DY. COMMISSIONER OF INCOME TAX, CIRCLE, HISAR vs. SYNERGY WASTE MANAGEMENT PRIVATE LIMITED, HISAR

Whether Ld. CIT(A) erred in not conferring the stand of the revenue as it is one of the essential conditions of the Act that the assessee enters into an agreement with the Central Govt., or the Stale Govt., or local body or any other statutory body for carrying out infrastructure facilities. Without complying with these conditions, the assessee cannot be allowed to enjoy deduction u/s 80IA. In the instant case, assessee has not entered into such agreement with (central Govt., State Govt., or any other statutory body nor copy of agreement furnished by assessee fulfill the requirement of section 80IA(4) of the Act as per detailed discussion held by the AO during assessment.

Whether Ld. CIT(A) erred in not admitting version of the AO that the assesses is neither carrying on nor engaged in the business of (i) Developing or (ii) Operating & maintaining of (iii) developing, operating and maintaining any infrastructural facility and not entered into agreement with the Central Govt., Stale Govt., or Local authorities or any other statutory body for providing such facilities. The conditions stipulated in section 80IA(4) of the Act remained unfulfilled as assesses is only engaged in the business of treating bio medical waste which is not infrastructural facility as defined in explanation to sub section 4 of section 80IA.

Whether Ld. CIT(A) erred and failed to appreciate the version of the AO who after elaborate discussion, held that receipts of supply of material did not qualify for deduction u/s 80IA(4) and assessed as normal business income. AO during assessment concluded that activity of supply of material is not included in the objects of the assessee. 6 Whether Id. CIT(A) erred and failed to appreciate to the facts that, assessee has invested Rs. 2 Crore in plants located al Lucknow, Meerut, Delhi and Gurgaon as per balance sheet and sequence of events, amount of investment in plant and machinery and nature of plant and machinery creates doubt for eligibility for deduction u/s 801A(4) of the Act. As per provisions of section 80IA(4) of the Act, the assessee should be in the business of either 'developing' or ‘operate and maintain' of 'infrastructure facility'. Careful 3 Synergy Waste Management Pvt. Ltd. reading of section 80IA(4) of the Act shows that word 'Developing' includes huge investment such as creating of infrastructure, roads etc. Such structures would be incapable of installing at some other place by un-installing from previous location and transporting to new location. But in the case of assessee, the machinery installed is like incinerator, autoclave and microwave systems are manufactured machinery which is capable of un-installation, transportation and installing at some other place.”

Suffice to say, the Revenue’s first substantive grievance herein challenges correctness of the CIT(A)/NFAC’s lower appellate findings holding the assessee as eligible for Section 80IA(4) deduction which was disallowed by the Assessing Officer in his assessment order dated 27.12.2019 to the tune of Rs.22,70,690/- thereby holding that the same would not be entitled for the relief herein.

We note in this factual backdrop that the instant issue of the assessee’s section 80IA(4) deduction claim entitlement is a recurring one between the parties. And the tribunal’s last order dated 07.02.2023 in departmental appeal to 5704/Del/2016, in assessment years 2011-12 to 2013-14, has upheld the assessee’s claim as under:

On careful consideration of the above rival submissions, first of all, we may point out that the assessee filed written submissions before the ld.CIT(A) explaining the reason for non-filing/non-uploading the return of income within the prescribed time limit for filing the return u/s 139(1) of the Act which read as follows:- “Sir, 1) The company has been filing all its returns i.e. Income Tax ,TDS etc within the statutory due dates as is clear from the following records: Assessment Year Date of filling Income Tax Return Due Date 2006-07 20.11.2006 30.11.2006 2007-08 29.10.2007 31.10.2007 2008-09 25.09.2008 30.09.2008 2009-10 29.09.2009 30.09.2009 2010-11 28.09.2010 30.09.2010 4 Synergy Waste Management Pvt. Ltd. 2011-12 29.09.2011 30.09.2011 30.09.2012 2012-13 12.10.2012 2) The turnover of the company has also increased from 2.87 Crores in 2005-06 to 11.91 Crores in 2011- 12 due to Joint efforts of all its management, employees and all other related persons. 3) During the year under consideration also the assessee got all its accounts audited before the due date. The final Computation of Income was also prepared & the complete amount of tax due on self assessment i.e. Rs. 558280 was paid on 27.09.2012. The digital signature of Director i.e. Sh. Dheeraj Aggarwal required for filling the return were also obtained on 26th Sept 2012. Thus the return was complete in all respect along with Tax on 27.09.2012 & was given to the company’s consultant/C.A. for filling on 27.09.2012. The return was uploaded /said to be uploaded by the Tax Practitioner on 28th September as confirmed on phone. In our case all the formalities like preparing the Balance Sheet, Audit Report u/s 44AB,115JB & Sec 80IB were completed well before time i.e. 25.09.2012. Tax was also deposited and digital signatures renewed by 27th Sep. 2012 As per the CA ‘The return of the party was uploaded on 28th Sept 2012, there was some problem in the Internet as well as Departmental Site hence we were frequently facing error in uploading many return and ‘Server Time Out’ message was appearing many times and when we tried to Login again to file the return the message was appearing ‘You have already filed the return so please select the Revised Option ’ in many cases. So in such cases we had to go to my returns column & download the acknowledgment from there which comes protected with password i.e. (PAN+ DOI) in small fonts. With all this internet & site problems we uploaded the return of Synergy Waste Management Pvt. Ltd. on 29.09.2012 and downloaded the acknowledgement of the return but we could not open it as it was not accepting the password so with the fair belief and confidence that we can download the return acknowledgement any time from the department site, we proceeded with our other returns and even confirmed the party on their telephonic enquiry that 5 Synergy Waste Management Pvt. Ltd. Yes your return has been filed/uploaded and you can take print out from our office any time. All the Tax Audit/Company Audit returns were uploaded from our system by 8 p.m. on 30th September, 2012 and only two non Tax Audit return of two nearly closed/not in running business companies were uploaded on 1st October, 2012. To our shock/greatest surprise when the party came to collect the acknowledgement on 07.10.2012 we came to know that the status is appearing as ‘No Records’ found Then after all the discussion/inquiries with CPC Banglore etc. we again uploaded the return on 12.10.2012. ’ Neither the assessee nor the Counsel was aware that the return was not uploaded, there was not a single reason for not filing the return in time as per the provisions of sec 139(1), 30th Sept 2012 was a Sunday hence the due date was extended to 01.10.2012, so if the omission would have been noticed, the Counsel could have filed the return on 01.10.2012 also. You are kindly requested to condone the delay in filing the return as the assessee has completed all the formalities for filing the return & it was just omitted to be uploaded by the assessee’s counsel due to some technical error/confusion.

The ld.CIT(A) has granted relief to the assessee by observing that the contentions of the appellant that it was prevented by sufficient cause from filing the return within the time specified was accepted with the following observations and findings:- “3.3. From the perusal of facts in the case of the appellant, it is apparent that claim u/s 80IA has not been allowed to the appellant on account of the fact that the return of income has not been filed as per the time allowed for filing original return of income as per section 139(1) of the Income Tax Act, 1961. However, appellant has explained that it was on account of technical reasons that the return of income was not uploaded in the system when the appellant attempted to upload the same on 29.09.2012 i.e. within the time allowed to file return of income u/s 139(1). The appellant demonstrated before me that they have filed returns for AY 2006-07 to AY 2011-12 within time allowed for filing of return and well within 6 Synergy Waste Management Pvt. Ltd. the due date. Appellant has stated that final computation of income was prepared and self assessment tax due of Rs. 5,58,280/- was paid on 27.09.2012. The digital signature of Director i.e. Sh. Dheeraj Aggarwal required for filling the return were also obtained on 26.09.2012. The return alongwith tax was given to the company’s consultant/C.A. for filling on 27.09.2012. The return was uploaded /said to be uploaded by the Tax Practitioner on 28th September as confirmed on phone. Appellant has stated that all the formalities like preparation of Balance Sheet, Audit Report u/s 44AB, 115JB & Section 80IB were completed before 25.09.2012. The appellant has stated that their CA informed them that “the return of the party was uploaded on 28th Sept 2012, there was some problem in the Internet as well as Departmental Site hence we were frequently facing error in uploading many return and ‘Server Time Out’ message was appearing many times and when we tried to Login again to file the return the message was appearing ‘You have already filed the return so please select the Revised Option ’ in many cases. So in such cases we had to go to my returns column & download the acknowledgment from there which comes protected with password i.e. (PAN+ DOI) in small fonts. ” 3.4 The appellant has stated that with internet & site problems, they uploaded the return of Synergy Waste Management Pvt. Ltd. on 29.09.2012 and downloaded the acknowledgement of the return. However, they could not open the acknowledgement as it was not accepting the password. The appellant has stated that with the fair belief and confidence that they can download the return acknowledgement anytime from the department site, they proceeded with their other returns. The appellant has stated that they even got confirmation that their return has been filed and uploaded from their CA. However, on 07.10.2012, on trying to obtain acknowledgement, their status appeared as ‘No Records’ found. After enquiry with CPC Bangalore, the return was again uploaded on 12.10.2012, 3.5 The appellant has furnished copies of 'Computation of Total Income for AY 2012- 13’, copy of auditor’s report which is signed dated 29.08.2012, Annexure to the Audit Report which is signed 29.08.2012. The Annexure includes balance sheet and statements of Profit & Loss accounts duly verified by the Auditors and the management. Copy of Form No. 3CA signed and dated 25.09.2012, Annexure to the 7 Synergy Waste Management Pvt. Ltd. Form No. 3CA signed by director of the company and management dated 25.09.2012, copy of Form No. 10CCB which is also signed and dated 25.09.2012, Form No. 29B signed and dated 25.09.2012. The appellant has also furnished copy of Form No. 26 AS evidencing payment of taxes (self assessment tax) on 27.09.2012.From the above evidences furnished, the contentions of the appellant that it was prevented by sufficient cause from filing of return within time specified is accepted. The order of the AO u/s 143(1) of the I.T. Act disallowing claim for deduction u/s 80IA on account of the fact that return of income was not filed is set aside and the claim made by the appellant in its return of income shall be considered allowable subject to examination of the claim for deduction u/s 80IA on merits, if any, by the Assessing Officer during any other proceeding as per provisions of this Act.”

Now, we find it appropriate to consider the decision relied upon by the ld. Counsel of the assessee in the case of Dalmia Power Ltd. (supra). In this judgement, their Lordships has held that the Department was to consider the revised return filed by the assessee beyond the prescribed time limit after taking into account the scheme of amalgamation as sanctioned by NCLT. From the judgement relied upon by the ld. Counsel of the assessee in the case of S. Sevugan Chettiar (supra), we observe that the Hon’ble High Court of Madras has held that where default in complying the requirement was due to circumstances beyond the control of the assessee, then, the assessee could not have been denied the benefit of exemption u/s 10(10C) of the Act.

In the present case, it is a peculiar situation that the return of the assessee for AY 2012-13 was processed by CPC, Bengaluru and the intimation u/s 143(1)(a) of the Act was received by the assessee informing the denial of claim of exemption u/s 80IA of the Act on account of non-filing of the return within the prescribed time limit as per section 139(1) of the Act. We are in agreement with the contention of the ld. Counsel that in this process undertaken by the CPC, the assessee was not provided opportunity of being heard as it was a mechanical process and the assessee should get an opportunity to explain the cause for not filing the return within the prescribed time limit before the ld.CIT(A). On being asked by the Bench, the ld. Sr. DR did not controvert the factual position that for AY 2012-13, the balance sheet of the assessee was signed on 29.08.2012, report in 10CCD was obtained from the 8 Synergy Waste Management Pvt. Ltd. auditor on 25.09.2012, Form No. 29B for MAT u/s 115JB was signed by the auditor on 25.09.2012, Audit report u/s 44AB was signed by the auditor on 25.09.2012 and the Self assessment tax of Rs. 5,58,280/- was paid on 27/28.09.2012. The assessee has also filed the affidavit of Mr. Ashok Kumar Goyal, CA (Hisar) deposed on 17.11.2021 stating the factual position of non-uploading the return before the prescribed time limit, but, it was not filed before the authorities below.

Now, we proceed to consider the order of the ITAT, Nagpur Bench (AT e-Court, Pune) in the case of Krushi Vibhag Karmchari Vrund Sahakari Pat Sanstha vs. ITO (supra) wherein the coordinate Bench of the Tribunal, after considering the provisions of section 80AC of the Act and considering the judgements of the Hon’ble Supreme Court in the case of CIT vs. GM Knitting Industries Pvt. Ltd., (supra) and PCIT vs. Wipro Ltd., 446 ITR 1 (SC) held as follows: “5. I have heard both the sides and scanned through the relevant material on record. It is an undisputed fact that the assessee did not file return of income for the year under consideration either originally or pursuant to notice u/s 148. Computation of income was filed during the course of assessment proceedings in which the deduction u/s 80P was claimed. Whereas, the authorities below have canvassed a view that the assessee violated section 80A(5) and hence the deduction was not available; the assessee has made out a case that section 80A(5) does not apply where no return is furnished and rather it is section 80AC which would govern the case and because of omission of section 80P in the list of sections given in section 80AC, the deduction should be granted. In order to appreciate the contention of the ld. AR, it would be apposite to reproduce section 80AC, before its substitution by the Finance Act, 2018 w.e.f 1.4.2018, which reads as under: “ Where in computing the total income of an assessee of any previous year relevant to the assessment year commencing on the 1st day of April, 2006 or any subsequent assessment year, any deduction is admissible under section 80-IA or section 80- IAB or section 80-IB or section 80-IC or section 80- ID or section 80-IE, no such deduction shall be allowed to him unless he furnishes a return of his income for such assessment year on or before the due date specified under sub-section (1) of section 139."

On going through the above provision, it is crystallized that the requirement of filing return before the time u/s 139(1) is sine qua non for claiming deduction under the six sections (80-IA or 80- IAB or 80-IB or 80-IC or 80-ID or 80-IE). In other words, if a return is filed belatedly u/s 139(4) or under any other section, claiming deduction under any of the six sections, the writ of the section 80AC will operate to prevent its granting. This section does not deal with granting or non-granting of deduction under any other sections of Part C of Chapter VI-A, including section 80P. Thus, to infer that since section 80AC does not cover section 80P, the latter section is immune from any other statutory requirement, is wholly incorrect. In fact, section 80AC is alien to deduction under any section except the specified six sections.

Now, I turn to section 80A(5), which has been pressed into service by the AO for denying the benefit of deduction u/s 80P of the Act, which runs as under: `Where the assessee fails to make a claim in his return of income for any deduction under section 10A or section 10AA or section 10B or section 10BA or under any provision of this Chapter under the heading "C.-- Deductions in respect of certain incomes", no deduction shall be allowed to him thereunder.' 8. This section provides that where an assessee fails to make a claim in his return of income for any deduction, amongst others, the sections enshrined in Part C to Chapter VI-A (including section 80P and six sections as given in section 80AC), then the deduction shall not be allowed. A perusal of the mandate of section 80A(5) divulges that the claiming of deduction under various sections of part C of Chapter VI-A in the return of income is essential. The reference in this provision is only to return of income, without any further qualification. The return may be u/s 139(1) or 139(4) or any other relevant section.

On a conjoint reading of sections 80A(5) and 80AC, it gets manifest that claiming of deduction under various sections of Part C of Chapter VI-A in the return of income is essential. However, an additional requirement for claiming deduction under sections 80-IA or 80-IAB or 80-IB or 80-IC or 80-ID or 80-IE is that such deduction must be claimed in a return filed u/s 139(1) of the Act. In one sense, section 80AC is an exception to section 80A(5), making the mandate of the latter section more stringent in the prescribed cases. Whereas other deductions of Part C of Chapter VI-A, including section 10 Synergy Waste Management Pvt. Ltd. 80P, can be claimed in the return filed under any section, including section 139(4); the six deductions as referred to in section 80AC must necessarily be claimed in the return filed u/s 139(1) only. Ex consequenti, the contention that since section 80P is not covered under section 80AC, the deduction under this section becomes automatically allowable without adhering to the requirement of section 80A(5), is bereft of force and hence dismissed.

Now I advert to the requirements of section 80A(5), which stipulates that no deduction under other sections including 80P shall be allowed if the assessee fails to make such a claim in the return of income. Thus, there are twin conditions, viz., first, claiming deduction u/s 80P and second, claiming such deduction in the return of income. There is no dispute on the first condition, which has been satisfied in this case as the assessee did claim the deduction albeit during the course of assessment proceedings. The whole controversy revolves around the second condition, which says that the claim should be made in the return of income. The assessee in the extant case did not file any return of income, but made a claim of the deduction in computation of income filed during the course of the assessment proceedings. The moot question is whether the requirement of making a claim in the return of income is a mandatory or a directory requirement. If it is held as mandatory, then the claim must be made in the return of income, failing which the benefit of deduction would be lost. Au contraire, if it is held as directory, then the claim made either in the return of income or in any manner before the conclusion of assessment proceedings, as is the case under consideration, would validate the entitlement.

The Hon'ble Supreme Court in CIT vs. G.M. Knitting Industries (P.) Ltd. (2015) 376 ITR 456 (SC) came across a situation in which the assessee claimed additional depreciation in Form 3AA but the Form was not furnished along with the return of income. Such Form was submitted during the course of assessment proceedings. The AO denied the claim on the ground that the Form 3AA was required to be statutorily filed along with the return of income. The view of the AO was reversed by the Tribunal as well as the Hon'ble High Court by holding that even if the Form was filed during the course of assessment proceedings, it amounted to sufficient compliance. The Hon'ble Supreme Court, taking note of the judgment in CIT Vs. Shivanand Electronics (1994) 209 ITR 63 (Bom), approved the view of the Hon'ble High Court having the effect that the requirement of filing Form 3AA was a necessary 11 Synergy Waste Management Pvt. Ltd. ingredient for claiming additional depreciation, but the timing of filing the Form was a directory requirement, which was fulfilled on filing it even during the course of assessment proceedings. The Hon'ble Bombay High Court in Shivanand Electronics (supra) dealt with the requirement of filing audit report for the purpose of claiming deduction u/s 80J, which required that the report should be filed "along with return of income'' under s. 80J(6A). It held that such requirement of filing the audit report along with the return of income was not mandatory, but directory in the sense that if assessee complied with the same before completion of assessment, deduction under s. 80J, on the basis of such report, was allowable.

Recently, the Hon'ble Supreme Court was confronted with the claim of benefit u/s 10B in Pr.CIT vs. Wipro Limited (2022) 446 ITR 1 (SC). The assessee furnished original return taking the benefit of section 10B and did not carry forward the loss. Thereafter, a revised return was filed foregoing the claim of deduction u/s 10B. The AO rejected the withdrawal of exemption under Section 10B by holding that assessee did not furnish the necessary declaration in writing before due date of filing return of income, which was an essential requirement for not claiming the benefit of section 10B. The Hon'ble High Court decided the issue in favour of the assessee by holding that the requirement of filing the declaration was mandatory but filing it along with the return of income u/s 139(1) was a directory requirement. The matter was brought by the Revenue before the Hon'ble Supreme Court. The assessee, inter alia, relied on the judgment of the Apex Court in G.M. Knitting Industries (supra). Their Lordships held that the requirement of filing the report in support of deduction u/s 10B was not a directory but a mandatory requirement. It further held that both the conditions of - filing the declaration and filing it before the time limit u/s 139(1) - were mandatory and had to be cumulatively satisfied. Rejecting the reliance on G.M. Knitting Industries (supra), the Hon'ble Supreme Court held that that decision was relevant in the context of deduction provisions and not the exemption provisions as given under Chapter III of the Act. As the Hon'ble Summit Court in Wipro Limited (supra) was dealing with section 10B, falling under Chapter III of the Act, it held qua G.M. Knitting Industries (supra) that: `Therefore, the said decision shall not be applicable to the facts of the case on hand, while considering the exemption provisions. Even otherwise, Chapter III and Chapter VI- A of the Act operate in different realms and principles of Chapter III, which deals with "incomes which do not 12 Synergy Waste Management Pvt. Ltd. form a part of total income", cannot be equated with mechanism provided for deductions in Chapter VI- A, which deals with "deductions to be made in computing total income". Therefore, none of the decisions which are relied upon on behalf of the assessee on interpretation of Chapter VI-A shall be applicable while considering the claim under Section 10B (8) of the IT Act.' 13. On going through the judgments in G.M. Knitting Industries (supra) in juxtaposition to Wipro Limited (supra), the principle which emerges is that the fulfillment of requirement of making a claim for exemption under the relevant sections of Chapter III in the return of income is mandatory, but when it comes to the claim of a deduction, inter alia, under the relevant sections of Chapter VI-A, such requirement becomes directory. In the latter case, the making of a claim even after the filing of return but before completing the assessment, meets the directory requirement of making a claim in the return of income. The instant case involves deduction u/s 80P and hence, would be governed by the principle laid down in G.M. Knitting Industries (supra), as per which the making of a claim of deduction is mandatory but the timing is directory. Even if the claim is made during the course of assessment proceedings, such a claim has to be allowed. In view of the foregoing discussion, I am satisfied that the authorities below were not justified in rejecting the assessee's claim of deduction u/s 80P only on the ground that such a claim was not made in the return but during the course of assessment proceedings. The impugned order is ergo set aside and the matter is remitted to the file of the AO for examining the claim of deduction u/s 80P on merits.

In view of the foregoing, first of all, from the proposition rendered by ITAT, Pune Bench in the case Krushi Vibhag Karmchari Vrund Sahakari Pat Sanstha vs. ITO (supra), we respectfully note that the coordinate Bench of the Tribunal, after considering the proposition rendered by the Hon’ble Supreme Court in the cases of G.M. Knitting Industries (supra) and Wipro Ltd. (supra) held that the Chapter III and Chapter VI-A of the Act operate in different realms and principles of chapter III, which deals with ‘incomes which did not form part of total income’ cannot be equated with mechanism provided for deductions in Chapter VI-A which deals with ‘deductions to be made in computing the total income.’ Therefore, it was held that the fulfillment of requirement for making a claim of exemption under the relevant sections of Chapter III in the return of income is 13 Synergy Waste Management Pvt. Ltd. mandatory, but, when it comes to the claim of a deduction, inter alia, under the relevant section of Chapter VI-A, such requirement become directory. In a case where the assessee claims deduction under Chapter VI-A of the Act, the making of a claim even after filing of return, but, before completion of the assessment proceedings and passing of assessment order meets the directory requirement of making a claim in the return of income.

In the present case, the assessee is claiming deduction u/s 80IA of the Act which was disallowed by the AO/CPC under intimation u/s 143(1) of the Act. Aggrieved, the assessee carried the matter before the ld. First appellate authority and the ld.CIT(A), after considering the totality of the facts and circumstances of the case, first of all, observed that the appellant furnished copies of the computation of total income, copy of auditor’s report signed on 29.08.2012, Annexures to audit report signed on 29.08.2012, which includes balance sheet and statement of Profit & Loss Account duly verified by the auditors and the management. It is also not in dispute that the copy of Form-3CA, annexure to the Form-3CA signed by the Director of the company and management, copy of form 10CCB, copy of form 29B were signed on 25.09.2012. It was also observed by the ld.CIT(A) that the assessee has also furnished copy of Form No.26AS evidencing the payment of tax (self assessment tax) on 27.09.2012. Thereafter, the ld.CIT(A) noted that the appellant was prevented by sufficient cause from filing the return within the prescribed time limit u/s 139(1) of the Act. Therefore, the explanation was found plausible and accepted by the ld.CIT(A). The ld.CIT(A) finally held that the order of CPC/AO u/s 143(1) of the Act disallowing claim u/s 80IA on account of the fact that the return of income was not filed within the prescribed time limit was set aside and the claim made by the appellant in the return of income was allowed subject to examination of claim for deduction u/s 80IA of the Act by the AO.

Now, the grievance of the Revenue in this appeal is that the ld.CIT(A) has wrongly held that the assessee is entitled to claim deduction u/s 80IA(4) of the Act, because, the claim was not made in the return of income filed within the prescribed time limit provided u/s 139(1) of the Act. At the cost of repetition, we may point out that in the present case, the assessee is claiming deduction u/s 80IA of the Act, therefore, the same would be governed by the proposition rendered by the Hon’ble Supreme Court in the case of G.M. Knitting Industries 14 Synergy Waste Management Pvt. Ltd. Pvt. Ltd. (supra), as per which the making of a claim of deduction is mandatory, but, timing is directory. Even if the claim is made during the assessment proceedings, such a claim is to be allowed. In view of the above, we are inclined to hold that the AO was not right in holding that the assessee is not entitled to claim deduction u/s 80IA(4) of the Act on account of belated filing of return beyond the prescribed time limit u/s 139(1) of the Act. The ld.CIT(A) was justified and correct in holding that the assessee is entitled to claim deduction u/s 80IA(4) of the Act as it was prevented by sufficient cause in filing the return of income within the prescribed time limit. In view of the proposition rendered by the Hon’ble Supreme Court in the case of G.M. Knitting Industries Pvt. Ltd. (supra), the claim of the assessee has reached to a higher pedestal because the Hon’ble Supreme Court has categorically held that for making a claim under Chapter VI-A of the Act which also includes provision of deduction u/s 80IA of the Act and the making of such claim for deduction is permissible even after filing of the return, but, before completing the assessment meets directory requirement in the filing of return of income.

In the present case, however, the return of income of the assessee for AY 2012-13 was filed beyond the prescribed time limit u/s 139(1) of the Act. For that the ld.CIT(A) has recorded a categorical finding that the assessee was prevented by sufficient cause in filing the return within the prescribed time limit perhaps due to weak responsive Departmental website. Even in a situation the return of income of the assessee for AY 2012-13 is treated as belated return beyond the prescribed time limit provided u/s 139(1) of the Act, then also, as per the judgement of the Hon’ble Supreme Court in the case of G.M. Knitting Industries Pvt. Ltd. (supra), which was followed by the coordinate Bench of the ITAT, Pune in the case of Krushi Vibhag Karmchari Vrund Sahakari Pat Sanstha (supra), the assessee is very well entitled to claim deduction u/s 80IA(4) of the Act. Therefore, we are unable to find any valid reason to interfere with the findings arrived at by the ld.CIT(A). Thus, we uphold the same. Accordingly, the sole ground of the Revenue in for AY 2012-13 being devoid of merits is dismissed. Appeal of the Revenue in ITA No.5703/Del/2016 for AY 2012-13 20. As agreed by the ld. Representatives of both the sides, the issue and grounds in the Departmental appeal for AY 2011-12 to 2014-15, i.e., in all four appeals are 15 Synergy Waste Management Pvt. Ltd. identical and similar and, therefore, the case for AY 2012-13 i.e., can be taken as a lead case for adjudication of the sole issue involved in all these four Departmental appeals. The grounds raised

Replying to the above, the ld. Counsel of the assessee drew our attention towards the orders of the authorities below and submitted that the issue is squarely covered by the various judgements of the Hon’ble High Court of Bombay in the case of CIT vs. Continental Warehousing Corporation (Nhava Sheva) Ltd. (2015) 58 taxmann.com 78 (Bom) and submitted that in this case, the AO had denied deduction u/s 80IA(4) of the Act stating that there was no specific agreement with the Central Government, State Government or the Local Authority and the Hon’ble High Court, considering the similar facts and circumstances, held that there is no requirement of either a specific agreement once the facility is nothing, but, ‘infrastructural facility’ set up within the precincts of the port, then, even otherwise the deduction admissible u/s 80IA(4) of the Act is admissible. The ld. Counsel also drew our attention towards the relevant operative part of the first appellate order, specifically para 7.1 to 7.6 of the first appellate order and submitted that the engagement of the assessee in treatment of bio medical waste constitute maintaining or developing of infrastructural facility with respect to solid waste management system and the same is eligible infrastructure facility as per provisions of section 80IA of the Act.

He further submitted that even, in absence of any specific agreement, the business operation/action of the assessee are required to be seen with respect to performance of the terms of agreement as well as conditions prescribed by the authority with which 17 Synergy Waste Management Pvt. Ltd. agreement has been entered into. The ld. Counsel also submitted that it is a glaring fact that the assessee is working under the contract means that the assessee has got contract for supervision of operation and maintenance. The ld. Counsel also submitted that the AO has not controverted a very relevant fact that the assessee has set up bio medical waste facility and the provision of section 80IA(4) of the Act do not put any bar or monetary restriction regarding investment required to be set up eligible infrastructural facility. The ld. Counsel submitted that the assessee has undertaken contract work relating to bio medical waste disposal and treatment as per the terms and conditions entered into with various authorities and it is not the allegation of the AO that any of the prescribed conditions have not been met or the appellant has not carried out the work relating to bio medical waste treatment in accordance with the terms and conditions prescribed in the contracts.

The ld. Counsel lastly submitted that the AO did not appreciate the relevant facts and circumstances which were rightly considered by the ld.CIT(A) before granting relief to the assessee. Therefore, the first appellate authority was right in granting relief to the assessee. The ld. AR also submitted that the assessee, in support of his claim for deduction u/s 80IA(4) submitted detailed submissions before the authorities below, which has been reproduced by the ld.CIT(A) in para 4 of the first appellate order which clearly reveals that the issue is covered in favour of the assessee by various judgements. Therefore, the first appellate order may kindly be upheld by dismissing the appeal of the Revenue.

The main allegation of the AO in dismissing the claim of the assessee is that the conditions prescribed for claiming deductions u/s 80IA has not been complied with by the assessee because: (i) there was no development of any infrastructure facility; (ii) the appellant had been treating bio medical waste which was not covered in the definition of ‘infrastructure facility’ as per Explanation to section 80IA(4) of the Act and (iii) the appellant was paying rent for plant & machinery which indicate that the facility was not owned by the appellant. From the copies of the agreements placed before the AO, he also noticed that the activities of the appellant were not covered as per the provisions of section 80IA(4) of the Act and the agreement with Uttar Pradesh Pollution Control Board, column No. (iii) contains only authorization from the Pollution Control Board for various periods, the agreement with Delhi 18 Synergy Waste Management Pvt. Ltd. Government only specify terms and conditions for plot of land provided to the appellant by the Delhi Government for limited period and the agreement with the General Hospital, Sirsa is no an agreement with any authority as per the requirement of section 80IA of the Act. 26. Furthermore, the ld. CIT(A) has granted relief to the assessee with the following observations and findings:-

On careful consideration of the rival submissions, first of all, we note that the ld. Counsel of the assessee, during the arguments submitted copy of the order of ITAT, ‘G’ Bench reported as (2017) 88 taxmann.com 405 (Del. Trib) in assessee’s own case named as Synergy Waste Management Pvt. Ltd. vs. ACIT, wherein the Tribunal held that where the AO had specifically allowed the claim u/s 80IA(4) after reducing it by other income not being eligible for claim of deduction, the provisions of section 263 of the Act could not be invoked on the ground that there had been no application of mind by the AO merely because he has not made lengthy discussion on the issue in the assessment order. On perusal of the said order, we observe that the ld.CIT, Hisar, invoking the provisions of section 263 of the Act revised the order of assessment for AY 2009-10 wherein the AO held that the assessee is entitled to claim deduction u/s 80IA(4) of the Act. The Tribunal, allowing the appeal of the assessee, held that the provisions of section 263 of the Act could not be invoked on the ground that there had been no application of mind by the AO merely because he had not included lengthy discussion or deliberations on the issue in the assessment order. This order support the claim of the assessee that he was held entitled to claim deduction u/s 80IA(4) of the Act by the AO which was approved by the coordinate Bench of the Tribunal setting aside the revisionary order u/s 263 of the Act. Further, from another order of ITAT ‘G’ Bench dated 24.04.2018 in assessee’s own case for AY 2010-11 in we further observe that the ld.CIT(A), Hisar also revised the assessment order for AY 2010-11 u/s 263 and the Tribunal, allowing the appeal of the assessee, held that the Revenue did not bring to the notice of the Bench any change in the circumstances for AY 2009-10, 2011-12 and 2013-14 on the one hand and 33 Synergy Waste Management Pvt. Ltd. AY 2010-11 on the other. It was also held that it is difficult to take a different view from the one taken in the order dated 30.05.2016 in ITA No. 2560/Del/2015. The relevant findings of the Tribunal in its order are being reproduced below for the sake of compliance:- “11. We have perused the material papers on record in the light of the submissions on either side. Relevant contents of the assessment order dated 26/12/2011 for the AY 2009-10 read that- "Requisite information/documents have been furnished, which are placed on records. Books of accounts produced were test checked. The case was discussed with them. The assessee has filed a revised return on 26.03.2011. The company has omitted to claim a deduction under section 80IA for which it was eligible being infrastructure company carrying on solid waste management activities. Thus, the assessee has claimed deduction of Rs.1,72,76,560/-under section 80IA of the Income tax Act, 1961 in the revised return. The claim of the assessee is accepted subject to the observations that the assessee is entitled to deduction of Rs.1,66,73,315/-and other income of Rs.6,03,245/-is not eligible for deduction under section 80IA of the Income tax Act, 1961. However tax is chargeable under section 115 JB (MAT) since tax on book profit of Rs.1,78,09,927/-is more than tax on normal income."

A reading of the above portion of the assessment order for AY 2009-10 makes it clear that the facts are identical for both the assessment years 2009 10 and 2010-11. In the case of assessment year 2009-10 also, Ld. ClT exercised powers under section 263 of the Act and set aside the matter to the AO with similar observations as those for assessment year 2010-11. A reading of the order dated 30/05/2016 in passed by a coordinate bench of this Tribunal shows that the grounds on which the learned CIT revised the orders are not tenable and such an exercise was blatantly illegal and liable to be crashed. For the assessment year 2010-11 also CIT revised the assessment order on almost similar grounds like the order passed by the assessing officer is without determination of total income and tax payable, learned assessing officer had not made proper enquiry etc.

Facts being continued to be similar for both these years including wording of the assessment order, we are of the considered opinion that the 34 Synergy Waste Management Pvt. Ltd. findings of the coordinate bench of this tribunal for the assessment year 2009-10 are very much applicable for this assessment year also.

Further, there is no denial from the revenue that the assessee had submitted all the relevant documents at the time of assessment proceedings and such documents include the computation of income, copy of the audited balance sheet, copy of the tax audit report under section 44 AB, and the copy of the auditor's report in form 10 CCB also. Moreover assessment order clearly reads that all the requisite information/documents including the books of accounts were produced and with a specific reference to the eligibility of the assessee being an infrastructure company carrying on solid waste management activities, learned AO accepted the claim of the assessee.

Further it goes uncontroverted that for the assessment years 2011-12, 2012-13 and 2013-14 the Assessing Officer denied exemption under section 80IA to the assessee and made additions but in appeals the CIT(A) clearly giving a finding that the infrastructure facility set up by the assessee in the form of biomedical waste treatment plant is entitled to deduction under section 80IA of the Act, allowed the appeal of the assessee.

Revenue does not bring to our notice any change of circumstance; for the assessment years 2009-10, 2011-12 to 2013-14 on one hand and 201. 11 on the other. Facts being continued to be similar, we find it difficult to take a different view from the one taken in order dated 30/05/2016 in ITA do. 2560/Del/2015 by the Tribunal or by the first appellate authority in respect of the assessment years 2011-12 to 2013-14.

In these circumstances, we find that the impugned action of the CIT under section 263 of the Act being blatantly illegal, the impugned order is liable to be quashed, and we direct accordingly.”

Now, we proceed to adjudicate the grievance of the Revenue regarding sustainability of first appellate order of the ld.CIT(A). From the relevant part of the first appellate order as reproduced hereinabove, we clearly observe that he ld.CIT(A) first of all noted the provisions of section 80IA(4) of the Act along with Explanation thereto. Thereafter, he examined the definition of bio- medical waste and also considered the Bio-medical Waste 35 Synergy Waste Management Pvt. Ltd. Management Rules, 2016 and Notification dated 08.04.2016. After analyzing the Solid Waste Management Rules, 2016, the ld. CIT(A) proceeded to consider the proposition rendered by the ITAT, Mumbai Bench in the case of ITO vs. EA Infrastructure Operations Pvt. Ltd., order dated 09.07.2010 and also adjudicated the objections raised by the AO in dismissing the claim of deduction u/s 80IA of the Act by the assessee. The ld.CIT(A), in para 7.3 considered the proposition rendered by the Hon’ble Bombay High Court in the case of CIT vs. Continental Warehousing Corporation (Nhava Sheva) Ltd. (supra) and also considered the proposition rendered by the coordinate Bench of the ITAT, Ahmedabad in the case of En-Vision Enviro Engineers (P) Ltd., 150 TTJ 621 (Ahd). The ld.CIT(A) finally held that the engagement of the assessee in the treatment of bio- medical waste constitutes maintaining or developing of infrastructural facility with respect to solid waste management system which is an eligible infrastructural facility as per the provisions of section 80IA(4).

He also concluded that in absence of specific agreement, the actions of the assessee are required to be seen with respect to performance of terms of agreement as well as conditions prescribed by the assessee with which agreement has been entered into. It was also rightly observed that when the assessee is working under the contract means that the assessee has got contract of supervision and maintenance and it will be far-fetched or beyond imagination to state that the project in such a case has been developed by the Municipal Corporation. On being asked by the Bench, rebutting the allegation of the AO that the assessee do not own any plant and machinery as it had paid rent thereon, the ld. Counsel submitted the copies of the financial statements including balance sheet and chart of relevant FY showing claim of depreciation which reveals that the assessee has deployed and set up plant and machinery and had also claimed depreciation thereon which was allowed by the AO without any dispute or doubt, thus, inadvertent mentioning of rent payment in P&L Account on plant & machinery does not raise any bar regarding claim of deployment of plant & machinery by the assessee for setting up of infrastructure facility on which claim of deduction u/s 80IA(4) has been made. In view of the above, we are in agreement that the conclusion drawn by the ld.CIT(A) that the appellant assessee has set up bio-medical facility as per the provisions of section 80IA(4) of the Act, there is no monetary restriction on the amount of investment required to set up eligible infrastructure facility the appellant assessee has carried out the work contract with 36 Synergy Waste Management Pvt. Ltd. various hospitals and local government bodies relating to treatment, management and disposal of bio-medical waste as per the terms and conditions entered with various authorities which has been noted by the ld.CIT(A) in the first appellate order. He rightly noted that it is not an allegation of the AO that any of the prescribed conditions have not been met or else the appellant has not carried out the work relating to bio-medical waste treatment in accordance with the terms and conditions prescribed in the contracts. After recording the above findings, the ld.CIT(A) finally observed that the infrastructure facility set up by the appellant in the form of bio-medical waste treatment plant is entitled to deduction u/s 80IA(4) of the Act.

At the cost of repetition, we may also point out that the Tribunal in the consistent orders for AYs 2009-10 and 2010-11 dated 30.05.2016 and 24.04.2018 respectively, has held that the Revenue does not bring to the notice of the Bench any change of circumstances for AY 2009- 10, 2010-11 to 2013-14 and 2010-11 and the facts being continued to be identical and similar. Therefore, after allowing appeal of the assessee against the order of CIT, Hisar for AY 2009-10 and 2010-11, we safely presume that the assessment order allowing claim u/s 80IA of the Act has been upheld by the Tribunal setting aside the report of the action u/s 263 of the Act. On being asked by the Bench, the ld. Sr. DR could not assist us as to whether any appeal has been filed by the Department against the said orders of the Tribunal and these orders have been set aside or modified in any manner. In view of the foregoing, we reach to a final logical conclusion that there is no ambiguity, perversity or any other valid reason to interfere with the findings arrived at by the ld. CIT(A) and, therefore, we uphold the same. Consequently, the appeal of the Revenue for AY 2012-13 being devoid of merits is dismissed.

Since, in the beginning of the hearing, the ld. Representatives of both the sides have agreed that the facts and circumstances of all four appeals of the Revenue are identical and similar, therefore, our above noted findings recorded for AY 2012-13 would apply, mutatis mutandis, to other appeals pertaining to AY 2011-12, 2013-14 and 2014-15. Resultantly, these three appeals of the Revenue are also dismissed, following the findings arrived at for AY 2012-13.”

This Revenue’s appeal is dismissed in above terms. Order Pronounced in the Open Court on 20/12/2024.