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IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 5TH DAY OF OCTOBER, 2021
PRESENT
THE HON’BLE MRS.JUSTICE S.SUJATHA
AND
THE HON’BLE MR. JUSTICE RAVI V. HOSMANI
I.T.A.No.567/2017
BETWEEN : M/S. HINDUJA LAND DEVELOPMENTS [P] LTD., REP. BY ITS MANAGING DIRECTOR SRI SUNIL HINDUJA NO.1B, RICHMOND ROAD BENGALURU-560025 PAN: AABCH2768J.
...APPELLANT
(BY SRI A.SHANKAR, SENIOR COUNSEL A/W. SRI BHAIRAV KUTTAIAH, ADV. FOR SRI M.LAVA, ADV.)
AND : THE ASSISTANT COMMISSIONER OF INCOME-TAX, CIRCLE-11[4] PRESENTLY CIRCLE – BMTC BUILDING, 80 FEET ROAD KORAMANGALA BANGALORE-560095.
…RESPONDENT
(BY SRI E.I.SANMATHI, ADV. A/W. SRI K.V.ARAVIND, ADV.)
THIS INCOME TAX APPEAL IS FILED UNDER SECTION 260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER DATED 15/03/2017 PASSED IN ITA NO.1784/BANG/2016, FOR THE ASSESSMENT YEAR 2006-2007, PRAYING THIS HON'BLE COURT TO A) TO FORMULATE THE SUBSTANTIAL QUESTION OF LAW AS STATED ABOVE AND THE ANSWER THE SAME IN FAVOUR OF THE APPELLANT. B) TO ALLOW THE APPEAL AND
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SET ASIDE THE FINDINGS TO THE EXTENT WHICH IS AGAINST THE APPELLANT IN THE ORDER PASSED BY THE INCOME TAX APPELLATE TRIBUNAL IN ITA NO. 1784/BANG/2016 FOR THE ASSESSMENT YEARS 2006-2007 DATED15/03/2017 VIDE ANNEXURE-A. C) TO PASS SUCH OTHER ORDERS, AS THIS HON'BLE COURT DEEMS FIT AND PROPER TO MEET THE ENDS OF JUSTICE.
THIS APPEAL COMING ON FOR HEARING, THIS DAY, S. SUJATHA, J., DELIVERED THE FOLLOWING:
J U D G M E N T
This appeal is filed by the assessee under Section 260A of the Income Tax Act, 1961 [‘Act’ for short] assailing the order of the Income Tax Appellate Tribunal “SMC – C” Bench, Bangalore [‘Tribunal’ for short] in ITA No.1784/Bang/2016 dated 15.03.2017 relating to the assessment year 2006-07.
The appeal has been admitted to consider the following substantial questions of law:
“1. Whether the Tribunal was justified in law in denying the eligible claim of deduction available to the appellant under the provisions of Section 80IB[10] of the Act on the facts and circumstances of the case?
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Whether the Tribunal erred in not appreciating that consent cannot confer jurisdiction and in accordance with the Board Circular, and several case laws the Tribunal ought to have granted relief by allowing the claim of eligible deduction under Section 80IB[10] of the Act, on the facts and circumstances of the case?
Whether the Tribunal was justified in denying the benefit of deduction under Section 80IB[10] of the Act without properly appreciating that the claim of deduction has been granted to the appellant on the very same project in the subsequent assessment year 2007-08 and consequently passed a perverse order on the facts and circumstances of the case?
Whether the authorities below are justified in law in charging interest under Section 234B and 234C of the Act on the facts and circumstance of the case?”
The assessee is a private limited company engaged in the business of land development and
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construction of dwelling houses. During the relevant assessment year 2006-07, return of income was filed by the assessee declaring a total income of Rs. NIL after claiming deduction under Section 80IB[10] of the Act amounting to Rs.1,19,94,340/- on 30.09.2006. The said return was processed under Section 143[1] of the Act and the assessment order under Section 143[3] of the Act was passed on 31.12.2008 denying the deduction under Section 80IB[10] of the Act on the ground that the assessee had withdrawn the claim of deduction under Section 80IB[10] vide its letter dated 29.12.2008.
Being aggrieved, the appellant preferred an appeal before the learned Commissioner of Income Tax [Appeals], Bengaluru. The said appeal has been rejected primarily on the ground that the assessee had withdrawn the claim of deduction under Section 80IB[10] of the Act by filing revised return and accepted the objections of the Assessing Officer during the
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assessment proceedings. Against which, appeal was preferred before the Tribunal. The Tribunal confirmed the order of the Authorities and denied the deduction under Section 80IB[10] of the Act, dismissing the appeal.
Being aggrieved, the assessee has preferred the present appeal.
Learned senior counsel Sri.A.Shankar representing the appellant-assessee would submit that the Tribunal has failed to appreciate the factum that the assessee has filed revised return of income which indeed refers to the deduction claimed under Section 80IB[10] of the Act i.e., under Chapter VI-A [Schedule 10] at Rs.3,973,958/- in Part-B of the Computation of Income and Tax, the Authorities proceeded on a footing that the claim of deduction under Section 80IB[10] of the Act was indeed withdrawn in the revised return and thereby denied the claim of deduction
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made by the assessee. Learned senior counsel would submit that it is settled legal position that no tax would be collected without the authority of law and there is no estoppel against law. Even if any consent is made as per the letter dated 29.07.2008, the same would not confer jurisdiction on the authorities to deny the benefit when the law holds otherwise. Learned senior counsel placing reliance on the judgment of the Co-ordinate Bench of this Court in the case of M/s. Bhandari Metals V/s. State of Karnataka [ILR 2004 KAR 2025], submitted that if the assessee makes any return and submits before the Assessing Authority, he is not estopped or precluded from any law by preferring any appeal and demonstrate before the appellate authority that he is not exigible to such tax. Thus, it was contended that the appellate authority is bound to examine the matter and determine the question on merits. The Tribunal blindly accepted the findings of the authorities merely on the ground that the revision return was filed by the assessee
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withdrawing the claim of deduction under Section 80IB[10]. The other judgments cited by the learned counsel enunciates the same principles of law. We are not inclined to refer to all the judgments, since the matter requires a remand to the Assessing Officer in the context of the submissions made by the learned counsel for the Revenue placing reliance on Section 80AC of the Act.
At this juncture, it would be profitable to refer to Section 80AC of the Act which reads thus: "Deduction not to be allowed unless return furnished.
80AC. Where in computing the total income of an assessee of any previous year relevant to the assessment year commencing on or after—
(i) the 1st day of April, 2006 but before the 1st day of April, 2018, any deduction is admissible under section 80-IA or section 80-
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IAB or section 80-IB or section 80-IC or section 80-ID or section 80-IE;
(ii) the 1st day of April, 2018, any deduction is admissible under any provision of this Chapter under the heading "C.— Deductions in respect of certain incomes",
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."
In terms of the said provisions, no deduction shall be allowed to an assessee 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 which undisputedly applies to Section 80IB as per Clause[i] of 80AC. Learned senior counsel has made an endeavor to argue that the law is now well settled inasmuch as the deduction under Section
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80IB[10] which was nebulous at the relevant point of time.
Having regard to these aspects, denial of the claim on hyper technicalities would cause injustice to the assessee. Further, the submission of the learned senior counsel that the scrutiny assessment order made under Section 143[3] relating to the same project for the assessment year 2007-08, where deduction under Section 80IB[10] of the Act has been extended by the Assessing Officer and the same has been reached finality also merits consideration. In the given circumstances, we are of the considered view that the entire exercise made by the Authorities in denying the deduction under Section 80IB[10] is based on the revision return said to have been filed by the assessee withdrawing the claim of deduction under 80IB but the document now placed before the Court said to be the revised return dated 24.12.2008, would indicate that
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the deductions under Chapter VI-A [Schedule 10] were claimed by the assessee.
In such circumstances, the proceedings of the Authorities and the Tribunal warrants interference so as to ascertain the genuineness of this return said to have been filed by the assessee, in the light of Section 80AC of the Act.
Hence, without expressing any opinion on the substantial questions of law raised by the assessee, we deem it appropriate to restore the matter to the file of the Assessing Officer to re-examine the matter on the deduction claimed by the assessee under Section 80IB[10] with respect to return dated 24.12.2008 vis-à-vis Section 80AC of the Act and the settled legal principles holding the field on the subject matter of Section 80IB[10] of the Act. Accordingly, we pass the following:
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ORDER i] Appeal is allowed in part.
ii] The impugned order passed by the Tribunal dated 15.03.2017 in ITA No.1784/Bang/2016; the order of the Assessing Officer dated 31.12.2008 and the order of the Commissioner of Income-Tax [Appeals] dated 11.08.2016 in ITA.No./39/C- 11[4]/CIT[A]/BNG-3/2014-15 are set aside.
iii] The matter is restored to the file of the Assessing Officer to re-consider the matter in the light of the observations made herein above insofar as the denial of deduction of the claim under Section 80IB[10] of the Act and to pass appropriate orders in accordance with law in an expedite manner.
iv] All the rights and contentions of the parties in respect of deduction claimed under Section 80IB[10] of the Act is kept open.
Sd/- JUDGE
Sd/- JUDGE NC.