AMITH SOFTWARE TECHNOLOGIES PRIVATE LIMITED ,BANGALORE vs. THE INCOME TAX OFFICER WARD-1(1)(2), BANGALORE

None appeared on behalf of the assessee, even though the adjournments were granted on several occasions at the specific request of the assessee. It was noticed that the assessee has again moved a petition seeking adjournment of the case. Hence, we reject the adjournment request of the assessee and proceed to dispose of the appeal ex-parte, without the presence of the assessee.

The facts of the case are that the assessee is a software development company and is 100% export-oriented unit registered with STPI Bengaluru. The assessee has been claiming deduction u/s 10A of the Income-tax Act,1961 ['the Act' for short] and it has been granted to the assessee in the earlier years. For the year under consideration also, the assessee claimed deduction u/s 10A of the Act. The due date for filing return of income for the year under consideration i.e. assessment year 2008-09 was 30.9.2008. However, the return of income of the assessee came to be filed on 1.10.2008. According to the assessee, the filing of return was delayed by 10 minutes in the night of 30th September due to technical issues and hence the date of filing was taken as 1.10.2008. Subsequent thereto the assessee filed a revised return of income on 30.9.2009. The revised return was taken up for scrutiny and the order u/s 143(3) of the Act was passed on 29.12.2010, wherein the claim made by the assessee u/s 10A of the Act was disallowed. The assessee challenged the same by filing appeal before Ld. CIT(A), but could not succeed. The assessee then filed appeal before the Income Tax Appellate Tribunal and the ITAT, vide

There after, the A.O. re-opened the assessment u/s 147 of the Act by issuing notice to the assessee on 24.3.2015. The A.O. appears to have re-opened the assessment on the ground that the deduction u/s10A of the Act could not be allowed to the assessee since the return of income has been filed beyond the due date prescribed u/s139(1) of the Act. In the re-opened assessment, the A.O. disallowed the claim made by the assessee u/s 10A of the Act.

The assessee challenged the order so passed by the A.O. in the re-opened assessment by filing appeal before Ld. CIT(A). In the meantime, the assessee also moved an application u/s 119(2)(b) of the Act before the Central Board of Direct Taxes (CBDT) to condone the delay in filing return of income. The CBDT, vide its order dated 29.5.2017, condoned the delay in filing return of income for the year under consideration, i.e., assessment year 2008-09. The order of CBDT was received subsequent to passing of assessment order and the assessee placed the same before Ld. CIT(A) as an additional evidence. The Ld. CIT(A) admitted the same and forwarded it to the A.O. calling for a remand report. In the remand report, the A.O. expressed the view that the condonation of delay in filing return of income will not amount to acceptance to claims in the return of income. Accordingly, he expressed the view that the deduction u/s 10A of the Act cannot be allowed to the assessee, since the return of

We heard Ld. D.R. and perused the record. We notice that the due date prescribed u/s 139(1) of the Act for filing return of income for assessment year 2008-09 is 30.9.2008. However, the assessee has filed the return of income on 1.10.2008. According to the assessee, the return of income was uploaded in the internet in the night of 30.9.2008 and the same got delayed by 10 minutes due to technical issues and hence the computer system took the date of filing of return as 1.10.2008. Hence, the assessee moved an application before the CBDT u/s 119(2)(b) of the Act.

The provisions of section 119(2)(b) of the Act reads as under: 119(2)(b):- the Board may, if it considers it desirable or expedient so to do for avoiding genuine hardship in any case or class of cases, by

A careful perusal of the above said provision would show that the Board, in order to avoid genuine hardship in any case or classes of cases, by specific or general order, may authorize an income tax authority, not being Commissioner (Appeals) to admit an application or claim for any exemption, deduction, etc. after the expiry of the period specified by or under this Act for making such an application or claim and deal with the same on merits in accordance with law. Hence, an application could be made u/s 119(2)(b) of the Act for allowing any exemption or deduction after the expiry of prescribed period for making the said claim.

In the instant case, the assessee has claimed deduction u/s 10A of the Act through the return of income. As per the proviso below sec.10(1A) of the Act, the deduction u/s 10A is not allowable, if the return of income is not filed within the due date prescribed u/s 139(1) of the Act for filing return of income. We have noticed earlier that the due date for filing return of income for the year under consideration was 30-09-2008 and it came to be filed on 01- 10-2008 due to technical glitches in computer system. Hence the

We notice that the tax authorities have expressed the view that the CBDT has expressly stated that the condonation of delay in filing the return will not amount to acceptance of claims made in the return of income and hence the said condonation will not absolve the assessee from complying with the condition prescribed under the proviso to section 10A(1A) of the Act, which mandates furnishing of return of income on or before the due date specified

In view of the foregoing discussions, we set aside the order passed by Ld. CIT(A) on this issue and restore the matter to the file of the A.O. for examining the claim made by the assessee u/s 10A of the Act on merits in accordance with law. 12. In the result, the appeal filed by the assessee is allowed.