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M/s. Unitech Limited, 6, Community Centre, Saket, New Delhi. vs. ACIT, Circle 18 (1), New Delhi.
December, 30th 2013
           IN THE INCOME TAX APPELLATE TRIBUNAL
                (DELHI BENCH `H' : NEW DELHI)

            SMT. DIVA SINGH, JUDICIAL MEMBER
                            and
       BEFORE SHRI B.C. MEENA, ACCOUNTANT MEMBER

                         ITA No.1014/Del./2012
                    (ASSESSMENT YEAR : 2008-09)

M/s. Unitech Limited,                        vs.   ACIT, Circle 18 (1),
6, Community Centre,                               New Delhi.
Saket, New Delhi.

      (PAN : AAACU1482H)

      (APPELLANT)                                  (RESPONDENT)

      ASSESSEE BY : S/Shri Salil Aggarwal & Gautam Jain, Advocates
                     and Shri Shalesh Gupta, CA
             REVENUE BY : Shri R.S. Meena, CIT DR

                                      ORDER

PER B.C. MEENA, ACCOUNTANT MEMBER :

      This appeal filed by the assessee against the order of the CIT, Delhi-VI,

New Delhi dated 06.02.2012.

2.    The return of income for the assessment year 2008-09 was filed on

02.04.2009. The return was filed beyond the time limit specified in section

139(1) of the Income-tax Act, 1961. In the return of income, deduction u/s

80IB (10) was claimed which was allowed by the Assessing Officer while

making the assessment u/s 143(3) of the Income-tax Act, 1961 dated

30.12.2009. CIT initiated the proceedings u/s 263 of the Income-tax Act,
                                      2              ITA No.1014/Del./2012

1961 and withdrew the deduction u/s 80IB (10) allowed by the Assessing

Officer of Rs.30,14,60,000/- by treating the claim as wrong in view of the

application of section 80AC of the Income-tax Act, 1961. CIT's view is that

the provisions of section 80AC are mandatory. Now, the assessee is in appeal

before us by taking the following grounds :-

      "1. That order made u/s 263 of the Act dated 6.02.2012 is
      without satisfying the statutory pre-conditions provided under
      section 263 of the Act i.e. order of assessment under section
      143(3) of the Act dated 30.12.2008 was neither erroneous and,
      nor prejudicial to the interest of revenue, thus the same was
      without jurisdiction and, deserves to be quashed as such.

      1.1 That finding of the learned Commissioner of Income Tax
      that the learned Assessing Officer did not examine whether
      deduction u/s 80IB(IO) of the Act can be claimed in the belated
      return and as such, Assessing Officer did not apply his mind and
      allowed deduction u/s 80IB(l0) without considering the
      provision of section 80AC of the Act is not based on correct
      appreciation of facts and evidence on record and therefore, the
      finding that order is erroneous is misconceived, misplaced and
      untenable.

      1.2 That learned Commissioner of Income Tax has failed to
      appreciate that claim of deduction u/s 80IB was specifically
      examined in the course of assessment proceedings and
      specifically allowed in the order of assessment and as such, there
      was no basis much less valid basis to conclude that, the learned
      Assessing Officer did not make necessary enquiries, regarding
      claim of deduction and hence, impugned order made by
      overlooking facts is not sustainable.

      1.3 That learned Commissioner of Income Tax has failed to
      appreciate that since the learned Assessing Officer had found
      that section 80AC of the Act had no application to the facts of
      the appellant company, therefore the mere fact that the learned
      Commissioner of Income Tax held an opinion different from the
      opinion of learned Commissioner of Income Tax could not
                               3               ITA No.1014/Del./2012

render the order of assessment to be erroneous, so as to warrant
invocation Act.

2     That learned Commissioner of Income Tax has further
erred both in law and on facts in disallowing the claim of
deduction of Rs.30,14,60,000/- u/s 80IB(l0) of the Act by
relying on provision contained in section 80AC of the Act.

2.1 That while making the aforesaid disallowance, the learned
Commissioner of Income Tax has failed to appreciate that
section 80AC of the Act could not be applied on the facts of
appellant company and as such, disallowance made is not in
accordance with law.




2.2 That the finding that section 80AC includes all assessee,
whatever its status may be i.e. individual, HUF, Company, AOP,
BOI, Local authority or Artificial Juridical person is not based
on correct interpretation of statutory provision of the Act and,
therefore unsustainable.

2.3 That the learned Commissioner of Income Tax has further
erred both in law and on facts in holding that, requirement to
furnish return of income within the due date u/s 80AC of the Act
is mandatory and, not directory and as such, disallowance made
is unjustified and, misplaced.

2.4 That further the learned Commissioner of Income Tax has
completely and totally misapplied and misinterpreted the
judgment of Apex Court in the case of May George vs. Special
Tehsildar & Or in Civil Appeal No. 2255 of 2006 dated
25.05.2010 and therefore, denial of deduction is contrary to law
and unsustainable.

2.5 That learned Commissioner of Income Tax has also erred
both in law and on facts in holding that decision of Hon'ble
Tribunal in the case of Dhir Global India (P) Ltd reported in 133
TTJ 500 (Del) is distinguishable by failing to appreciate that in
the said case too it was held that, requirement to furnish return
of income within the due date for claim of deduction is directory
and not mandatory and as such, disallowance made is invalid
and contrary to law.
                                      4               ITA No.1014/Del./2012

      2.6 That finding that "assessee could have filed e-return
      without payment of self assessment tax" and therefore
      disallowance is warranted u/s 80AC of the Act is also
      misconceived, misplaced and unsustainable.

      2.7 That the learned Commissioner of Income Tax has failed
      to appreciate that the return filed by the assessee on 02.04.2009
      could not be disregarded to be as not filed u/s 139(1) of the
      Income Tax Act on the facts and in the circumstances of the
      case.

      2.8 Without prejudice that the aforesaid provisions of section
      80AC were inapplicable in the case of a company and that the
      Assessing Officer was satisfied that the assessee could not
      furnished the return of income on or before 30.09.2008 on
      account of genuine difficulty under this circumstances it had
      furnished return of income on 02.04.2009 and not on or before
      30.10.2008.

      2.9 That the learned Commissioner of Income Tax also failed
      to appreciate that it is not the case where the return of income
      was not filed but was a case where return of income was
      belatedly filed. The deduction claimed of Rs.30,14,60,000/-
      could not have been forgone as no return could have been filed
      and could not have been accepted without paying self
      assessment tax.

      2.10 That various adverse findings and observation recorded in
      order u/s 263 of the Act without granting opportunity are not
      only contrary to facts but also law and therefore, unsustainable.

             It is therefore prayed that, impugned order made under
      section 263 of the Act dated 6.02.2012 be held to be without
      jurisdiction and, further disallowance made u/s 80IB(10) of the
      Act may kindly be deleted and appeal of the appellant company
      be allowed."


3.    While pleading on behalf of the assessee, ld. AR submitted that a bare

reading of section 263 of the Income-tax Act, 1961 makes it clear that the pre-
                                        5               ITA No.1014/Del./2012

requisite of exercising of jurisdiction by the CIT suo motu under this section

is that the order of the Assessing Officer must be erroneous insofar as it is

prejudicial to the interest of revenue. The Commissioner has to be satisfied of

twin conditions, namely, the order of the AO sought to be revised is

erroneous; and it is prejudicial to the interests of the revenue. If any of one is

absent then the Commissioner has no jurisdiction to initiate the proceedings

u/s 263 of the Act. These provisions cannot be invoked to correct each and

every type of mistakes or errors committed by the AO. Further, he submitted

that once the Assessing Officer has adopted a course which is permissible in

law at the relevant time and it has resulted into loss or where two views are

possible and the CIT did not agree with the view taken by the Assessing

Officer then the order cannot be treated as erroneous or prejudicial to the

interests of revenue unless the view taken by the Assessing Officer is

unsustainable in law. The ld. AR submitted that the Assessing Officer made

the order for assessment year 2008-09 on 30.12.2009. The assessee made the

claim for deduction u/s 80IB of the Act on the profit of Horizon Project,

Greater Noida which is evident from page 2 of the paper book. During the

assessment proceedings, the Assessing Officer asked details supported with

documents on the hearing dated 30.11.2009 which is evident from page 78 of

the paper book which is the reply of the assessee to the queries raised by the

Assessing Officer submitted along with the documents. This reply is dated
                                      6               ITA No.1014/Del./2012

07.12.2009. It is clear from Point No.10 of the reply that the assessee has

submitted working of profit along with relevant back-up papers in respect of

deduction claimed u/s 80IB in respect of the project Horizon Project along

with approvals etc. which were enclosed. Thus, the Assessing Officer has

examined the claim of the assessee during the proceedings u/s 143(3) of the

Act. He further submitted that when the Assessing Officer has taken a view

then the revisionary authority has no jurisdiction to initiate proceedings u/s

263 of the Act, as held by Hon'ble Karnataka High Court in the case of

Fatima Bai vs. ITO reported in [2009] 32 DTR 243 (Kar). Ld. AR also relied

on the decision of Hon'ble Delhi High Court in the case of Director of

Income-tax vs. Jyoti Foundation reported in (2013) 357 ITR 388 (Delhi)

wherein Hon'ble jurisdictional High Court has held that revisionary power u/s

263 of the Income-tax Act, 1961 is confirmed by the Act on the CIT/DIT

when an order passed by lower authorities is erroneous and prejudicial to the

interest of revenue. Orders which are passed without enquiry or investigation

is treated as erroneous and prejudicial to the interests of revenue, but orders

which are passed after enquiry/investigation on the question/issue are not per

se or clearly detailed as erroneous and prejudicial to the interests of the

revenue because the revisionary authority feels and opines that further

enquiry/investigation is required or deeper or further scrutiny is undertaken

then Commissioner must record a finding that order/enquiry made is
                                      7              ITA No.1014/Del./2012

erroneous. In the assessee's case, the enquiries were certainly made by the

Assessing Officer and it was not a case of no enquiry. This fact is evident

from pages 78 to 80 of the paper book. Similar view has also been upheld by

the Hon'ble Delhi High Court in the case of ITO vs. DG Housing Projects

Limited ­ 343 ITR 329. He further submitted that the order passed by

Assessing Officer should not be mere pre-judicious to the revenue or a mere

erroneous view which can be revised u/s 263 of the Income-tax Act, 1961.

There should be added element of unsustainability of the order of Assessing

Officer which calls the Commissioner with jurisdiction to issue notice and

proceeded to make appropriate orders. The issue regarding the provisions of

section 80AC are directory or mandatory was debatable during the relevant

period when the Assessing Officer made the order. Therefore, the view taken

by the Assessing Officer was sustainable at that time. He also relied on the

decision of Hon'ble Delhi High Court in the case of CIT vs. Contimeters

Electricals P. Ltd. ­ 317 ITR 249 wherein the Hon'ble jurisdictional High

Court has held that the Tribunal has arrived at the correct conclusion that

requirement of filing the audit report along with return was not mandatory but

directory and that if the audit report was filed at any time before permitting

the assessment, the requirement of section 80IA (7) would be met. Ld. AR

also submitted that provisions giving incentives should be liberally construed

as held by various judgments, namely, CIT vs. Pranoy Roy ­ 309 ITR 231,
                                      8               ITA No.1014/Del./2012

Bajaj Tempo Ltd. vs. CIT ­ 196 ITR 188 (SC) and Gem Granites vs. CIT ­

271 ITR 322 (SC). Ld. AR pleaded that provisions of section 80IB are

incentives, hence technicalities of section 80AC should not come in the way.

He also submitted that in many of the cases, the word "shall" had been

interpreted as "may", therefore, "shall" occurs in section 80AC be read as

"may". Therefore, filing the return as per the provisions of section 139(1) of

the Act was only to be taken as directory in nature. Such view has been taken

by various Benches of ITAT and has been reaffirmed by Hon'ble

jurisdictional High Court in the case of CIT vs. Contimeters Electricals P.

Ltd., cited supra.

4.    On the other hand, ld. DR submitted that there is expressed provision in

the law where the deduction is not to be allowed unless the return furnished

on or before the due date specified under sub-section (1) of section 139 of the

Act. Therefore, the order of the Assessing Officer was erroneous and

prejudicial to the interest of revenue and the CIT was having all the powers to

revise the order of the Assessing Officer. He further submitted that the powers

of Commissioner to revise the order of the Assessing Officer are plenary. In

this case, the order of the Assessing Officer was not only erroneous but also

prejudicial to the interest of revenue, therefore, two ingredients were in co-

existence, therefore, the CIT was justified in invoking the revisional

jurisdiction. He further submitted that once the expressed provisions are
                                       9              ITA No.1014/Del./2012

available in the law, there was no scope for any debate on the issue.

Therefore, the issue was not debatable and the Assessing Officer has not

considered the provisions of law and the CIT was justified in invoking the

provisions of section 263 in this case. He further submitted that various

decisions relied upon by the ld. AR where the provisions of section 10B(1)

have to be directory rather than mandatory cannot be applied to the provisions

of section 80IB when a clear cut provision in the law is available u/s 80AC of

the Act. He relied on the order of the CIT and pleaded to sustain the same.

5.    We have heard both the sides on the issue. It is a well settled law that

the provisions of section 263 of the Income-tax Act, 1961 cannot be invoked

only when the order of the Assessing Officer is erroneous as well as

prejudicial to the interest of revenue. This proposition has been decided by

Hon'ble Supreme Court in the case of Malabar Industrial Co. Ltd. vs. CIT

reported in 243 ITR 83 (SC). The relevant head note is reproduced as under :-

      "A bare reading of section 263 of the Income-tax Act, 1961,
      makes it clear that the prerequisite for the exercise of
      jurisdiction by the Commissioner suo motu under it, is that the
      order of the Income-tax Officer is erroneous in so far as it is
      prejudicial to the interests of the Revenue. The Commissioner
      has to be satisfied of twin conditions, namely, (i) the order of
      the Assessing Officer sought to be revised is erroneous; and
      (ii) it is prejudicial to the interests of the Revenue. If one of
      them is absent--if the order of the Income-tax Officer is
      erroneous but is not prejudicial to the Revenue or if it is not
      erroneous but is prejudicial to the Revenue--recourse cannot
      be had to section 263(1) of the Act. The provision cannot be
      invoked to correct each and every type of mistake or error
      committed by the Assessing Officer, it is only when an order is
                                      10              ITA No.1014/Del./2012

      erroneous that the section will be attracted. An incorrect
      assumption of facts or an incorrect application of law will
      satisfy the requirement of the order being erroneous. In the
      same category fall orders passed without applying the
      principles of natural justice or without application of mind.
      The phrase "prejudicial to the interests of the Revenue" is not
      an expression of art and is not defined in the Act. Understood
      in its ordinary meaning it is of wide import and is not confined
      to loss of tax. The scheme of the Act is to levy and collect tax
      in accordance with the provisions of the Act and this task is
      entrusted to the Revenue. If due to an erroneous order of the
      Income tax Officer, the Revenue is losing tax lawfully payable
      by a person, it will certainly be prejudicial to the interests of
      the Revenue. The phrase "prejudicial to the interests of the
      Revenue" has to be read in conjunction with an erroneous
      order passed by the Assessing Officer. Every loss of revenue
      as a consequence of an order of the Assessing Officer cannot
      be treated as prejudicial to the interests of the Revenue, for
      example, when an Income tax Officer adopted one of the
      courses permissible in law and it has resulted in loss of
      Revenue, or where two views are possible and the Income tax
      Officer has taken one view with which the Commissioner
      does not agree, it cannot be treated as an erroneous order
      prejudicial to the interests of the Revenue, unless the view
      taken by the Income tax Officer is unsustainable in law."

It is also well settled by Hon'ble Supreme Court that where two views are

possible and the Assessing Officer has taken one view with which the

Commissioner does not agree, it cannot be treated as erroneous order

prejudicial to the interest of the revenue unless the view taken by the

Assessing Officer is unsustainable in law. The following facts of this case are

undisputed. The return of income was filed on 02.04.2009 wherein the

deduction u/s 80IB was claimed and the profits of Horizon Project, Greater

Noida were claimed as exempted u/s 80IB of the Income-tax Act, 1961. The
                                       11              ITA No.1014/Del./2012




assessee has got its account audited whether the auditor has made a report in

Form 10CCB as per Rule 10BBB for the claim of assessee u/s 80IB which is

dated 25.09.2008 which is placed at pages 5 to 12 of the paper book. Thus,

the assessee was able to get its audit report with regard to the claim of section

80IB(Form No.10CCB on 25.09.2008). The case was selected for scrutiny

and the Assessing Officer raised various queries to the assessee which

includes queries with regard to the claim of the assessee u/s 80IB which is

evident from page no.79 of the paper book wherein the assessee has submitted

relevant papers in support of the claim deduction u/s 80IB in respect of

Project Horizon, Greater Noida along with approvals. Thus, the claim of the

assessee has been allowed after considering the reply of the assessee.

Therefore, this cannot be a case where the CIT can invoke the revisional

power for the reason no enquiry was made. Now, the second issue which is

raised is whether the two views are possible at the relevant time when the

Assessing Officer made the order with regard to the filing of the return of

income u/s 139(1) whether it was directory or mandatory was debatable. The

provisions of section 80AC read as under :-

      "80AC.       Where in computing the total income of an assessee
      of the 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
                                      12             ITA No.1014/Del./2012

      or before the due date specified under sub-section (1) of section
      139.]"

The provisions of section 10B(5) read as under :-

      "10B ...........

      (5) The deduction under sub-section (1) shall not be
      admissible for any assessment year beginning on or after the 1st
      day of April, 2001, unless the assessee furnishes in the
      prescribed form, along with the return of income, the report of
      an accountant, as defined in the Explanation below sub-section
      (2) of section 288, certifying that the deduction has been
      correctly claimed in accordance with the provisions of this
      section."

In both these provisions, the deduction was held to be not admissible unless

the assessee furnishes the prescribed form along with return of income or the

return of income on or before due date of filing return. The ITAT, Delhi

Bench in the case of Hansa Dalakoti vs. ACIT in ITA No.3352/Del/2012

dated 25.01.2012 held as under :-

      "The language of section 80AC and section 10B(1) is pari
      materia. Both of these sections debar the assessee from claiming
      deduction under section BO-IC and exemption under section
      10B, in a case where return of income is not filed by the
      assessee within the prescribed statutory time under section
      139(1). The provisions of section 10B(1) were considered by the
      co-ordinate Bench of the Tribunal in Asstt. CIT v. Dhir Global
      Industries (P.) Ltd. [2011] 43 SOT 640 / [2010] 8 taxmann.com
      208 (Delhi). According to the facts of the said case, there was a
      delay of 1A½ months. Considering the facts that the provisions
      was new and there was reasonable cause for late filing of the
      return, the Tribunal directed the Assessing Officer to consider
      the claim of the assessee under section 10B irrespective of the
      fact that the return has been filed late by 1A½ months.
                                      13               ITA No.1014/Del./2012

      The facts of the instant case are almost identical. The assessee
      had filed all the necessary documents which were supporting the
      claim of the assessee for deduction under section 80-IC before
      due date of filing the return. The default of the assessee for not
      filing the return was only a technical default as the return was
      not filed, but supporting documents were filed. Therefore, the
      claim of the assessee should be considered on merits and it
      should not be rejected for the reason that the assessee did not file
      her return of income within the prescribed date. In view of the
      aforementioned ratio of the decision of the Tribunal, the claim of
      the assessee under section 80-IC cannot be denied simply for the
      reason that the return of income was not filed within the due
      date as prescribed under section 139(1) by keeping in view the
      fact that the assessee had submitted the necessary documents
      with the department before the due date of filing the return and
      the default of the assessee was only a technical default.
      However, keeping in view the fact that the Assessing Officer has
      not examined the claim of the assessee on merits as to whether
      or not the assessee is fulfilling the conditions laid down in
      section 80-IC, the matter is restored back to the file of the
      Assessing Officer to examine whether these conditions are
      satisfied by the assessee."


The ITAT Bangalore Bench `A', in the case of M/s. Vanshee Builders &

Developers P. Ltd. vs. ITO in ITA No.386/Bang/2012 for Assessment Year

2008-09 dated 07.12.2012, after analyzing judicial precedent on the subject

for entitlement of deduction u/s 80IB read with section 80AC for filing the

return of income within the due date of filing the return u/s 139 of the Act,

has held as under :-

      "(1) In the case of Bajaj Tempo Limited v. CIT reported in
      (1992) had held that `A provision in the taxing statute granting
      incentives for promoting growth and development should be
      construed liberally. Since a provision intended for promoting
      economic growth has to be interpreted liberally, the restriction
                                 14              ITA No.1014/Del./2012

on it too has to be construed so as to advance the objective of the
provision and not to frustrate it.'

(2) The Hon'ble jurisdictional High Court in the case of
Uddeereswara Mining Industries v. CIT reported in (1993) 204
ITR 550 (Kar) had ruled that -

      "5. There can be no dispute about the proposition that the
      term used in a fiscal legislation describing the subjects of
      taxation are to be normally understood in their popular
      sense unless the law itself indicates a different approach.
      Scientific and technical meanings are to be attributed to
      those words only when the context requires such meanings
      to be given. The normal rule is to give that meaning which
      to persons engaged in dealing with that subject matter
      attribute to that term, describing the subject. It is also true
      that a beneficial provision in a fiscal stature should be
      liberally construed to advance the purpose behind the
      Legislation........."

(3) The Hon'ble `B' Bench of the Delhi Tribunal in the case
of ACIT v. Dhir Global Industrial (P) Ltd reported in (2011) 43
SOT 640 recorded its finding which is extracted as below:

      "A proviso has been inserted during the current year in s.
      10B(1) which provides that no deduction under this
      section shall be allowed to an assessee if the return of
      income is not furnished on or before the due date specified
      under sub-section (1) of s. 139. This proviso in s. 10B(1)
      is directory and not mandatory. In the present case, there
      was only a marginal delay of 1 ½ month infilling the
      return of income. The return filed was valid one. The same
      has also been accepted as a valid return by the AO. The
      reasonable cause attributed by the assessee for the delay is
      that new provision of e-filing of the return was introduced
      from the current assessment year. There was some
      problem under the new provisions due to which the date of
      filing the return had been extended by the CBDT from
      time to time and from 31st October 2006, the same was
      extended to 30th November, 2006. The new provision
      regarding e-filing of return was introduced in this first
      year; the software did not accept the return, if self-
                                   15                  ITA No.1014/Del./2012

     assessment tax was not paid. Assessee's case is that due to
     some financial problems it could not pay the self-
     assessment tax on time, as a result of which there was a
     delay in the payment of tax and consequent filing of return
     by about 1 ½ months. It was further claimed that
     subsequently the software has been modified and now
     returns are being accepted, even when self-assessment tax
     is not paid. These factual factors have not been disputed
     by the Revenue. In these circumstances, there was genuine
     and valid reason for the delay in filing of return and
     moreover these provisions are directory and not
     mandatory. Once the validity of the return has not been
     questioned by the Revenue, the rejection of the assessee's
     claim under s. 10B(1) at the threshold by the AO was not
     justified. The Act does not prohibit that relief in this
     regard when genuine hardship is faced cannot be granted
     by appellate authority. Further, the very fact that the Act
     envisages that relief regarding exemption should be
     considered and granted when application is made after the
     specified period in cases of genuine hardship clearly
     indicates that provision in this regard is directory and not
     mandatory. Hence, in case of genuine hardship the relief
     can        be           granted              by the appellate
     authority...................................

     In its conclusion, the Hon'ble Bench had observed thus -

     "Proviso fourth to s. 10B(1) which prohibits deduction
     under this section if the return is not furnished on or
     before the due date specified under s. 139(1) is directory
     and not mandatory and, therefore, relief can be granted by
     the appellate authority in case, there was genuine and
     valid reason for the marginal delay in filing of return"

(4) An identical issue to that of the present one was
considered by the Hon'ble `B' Bench of Hyderabad Tribunal in
the case of ITO v. Shri S Venkataiah in ITA No.984/Hyd/2011
dated 31.5.2012 for the assessment year 2008-09. The Revenue
had, among others, approached the Hon'ble Tribunal with the
following relevant grounds:

     "1.   The order of the CIT(A)..........................................
                                  16                ITA No.1014/Del./2012


      2.     The CIT (A) erred in allowing the additional
      evidence without giving a reasonable opportunity to the
      AO to examine the evidence which is in contravention to
      the rule 46A(3) of IT Rules 1962;

      3.    The CIT (A) ought to have appreciated that the AO
      had rightly disallowed the deduction claimed u/s 80IC
      following the provisions of section 80AC;

      4.     The CIT (A) ought to have held that the explanation
      offered by the assessee was nothing but an after thought
      and devoid of any merit as no effort was made by him to
      take recourse u/s 119(2)(b) for extension of time for filing
      the return of income;

      5.     The CIT (A) erred in coming to a conclusion that
      the assessee was prevented by a genuine reason in filing
      the return belatedly; &

      6.     The CIT (A) ought to have appreciated that the
      intention of the Legislature behind incorporating s. 80AC
      was to impose stringent guidelines on the assessee who
      claim exemption of profits u/s 80IA to 80IE."

(i)    Taking into account the submission of the assessee and the
rebuttal of the learned D R as recorded in its findings, the
Hon'ble Tribunal had decided the issues against the Revenue.
The relevant portions of findings of the Hon'ble Bench, for
appreciation of facts, are extracted as under:

      "13..........................In this case, admittedly, the assessee
      filed the return of income on 23.12.2008. The due date for
      filing the return of income u/s 139(1) of the Act for the
      assessment year under consideration in the case of the
      assessee is 31.10.2008. As such, the return filed by the
      assessee is belated. In this, the assessee claimed deduction
      u/s 80IC of the Act which was disallowed by the assessing
      officer as the return of the assessee was not filed within
      the time as prescribed u/s 139(1) of the Act. The assessee
      has given reasons for delay in filing the return of income
      that the assessee was preparing its accounts through
                         17              ITA No.1014/Del./2012

computer and the computer got corrupted due to viruses
and in spite of continuous efforts by the computer
technical personnel to retrieve the data in time for filing
the return of income, problem persisted in the system. By
trying to retrieve the data for 4 days the required data
could not be retrieved and the backed up data were
available up-to 31st January 2008 in the CD and the entire
data for the two months period, February and March,
2008, had to be re-entered into the computer system again.
On preparation of the final accounts and finalizing of
statutory audit it took a little extra time that resulted in
belated filing of return of income. Thus, there was a delay
of 74 days in filing the return of income which is beyond
the control of assessee. This was also confirmed by the
statutory auditor vide his letter dated 20.3.2011. Being so,
in our opinion there is a reasonable cause for filing the
return of income belatedly and this is beyond the control
of the assessee. When the substantial question of justice
involved, technicalities should be ignored. Further, we are
supported by the order of the Tribunal in ITA Nos. 1231
& 1199/Hyd/2010 in the case of DCIT v. M/s. Vega
Conveyors & Automation Limited order dated 31st
December 2010 wherein in para 5 of the order, the
Tribunal held as follows:

`5. We have considered the rival submissions and
perused the orders of the lower authorities, and other
material available on record, including the case-law relied
upon by the parties. It is an undisputed fact that the
assessee in the present case has filed the audit report in
Form 10CCB during the course of re-assessment
proceedings. The issue that arises for consideration is
whether the assessing officer was justified in disallowing
the assessee's claim for deduction under s.80IB on the
ground that the audit report in Form 10CCB was not filed
along with the return of income; or whether the CIT (A)
was correct in proceeding on the basis of Form 10CCB
filed during the course of re-assessment proceedings and
directing the assessing officer to allow the claim of the
assessee for deduction under s. 80IB of the Act. It is
settled position of law, as consistently held by various
Benches of this Tribunal and as held in various decisions
                               18              ITA No.1014/Del./2012

      referred to by the CIT (A) in the impugned order, that
      though filing of audit report in Form 10CCB is mandatory
      and pre-requisite for deduction under s. 80IB, non-filing
      of the same along with the return of income is only a
      curable defect, and assessee's claim for deduction has to
      be considered on its merits as sand when the defect is
      cured by filing Form 10CCB. We are fortified in this
      behalf by the decision of the jurisdictional High Court in
      the case of Hemsons Industries (supra), relied upon by the
      learned counsel for the assessee. It is contended by the
      learned Departmental Representative that the assessee's
      claim for deduction under s. 80IB can be entertained and
      examined on merits, when the audit report is filed before
      the completion of assessment, which has not been done in
      the present case, since the audit report was filed only
      during the course of re-assessment proceedings initiated
      by the assessing officer, which cannot end up giving
      additional deductions/benefits to the assessee. We do not
      find merit even in this contention of the learned
      Departmental Representative. In the case of Hemsons
      Industries (supra) before the jurisdictional High Court, of
      one of the years under appeal before Hon'ble High Court,
      viz., assessment year 1979-80, audit report was filed
      during the course of re-assessment proceedings and in
      response to the show-cause notice under s. 148 issued by
      the assessing officer. In this view of the matter,
      respectfully following the decision of the jurisdictional
      High Court cited above, among others, we find no
      justification to interfere with the order of the CIT (A). We
      accordingly uphold the same and reject the grounds of the
      Revenue in this appeal.'

      14. In our opinion, in view of the above discussion, the
      claim of the assessee cannot be denied on technicalities
      when the assessee is legally otherwise entitled for
      deduction. As such, we are inclined to dismiss the appeal
      filed by the Revenue as devoid of merit."

7.    Considering the facts and circumstances of the issue as
deliberated upon in the fore-going paragraphs and also in
conformity with the rulings of the Hon'ble Supreme Court, the
Hon'ble jurisdictional High Court and also the findings of the
                                       19              ITA No.1014/Del./2012

      Hon'ble Benches of Delhi and Hyderabad Tribunals cited supra,
      we are of the considered view that s. 80AC of the Act which
      prohibits deduction u/s 80IB if the return is not furnished on or
      before the due date specified u/s 139(1) of the Act is only
      directory and not mandatory, provided there was reasonable
      cause for filing of return of income belatedly."

The Hon'ble jurisdictional High Court in the case of CIT vs. Contimeters

Electricals P. Ltd. (317 ITR 249 (Delhi)) in its order dated 2nd December,

2008 has held as under :-

      "The Commissioner issued a notice under section 263 of the
      Income-tax Act, 1961 stating that the assessee was not entitled
      to the deduction under section 80-IA as the assessee did not
      fulfil the condition laid down in section 80-IA(7). Therefore he
      held that assessment completed by the Assessing Officer was
      prejudicial to the interest of the Revenue. The commissioner
      cancelled the assessment and directed the Assessing Officer to
      complete the assessment as per law. In an appeal filed by the
      assessee, the Tribunal held that the provisions of section 80-
      IA(7) were not mandatory and were merely directory. On
      appeal :

      Held, dismissing the appeal, that the Tribunal arrived at the
      correct conclusion that the requirement of filing the audit report
      along with the return was not mandatory but directory and that if
      the audit report is filed at any time before the framing of the
      assessment, the requirement of section 80-IA(7) would be met.
      The Tribunal was also right in holding that the Commissioner
      did not even call for any explanation of the assessee and the
      issue of fulfillment of the conditions of section 80-IA had not
      been part of the show-cause notice. Therefore, it could not form
      the basis for revision of the assessment order under section 263.
      No substantial question of law arose."

In this case, the order of Assessing Officer is dated 30.12.2009. For the

purpose of revision u/s 263 of the Act, the legal position at the time of passing
                                        20               ITA No.1014/Del./2012

the impugned order by the Assessing Officer is to be considered and not the

legal position at the time of filing the return of income or after the finalization

of assessment. The facts of the case clearly establishes that at the time of

passing the assessment order, two views were possible with regard to the

claim of deduction u/s 80IB in view of provisions of section 80AC. The

Assessing Officer has adopted one of the courses permissible in law at the

relevant time. It is well established law that where two views were possible

and Assessing Officer had taken one view and if CIT do not agree with it then

he cannot invoke provisions of section 263 of the Act to revise the A.O.'s

order. Therefore in our considered view, the CIT was not justified in invoking

the provisions of section 263 of the Act in this case. The appeal of the

assessee is allowed.

6.     In the result, the appeal of the assessee is allowed.

     Order pronounced in open court on this 18th day of December, 2013.

                 Sd/-                                     sd/-
           (DIVA SINGH)                             (B.C. MEENA)
         JUDICIAL MEMBER                         ACCOUNTANT MEMBER

Dated the 18th day of December, 2013/TS

Copy forwarded to:
      1.Appellant
      2.Respondent
      3.CIT
      4.CIT(A)
      5.CIT(ITAT), New Delhi.
                                                                AR, ITAT
                                                               NEW DELHI.

 
 
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