BABULAL MOHANRAJ JAIN,,PUNE vs. DEPUTY COMMISSIONER OF INCOME-TAX - I,

The short issue in appeal is rejection of assessee‟s claim of deduction u/s.80IB of the Income Tax Act, 1961 (hereinafter referred to as „the Act‟) for not filing return of income within due time as prescribed u/s.139(1) of the Act.

Shri J.G. Pendse appearing on behalf of assessee submitted that the assessee is engaged in manufacture, export and trading of chemicals. The assessee is eligible for claiming deduction u/s.80IB(3) of the Act. The assessee in the earlier and the subsequent assessment years was allowed deduction u/s.80IB(3) of the Act. The only reason for rejecting assessee‟s claim in the assessment year under appeal was delay in filing return of income u/s.139(1) of the Act. The ld. AR submitted that the delay occurred in filing of return of income for assessment year 2007-08 as the elder brother of assessee was swept away in flash floods on 25.09.2007 while he was on pilgrimage. The whereabouts of his brother were not known despite massive search operation. Finally his death certificate was received in November, 2007. The assessee was engaged in search operations of his brother. Therefore, the assessee could file his return of income on 10.03.2008. The assessee filed an application u/s.119(2) of the Act before the Central Board of Direct Taxes (CBDT) on 4th January, 2010 seeking condonation of delay in filing return and claiming deduction u/s.80IB of the Act. However, the application of assessee was rejected. Against the said order of rejection, assessee approached the Hon'ble Bombay High Court in Writ Petition No.8022 of 2012. The Hon'ble High Court after ascertaining the cause for delay in filing return of income directed the CBDT to re-consider the application. The Hon'ble High Court held that the reasons furnished by assessee for delay in filing return shows that default was due to the circumstances beyond his control. On the directions of the Hon'ble High

Shri Sanjeev Ghei representing the Department submitted that the deduction u/s.80IB(3) was disallowed as the return was filed beyond the due date as prescribed u/s.139(1) of the Act. The provisions of section 80AC mandates that assessee is not eligible for claiming deduction u/s.80IB(3) of the Act unless the return of income is furnished on or before the due date as prescribed u/s.139(1) of the Act. The ld. DR further submitted that the CBDT has condoned delay vide order dated 04.05.2018 i.e. after the order of Commissioner of Income Tax (Appeals). Therefore, it is a subsequent event, the order of Assessing Officer and Commissioner of Income Tax (Appeals) are prior to this order.

Both sides heard. Orders of the Authorities below perused. It is an undisputed fact that in the past and subsequent assessment years, assessee‟s claim of deduction u/s.80IB(3) of the Act was allowed. In support, the assessee has filed copy of assessment orders for assessment year 2003- 04 & 2009-10. In the assessment year under appeal, the Assessing Officer disallowed assessee‟s claim of deduction u/s.80IB (3) of the Act invoking the provisions of section 80AC of the Act.

In the result, the impugned order is set aside and appeal of the assessee is allowed for statistical purpose.