DCIT, CC-14, NEW DELHI vs. A.P. SECURITAS PVT. LTD, DELHI

2. Whether ITR filed w/s 139(4) can be considered as ITR filed u/s 139(1) of the Act.

3. Whether the use of word "shall" in Section 80AC(ii) merely directory or it should be read as mandatory.

4. Whether allowing a deduction of certain income, falling in bending "C-Deductions in respect of certain incomes” in chapter VIA, for an ITR filed beyond the time limit prescribed/s will not tantamount to going beyond the scope of what the Parliament has provided. 5.(a) The order of the Ld. CIT (A) is erroneous and not tenable in law and on facts.”

5. The ld Departmental Representative submitted Page | 2

1. Statutory Mandate of Section 80AC(ii)  Section 80AC(ii), as substituted by the Finance Act, 2018 w.e.f. A.Y. 2018-19, provides in unequivocal terms that "no deduction under any provision of this Chapter shall be allowed unless the return of income is furnished by the assessee on or before the due date specified under sub-section (1) of Section 139."  The statutory language is clear, mandatory, and admits of no dilution. The Legislature, in its wisdom, consciously replaced the earlier provision (restricting its scope to limited sections) and made the condition applicable to all deductions under Chapter VIA, including Section 80JJAA.  Therefore, compliance with the due date prescribed under Section 139(1) is a condition precedent for claiming deduction. Filing the return within the extended time permitted u/s 139(4) cannot cure this statutory default.

2. Binding Precedent - Pr. CIT v. Wipro Ltd. (SC)  The Hon'ble Supreme Court in Pr. CIT v. Wipro Ltd. [2022] 446 ITR 1 (SC) has unequivocally held that when the statute requires return to be filed within the due date u/s 139(1) as a condition for claiming deduction, such requirement is mandatory.  Filing return belatedly u/s 139(4) cannot cure this statutory default.  This binding precedent governs the present case squarely and leaves no scope for liberal interpretation against the clear legislative mandate.

A. P. Securitas Pvt. Ltd  The Hon'ble Madras High Court, while interpreting Section 80AC(ii), has categorically held that no claim under any provision of Part C of Chapter VIA would be admissible in case of a belated return.  The Hon'ble Court further clarified that the scope of adjustment u/s 143(1)(a) includes denial of deduction where the return itself is belated, since such defect is apparent from record.  This ruling directly supports the CPC's action and negates the relief granted by CIT(A).

4. Distinction from G.M. Knitting Industries (SC)  The assessee's reliance on CIT v. G.M. Knitting Industries Pvt. Ltd. [2016] 71 taxmann.com 35 (SC) is misplaced.  In that case, the default was purely procedural - non-filing of audit forms (Form 3AA/10CCB) with the return. The return itself was filed within time, and the forms were subsequently filed during assessment proceedings.  In the present case, the defect is substantive belated filing of return itself, which strikes at the eligibility under Section 80AC(ii).  Moreover, the law at that time did not contain the wide mandate inserted by Finance Act, 2018. The later ruling in Wipro Ltd. (SC) now governs the issue, making timely filing u/s 139(1) a mandatory condition.

5. Doctrine of Strict Compliance for Incentive Provisions A. P. Securitas Pvt. Ltd  While incentive provisions are to be construed liberally in respect of eligibility and quantum, the conditions prescribed by the statute for availing such benefits are to be strictly complied with.  The Hon'ble Supreme Court in Novopan India Ltd. v. CCE 1994 (73) ELT 769 (SC) and reiterated in Commissioner of Customs v. Dilip Kumar & Co. (2018) 9 SCC 1 (Constitution Bench) has held that in matters of exemption and incentive provisions, the conditions prescribed therein are to be strictly construed and the burden lies upon the assessee to establish compliance.  In the present case, the condition u/s 80AC(ii) is explicit, substantive and mandatory. Failure to file return within Section 139(1) extinguishes the assessee's right to deduction u/s 80JJAA.

6. No Equity Against Statute  The Ld. CIT(A)'s reliance upon "bona fide hardship" and "reasonable delay" is contrary to settled law. When the statute itself prescribes a mandatory condition, neither equity nor hardship can override express statutory mandate.  The Hon'ble Supreme Court in CIT v. Anjum M.H. Ghaswala (2001) 252 ITR 1 (SC) - (Para 17) held that equitable considerations cannot prevail over statutory provisions in tax law.  Thus, the plea of marginal delay of 52 days or bona fide circumstances cannot vest the assessee with a right which the statute expressly denies.

7. CPC's Action Valid and Justified  CPC rightly invoked adjustment u/s 143(1)(a) to disallow deduction u/s 80JJAA, as the return was admittedly not filed within due date u/s 139(1).  The adjustment was in conformity with law and aligned with the mandate of Section 80AC(ii). The CIT(A) erred in interfering with such lawful adjustment on grounds which are legally untenable.

DR's Contentions for Ground No. 2: 1. Error in Treating Section 139(4) as Extension of Section 139(1)  The Ld. CIT(A) erred in holding that Section 139(4) is an "extension" of Section 139(1). The two provisions operate in different spheres. o Section 139(1) prescribes the due date for filing return. o Section 139(4) provides a separate facility for furnishing a belated return, which is valid for assessment purposes but does not override specific statutory conditions that hinge upon compliance with Section 139(1).

 This distinction has been recognized by the Hon'ble Supreme Court in Pr. CIT v. Wipro Ltd. [2022] 446 ITR 1 (SC), where it was held that the statute requiring filing of return within due date u/s 139(1) as a condition precedent must be strictly complied with and that filing u/s 139(4) cannot be treated as compliance.

2. Binding Judicial Precedents  Pr. CIT v. Wipro Ltd. (SC) (supra): The Apex Court has categorically held that if the statute links deduction to filing within due date u/s 139(1), such requirement is mandatory. Non-compliance disentitles the assessee. This ratio squarely applies post-Finance Act, 2018.  AA520 Veerappampalayam PACCS Ltd. v. DCIT [2022] 138 taxmann.com 571 (Madras HC): The Hon'ble Madras High Court held that in view of Section 80AC(ii), no claim under Part C of Chapter VIA is admissible in case of a belated return. It further upheld CPC's power u/s 143(1)(a) to make such adjustment an error apparent from record.  These binding rulings override contrary decisions relied upon by the assessee and the CIT(A), which pertain either to pre- amendment law or to procedural defaults (such as belated filing of audit forms), not to the substantive requirement of filing within due date.

3. Distinguishing Case Law Relied Upon by CIT(A)

 CIT v. G.M. Knitting Industries Pvt. Ltd. (SC) concerned late filing of audit reports while return itself was timely. It was a case of procedural lapse, not substantive non-compliance with Section 139(1). Hence inapplicable.  Bajaj Tempo Ltd. v. CIT (SC) lays down the principle of liberal interpretation of incentive provisions. However, even liberal interpretation cannot dispense with a statutory condition expressly made mandatory by Parliament.

A. P. Securitas Pvt. Ltd  Various High Court and ITAT decisions such as Chikkaral Services Co-operative Bank Ltd. v. CIT (2016) 95 CCH 0197 pertain to periods prior to the Finance Act, 2018 or to issues of audit report filing. These cannot override the later binding judgments of the Supreme Court and Madras High Court under the amended law.

5. No Equity in Taxation  The Ld. CIT(A)'s reliance on "bona fide reasons" and "reasonable delay" is contrary to settled law.  In CIT v. Anjum M.H. Ghaswala (2001) 252 ITR 1 (SC), the Supreme Court held that equity has no place in interpretation of taxing statutes.  Hence, neither hardship nor bona fide reasons can dilute the mandatory requirement of Section 80AC(ii).

6. CPC's Adjustment was Valid Page | 8 A. P. Securitas Pvt. Ltd  CPC's adjustment u/s 143(1)(a) disallowing deduction was based on a patent defect apparent from return itself, i.e., belated filing beyond due date u/s 139(1).  This falls squarely within the permissible scope of "prima facie adjustments" under Section 143(1)(a), as recognized in AA520 Veerappampalayam PACCS Ltd. (Madras HC, 2022).

DR's Contentions for Ground No. 3: 1. Plain Language of the Statute  Section 80AC(ii), as substituted by the Finance Act, 2018, provides that "no deduction under any provision of this Chapter shall be allowed unless the return of income is furnished by the assessee on or before the due date specified under sub-section (1) of section 139."  The use of the word "shall" denotes a mandatory legislative command, leaving no discretion either to the Assessing Officer or to appellate authorities.  Had the Legislature intended flexibility, it would have used permissive expressions like "may" or provided an enabling clause for condonation of delay. The absence of such relaxation confirms that the condition is imperative and not merely directory.

2. Principles of Statutory Interpretation  The settled rule of interpretation is that where the Legislature uses the word "shall", particularly in the context of conditions precedent for claiming statutory benefits, the requirement is mandatory unless the context indicates otherwise.

A. P. Securitas Pvt. Ltd  The Supreme Court in State of Jharkhand v. Ambay Cements (2005) 1 SCC 368 held that if compliance with a condition is a prerequisite for availing a right, the requirement is mandatory.  Section 80AC(ii) is couched in negative terms - "no deduction shall be allowed unless...". The negative wording reinforces the mandatory character.

3. Judicial Precedents Confirming Mandatory Nature  Pr. CIT v. Wipro Ltd. [2022] 446 ITR 1 (SC): The Hon'ble Supreme Court has categorically held that where the statute makes filing of return within the due date u/s 139(1) a condition precedent, such condition is mandatory and cannot be relaxed. This is a binding precedent directly on point.  AA520 Veerappampalayam PACCS Ltd. v. DCIT [2022] 138 taxmann.com 571 (Madras HC): The Madras High Court held that Section 80AC(ii) clearly bars deduction under Part C of Chapter VIA in case of belated returns. The Court specifically observed that the statutory mandate must be given full effect, and CPC's adjustment under Section 143(1)(a) was justified.  CIT v. Anjum M.H. Ghaswala (2001) 252 ITR 1 (SC): The Supreme Court clarified that when statute uses mandatory language, neither CBDT nor courts can override the mandate by invoking equity or hardship.

condoned. These decisions are distinguishable as they relate to procedural lapses (timing of furnishing forms).  In contrast, Section 80AC(ii) imposes a substantive condition precedent for eligibility. Failure to comply with such condition results in total disentitlement.

6. The Authorised Representative submitted that the claim of deduction u/s 80JJA was made by assessee after the due date of filing of return u/s 139(4) of the Act so the claim of deduction was within time prescribed u/s 139(4) of the Act.

8. In para 8 and 8.1 the ld CIT(A) observed as under:-

8. Aforesaid discussions are summed up as under: (i) The only ground for invoking section 143(1)(a) by the AO, CPC under was that deduction claimed in the return of income by the Appellant is Page | 13 A. P. Securitas Pvt. Ltd more than the deduction mentioned in the form 10DA. This is based on incorrect appreciation of fact as the claim of deductions per the return of income is INR 18,13,01,752/- as against claim made in form 10DA filed by the Chartered Accountant at Rs. 20,05,79,051/-. Accordingly, such adjustment is incorrect and liable for deletion. (ii) The claim of deduction under section 80JJAA was made by the appellant after the due date of filing of return under section 139(1) but before the prescribed due date of filing of return under section 139(4) of the Act. The legal position has been settled by the courts / Tribunals from time to time that claim of deduction under chapter VI-A made by the return of income filed before due date stipulated under section 139(4) is allowable. Accordingly, the appellant's claim of deduction under section 80JJAA of the Act by filing return of income within the time limit permitted under section 139(4) is allowable. (iii) Further, on identical facts and for identical Assessment year, the courts/ ITATS as stated above, have held that the claim of deduction under section 80JJAA of the Act is allowable. (iv) The Hon'ble Supreme Court has settled the legal principle that the claim of deduction under Chapter VIA is mandatory but the timing is directory. The Apex Court had, therefore, permitted that the claim of deduction could be made up to the finalization of assessment. The said principle has been followed by various courts including the jurisdictional High Court and Jurisdictional Delhi Tribunal in several cases. In view of this settled principle, the appellant's claim of deduction u/s 80JJAA of the Act is allowable. (v) Furthermore, the courts/ITATs from time to time have also held that the fresh claim of deduction under chapter-VIA such as 80JJAA of the Act may be made even before the higher authority such as CIT(A) or ITAT. (vi) It is also a settled position of law that the bona fide and reasonable delay of filing of return of income is permitted and therefore, is liable to be condoned. In the instant case, as ascertained from the facts, the delay of 52 days from the prescribed due date for filing of return u/s 139(1) was attributable to genuine hardship and accordingly, such delay is liable to be ignored. 8.1 In view of the aforesaid discussions and by following the binding legal precedents, the addition made by the AO is incorrect. Accordingly, the appellant's grounds on this issue are allowed.

9. Hon’ble High Court of Delhi in case titled as “Shree Bhavani Power Projects (P) Ltd. Vs. Income-tax Officer (2024) 165 taxmann.com 733 (Delhi) has held that “where Assessing Officer reopened assessment on ground that assessee had failed to electronically upload Form 10CCB along with its return of income within time frame prescribed under section 139, since a failure to digitally upload Form 10CCB could not lead one to conclude that assessee had failed to make a full and true disclosure, impugned reassessment proceedings after four years from end of relevant year were to be set aside.”

Order pronounced in the open court on 21 /01/2026.