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Income Tax Appellate Tribunal, HYDERABAD BENCHES “B” : HYDERABAD
Before: SHRI S.S.GODARA & SHRI LAXMI PRASAD SAHU
IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES “B” : HYDERABAD (THROUGH VIDEO CONFERENCE)
BEFORE SHRI S.S.GODARA, JUDICIAL MEMBER AND SHRI LAXMI PRASAD SAHU, ACCOUNTANT MEMBER
Appellant Respondent ITA No. A.Y.
1029/Hyd/18 2009-10 Dy.Commissioner of M/s.GKC Projects Ltd., Income Tax, Hyderabad 1030/Hyd/18 2010-11 Central Circle-3(1), [PAN: AACCG1395F] Hyderabad 1031/Hyd/18 2011-12
1032/Hyd/18 2012-13 For Assessee : Shri P.V.S.S.Prasad, AR For Revenue : Shri Y.V.S.T.Sai, CIT-DR Date of Hearing : 13-01-2022 Date of Pronouncement : 22-02-2022
O R D E R PER S.S.GODARA, J.M. : These four Revenue’s appeals for AYs.2009-10 to 2012-13 arise from the CIT(A)-11, Hyderabad’s order dated 23-02-2018 passed in appeal Nos.036 to 039 / 2017-18 / ACIT CC-3(1) Hyd / CIT(A)-11 / 17-18, involving proceedings u/s.143(3) r.w.s.153A of the Income Tax Act, 1961 [in short, ‘the Act’]; respectively. Heard both the parties. Case files perused.
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The Revenue pleads the following identical substantive grounds in the instant batch of four appeals:
“(i) Whether on the facts and circumstances of the case, and in law, the ld CIT(A) erred in allowing the claim of deduction u/s 80-IA at Rs. 7,73,75,767/- which was made for the first time in the return filed u/s 153A without appreciating the fact that the provisions of section 153A could not operate to the advantage of the assessee, who chose not to make a claim in the manner lawfully open to it u/s 139(1) of the Act. (ii) Whether on the facts and circumstances of the case, and in law, the ld ClT(A) erred in not appreciating that the provisions of section 153A to 153C cannot be interpreted to be further innings for Assessing Officer and/or assessee beyond provisions of sections 139, 147, and 263, as such no fresh claim or deduction could be claimed by the assessee or allowed by AO. (iii) Whether on the facts and circumstances of the case, in law, the ld. ClT(A) erred in not following the principle laid down by the Hon'ble Supreme Court in the case of CIT v. Sun Engineering Works (P) Ltd. (1922) 198 ITR 297 (SC) wherein the Hon'ble Supreme Court has held that in reassessment proceedings the assessee cannot claim deduction which was neither claimed nor allowed in original assessment and it is not open to the assessee to seek a review of concluded items. Since the proceedings under section 153A of the Act are analogous to proceedings under section 147 of the Act to the extent that these proceedings are for the benefit of Revenue and not of the assessee, the ld CIT(A) should have upheld the disallowance of deduction claimed u/s 80-IA. (iv) Whether on the facts and circumstances of the case, and in law, the ld.CIT (A) failed to appreciate that in this case already original assessment was completed, u/s 143(3) which has become final and it is not open for the assessee to use another proceedings under section 153A of the Act to reopen the concluded assessments. (v) Whether on the facts and in the circumstances of the case and in law, the ld.ClT(A) erred in not appreciating that as per provisions of section 80AC inserted w.e.f. 1-4-2006 no deduction u/s 80IA shall be allowed unless the assessee furnishes a return of income claiming such deduction for such assessment year on or before the due date specified under sub-section (1) of section 139 and the same cannot be extended to return filed u/s 153A. (vi) The appellant craves leave to amend or alter any ground or add any other grounds which may be necessary”.
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Learned CIT-DR has also filed a ‘synopsis’ of Revenue’s written arguments before us. His vehement contentions therein inter alia are that the assessee is not entitled to raise the impugned Section 80-IA deduction claim in its return(s) filed in Section 153A proceedings since the same are initiated to assess only the un-disclosed income in light of Kabul Chawla [380 ITR 573] (Delhi). And that it was very much incumbent on the assessee to raise the impugned deduction claim only in the return earlier filed u/s.139(1) of the Act. Mr.Sai quotes Section 80A(5) r.w.s.80AC that an assessee ought to file a return; and that too, u/s.139(1) of the Act only claiming section 80IA deduction so as to be eligible for the same. He refers case law to EBR Enterprises Vs. Union of India (2019) [107 taxmann.com 220 (Bombay)] that the assessee’s failure in ensuring necessary compliance of the foregoing twin provisions renders it deduction claim as not allowable case law Jai Steel (India) Vs. ACIT (2013) [259 CTR 281] (Rajasthan) and GMR Infrastructure Ltd., Vs. DCIT ITA No.1036 of 2017, dt.06-07-2021 (Karnataka) is also referred that an assessee is not entitled to raise a fresh claim in return filed in Section 153A proceedings. The Revenue also reiterates hon'ble apex court’s detailed discussion in Plastiblends India Ltd., (2017) 86 taxmann.com 137 (SC) that Chapter-VI in the Act which ought to be strictly construed as per Dilip Kumar & Co. (2018) [95 taxmann.com 327]
The assessee has drawn a strong support from the CIT(A)’s detailed discussion holding it eligible for Section 80-IA deductions as under:
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We have given our thoughtful consideration to the foregoing rival pleadings and find no merit in the Revenue’s stand in principle. We make it clear that the assessee had not claimed the impugned Section 80-IA deduction relief in its original returns filed u/s.139(1) of the Act. There is further no dispute that the department had carried out the search in issue on 25-09-2012 in assessee’s case wherein the time limit for filing Section 139(1) return for including Section 80-IA deduction had very well elapsed except in AY.2012-13. The Assessing Officer thereafter initiated Section 153A proceedings thereby asking for returns vide notices dt.06-06-2013 giving thirty days to the assessee for return(s) which were ultimately filed on 09-07-2013. 5.1. Mr.Sai at this stage raised an additional plea beyond the Revenue’s grounds that the assessees four returns herein deserve to be treated as ‘belated’ ones since filed beyond the “due date” prescribed u/s.139(1) Explanation 2(1)-(vii) r.w.s.153(1)(a) of the Act. His case is that the time limit specified in the Assessing Officer’s Section 153A notice(s) was indeed a
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mandatory one which ought to have been strictly complied with so as to treat the assessee as eligible for Section 80-IA deduction. We see no substance in the Revenue’s instant additional technical argument in light of the tribunal’s Special Bench decision in Mahindra & Mahindra Vs. DCIT (2009) 30 SOT 379 (Mum) that a departmental representative cannot raise an argument beyond the assessment findings. We wish to make it clear that the Assessing Officer herein has nowhere treated the assessee’s four returns as belated ones. It further emerges as per the assessee’s stand that it had received the Assessing Officer’s corresponding Section 153A notices on 10- 06-2013 which stood duly complied on 09-07-2013 as it chose to file returns wherein the time prescribed only which have been accepted through out as ‘valid ones’. No rebuttal to this clinching factual aspect has come from the departmental side. We thus decline the Revenue’s instant technical argument. 6. We now proceed to deal with the Revenue’s issue (s) raised herein as to whether the assessee could raise a fresh claim of Section 80-IA deduction in a return filed u/s.153(1)(a) of the Act for the first time or not even if it had chosen not to do so in Section 139(1) regular return submitted before search. We wish to reiterate here that the Revenue’s case strongly relies upon Section 80-IA r.w.s.80AC of the Act inter alia stipulating that “where the assessee fails to make a claim in his return of income for any deduction …….., no deduction shall be allowed to him thereunder” and that “no such deduction shall be allowed to him unless he furnishes a return of his income for such
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assessment year on or before the due date specified under sub- section(1) of Section 139” ; respectively.
We next note that crux of the instant issue lies in non- obstante clauses in Section 153A itself wherein the legislature has made it clear that “Notwithstanding anything contained in Section 139, Section 147, Section 148, Section 149, 151 and Section 153 …………”. The same sufficiently suggests that once Section 139 itself is not applicable in an instance involving Section 153A proceedings, all other consequences flowing therefrom in case of an assessee having not claimed Section 80- IA deduction in section 139(1) return are deemed to have been rendered non-operative. Coupled with this, hon'ble jurisdictional high court in Gopal Lal Bhadruka Vs. DCIT (2012) (346 ITR 106) (AP HC) has also made it clear that an Assessing Officer framing Section 153A assessment can very well take note of all other material apart from the incriminating and seized one during the course of search for the purpose of framing assessment u/s.153A as he supposed to total income.
This tribunal’s co-ordinate bench’s order in M/s.KNR Constructions Ltd. Vs. DCIT in ITA No.946 to 948/H/2015, dt.16-10-2015 has also settled the issue now that the Hon'ble Rajasthan high court’s decision in Jai Steel (India) Vs. ACIT (2013) [259 CTR 281] (Rajasthan) (supra) nowhere dealt with instance of a deduction claim under Chapter-VI as the assessee therein had raised a general fresh claim of expenditure of sale tax only. The very factual position continues in EBR
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Enterprises Vs. Union of India (2019) [107 taxmann.com 220 (Bombay)] (supra) as well wherein the hon'ble high court had come across an issue of Section 80-IA deduction claim, not involving Section 153A proceedings, as are the facts before us. It rather emerges that their lordships yet another recent decision in PCIT Vs. JSW Steel Ltd. (2020) [115 taxmann.com 165 (Bombay) has taken note of the foregoing non-obstante clauses in line in Section 153A(supra) in holding that an assessee in Section 153A return can very well raise such a new claim of deduction. 7. Mr.Sai at this stage sought to distinguish the foregoing judicial precedent that it only deals with an instance of “abated” assessment wherein the Assessing Officer is empowered to decide all the issues emanating therefrom even other than those confined to a search assessment. We find no merit in the Revenue’s instant technical argument as Section 153A nowhere draws any distinction of an “abated” or “un-abated” assessment so far as an assessee’s eligibility to raise a new deduction claim under Chapter-VI therein is concerned. We thus uphold the CIT(A)’s lower appellate findings in principle.
It further transpires at the same time that both the Assessing Officer as well as the CIT(A) have nowhere examined the assessee’s entitlement to claim Section 80-IA deduction in the light of the alleged projects undertaken / developed in all these four assessment years on merits. Faced with this situation, we deem it appropriate to restore the instant sole issue back to the Assessing Officer for his afresh adjudication
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on merits in light of all legal and factual requirements enshrined in Section 80-IA of the Act. Needful shall be done within three effective opportunities of hearing. Ordered accordingly. No other ground has been pressed before us. 10. These Revenue’s four appeals are treated as partly allowed for statistical purposes in above terms. A copy of this common order be placed in the respective case files.
Order pronounced in the open court on 22nd February, 2022
\ Sd/- Sd/- (LAXMI PRASAD SAHU) (S.S.GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER
Hyderabad, Dated: 22-02-2022 TNMM
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Copy to : 1.Deputy Commissioner of Income Tax, Central Circle-3(1), Hyderabad. 2.M/s.GKC Projects Limited, Sy.No.9(P), CII Green Building Lane, Hitec City, Kondapur, Hyderabad. 3.CIT(Appeals)-11, Hyderabad. 4.Pr.CIT-(Central), Hyderabad. 5.D.R. ITAT, Hyderabad. 6.Guard File.