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Income Tax Appellate Tribunal, SURAT BENCH, SURAT
Before: SHRI PAWAN SINGH, JM & DR. A. L. SAINI, AM
O R D E R PER DR. A. L. SAINI, AM: Captioned appeal filed by the Revenue and Cross Objection filed by the Assessee, pertaining to Assessment Year (AY) 2012-13, is directed against the order passed by the Learned Commissioner of Income Tax (Appeals)-2, Surat [in short “the ld. CIT(A)”], in Appeal No. ITBA/APS/S/250/2019-20/1025549663(1) dated 21.02.2020, which in turn arise out of an assessment order passed by the Assessing Officer under section 143(3) r.w.s.147 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”), dated 23.08.2017.
ITA 115/SRT/2020 & CO 11SRT/2020/AY.2012-13 Saurashtra Enviro Projects Private Limited 2. Grounds of appeal raised by the Revenue are as follows: “(i) On the facts and circumstances of the case and in Law, the Ld. CIT(A) has erred in deleting the disallowance made by the AO of Rs.18,93,63,796/- on account of deduction claimed u/s 80IA of the Act as the assessee company has filed its return of income on 26.10.2012 which is after the specified due date u/s 139(1) of the Act, i.e. 30.09.2012 without appreciating the meaning and applicability of section 80AC of the I.T. Act. (ii) On the facts and circumstances of the case and in Law, the Ld. CIT(A), Surat ought to have upheld the order of the Assessing Officer. It is, therefore, prayed that the order of the Ld. CIT(A)-2, Surat may be set-aside and that of the Assessing Officer’s order may be restored. (iii) On the facts and circumstances of the case and in law, the appellant craves its right to add, alter, amend, deleted, any of the ground or grounds of appeal.”
3. Brief facts of the issue in dispute are stated as under. The assessee before us is a private limited company and filed its return of income for A.Y. 2012-13 showing total income of Rs.1,09,32,327/- after claiming deduction of Rs.18,93,63,796/- under section 80IA of the Act on 26.12.2012. The case was selected for scrutiny and order under section 143(3) was passed on 16.03.2015 determining total income of Rs.1,09,32,327/-. Later on, assessee`s case was re- opened under section 147 of the Income Tax Act after recording the reasons and a notice under section 148 of the I.T. Act, dated 19.05.2016 was issued and duly served to the assessee on 24.05.2016. Subsequently, notice under section 143(2) of the I.T. Act of the Income Tax Act, 1961 was issued on 27.09.2016. The assessee company is engaged in the business of providing services in relation to treatment and / or disposal of industrial waste. The assessee submitted that the return filed u/s 139 of the Act, on 26.10.2012 may be considered as the return filed in response to the notice u/s 148 of the I.T. Act. The assessee also requested to provide the reason recorded for reopening of the case. Therefore, the reason recorded for re- opening the assessment was provided to the assessee vide letter dated 14.06.2016. The assessee vide its letter dated 08.08.2017 submitted an objection on reopening of the case for the year under consideration. The objections raised vide letter dated 08.08.2017 by the assessee company were found to be untenable, accordingly the objections raised by it have been disposed of vide order dated 09.08.2017, a copy of order was served to the assessee.
ITA 115/SRT/2020 & CO 11SRT/2020/AY.2012-13 Saurashtra Enviro Projects Private Limited 4. The details and other documents filed and furnished during the course of assessment proceedings have been scrutinized by the assessing officer. The Assessee-Company submitted its reply and stated that various juridical pronouncement wherein it was held that the late filing of return will not deprive the assessee from deduction u/s 80IA of the I.T Act. However, assessing officer rejected the contention of the assessee and held that it is clear that assessee had filed its return of income on 26.10.2012 as against the due date of 30.09.2012, hence as per section 80AC of the Act, the assessee is not eligible for deduction u/s 80IA of the Act. Therefore, assessing officer noted that claim of the assessee is not correct and accordingly, the deduction of Rs.18,93,63,796/- claimed by the assessee u/s 80IA of I.T. Act was disallowed.
Aggrieved by the order of Assessing Officer, the assessee carried the matter in appeal before the ld. CIT(A), who has allowed the deduction under section 80IA of the Act, observing as follows: “Ground No. 2, 3, 4 and 5 are regarding deduction u/s 80IA of the Act. There is no dispute regarding whether or not appellant is eligible for the deduction. The dispute is regarding whether or not deduction is to be allowed when return of income was filed late by 26 days. AO has relied on certain decisions and disallowed the deduction. However, during appellate proceedings, appellant has relied on following judgments:
1.
CIT vs. M/s Unitech Ltd. Tax appeal no. 239 of 2015[Del. HC] 2. M/s Anand Shelter developers and builders Pvt. Ltd. v ACIT [ITA no. 1606/PUN/2015] 3. CIT v. S Venkataiah [ITA No. 114 of 2013] Appellant has also submitted that where divergent views are available & there is no direct decision of the Hon'ble Jurisdictional High Court, the view in favour of assessee has to be followed as per CIT Vs Vegetable Products, 88 ITR 192 (SC). This being the situation in instant case, where divergent decisions are there and no direct decision of Hon'ble Jurisdictional High Court is there, following CIT vs Vegetable Products decision, view in favour of the appellant is taken and the deduction u/s 80IA directed to allowed. Ground No.2 to 5 are therefore allowed.”
6. Aggrieved by the order of ld. CIT(A), the Revenue is in appeal before us.
Learned Departmental Representative (ld. DR) for the Revenue argued that since the assessee has not filed the return of income, on time, as per the time limit prescribed under section 139(1) of the Act, therefore assessee is not entitled to Page | 3
ITA 115/SRT/2020 & CO 11SRT/2020/AY.2012-13 Saurashtra Enviro Projects Private Limited claim deduction under section 80IA of the Act. Besides, ld DR relied on the Judgments which were referred by the assessing officer in the assessment order and pleaded that since the assessee has failed to file the return of income in pursuance of time limit prescribed under section 139(1) of the Act, therefore stand taken by the assessing officer may be upheld.
On the other hand, Shri Rasesh Shah, Learned Counsel for the assessee defended the order passed by the ld. CIT(A) and stated that although the different High Courts have given different verdicts on the issue under consideration, however some of the Judgments of High Courts are favoring the assessee. Therefore, ld Counsel pleaded that where divergent views are available and there is no direct decision of the Hon'ble Jurisdictional High Court, the view in favour of assessee has to be followed as per the Judgment of Hon`ble Supreme Court in the case of CIT Vs Vegetable Products, 88 ITR 192 (SC).
We have heard both the parties and carefully gone through the submissions put forth on behalf of the assessee along with the documents furnished and the case laws relied upon, and perused the facts of the case including the findings of the ld. CIT(A) and other material brought on record. The ld Counsel submits before us that various Audit report in support of claim of deduction u/s 80IA of the Act were obtained by due date but return could not be filed within the time limited prescribed under section 139(1) of the Act, for the following reasons:
(1) Assessee's CA Saurin Shah was busy with the medical procedures of his mother who was having Cancer that was detected during relevant period. Copies of medical reports already provided to AO vide letter dated 12.02.2016.
(2) Further, main director of the company remained out of country for considerable time. Copies of passport pages were already provided to AO vide letter dated 12.02.2016.
(3) Assessee was dealing with number of client and they were supposed to claim tax deducted at source by said clients based on entry reflected in their 26AS. Their
ITA 115/SRT/2020 & CO 11SRT/2020/AY.2012-13 Saurashtra Enviro Projects Private Limited 26AS is so bulky that same is not available for download directly and request was to be made in this regard to the TRACES by the Assessee. The copies of the sample screenshot has been provided vide letter dated 18.08.2017.
The ld Counsel further argued that assessee was prevented by reasonable and sufficient cause for not filing the return of income before due date and there is minor delay of only 26 days. Under such circumstances deduction u/s 80IA cannot be denied as per section 80 AC as held in the following cases:
1.
1. CIT vs. M/s Unitech Ltd.- Tax appeal no. 239 of2015[Del. HC] 2. M/s Anand Shelter developers and builders Pvt. Ltd. v ACIT- [1TA no. 1606/PUN/2015] 3. CIT v. Svenkataiah [ITA No. 114 of 2013] 11. We have gone through the order of ld CIT(A) and explanation provided by the ld Counsel and noted that there is minor delay of 26 days, in filing of return of income. The ld CIT(A) relied on the judgment of Hon`ble Delhi High Court in the case of M/s Unitech Ltd (supra) and judgment of Coordinate Bench of ITAT Puna in the case of M/s Anand Shelter developers and builders Pvt. Ltd(supra) and held that where divergent views are available and there is no direct decision of the Hon'ble Jurisdictional High Court, the view in favour of assessee has to be followed. Thus, we do not find any infirmity in the order of ld CIT(A). The conclusions arrived at by the CIT(A) are, therefore, correct and admit no interference by us. We, approve and confirm the order of the CIT(A) and dismiss the appeal of the Revenue.
12. In the result, appeal of the Revenue is dismissed. Now, coming to the Cross Objection (in CO No.11/SRT/2020) for 13. AY.2012-13 wherein the assessee raised the following grounds: “
1. On the facts and circumstances of the case as well as on the subject, the learned CIT(A) has erred in confirming the action of Assessing officer in reopening the assessment u/s 147 after issuing notice u/s 148 of the Act and passing the re-assessment order.
2. It is therefore prayed that assessment framed u/s 143(3) r.w.s 147 of the Act may kindly be quashed.
ITA 115/SRT/2020 & CO 11SRT/2020/AY.2012-13 Saurashtra Enviro Projects Private Limited 3. Appellant craves leave to add, alter or delete any ground(s) either before or in the course of hearing of the appeal.”
Since, we have confirmed the findings of the ld. CIT(A) and dismissed the appeal of the Revenue, therefore Cross Objection raised by the assessee becomes infructuous and hence we do not adjudicate.
In the result, Cross Objection filed by the assessee is dismissed as infructuous.
In the combined result, the appeals filed by the Revenue and Cross Objection filed by the assessee are dismissed.
Registry is directed to place one copy of this order in all appeals folder / case files.
Order is pronounced in the open court on 14/11/2022 by placing the result on the Notice Board.