ACIT CORPORATE CIRCLE 2, COIMBATORE vs. SHANTHI GEARS LIMITED, COIMBATORE

आदेश आदेश /O R D E R आदेश आदेश

PER MAHAVIR SINGH, VP:

“2. The learned Commissioner of Income Tax (Appeals)-I Coimbatore has erred in allowing the Assessee’s appeal when the Assessee had not claimed deduction in the original return filed but made a fresh claim by filing a letter dated 17.09.2015 and the due procedure for filing of Form 10CCB was not followed.

3. The facts pf the case. i.e. Precot Meridian Vs. ACIT, Company Circle – I(1), Coimbatore relied upon by the learned CIT(A) are different from that of the Assessee and not applicable to this case.

:: 3 :: Assessee vide letter dated 17.09.2015 made a claim of deduction u/s.80IA of the Act in regard to profit derived from wind-mills along with necessary enclosures and audited report in Form No.10CCB dated 04.09.2015. The Assessing Officer disallowed the claim of deduction u/s.80IA of the Act by holding that the Assessee company failed to follow the due procedure in filing of Form No.10CCB electronically. The Assessing Officer stated that the provisions of Section 80AC of the Act is mandatory and therefore by not following the same, as the Assessee has made claim only in subsequent submissions during the assessment proceedings and not in the original return filed, the same is not allowable.

Accordingly, the Assessing Officer has not considered the claim u/s.80IA of the Act by observing in paragraph no.5.3, as under:

“5.3. It is an admitted fact that the Assessee had not followed the due procedure while claiming the deduction u/s.80IA of the I.T. Act, 1961. From the Assessment Year 2013 – 2014 onwards, as per Section 80IA(7) of the Act, the Assessee who claimed deduction u/s.80IA of the Act should mandatorily file the return of income along with Form No.10CCB electronically, as per Rule 12(2) of the I.T. Rules, 1962 inserted with effect from 01.04.2013. Since, the Assessee

:: 4 :: Form No.10CCB electronically and the very fact that the Assessee company themselves having accepted the same, and also based on the above discussions, the claim of deduction u/s.80IA of the Act amounting to Rs.4,15,68,651 is not allowed to the Assessee.”

4. Aggrieved, the Assessee came in appeal before the Commissioner of Income Tax (Appeals). The Commissioner of Income Tax (Appeals) after considering various submissions, allowed the claim of the Assessee by observing in paragraphs no.5.4 and 5.5, as under:

“5.4. Considering both the arguments, it is necessary to analyze the existing statutory provisions and the relevant decisions of the Courts. As per Section 80AC, the only mandatory requirement to become eligible for the claim of deduction is that the Assessee should file return of income as stipulated u/s.139(1) of the Act. The appellant company filed the return of income on 30.09.2013 which is within the due date. Hence, the appellant company is entitled to claim deduction u/s.80IA, if found eligible by the Assessing Officer.

5.5. The Hon’ble ITAT, Chennai Bench in the case of M/s. Precot Meridian Limited Vs. ACIT, Company Circle – I(1), Coimbatore (discussed supra) has considered a similar issue, wherein belated claim made before the Assessing Officer in the course of assessment proceedings. The Apex Court in the case of NTPC Vs. CIT [1996] 229 ITR 383 (SC) held that “the purpose of assessment proceedings before the Tax Authorities is to assess correctly the tax liability of an assessee in accordance with law.” The Court has also considered the situation in which :: 5 :: a claim was made belatedly, while pronouncing its judgement. Respectfully following the principles laid down by the Apex Court and the decision of the ITAT, Chennai Bench on similar facts and circumstances and in the interest of justice, it is directed that the Assessing Officer should entertain the claim of deduction u/s.80IA after due verification of the genuineness.”

:: 6 :: Company Circle-I(2), Coimbatore Vs. M/s. Precot Meridian Limited, Coimbatore in dated 29th April, 2013. Further, he stated that the Commissioner of Income Tax (Appeals) has wrongly relied upon in the case of National Thermal Power Company Limited Vs. Commissioner of Income Tax reported in [1998] 229 ITR 0383 (SC).

“80AC : Where in computing the total income of an Assessee of the previous year relevant to the Assessment Year commencing on the 1st day of April, 2006 or any subsequent assessment year, any deduction is admissible under section 80IA or section 80IAB or section 80IB or section 80IC (or section 80ID or section 80IE), 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.”

The learned Counsel for the Assessee stated that the pre- condition of Section 80C of the Act is furnished on the return of income of the Assessee on or before the due date specified under sub-section 1 of Section 139 of the Act. The learned

:: 7 :: Counsel for the Assessee relied upon the various decisions which are as under:

[1] ACIT, Company Circle-I(2), Coimbatore Vs. M/s. Precot Meridian Limited, Coimbatore in dated 29th April, 2013. [2] DCIT-5(2)(1), Mumbai Vs. M/s. JSW Infrastructure Limited, Mumbai in ITA No.3708 & 3709/Mum/2018 dated 08.11.2019. [3] DCIT 15(3) Vs. Kamdhenu Builders and Developers, Navi Mumbai in ITA No.7010/Mum/2010 dated 27.01.2016. [4] ACIT vs. Monarch Innovative Technologies Private Limited in ITA No.4815/Mum/2016 dated 12.02.2018. [5] National Thermal Power Company Limited Vs. Commissioner of Income Tax in Tax Ref. Case No.4 of 1988 dated 04.12.1996. [6] Commissioner of Income Tax Vs. Jayant Patel in Tax Case No.1742 of 1986 dated 21.09.1998.

“9. We have heard both the parties, perused the material available on record and gone through the orders of the authorities below along with case laws cited by both parties. We find that the learned CIT(A) has recorded categorical findings, in light of the provision of section 80AC and held that nowhere, in the section, it was provided that unless, the Assessee makes a claim in its return filed u/s.139(1), the said claim is allowable. We further observed that as per provision of section 80AC, it is mandatory for the Assessee to file return of income on or before the due date

:: 8 :: specified u/s.139(1) to claim the benefit of any deduction provided u/s.80IA/80IB/80IC/80ID and 80IE, but nowhere in the said section, it was provided that unless, the Assessee makes claim for deduction in the return filed u/s.139(1), the said claim is allowable. We further noted that the learned CIT(A) recorded categorical finding, in the light of the decision of ITAT Chennai Bench, in the case of ACIT Vs. Precot Meridian Limited (supra), where it was held that, once original return is filed u/s.139(1) within due date specified under the Act, then any deduction claimed in the revised return filed within due date specified u/s.139(5) shall be allowed. We further, noted that the learned CIT(A) had also taken a support from the decision of ITAT, Mumbai Bench, in the case of Kamadhenu Builders & Developers Vs. Additional CIT, where it was observed that section 80A(5) only requires filing of return, but nowhere it suggest that claim should be made in the original return and not by way of original return, further when the original return of income was filed within the due date, then the revised return filed, thereafter before completion of assessment proceedings is to be considered by the Assessing Officer, because the Act has been given opportunity to the Assessee to file revised return u/s.139(4) for removal of any defect or any omissions in the original return and that if both the returns were filed within time limit prescribed under the law, then conditions prescribed u/s.80IB(1)) of the I.T.Act, 1961 are fulfilled. In this case, the Assessee has filed a return u/s.139(1) within due date specified date, but the claim for deduction u/s.80IA, in respect of second unit was not made, however a revised return was filed u/s.139(5) within due date specified under the Act and made additional claim for deduction, in respect of second unit. When original return was filed within due date specified u/s.139(1), then any revised return filed within the due date specified u/s.139(5) to rectify any mistakes or omissions or wrong statements made in the return already filed u/s.139(1), then the revised

:: 9 :: return takes, the nature of the original return filed within due date specified u/s.139(1) and consequently, the Assessee fulfills the conditions prescribed u/s.80AC of the Act, in order to be eligible for deduction u/s.80IA of the I.T. Act, 1961. The learned CIT(A) after considering the relevant facts has rightly deleted the additions made by the Assessing Officer towards disallowances of deduction claimed u/s.80IA of the I.T.Act, 1961. We do not see any reasons to interfere in the order of the learned CIT(A) and hence, we are inclined to uphold the findings of the learned CIT(A) and reject the ground taken by the Revenue.”

Further, when the original return was filed within the due date, then the revised return filed, thereafter, before the completion of assessment proceedings, is to be considered by the Assessing Officer, because the Act has given an opportunity to the Assessee to file his return u/s.139(4) of the Act for the removal of defects or omission in the original return.