TaxTMI 
TaxTMI 
2023 (10) TMI 906
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....Income Tax Act of Rs. 2,00,10,879/- on account of late filling of income tax return. (ii). The CIT (A) has erred on facts and in law for not considering the timely filling of Audit Report us 80IC in form 10CCB under rule 18BBB and tax audit report in form 3CB/CD us 44AB of Income Tax Act, 1961 from where Id. AO can very well draw the amount of eligible deduction available to appellant. 4. That on the facts and in the circumstances of the case and in law, Id. CIT (A) erred in not deleting the addition made by Learned AO which was also unlawful and made in violation of principles of natural justice. 3. Ground no. 1 is of general in nature and hence no specific adjudication is required. Apropos ground no. 2 the ld. counsel placing reliance on the judgement of Hon'ble High Court of Madras in the case of CIT vs Seshasayee Paper & Board Ltd. reported as 73 taxman 80 (Mad.) submitted that in respect of profit and gains from industrial under taking the interest received on deposit kept with electricity board should not be deducted from gross total income while computing the relief admissible u/s. 80I of the Income Tax Act 1961 (for short the 'Act' ). 4. Replying to ....
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....cts and in law for not considering the timely filling of Audit Report us 80IC in form 10CCB under rule 18BBB and tax audit report in form 3CB/CD us 44AB of Income Tax Act, 1961 from where Id. AO can very well draw the amount of eligible deduction available to appellant. 8. The ld. counsel submitted that for AY 2015-16 the assessee filed income tax return on 29.02.2016 after the specified due date of filing return u/s. 139(1) of the Act. The ld. counsel submitted that as per rule 18 BBB of the I.T Rules 1962, the audit report in Form 10CCB along with tax audit report in Form 3CB/3CD was to be filed within prescribed due date of filing of return which was filed within the due date of filing of return u/s. 139(1) of the Act. Explaining the cause of delay in filing return the ld. counsel drew our attention towards submissions before ld. CIT(A) which are as follows:- In this regard, we like to explain that Mr. Anil Mahajan is an executive partner of M/s Canadian Speciality Vinlys and taking all business decisions. However, his medical condition was critical and he has undergone medical treatments during March 2014 to 2017 in hospital. He was first diagnosed lungs infection i....
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....ter filing the return, but, before completion of the assessment proceedings is permissible. 10. The ld. Counsel vehemently contended that in the instant case the issue of 0the disallowance of claim u/s 80IC of the Act on account of non-filing of the return within the prescribed time limit u/s 139(1) of the Act, due to the illness of executive partner of assessee company Shri Anil Mahajan, would be governed by the judgement of the Hon'ble Supreme Court in the case of CIT vs. GM Knitting Industries Pvt. Ltd., reported as 376 ITR 456 (SC), wherein it has been held that filing of the return for making of a claim under Chapter VI-A of the Act is mandatory, but, compliance of timing is directory. Therefore, even if the claim is made during the period of assessment proceedings, such claim u/s. 80IC of the Act, has to be allowed. 11. Replying to the above, the ld. Senior DR supporting the orders of the authorities below submitted that for claiming deduction u/s. 80IC of the Act the claim is required to be made in the return of income file within prescribed time limit u/s. 139(1) of the Act which is a mandatory pre-requirement for claiming said deduction. He vehemently pointed out tha....
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....e u/s 148. Computation of income was filed during the course of assessment proceedings in which the deduction u/s 80P was claimed. Whereas, the authorities below have canvassed a view that the assessee violated section 80A(5) and hence the deduction was not available; the assessee has made out a case that section 80A(5) does not apply where no return is furnished and rather it is section 80AC which would govern the case and because of omission of section 80P in the list of sections given in section 80AC, the deduction should be granted. In order to appreciate the contention of the ld. AR, it would be apposite to reproduce section 80AC, before its substitution by the Finance Act, 2018 w.e.f 1.4.2018, which reads as under: "Where in computing the total income of an assessee of any previous year relevant to the assessment year commencing on the 1st day of April, 2006 or any subsequent assessment year, any deduction is admissible under section 80-IA or section 80-IAB or section 80-IB or section 80-IC or section 80-ID or section 80-IE, no such deduction shall be allowed to him unless he furnishes a return of his income for such assessment year on or before the due date specifie....
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....Act. In one sense, section 80AC is an exception to section 80A(5), making the mandate of the latter section more stringent in the prescribed cases. Whereas other deductions of Part C of Chapter VI-A, including section 80P, can be claimed in the return filed under any section, including section 139(4); the six deductions as referred to in section 80AC must necessarily be claimed in the return filed u/s 139(1) only. Ex consequenti, the contention that since section 80P is not covered under section 80AC, the deduction under this section becomes automatically allowable without adhering to the requirement of section 80A(5), is bereft of force and hence dismissed. 10. Now I advert to the requirements of section 80A(5), which stipulates that no deduction under other sections including 80P shall be allowed if the assessee fails to make such a claim in the return of income. Thus, there are twin conditions, viz., first, claiming deduction u/s 80P and second, claiming such deduction in the return of income. There is no dispute on the first condition, which has been satisfied in this case as the assessee did claim the deduction albeit during the course of assessment proceedings. The w....
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...., on the basis of such report, was allowable. 12. Recently, the Hon'ble Supreme Court was confronted with the claim of benefit u/s 10B in Pr.CIT vs. Wipro Limited (2022) 446 ITR 1 (SC). The assessee furnished original return taking the benefit of section 10B and did not carry forward the loss. Thereafter, a revised return was filed foregoing the claim of deduction u/s 10B. The AO rejected the withdrawal of exemption under Section 10B by holding that assessee did not furnish the necessary declaration in writing before due date of filing return of income, which was an essential requirement for not claiming the benefit of section 10B. The Hon'ble High Court decided the issue in favour of the assessee by holding that the requirement of filing the declaration was mandatory but filing it along with the return of income u/s 139(1) was a directory requirement. The matter was brought by the Revenue before the Hon'ble Supreme Court. The assessee, inter alia, relied on the judgment of the Apex Court in G.M. Knitting Industries (supra). Their Lordships held that the requirement of filing the report in support of deduction u/s 10B was not a directory but a mandatory require....
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....hat such a claim was not made in the return but during the course of assessment proceedings. The impugned order is ergo set aside and the matter is remitted to the file of the AO for examining the claim of deduction u/s 80P on merits. 14. In view of the foregoing, first of all, from the proposition rendered by ITAT, Pune Bench in the case Krushi Vibhag Karmchari Vrund Sahakari Pat Sanstha vs. ITO (supra), we respectfully note that the coordinate Bench of the Tribunal, after considering the proposition rendered by the Hon'ble Supreme Court in the cases of G.M. Knitting Industries (supra) and Wipro Ltd. (supra) held that the Chapter III and Chapter VI-A of the Act operate in different realms and principles of chapter III, which deals with 'incomes which did not form part of total income' cannot be equated with mechanism provided for deductions in Chapter VI-A which deals with 'deductions to be made in computing the total income.' Therefore, it was held that the fulfillment of requirement for making a claim of exemption under the relevant sections of Chapter III in the return of income is mandatory, but, when it comes to the claim of a deduction, inter alia, under the relevant sect....