2015 (4) TMI 1279 - HC - Income Tax

Court denies deduction under Section 80IB for late tax return filing

M/s. Unique Shelters Pvt. Ltd. Versus  Union Of India, Central Board Of Direct Taxes Department Of Revenue Ministry Of Finance, CIT, ITO

The court dismissed the writ petition, affirming the CBDT's order and held that the petitioner was not entitled to the deduction under Section 80IB due to ... Deduction u/s 80IB - deduction denied as return of income was filed on 30.03.2011 and it was belated and not filed within the prescribed time limit namely, as prescribed under Section 80AC i.e., on or before 30.09.2009 - HELD THAT:- In view of this finding recorded in KAREEMSONS PVT. LIMITED VERSUS COMMISSIONER OF INCOME-TAX [1991 (8) TMI 28 - KARNATAKA HIGH COURT] petitioner is attempting to take an umbrage under it to contend that even in respect of Section 139 occurring elsewhere in the Income Tax Act it has to be held as imbedded with the provision of Section 139(4) also. While examining a provision under fiscal statute and that too exemption provision, the words found in that Section alone is to be looked into or examined and no other provision of the Act can be imported to be read along with said provision since Parliament has consciously omitted to include SubSection (4) of Section 139 of the Act by not inserting the said provision in Section 80AC, 10A or 10 B etc. In that view of the matter, this Court is of the considered view contention raised by Sri.S.Sriranga, learned counsel appearing for petitioner cannot be accepted and same stands rejected. Condonation of delay in filing the claim - Non filing of return of income along with auditor’s report which ought to have accompanied such return of income, if filed either at a later stage or at any rate before framing of assessment proceedings it becomes a curable defect or return of income at the most such filing of return of income can be construed as an irregularity and not an illegality. In view of the same, contention of learned counsel for petitioner that return of income could not have been filed on or before 30.09.2009 cannot be accepted. Secondly, petitioner was in possession of statutory audit report as prescribed under Companies Act, since same had been obtained on 02.09.2009 itself and petitioner had also obtained tax audit report under Section 44AB on 30.09.2009. As such, only exercise which was required to be undertaken by the petitioner was to file return of income on 30.09.2009 and substantiate its claim during assessment proceedings by furnishing the report of the auditor in From No.10CCB. Having not adopted said course, petitioner cannot be heard to contend that filing of Form No.10CCB along with return of income being mandatory and as such, it had to await such report from the auditor and till then it could not file the return of income, cannot be accepted. Hence, second contention also stands rejected. CBDT ought to have accepted the cause shown by petitioner for belatedly filing return of income and condoned the delay - As noticed hereinabove except auditor’s report in Form No.10CCB all other materials were available with petitioner to file the return of income. In fact building completion certificate which came to be issued by BBMP on 30.12.2008 was very much available with the petitioner as on 30.09.3009 (last date for filing return of income). As rightly observed by Board – CBDT, petitioner had nine (9) months time and yet it did not file return of income from the date of receipt of completion certificate i.e., 30.12.2008. In that view of the matter, finding recorded by Board at paragraph 7.1 and 7.2 of impugned order which is already extracted supra cannot be held as suffering from any illegality calling for interference at the hands of this Court. That apart it requires to be noticed that law of limitation cannot be jettisoned on the ground of purported report ought to have been received by petitioner and as such, there has been delay in filing the return of income. Thus petitioner had all the material available with it for filing of return of income except report of auditor in Form No.10CCB as on 30.09.2009 and nothing prevented the petitioner to file the return of income on that date. In the alternate, petitioner could have said filed said report on or before framing of assessment proceedings. In that view of the matter this Court is of the view that no infirmity can be found in the impugned order calling for interference at the hands of this Court. - Decided against assessee. Issues Involved:1. Rejection of Deduction under Section 80IB due to late filing of return.2. Interpretation of Section 80AC and Section 139(1) and (4).3. Condonation of Delay by CBDT under Section 119(2)(b) and (c).4. Strict Interpretation of Fiscal Statutes.5. Filing of Return without Auditor's Report.6. Liberal Approach in Condonation of Delay.Detailed Analysis:1. Rejection of Deduction under Section 80IB:The petitioner, an assessee under the Income Tax Act, 1961, filed the return of income for the assessment year 2009-10 on 30.03.2011, beyond the prescribed time limit of 30.09.2009. Consequently, the Assessing Officer rejected the benefit of deduction claimed under Section 80IB by interpreting Section 80AC, which mandates that the return must be filed on or before the due date specified under Section 139(1).2. Interpretation of Section 80AC and Section 139(1) and (4):The petitioner argued that Section 139(4), which allows filing of returns within one year from the end of the relevant assessment year, should be read as part of Section 139(1) or as a proviso to it. However, the court emphasized that fiscal statutes must be strictly construed, and no words can be added or subtracted to derive the legislative intent. It was noted that Section 80AC explicitly requires the return to be filed within the due date specified under Section 139(1) for the deduction to be admissible.3. Condonation of Delay by CBDT under Section 119(2)(b) and (c):The petitioner approached the CBDT for condonation of delay under Section 119(2)(b) and (c), citing reasons beyond their control for the late filing. The CBDT rejected the application, stating that the petitioner had sufficient time to file the return after receiving the Building Completion Certificate on 30.12.2008. The court upheld this decision, noting that the petitioner failed to provide convincing reasons for the delay.4. Strict Interpretation of Fiscal Statutes:The court reiterated the principle that fiscal statutes must be interpreted strictly, as established by the Supreme Court in various judgments. The language of the statute must be followed without any addition or implication. The court cited the Supreme Court's observation that there is no room for any intendment or equity in tax laws, and the language used must be interpreted literally.5. Filing of Return without Auditor's Report:The petitioner contended that the delay was due to the late receipt of the auditor's report in Form No.10CCB. The court rejected this argument, stating that the return could have been filed within the due date, and the auditor's report could be submitted later. The statutory audit report and tax audit report were already available by 30.09.2009, and the delay in filing the return was not justified.6. Liberal Approach in Condonation of Delay:The petitioner cited the Bombay High Court's judgment in Sitaldas K. Motwani's case, which advocated a liberal approach in condoning delays to achieve substantial justice. However, the court distinguished this case, emphasizing that the law of limitation cannot be disregarded based on a liberal approach. The court held that there was no justification for the delay, and the CBDT's decision to reject the condonation application was valid.Conclusion:The court dismissed the writ petition, affirming the CBDT's order dated 28.01.2014, and held that the petitioner was not entitled to the deduction under Section 80IB due to the late filing of the return. The court emphasized the need for strict interpretation of fiscal statutes and the importance of adhering to statutory deadlines.