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Income Tax Appellate Tribunal, DELHI BENCH ‘A’, NEW DELHI
Before: Sh. Amit ShuklaDr. B. R. R. Kumar
Per Dr. B. R. R. Kumar, Accountant Member:
The present appeal has been filed by the assessee against the orders of the ld. CIT(A), Muzaffarnagar dated 15.12.2016.
Following grounds have been raised by the assessee: “1. That the learned CIT(A) has erred on facts and Law in disallowing deduction u/s 80 IC of the Income Tax Act 1961, due to the late filling of Return, by overlooking facts of the case and not considering case laws and other supporting documents.”
For the year under consideration, the assessee company has claimed deduction u/s 80IC amounting to Rs.7,52,173/- @ 30% of the eligible profits. For the instant year, the due date for filing of return u/s 139(1) of the Income Tax Act, 1961 was 30.09.2012 whereas the return has been filed on 28.10.2012. Owing to the delay of 28 days the Assessing Officer disallowed the deduction u/s 80IC relying on the provisions of Section
2 ITA No. 1449/Del/2017 Affine Steels Pvt. Ltd. 80AC. The ld. CIT (A) confirmed the addition on the grounds that the assessee could not substantiate the reasons for delay in filing of the appeal.
We find from the records that the audit was completed on 24.08.2012 and the papers were handed over to the counsel for filing of the return which could not be done due to systems error on the last date of filing of the return.
In the case of M/s. Fiberfill Engineers vs. Deputy Commissioner of Income Tax in W.P. (C) No. 3935/2015 dated 10.08.2017, the Hon’ble Jurisdictional High Court observed that when the Department for AY 2010- 11 accepted that on merits the Petitioner’s claim for deduction under Section 80 IC of the Act was justified. With there being no change in the circumstances, the Petitioner’s claim for deduction under Section 80 IC of the Act on merits for the next year i.e. AY 2011-12 could not possibly be denied. The Hon’ble High Court noted that the above facts were not considered by the CBDT when it rejected the Petitioner’s application under Section 119(2)(b) of the Act. The application made by the Petitioner before the CBDT pursuant to the order passed by the High Court was a detailed one. The Petitioner pointed out that in all the subsequent years, i.e., AY 2012-13 up to 2016-17, there was no delay whatsoever in the filing of the returns. It also pointed out that since the Petitioner was an eligible undertaking it could not be denied the deduction under Section 80IC of the Act. The above factors did not appear to have been taken into account by the CBDT.
The Hon’ble High Court was not convinced with the Department in that Circular No.9/2015 of the CBDT would not apply to the belated filing of a return where deduction is claimed under Section 80 IC of the Act as the said circular does not expressly say so.
3 ITA No. 1449/Del/2017 Affine Steels Pvt. Ltd. 7. The Hon’ble High Court further noted that as per the Hon’ble Bombay High Court, the phrase “genuine hardship” in Section 119(2)(b) of the Act ought to be construed liberally. As observed by the said High Court “when substantial justice and technical considerations are pitted against each other, cause of substantial justice deserves to be preferred, for the other side cannot claim to have vested right in injustice being done because of a non-deliberate delay.”
The Hon’ble High Court opined that since the entitlement of the Petitioner to the deduction under Section 80 IC of the Act even for AY 2010-11 had not been questioned by the Department on merits, there was no justification for not viewing the delay of 46 days in filing the return to be bona fide. It was not one of those cases where the delay was so extraordinary so as to not be condoned. In conclusion it was held that the claim of the Petitioner for deduction u/s 80IC cannot be defeated on the ground of delay in filing the return. Similarly, the Coordinate Bench of the ITAT Chandigarh in the case of ‘Symbiosis Pharmaceuticals (P) Ltd. Vs DCIT (2017) 51 CCH 0632 (Chd-Trib) held that the claim of the assessee of deduction could not be ousted if the return has been filed within the extended period of sub section (4) of section 139 of the I.T. Act.
Reliance is also placed on the decision dated 26th June 2013 of the Andhra Pradesh High Court in ITTA No.114 of 2013 (CIT v. Sri S Venkataiah), the decisions dated 29th April 2013 of the ITAT Madras in ITA No.1214/Mds/2012 (ACIT vs. Precot Meridian Ltd.) and 4th February 2013 in ITA No. 1219-1223/Mds/2012 (ACIT v. V.N. Devadoss), the decisions of the ITAT Delhi dated 30th July 2010 in ACIT v. Dhir Global Industrial (P) Ltd. 133 TTJ (Del) 580, the decision of the Bangalore ITAT dated 12th April 2103 in M/s Vanshee Builders & Developers P. Ltd. v. CIT 63 SOT 30 deduction chapter VI-A has been allowed wherein the return
4 ITA No. 1449/Del/2017 Affine Steels Pvt. Ltd. has been filed late against the stipulation mentioned in Section 80AC, owing to the bonafide reasons in filing of the return belatedly. The sum and substance of the cases is that, if the assessee is eligible for deduction, the hyper technicalities should not come in the way of allowing such deduction to the assessee.
In the instant case, the time limit for filing of the return under sub- section (4) of the Section 139 of the Act has not been expired which entitles the assessee for deduction u/s 80IC. In view of this, the matter is restored to the file of the Assessing Officer to examine the limited aspect as to whether the assessee, otherwise, is entitled to claim deduction us 80IC of the Act and if so found eligible, the Assessing Officer will allow the claim accordingly irrespective of the fact that there was a delay of 28 days in filing the return of income beyond the prescribed period under the provisions of section 139(1) of the Act.
In the result, the appeal of the assessee is allowed. Order Pronounced in the Open Court on 28/02/2020.
Sd/- Sd/- (Amit Shukla) (Dr. B. R. R. Kumar) Judicial Member Accountant Member Dated: 28/02/2020 *Subodh* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR