2023 (11) TMI 536 - AT - Income Tax

Assessee cannot claim fresh Section 80IA deduction in return filed under Section 153A when not claimed originally

Dy. Commissioner of Income Tax, Central Circle 2 (1), Hyderabad Versus M/s. HES Infra Pvt. Ltd., Hyderabad.

Dy. Commissioner of Income Tax, Central Circle 2 (1), Hyderabad Versus M/s. HES Infra Pvt. Ltd., Hyderabad. - TMI Issues Involved:1. Whether the CIT(A) erred in granting deduction u/s 80IA for the first time in return filed in response to notice u/s 153A.2. Whether the CIT(A) erred in allowing deduction u/s 80IA without examining if the assessee satisfies the parameters set by ITAT in previous cases.3. Whether the assessee can claim deduction u/s 80IA in the return filed in response to notice u/s 153A if it was not claimed in the original return of income.Summary:Issue 1: Deduction u/s 80IA in Return Filed in Response to Notice u/s 153AThe Revenue argued that the CIT(A) erred in granting the deduction u/s 80IA, as the claim was made for the first time in the return filed in response to notice u/s 153A. The assessee originally did not claim the deduction in the return filed u/s 139(1). The Tribunal held that the assessee cannot be permitted to make a fresh claim of deduction in the re-assessment proceedings u/s 153A, as the return of income filed in response to notice u/s 153A must comply with the provisions of section 139, including the due date for filing the return.Issue 2: Parameters for Deduction u/s 80IAThe Revenue contended that the CIT(A) allowed the deduction without examining whether the assessee met the parameters fixed by the ITAT in the case of Sushi Hitech, which include developing, operating, and maintaining any infrastructure facility. The Tribunal noted that the assessee was engaged in infrastructural activities but was not the owner of the infrastructure facilities, which were owned by the government departments. Therefore, the assessee did not satisfy the conditions for claiming the deduction u/s 80IA.Issue 3: Fresh Claim of Deduction in Return Filed u/s 153AThe Tribunal emphasized that the re-assessment proceedings u/s 153A are not de novo assessments and can only address issues related to incriminating material found during the search. The Tribunal referred to section 80AC, which mandates that deductions under section 80IA can only be claimed if the return is filed on or before the due date specified under section 139(1). Since the assessee did not claim the deduction in the original return or during the original assessment proceedings, the Tribunal held that the fresh claim made in the return filed in response to notice u/s 153A is not permissible.Conclusion:The Tribunal ruled in favor of the Revenue, reversing the CIT(A)'s order and restoring the Assessing Officer's decision to disallow the deduction u/s 80IA. The appeals by the Revenue were allowed, and the assessee was not permitted to make a fresh claim of deduction in the re-assessment proceedings u/s 153A.