TaxTMI 
TaxTMI 
2015 (2) TMI 1311
X X X X Extracts X X X X
X X X X Extracts X X X X
....the CIT(A) in I.T.A. No. 328/Coch/2014 are that the assessee is a co-operative Bank registered under the Kerala Co-operative Societies Act, 1969. Since the assessee had failed to file return of income for the assessment years 2008-09 and 2009-10, the Assessing officer issued a notice u/s. 142(1) requiring the assessee to file the return of income. The assessee neither complied with this notice nor filed return of income in terms of section 139 or in terms of notice u/s. 142(1) of the Act and hence, the Assessing officer proceeded to initiate best judgment assessment u/s. 144 of the Act as per the notice issued u/s. 142(1) of the Act. Accordingly, the Assessing officer called for details which were required by him to complete the assessment u/s. 144 of the Act. The assessee filed a return of income on 29-08-2011 which was beyond the time allowed u/s. 139(4) and therefore, the Assessing officer treated the same as invalid. On the basis of materials gathered in the course of assessment, the Assessing officer worked out the total income of the assessee at Rs. 91,46,250/-. While completing the assessments, the Assessing officer disallowed the claim of deduction u/s. 80P by invoking the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the provisions of section 139 of the Act. Section 139(1) reads as follows: "139(1) Every person,- (a) Being a company or a firm; or (b) Being a person other than a company or a firm, if his total income or the total income of any other person in respect of which he is assessable under this Act during the previous year exceeded the maximum amount which is not chargeable to income-tax, shall, on or before the due date, furnish a return of his income or the income of such other person during the previous year, in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed: Provided that a person referred to in clause (b) who is not required to furnish a return under this sub-section and residing in such area as may be specified by the Board in this behalf by notification in the Official Gazette, and who during the previous year incurs an expenditure of fifty thousand rupees or more towards consumption of electricity or at any time during the previous year fulfils any one of the following conditions, namely:- (i) Is in occupation of an immovable property exceeding a specified floor area, whether by way of own....
X X X X Extracts X X X X
X X X X Extracts X X X X
....statutory liability of filing the return under the Income-tax cannot be disowned on the ground that they were under a bona fide impression. Furthermore, section 276CC of the Income-tax Act, 1961 makes it a punishable offence in case the return of income which is required to be filed u/s 139(1) or on issuance of a notice u/s 142(1), etc. is not filed. Therefore, it is obvious that the return has to be filed within the time limit prescribed u/s 139(1) or atleast within the time specified in the notice u/s 142(1). If the return was not filed by the taxpayers, then the consequential penal provisions as provided in section 276CC of the Act would follow. We find that the Apex Court in the case of Prakash Nath Khanna & Anr vs C.I.T. (2004) 266 ITR 1 (SC) had an occasion to consider the scope and ambit of section 276CC of the Act. After examining various judgments on the subject and the provisions of section 139(1), the Apex Court found that the time limit for filing the return of income is indicated only in sub section (1) of section 139 and not in sub section (4) of section 139. Therefore, even if the return was filed in terms of sub section (4) of section 139, that will not dilute the i....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... anything into the statutory provisions. While interpreting the provisions the court only interprets the law and cannot legislate it. If a provision of law is misused and subjected to the abuse of process of law, it is for the legislature to amend, modify or repeal it, if deemed necessary. In fact, the Apex Court has observed as follows at page 9 of the ITR: " It is a well settled principle in law that the court cannot read anything into a statutory provision which is plain and unambiguous. A state is an edict of the Legislature. The language employed in a statute is the determinative factor of legislature intent. The first and primary rule of construction is that the intention of the legislation must be found in the words used by the Legislature itself. The question is not what may be supposed and has been intended but what has been said. "Statutes should be construed, not as theorems of Euclid". Judge Learned Hand said, "but words must be construed with some imagination of the purposes which lie behind them". (see Lenigh Valley Coal Co. v. Yensavage (218 FR 547). The view was reiterated in Union of India v. Filip Tiago De Gama of Vedem Vasco De Gama, AIR 1990 SC 981 and Padma ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... any amount was allowed u/s. 10A, 10AA or 10B or 10BA or under provisions of Chapter VIA under the head "C.- Deductions in respect of certain incomes" in any assessment year, then the same deduction in respect of the same profit & gains shall not be allowed under any other provisions of the Act for such assessment year; (ii) The aggregate deduction under various provisions shall not exceed the profit and gains of the undertaking or unit or enterprise or the business profit, as the case may be; and (iii) There shall be a claim made in the return of income. 17. The legislature, in their wisdom thought it fit that implementation of these three conditions would prevent misuse and to avoid multiple claim of deduction u/ss 10A, 10AA, 10B or 10BA or under any provisions of Chapter VIA under the head "C.-Deductions in respect of certain incomes". Condition No.(iii) is also manifest in provisions of section 80A(5) of the Act. Therefore, a plain reading of the language of section 80A(4) and 80A(5) makes it clear the purpose and intent of the legislature. It does not require any further interpretation. 18. The question now arises for consideration is whether filing of return of....
X X X X Extracts X X X X
X X X X Extracts X X X X
....in section (1) of section 139. In section 80A(5) the legislature obviously omitted to mention the words "in due time". What it says is where the taxpayer fails to make a claim in the return of income, no deduction shall be allowed. It does not say that the return of income shall be furnished in due time. Therefore, it is obvious that for the purpose of section 276CC, the return has to be filed in due time, i.e. within the time limit prescribed u/s 139(1). However, for the purpose of claiming deduction u/s 80P, in view of the language employed in section 80A(5) what is required is to make a claim in the return of income. The return may be filed either u/s 139(1) or 139(4) or in pursuance of a notice issued u/s 142(1) or 148 of the Act. In view of the absence of the words "in due time" in section 80A(5), this Tribunal is of the considered opinion that the return filed u/s 139(1) or 139(4) or within the time limit specified in section 142(1) or 148 can also be considered as return of income within the meaning of section 80A(5) of the Act. 21. The next question follows is when there is a failure on the part of the taxpayer to file return of income within the time limit provided u/s ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... taxpayer was entitled to carry forward loss. After referring to Direct Taxes (Amendment) Act, 1987, the Kerala High Court observed that as the section stands at present, no loss which has not been determined in pursuance of a return filed in accordance with the provisions of section 139(3) of the Act shall be carried forward and set off is to be permitted. Therefore, it is obvious that the legislature made it mandatory for filing the return of income within the due date prescribed in section 139(1) as far as carry forward of loss u/s 80 is concerned. While introducing section 80A(5) the legislature well aware that not only for carry forward of losses but also for deductions u/s 10A, 10B the taxpayer has to file the return of income within the time limit prescribed u/s 139(1) of the Act. In spite of that the legislature omitted to mention the words "within due time" in section 80A(5) of the Act. Therefore, this Tribunal is of the considered opinion that the return of income filed within the time limit provided in section 139(1) or 139(4) or time specified in the notice u/s 142(1) or 148 can be considered as return of income. However, the belated return filed beyond the time limit p....
X X X X Extracts X X X X
X X X X Extracts X X X X
....l is accepted, then the person, who files the return of income and fails to make a claim of deduction in the return of income either by ignorance or otherwise may not get the benefit, but a person who has not filed the return of income may be in a better position to claim the benefit. This Tribunal is of the considered opinion that this is not the intention of the legislature at all. The persons, who complied with the provisions of the Income-tax Act by filing the return, however, failed to make a claim in the return either by ignorance or otherwise cannot be put in a worse position than a person who has not filed return as required u/s 139 of the Income-tax Act. The intention of the legislature in enacting section 80A(4) and 80A(5) is to avoid multiple deduction in respect of the same profit. The legislature prescribed three conditions in sections 80A(4) and 80A(5) which are as follows: (i) If a deduction in respect of any amount was allowed u/s. 10A, 10AA or 10B or 10BA or under provisions of Chapter VIA under the head "C.- Deductions in respect of certain incomes" in any assessment year, then the same deduction in respect of the same profit & gains shall not be allowed under ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r to furnish a return of income. Section 147 provides for condition for assessment of the income which escaped assessment. As per the provisions of section 147, when the assessing officer has a reason to believe that any income chargeable to tax has escaped assessment for any assessment year, then subject to provisions of sections 147 to 153 he may assess or reassess the income which escaped assessment. The question arises for consideration is - at what point of time the income would be considered to be escaped assessment. To consider any income chargeable to tax as escaped assessment, the assessment proceedings shall have to come to an end either by order u/s 143(3) or otherwise by operation of law. In the case before us, admittedly, the taxpayer has not filed any return of income within the time limit specified u/s 139(1) or 139(4) of the Act. Moreover, no return was filed in compliance to the notice issued u/s 142(1) of the Act either. The contention of the taxpayer is that the return was filed belatedly but before completion of the assessment proceedings. In the case before us, admittedly, the notice u/s 142(1) was issued and the assessing officer directed the taxpayer to file ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....u/s 139(4) of the Act. Therefore, the assessing officer has rightly disallowed the claim of the taxpayers u/s 80P of the Act. 29. The next contention of the ld. taxpayers is that all these taxpayers being a co-operative societies functioning in the remote villages in the state of Kerala. Therefore, the ld. representative for the taxpayers prayed that a sympathetic view may be taken. We are conscious that sympathy is essential for justice. We are also conscious that sympathy cannot replace or substitute the provisions of the Act. Therefore, even though we have sympathy with the taxpayers, in view of the specific and mandatory provisions of section 139 r.w.s. 80A(5) of the Act, this Tribunal do not find any merit in the claim of the taxpayer. 8. To be consistent with the view taken by the Tribunal, we are inclined to dismiss this ground of the assessees in I.T.A. Nos.328&329/Coch/2012. 9. The next common ground of appeal in I.T.A. Nos. 515-517/Coch/2014 and 498/Coch/2014 is with regard to disallowance of deduction u/s. 80P of the I.T. Act. 10. The brief facts of the case as narrated by the CIT(A) in I.T.A. No.515/Coch/2014 are that the assessee is a Co-operative Bank mainly ....