2014 (4) TMI 213 - HC - Income Tax

High Court remands tax case due to appellant's argument on filing deadline extension

Bal Kishan Dhawan (HUF) Prop. BKD. Enterprises Versus Deputy Commissioner of Income Tax

The High Court remanded the case to the Income Tax Appellate Tribunal for reconsideration due to the appellant's argument regarding a notification ... Belated return filed u/s 80AC r.w. section 139 of the Act - Rejection of Claim u/s 80IB of the Act – Held that:- The court is of the view that assessee rightly contended that the CBDT had issued notification dated 31.10.2007, Annexure A.5, whereby in exercise of powers u/s 119 of the Act, the Board had extended the date for filing of the returns and reports of audit upto 15.11.2007 instead of 31.10.2007 – also, in terms of sub sections 6 and 7 of Section 260A of the Act, the matters go to the root of the case, it should be require to be taken up by the Court – the matter requires to be adjudicated afresh as the notification goes to the root of the matter and in view of sub sections 6 and 7 of Section 260A of the Act, it can be entertained by the Court – thus, the order is set aside and the matter is remitted back to the Tribunal for fresh adjudication – Decided in favour of Assessee. Issues:Delay in refiling the appeal, Interpretation of provisions under Income Tax Act, 1961 regarding deductions, Extension of time for filing returns, Disallowance of deduction under section 80IB, Charging of interest in the case.Analysis:The appeal was filed against the order of the Income Tax Appellate Tribunal regarding the disallowance of deductions claimed by the assessee under sections 80AC and 80IB of the Income Tax Act, 1961 for the assessment year 2007-08. The key questions of law raised by the appellant included the interpretation of the time period prescribed under Section 80AC, the impact of late filing of returns on deductions under section 80IB, extension of the return filing period under Section 139(1) fourth proviso, and the liberal construction of provisions for deduction eligibility. The appellant, a Hindu Undivided Family (HUF) running an industrial unit, faced disallowance of the deduction under section 80IB due to late filing of the return, despite having filed audited accounts within the prescribed period.The appellant argued that a notification issued by the Central Board of Direct Taxes (CBDT) extended the due date for filing returns to 15.11.2007, which was after the actual due date of 31.10.2007. The appellant contended that this notification should apply to their case and the matter should be remanded to the Tribunal for fresh adjudication. The revenue, however, argued that the notification was not applicable to the appellant as they were not a company or a firm. The Court found merit in the appellant's argument and decided to remand the matter to the Tribunal for reconsideration in light of the notification. The Court emphasized that the notification was crucial to the case and warranted a fresh adjudication. Therefore, the Court set aside the Tribunal's order and remanded the matter for a fresh decision after providing an opportunity for both parties to be heard.