2015 (5) TMI 1208 - AT - Income Tax

Tribunal allows deduction despite minor filing delay, emphasizes justice over technicalities

The Tribunal held that a technical delay of 46 minutes in filing the return should not result in denying a substantial deduction of Rs. 2,34,41,162 under ... Deduction u/s 80IC - AO denied deduction on the ground that assessee had not filed the return within specified time u/s 139(1) because as per records the return was filed on 1-10-2009 and not on 30-9-2009 - assessee’s contention that the return was actually uploaded and filed on the site of the Income-tax department at 12.46AM on 1-102009 and thus there was only a technical delay of 46 minutes in filing of return which, in any case, was filed before the commencement of the next working day - HELD THAT:- Section 80AC provides that deduction u/s 80IC shall be allowed to assessee if the return is filed on or before the due date specified under sub-section (1) of section 139. The provisions of section 80AC are directory and even the Board may, under the provision of section 119, condone the delay in order to avoid undue hardship. In the present case it cannot be said that the delay was, in any manner, mala fide. On the contrary, the assessee was vigilant enough to file the return at the midnight. We, therefore, condone the delay in filing the return. As far as ld. CIT(A)’s direction to the AO is concerned, we find that the assessee itself has clearly stated in its reply reproduced by AO in the assessment order, that the return was uploaded at 12.46 AM on 1-10-2009. Therefore, there was no necessity for restoring the matter to the file of AO for any verification. Cross-objection filed by the assessee is allowed and, therefore, the department’s appeal has become infructuous. However, since the AO has not examined the assessee’s claim u/s 80IC in detail and has rejected the same only on the ground of delay in filing of the return, we restore the matter to the file of AO for examining the assessee’s claim u/s 80IC. - Decided in favour of assessee for statistical purposes. Issues:1. Disallowance of deduction u/s 80IC due to delay in filing the return.2. Interpretation of provisions of section 80AC and section 139(4) of the Income Tax Act.3. Condonation of delay in filing the return.4. Ld. CIT(A)'s direction to verify the electronic trail of the e-return filing.Issue 1: Disallowance of deduction u/s 80IC due to delay in filing the return:The AO denied deduction u/s 80IC to the assessee as the return was filed after the specified time under section 139(1). The contention was that the return was filed on 1-10-2009 instead of 30-09-2009. The ld. CIT(A) directed the AO to verify the date of uploading the return electronically. The Tribunal held that a technical delay of 46 minutes should not result in denying a substantial deduction of Rs. 2,34,41,162 to the assessee. The Tribunal considered the filing time and date, and condoned the delay, emphasizing that justice should not be denied for such a minor delay.Issue 2: Interpretation of provisions of section 80AC and section 139(4) of the Income Tax Act:Section 80AC mandates that deduction u/s 80IC is allowed if the return is filed by the due date specified in section 139(1). However, section 139(4) provides an exception to this time limit. The Tribunal observed that the time limit for filing the return is not rigid, and the provisions of section 80AC are directory. It noted that the Board could condone delays under section 119 to prevent undue hardship. The Tribunal concluded that the provisions of section 80AC are not mandatory and should be interpreted in a manner that avoids injustice.Issue 3: Condonation of delay in filing the return:The Tribunal found that the delay in filing the return was not malicious and that the assessee filed the return promptly at midnight. Considering the circumstances, the Tribunal decided to condone the delay in filing the return. It highlighted that the delay was minimal and should not result in the denial of legitimate deductions to the assessee.Issue 4: Ld. CIT(A)'s direction to verify the electronic trail of the e-return filing:The ld. CIT(A) directed the AO to verify the electronic trail of the e-return filing to determine the actual date of uploading. However, the Tribunal noted that the assessee had already stated that the return was uploaded at 12.46 AM on 1-10-2009. Therefore, the Tribunal found no need to remand the matter for further verification, as the necessary information was already available on record.In conclusion, the Tribunal allowed the assessee's cross-objection, rendering the department's appeal infructuous. The matter was remanded to the AO for a detailed examination of the assessee's claim under section 80IC. The Tribunal emphasized the importance of interpreting tax provisions in a manner that upholds justice and avoids undue hardship.