assessee after completion of assessment or otherwise. In our opinion, the CIT has misconstrued the words "subject to the provisions of this Act" in S. 264 (1) and read a restriction on his revisional power which does not exist. The CIT was, therefore, not right in holding that it was not open to him to give relief to the Petitioner on account of the Petitioner 's own mistake which it detected after the assessment was completed. Once it is found that there was a mistake in making an assessment, the CIT had power to correct it under S. 264 (1). In our opinion, therefore, the CIT was wrong in not giving relief to the Petitioner in respect of over-assessment as a result of under-totalling of the purchases to the extent of Rs.20,000.'
M/s. Lekha Pariksha Vibhag Karmchari Sahakari Patsanstha Ltd.,
This was reiterated in case of Ramdev Exports v. CIT [2002] 120 Taxman 315/[2001] 251 ITR 873 (Guj.) This Court also in case of Danny Denzongpa v. CIT [2010] 7 taxmann.com 81/194 Taxman 415 [2012] 344 ITR 166 has taken a similar view.
However, the Petitioners are faced with the statutory provision contained in Sub Section (5) of Section 80A of the Act. The Petitioners' claim cannot therefore be accepted de hors the said statutory provision and ordinary principle of the wide powers of the CIT exercising revisional jurisdiction under Section 264 of the Act cannot be imported. What Sub Section (5) of Section 80A of the Act mandates is that, if the assessee fails to make a claim in his return of income for any deduction under the provisions specified therein, the same would not be granted to the assessee. This condition or restriction is not relatable to the Assessing Officer or the Income Tax Authority. This condition attaches to the claim of the assessee and has to be implemented by the Assessing Officer, CIT or the Appellate Tribunal as the case may be. There is no indication in Sub Section (5) of Section 80A of the Act as to why the restriction contained therein amounts to limiting the power of Assessing Officer but not that of Commissioner. 9. This issue can be looked from slightly different angle. In absence of the provision contained in Sub Section (5) of Section 80A of the Act has held by various decisions of the High Courts noted above, the CIT could entertain a fresh claim in Revision Application even if the claim was not made previously before the Assessing Officer. Provision contained in sub- section (5) of Section 80A is a statutory interdict which would prevent the CIT from granting any such claim in exercise of his revisional jurisdiction under Section 264 of the Act. As is often times stated, even High Court in exercise of Writ jurisdiction under Article 226 of the Constitution of India would not issue directions contrary to statutory provisions. Width of the powers of the CIT under Section 264 of the Act would not permit him to ignore the requirement of Section 80A(5) of the Act or allow the claim of an assessee in breach of the condition contained therein. We are therefore not in agreement that the expression given by the Income Tax Tribunal in case of Madhav Construction (supra) holding that the restriction contained in Sub Section (5) of Section 80A of the Act is to restrict the power of Assessing Officer and not higher Income Tax Authorities. 10. The Petitioners having given up the challenge to the constitutionality of the retrospectivity to Section 80A (5) of the Act, cannot bring in the concept of the reading down of the provision in order to save it from unconstitutionally. In plain terms, our duty would be to enforce the provision contained in Sub Section (5) of Section 80A of the Act, as it is stands in the statue book. The decision in case of Goetze (India) Ltd.
M/s. Lekha Pariksha Vibhag Karmchari Sahakari Patsanstha Ltd.,
(supra) was rendered in different background. The Supreme Court did not have any occasion to interpret the provision of Section 80A (5) of the Act in the context of the power of the CIT or the Appellate Tribunal. 11. In the result, we do not find any merit in the Writ Petition, the same is therefore dismissed.”
4.4. Respectfully following the aforesaid decisions and particularly the decision of Hon’ble Jurisdictional High Court, the grounds raised by the assessee are dismissed.
In the result, the appeal of the assessee is dismissed.
Order pronounced in the open Court 01/06/2022.