EMPIRE DEVELOPERS AND BUILDERS,PUNE vs. ITO, WARD 3(1), PUNE, PUNE

or act to the same as being necessary.” Brief Facts of the case :

2. The assessee for A.Y.2011-12 had filed return of income on 30/09/2011 claiming deduction u/s.80IB(10) of the Act. The Return of Income was processed u/s.143(1) of the Act. The Assistant Commissioner of Income Tax(CPC) vide order u/s.143(1) of the Act disallowed the Assessee’s claim of deduction u/s.80IB(10) of the Act. The assessee filed an application for rectification u/s.154 of the Act. The Dy.Director of Income Tax(CPC) passed an order u/s.154 on 07/01/2019 rejecting the assessee’s application u/s.154 of the Act. The reason mentioned in the Order u/s.154 is reproduced here as under : “As seen from the e-filed return of income and the rectification filed by you, it is found that you have not correctly filed Sch.80IA/80IB/80IC or 80IE.

-The deductions u/s.80IA/80IB/80IC/80IC/80IE are not allowable, if the return of income is filed beyond the due date, as per the provisions of sec 80ac. -Further, as per the provisions of section 111a(2)/112(2), if the balance current year income available is only income from capital gains then, in such cases, deduction under chapter VIA is not allowable.” 2.1 Then, the assessee filed an appeal before the Commissioner of Income Tax(Appeal) who dismissed the Appeal on the ground that there is no mistake apparent from record. Hence, assessee filed an appeal before this Tribunal.

Submission of Ld.AR : 3. Ms.Vaishnavi Badwe-CA filed a paper book. She filed copy of return of Income of the assessee for A.Y.2011-12. Ms.Vaishnavi Badwe-CA submitted that the Assessee had filed return of Income within the time allotted u/s 139(1) of the Act. She submitted that the assessee’s books of accounts are audited and assessee’s case falls under Audit Category. Hence the due date for filling return of Income u/s 139(1) for the year was 30/09/2011. Assessee had filed Return of Income on 30/09/2011, thus it was filed within the time mentioned u/s 139(1) of the Act. Ms.Vaishnavi Badwe-CA filed copies of the Income tax Act section 139 to demonstrate the due date of filling. She also filed copy of relevant pages of V.G. Mehta’s Ready Reckoner to show the due date for filling return u/s 139 for AY 2011-12. Assessee had claimed deduction u/s 80IB(10) of the Act . Ms.Vaishnavi Badwe-CA submitted that hence there was no valid reason for Income Department to disallow the claim of deduction u/s.80IB(10) of the Assessee. She also submitted that no reason is mentioned in the Order u/s.143(1) of the Act. She submitted that Ld.CIT(A) erred in not considering these facts. There was an apparent mistake hence assessee had filed an application u/s.154. She also invited our attention to section 143(1) of the Act and pleaded that under section 143(1) as applicable for A.Y.2011-12 only following adjustments were permissible : “143. [(1) Where a return has been made under section 139, or in response to a notice under sub-section (1) of section 142, such return shall be processed in the following manner, namely:— (a ) the total income or loss shall be computed after making the following adjustments, namely:— (i) any arithmetical error in the return; or (ii) an incorrect claim, if such incorrect claim is apparent from any information in the return; 3.1 Hence, Ld.AR for the Assessee submitted that the adjustments made in the order u/s.143(1) of the Act, are beyond the scope of section 143(1) of the Act. She submitted that “Due Date” mentioned in the order u/s.143(1) is 01.08.2011 which is incorrect, it should have been 30.09.2011 as assessee is in Audit Category.

Submission of Ld.DR : 4. Ld. Departmental Representative relied on the order of the ld.CIT(A) and order u/s.154. We specifically asked Ld.DR to explain the reason for rejecting assessee’s claim u/s 80IB in the order u/s.143(1) and 154. The Ld.DR could not explain it.

Findings and Analysis : 5. We have heard both the parties and perused the records. It is a fact that Assessee had filed Return of Income on 30/09/2011 for A.Y.2011-12 claiming deduction u/s.80IB(10) of the Act. Copy of the Return of Income is at page 1-22 of the Paper book. We have read the provisions of Section 139 as applicable for AY 2011-12. The due date for filling Return of Income where Audit Report was required to be filed was 30/9/2011. However, the “Due Date” mentioned in the order u/s.143(1) of the Act, is 01/08/2011. We have read section 139(1) of the Act and agree with ld.AR for the Assessee that in the case of the Assessee, due date is 30/09/2011. The Section 139(1) is reproduced here under : “139(1) Every person

(a) being a company _ [or a firm]; or (b) being a person other than a company [or a firm], if his total income or the total income of any other person in respect of which he is assessable under this Act during the previous year exceeded the maximum amount which is not chargeable to income-tax, shall, on or before the due date, furnish a return of his income or the income of such other person during the previous year, in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed: Explanation 2.—In this sub-section, "due date" means,— (a ) where the assessee is— (i) a company; or (if) a person (other than a company) whose accounts are required to be audited under this Act or under any other law for the time being in force; or (Hi) a working partner of a firm whose accounts are required to be audited under this Act or under any other law for the time being in force, the _ [30th day of September] of the assessment year; in the case of a person other than a company, referred to in the first proviso to this sub-section, the 31st day of October of the assessment year; in the case of any other assessee, the 31st day of July of the assessment year.” 5.1 Thus, the Return of Income was filed within the time allowed u/s 139(1) of the Act. In the order u/s 143(1) no Reason is mentioned for disallowing the deduction u/s 80IB(10) of the Act.

-Further, as per the provisions of section 111a(2)/112(2), if the balance current year income available is only income from capital gains then, in such cases, deduction under chapter VIA is not allowable.” 6.1 Thus, no specific reason is mentioned in the Order u/s.154 of the Act. It is non-speaking order. There is no application of mind before passing the order u/s.154 of the Act.

6.2 Ld.CIT (A) has dismissed the appeal on the ground that there is no apparent mistake . However, disallowing a claim u/s.80IB(10) validly made by the assessee in the Return of Income without any authority of law is a mistake apparent from records. The Section 143(1) is reproduced here as under : “143. [(1) Where a return has been made under section 139, or in response to a notice under sub-section (1) of section 142, such return shall be processed in the following manner, namely:— (a ) the total income or loss shall be computed after making the following adjustments, namely:— (i) any arithmetical error in the return; or (ii) an incorrect claim, if such incorrect claim is apparent from any information in the return; (b ) …. (c ) …………… (d ) ……………. (e ) …… Provided that an intimation shall also be sent to the assessee in a case where the loss declared in the return by the assessee is adjusted but no tax or interest is payable by, or no refund is due to, him:

Provided further that no intimation under this sub-section shall be sent after the expiry of one year from the end of the financial year in which the return is made. Explanation.—For the purposes of this sub-section,— (a ) "an incorrect claim apparent from any information in the return" shall mean a claim, on the basis of an entry, in the return,— (i) of an item, which is inconsistent with another entry of the same or some other item in such return; (ii) in respect of which the information required to be furnished under this Act to substantiate such entry has not been so furnished; or (iii) in respect of a deduction, where such deduction exceeds specified statutory limit which may have been expressed as monetary amount or percentage or ratio or fraction;” 6.3 In this case the Return of Income was filed within the time mentioned u/s.139(1) of the Act. The assessee had claimed deduction. Hence, there was no apparent reason for CPC to disallow the claim of the Assessee. We specifically asked the Ld.DR to explain the reason for impugned disallowance and he could not explain it too.

6.4 In these facts and circumstances of the case, we are of the considered opinion that the denial of assessee’s claim u/s.80IB in the order u/s.143(1) and 154 of the Act is without any valid reason hence not sustainable. Accordingly, AO is directed to allow the deduction u/s.80IB claimed by the assessee in the return of income.

Accordingly, Ground Number 1 to 3 raised by the assessee are allowed.