Tribunal Grants Deduction Despite Late Filing, Cites Precedent; Orders Assessing Officer to Apply Section 139 Flexibility.

The Tribunal allowed the appellant's appeal, overturning the disallowance of a deduction under section 80-IE due to a delayed return filing for AY 2015-16. The Tribunal found that the delay should not disqualify the appellant from the deduction, referencing the Delhi HC's decision in a similar case. It directed the Assessing Officer to grant the deduction, emphasizing that the legislative provision for belated filing under section 139 should apply, and the appellant's entitlement to the deduction was not in question on merits.

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Issues:
Appeal against disallowance of deduction u/s. 80-IE due to delay in filing return.

Detailed Analysis:
The appellant, engaged in manufacturing Soya Chunks, appealed against the disallowance of a deduction u/s. 80-IE amounting to Rs. 18,44,653 due to a delay in filing the return of income for AY 2015-16. The Assessing Officer (AO) disallowed the claim as the return was filed after the due date of 30.10.2015, despite the appellant's explanation of facing domestic issues causing mental distress. The AO added the disallowed amount to the total income. The Commissioner of Income Tax (Appeals) upheld the AO's decision, emphasizing the importance of filing the return before the due date for claiming deductions under section 80IE. The appellant contended that the delay should not disqualify them from the deduction, citing a Delhi High Court decision in Fiberfill Engineers Vs. DCIT. The High Court's decision highlighted that a delay in filing the return should be viewed as bona fide if the entitlement to the deduction was not questioned on merits.

The Tribunal noted that the AO accepted the appellant's claim for deduction under section 80IE for previous assessment years and disallowed the current claim solely due to the delay in filing the return. The Tribunal referenced the legislative provision allowing belated filing under section 139 of the Income-tax Act, emphasizing that once the conditions are met, the return should be considered as filed under section 139(1). Relying on the Delhi High Court's decision in Fiberfill Engineers case, the Tribunal concluded that the delay in filing the return should not be a reason to deny the appellant's claim for deduction under section 80IE. The Tribunal directed the AO to allow the appellant's claim for deduction under section 80IE for AY 2015-16, as the deduction was otherwise merited.

In conclusion, the Tribunal allowed the appellant's appeal, emphasizing that the delay in filing the return should not disqualify the appellant from claiming the deduction under section 80IE. The decision was based on the legislative provision allowing belated filing and the precedent set by the Delhi High Court in a similar case.

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