Statutory exemption cannot be denied for late return filing or use of the wrong form absent express legal .
A statutory exemption cannot be denied merely because the return was not filed, or was filed late, within the time prescribed under section 139(1), where the Act does not make timely filing a condition for the benefit. A return filed in the wrong form also does not by itself disentitle the assessee from claiming exemption, if the substantive eligibility is otherwise satisfied. The operative principle is that procedural defects in filing cannot override an exemption claim unless the statute expressly links compliance with the exemption. On that reasoning, the exemption under section 10(23C)(iiiab) was held to remain available.
Issues: (i) whether exemption under section 10(23C)(iiiab) of the Income-tax Act, 1961 could be denied for non-filing or late filing of the return beyond the time prescribed under section 139(1) of the Income-tax Act, 1961; (ii) whether filing the return in Form under section 139(4D) instead of section 139(4C) of the Income-tax Act, 1961 disentitled the assessee from claiming the exemption.
Issue (i): whether exemption under section 10(23C)(iiiab) of the Income-tax Act, 1961 could be denied for non-filing or late filing of the return beyond the time prescribed under section 139(1) of the Income-tax Act, 1961.
Analysis: No provision in the Income-tax Act, 1961 was shown to support denial of the exemption merely because the return was not filed, or was filed belatedly, within the time under section 139(1). The entitlement to the exemption was not made conditional upon timely filing in the manner adopted by the lower authorities.
Conclusion: The exemption under section 10(23C)(iiiab) could not be denied on the ground of late or non-filing of the return.
Issue (ii): whether filing the return in Form under section 139(4D) instead of section 139(4C) of the Income-tax Act, 1961 disentitled the assessee from claiming the exemption.
Analysis: In view of the conclusion on the first issue, the alleged defect in the form of return did not alter the substantive entitlement to exemption. The wrong form filed was treated as irrelevant to the denial of the benefit claimed.
Conclusion: Filing the return in the wrong form did not disentitle the assessee from claiming the exemption.
Final Conclusion: The denial of exemption was unsustainable and the assessee was entitled to the claim under section 10(23C)(iiiab) of the Income-tax Act, 1961.
Ratio Decidendi: A statutory exemption cannot be denied merely for late or non-filing of a return, or for filing it in an incorrect form, unless the Act expressly makes such compliance a condition for the exemption.
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