AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2025 (8) TMI 288
X X X X Extracts X X X X
X X X X Extracts X X X X
....n the facts of the case in confirming the disallowance/addition of Rs. 1,27,04,176/- made by the Id. AO by denying the deduction claimed u/s 80IBA, or 80IAB or other on wrong interpretation and not considering the evidences and material in their perspective and sense, without giving any show cause. Hence the addition/ disallowance so made by the AO and confirmed by the Id. CIT(A) is being totally contrary to the provisions of law and facts on the record and hence same may kindly be deleted in full. 3. The Id. AO has grossly erred in law as well as on the facts of the case in charging interest u/s 234A,234B and 234C. The appellant totally denies it liability of charging of any such interest. The interest, so charged, being contrary to the provisions of law and facts, may kindly be deleted in full. 4. The appellant prays your honour indulgences to add, amend or alter of or any of the grounds of the appeal on or before the date of hearing." 3. Succinctly, the fact as culled out from the records is that the assessee is a LLP and engaged in the business of real estate. The assessee has filed its return of income declaring the total income of Rs. NIL on 31.03.2022 which was processe....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ll be deemed admissible exclusively if the income tax return for that particular case is filed within the prescribed due date. Consequently, no claims under any of the provisions in Part C of Chapter VIA will be entertained in the instance of a belated return. Accordingly this ground raised by the assessee is dismissed. 7.2 On Grounds of Appeal No 3:- This ground of appeal relates to interest u/s 234A, 234B and 234C which is mandatory and consequential in nature. Accordingly this ground raised by the assessee is dismissed. 7.3 On Grounds of Appeal No 4: The appellant requested that The Appellant reserves its right to alter/ amend/delete/modify its grounds of appeal stated above. However, no such option was exercised during the appellate proceedings. Therefore, it is clear that this ground of appeal is academic in nature, and no decision is required. For statistical purposes, this ground of appeal is dismissed. 8. In the result, the appeal is dismissed." 5. As the assessee did not find any favour, from the appeal filed before the ld. CIT(A), the assessee has preferred the present appeal before this Tribunal on the ground as reproduced hereinabove. To support the various groun....
X X X X Extracts X X X X
X X X X Extracts X X X X
....in this regard cannot be accepted. The provisions laid out in Section 80AC(ii), which came into effect on April 1, 2018, leave no room for ambiguity. They emphatically establish that any deduction sought under Part C of Chapter VIA will be deemed admissible exclusively if the income tax return for that particular case is filed within the prescribed due date. Consequently, no claims under any of the provisions in Part C of Chapter VIA will be entertained in the instance of a belated return. Accordingly this ground raised by the assessee is dismissed." And hence this appeal. SUBMISSIONS:- 1. Invalid action u/s 143(1):- Firstly it is submitted that the disallowance has been made u/s 143(1) and this is not an adjustment, it is the disallowance of a claim or deduction in a particular section and should not be disallowed u/s 143(1), the deduction if any is to be made only under scrutiny assessment. This is a legal and disputed issue and cannot be taken u/s 143(1). It is the settled legal position of law that u/s 143(1) only prima fasi adjustment can be done and this disallowance is not a prima fasci adjustment. Hence the deduction so denied may kindly be allowed. However the ld. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....le 18BBB of the IT Rules, 1961. The AO considering the fact that the return had not been filed within the time specified u/s 139(1) as admittedly it had been filed within the extended period as specified u/s 139(4). Accordingly, considering the statutory requirement as per provisions of Section 80AC required the assessee to explain the same. The assessee as per the submissions extracted in the assessment order gave the following explanation : "Income tax return along-with statement of income was filed on 31.03.2014 audit report through which we can avail the 80IC deduction is submitted on 28.10.2013. Book profit report in form 29B is submitted on 29.09.2013 and Tax Audit Report in form 3CA/3CD is submitted on 29.09.2013. Moreover, end of the year i.e. March 31 of the relevant A.Y. is also due date u/s 139 without penalty and ITR submitted on 31.03.2014". 3.2 The record shows that the explanation was rejected by the AO holding as under :- The explanation of the assessee is perused and it shows that the assessee itself admitted that the return of income for the year under consideration was filed beyond due date of filing of return. Moreover, audit report in form no. 10CCB was a....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... terms of Section 139(1), though within the extended time as set out in Section 139(4) as far as the levy of penalty etc. was concerned. Section 80AC of the Income Tax Act specifically lays down that deduction is admissible or in-fact no deduction is permissible unless the return is furnished on or before the due date specified in sub-section (1) of Section 139.For ready reference, said provision of law is hereby reproduced : "80AC -Where in computing the total income of an assessee of the 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 80IA or section 80IAB or section 80IB or section 80IC [or section 80ID 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 specified under sub-section (1) of section 139. " 3.4. We are called upon to decide in the facts of the present case whether the benefit of deduction u/s 80IC in the facts of the present case wherein the assessee admittedly did not file its return within the due date specified under subsection (1) of Section ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....uments of the Revenue that return filed late can only be considered if the delay is attributable to the Revenue, cannot be concurred with. In the face of decisions which hold that the said provision is a machinery provision, then this interpretation cannot apply only to cases where delay is attributable only to the Revenue. The said interpretation would be universally available as per facts to both the sides. To hold that the cause for delay can be gone into, only if delay is attributable to the Revenue in the facts of the case would necessitate a judicial forum to first require the Department to demonstrate how it can claim itself to be on higher footing qua the tax payer because reasons for delay can be gone into and condoned for adequate reasons demonstrated by the Revenue then even where delay occurs for reasons not attributable to the Revenue also. In the absence of any other argument, we do not see how in the facts as considered by different Courts in the decisions relied upon by the ld. AR, why they should not be applied. Once it has been held that Section 80AC is a machinery provision, then the issue is to be considered in the light of the facts available. The legal positio....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... and as a normal practice digital signatures were also handed over to him alongwith Board Resolution authorizing him to use and affix our Digital Signatures on the documents to be submitted to Income Tax Department. 4. That our aforementioned Company is having 77.30% shares in another Company "Saitech Medicare Private Limited". CA. A.S. Malhotra was Auditor of that Company also. Besides Symbiosis Pharmaceuticals (P) Ltd. and a few other shareholders, this Company is also having two shareholders namely Sh. Rajat Bhalotia and his father Sh. P.D. Bhalotia with 12.66% and 3.82% shares respectively. These shareholders have filed a suit with Company Law Board, Delhi against the major shareholder i.e. Symbiosis Pharmaceuticals (P) Ltd. and other shareholders including the Deponent. We suspected collusion of our Auditors with these two dissenting shareholders as our Auditor was also Auditor and tax consultant of Wonder Products, Nahan Road, Moginand, Kal Amb, Distt. Nahan; a firm of these two persons/ their family members. The suspicion is on account of the fact that return of Income for the year under consideration was filed late when balance sheet and audit report was filed in time a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....havani, we find, on facts is not applicable and is entirely distinguishable since we concur with the arguments advanced by the ld. AR thereon same are not being repeated here. Similarly, we find that the decision in the case of M/s Lakshmi Energy & Foods Ltd. also has no role to place as in the facts of that case, not only the return was filed beyond the extended period of time statutorily available under sub-section (4) of Section 139 but even otherwise, the said return was not supported by Tax Audit Report and Audit Report u/s 80IC prior to the filing of the return and infact they were filed during the assessment proceedings. 6.6 In the facts of the present case, as is evident from the assessment order itself, the supporting documents for the claim u/s 80IC was filed well within the extended time prescribed u/s 139(4). The said fact is evident from a reading of the assessment order itself. We also note that the principle of law as applicable to claim of exemption u/s 54 as considered by the Hon'ble jurisdictional High Court in the case of CIT V Jagriti Aggarwal is fully applicable to the case at hand also and infact the decision of the Delhi Bench of the ITAT in the case of....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of the Act-Filing of return electronically is a directory provision and if the return is filed manually on or before due date, such return cannot be ignored- AO at best could ask assessee to file electronic return again, so that the technicality of processing is satisfied-Claim of assessee for deduction u/s. 80IC cannot be denied on the ground of law stated in s. 80AC of the Act. 4. In the case of Lunidhar Seva Sahkari Mandali Ltd. vs. ASSESSING OFFICER (CPC) ITA No. 202/Rjt/2022 February 20, 2023 (2023) 67 CCH 0398 Rajkot Trib (2023) 200 ITD 0014 (Rajkot-Trib) Asst. Year 2019-20. Held as under: "7. We have heard the rival contentions and perused the material on record. In the instant facts, admittedly the assessee did not file return of income within the time permissible under section 139(1) of the Act. However, the assessee filed its return of income belatedly on 30-11-2020 and claimed deduction of Rs. 2,22,704/- under section 80P of the Act. The issue for consideration before us is that whether once the return of income is filed beyond the prescribed date under section 139(1) of the Act, can the deduction under section 80P of the Act be denied to the assessee, by way of adj....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... not apply to the impugned assessment year i.e. assessment year 2019-20 relevant to financial year 2018-19. Accordingly, in our considered view, denial of claim under section 80P of the Act would not come within the purview of prima facie adjustment under section 143(1)(a)(v) of the Act, for the simple reason that the section was not in force during the period under consideration i.e. assessment year 2019-20. 7.2 The second issue for consideration is that whether the case of the assessee would fall within the purview of prima facie adjustment under section 143(1)(a)(ii)(an incorrect claim, if such incorrect claim is apparent from any information in the return). In our view, the scope of the adjustments that can be made under the said provision has been elaborated in the Explanation to the aforesaid section, which does not include denial of deduction claimed by the assessee in case the assessee does not furnish its return of income within the date stipulated under section 139(1) of the Act. The Explanation to the said section specifically provides for cases/instances when the claim made by the assessee could be said to be "incorrect". Therefore, in our considered view, the case of....
X X X X Extracts X X X X
X X X X Extracts X X X X
....turn of income within due date u/s 139(1) of the Act, in light of the discussion and judicial precedents highlighted above. 8. In the result, appeal of the assessee is allowed. Order pronounced in the open court on 22-02-2023." Also refer Ambaradi Seva Sahkari Mandali Ltd. vs. DEPUTY COMMISSIONER OF INCOME TAX ITAT RAJKOT SUCHITRA KAMBLE, JM & WASEEM AHMED, AM.ITA No. 186/RJT/2022, 197/RJT/2022, 203/RJT/2022 February 10, 2023(2023) 67 CCH 0104 RajkotTrib Looking the facts of the present case there is also a sufficient reasons and beyond control to the assessee. The ratio of the above judgment is also applicable in the present case. However further there is no loss to revenue because the assessee had already paid AMT which of 20% and there was no melafide intention of the assessee to delay in filling the return only for 16 days nor assessee has benefited due it. Further when the Honble Supreme Court has extend time limit in many case then it should also be considered here and a genuine claim should not be denied only due to some technical reason and minor delay. Therefore in view of the above facts and circumstances the disallowance so made may kindly be deleted in ful....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ving any show cause notice and thereby the confirmation of addition/ disallowance so made by the AO and confirmed by the Id. CIT(A) is being totally contrary to the provisions of law. The brief facts related to the dispute are that the assessee-appellant filed his return of income declaring NIL income on 31.03.2022 in that ITR so filed the assessee claimed deduction u/s 80IBA for an amount of Rs. 1,27,13,930/- the said claim was denied to the assessee because the ITR was required to be filed on or before 15.03.2022 as per provision of section 139(1) of the Act. When the matter carried before the ld. CIT(A) the said claim was also denied to the assessee on the following finding given by the ld. CIT(A); The provisions laid out in Section 80AC(ii), which came into effect on April 1, 2018, leave no room for ambiguity. They emphatically establish that any deduction sought under Part C of Chapter VIA will be deemed admissible exclusively if the income tax return for that particular case is filed within the prescribed due date. Consequently, no claims under any of the provisions in Part C of Chapter VIA will be entertained in the instance of a belated return. Accordingly this ground ra....
X X X X Extracts X X X X
X X X X Extracts X X X X
....there. No views, interpretation, derivation can be taken or given on such legally non-existing document. However, learned ITAT also held that the CIT ought to have considered the claim of assessee in exercise of its appellate jurisdiction under section 250 of the Act. If the assessee is otherwise entitled to deduction under section 80IB(10), but due to its ignorance or for some other reason could not claim the same in the return of income, but has raised its claim before the Appellate Authority, then the Appellate Authority should have looked into the same. The assessee cannot be burdened with taxes which it otherwise is not liable to pay under the law. A duty is cast upon the Income-tax Authorities to charge legitimate taxes from the tax payers. They are not there to punish the tax payers for their bonafide mistakes. Accordingly, for the assessment year 2006-2007, the deduction computed by the CIT on the merits of assessee's claim was confirmed and the appeal was accordingly allowed. 2.(v) Feeling aggrieved against the order passed by the ITAT on 10-5-2019 in relation to assessment year 2006-2007, the revenue has preferred instant appeal. 3. We have heard learned counsel....
X X X X Extracts X X X X
X X X X Extracts X X X X
....on in the Official Gazette, and who 4 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 ownership, tenancy or otherwise, as may be specified by the Board in this behalf; or (ii) is the owner or the lessee of a motor vehicle other than a two-wheeled motor vehicle, whether having any detachable side car having extra wheel attached to such two-wheeled motor vehicle or not; or (iii) ** ** ** (iv) has incurred expenditure for himself or any other person on travel to any foreign country; or (v) is the holder of a credit card, not being an "add-on" card, issued by any bank or institution; or (vi) is a member of a club where entrance fee charged is twenty-five thousand rupees or more, shall furnish a return, of his income during any previous year en....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... setting forth such other particulars as may be prescribed. Explanation 1.-For the purposes of this sub-section, the expression "motor vehicle" shall have the meaning assigned to it in clause (28) of section 2 of the Motor Vehicles Act, 1988 (59 of 1988). Explanation 2.-In this sub-section, "due date" means,- (a) where the assessee other than an assessee referred to in clause (aa) is- (i) a company ***; or (ii) a person (other than a company) whose accounts are required to be audited under this Act or under any other law for the time being in force; or (iii) a working partner of a firm whose accounts are required to be audited under this Act or under any other law for the time being in force, the 30th day of September] of the assessment year; (aa) in the case of an assessee who is required to furnish a report referred to in section 92E, the 30th day of November of the assessment year; (b) in the case of a person other than a company, referred to in the first proviso to this sub-section, the 31st day of October of the assessment year; (c) in the case of any other assessee, the 31st day of July of the assessment year. Explanation 3.-For the purposes of this sub-se....
X X X X Extracts X X X X
X X X X Extracts X X X X
....this clause,- (i) in a case where the approval in respect of the housing project is obtained more than once, such housing project shall be deemed to have been approved on the date on which the building plan of such housing project is first approved by the local authority; (ii) the date of completion of construction of the housing project shall be taken to be the date on which the completion certificate in respect of such housing project is issued by the local authority; (b) the project is on the size of a plot of land which has a minimum area of one acre: Provided that nothing contained in clause (a) or clause (b) shall apply to a housing project carried out in accordance with a scheme framed by the Central Government or a State Government for reconstruction or redevelopment of existing buildings in areas declared to be slum areas under any law for the time being in force and such scheme is notified by the Board in this behalf; (c) the residential unit has a maximum built-up area of one thousand square feet where such residential unit is situated within the city of Delhi or Mumbai or within twenty-five kilometres from the municipal limits of these cities and one thousand ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....(1) or sub-section (4), discovers any omission or any wrong statement therein, he may furnish a revised return at any time before the end of the relevant assessment year or before the completion of the assessment, whichever is earlier." 4.(iv)(a) Consequences of non filing of return in time as per section 139(1) vis-à-vis resultant action under section 276-CC was under consideration before the Hon'ble Apex Court in Prakash Nath Khanna v. CIT [2004] 135 Taxman 327/266 ITR 1/[2004] 9 SCC 686. Assessee's submissions inter-alia were that :- 'The expression to furnish in due time figuring in section 276-CC means to furnish within the time permissible under the Act ; The return furnished under section 139(4) at any time before the assessment is made, has to be regarded as a return furnished under section 139(1) ; This was so held by the Apex Court in CIT v. Kulu Valley Transport Co. (P.) Ltd. [1970] 77 ITR 518 (SC) in context of sections 22(1) & 22 (3) of the Act which were pari-materia to sections 139(1) & 139(4).' Hon'ble Apex Court held Court cannot read anything into a statutory provision which is plain and unambiguous. A statute is an edict of the Legi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....and when reason for it is found in the four corners of the statute itself but at the same time a casus omissus should not be readily inferred and for that purpose all the parts of a statute or section must be construed together and every clause of a section should be construed with reference to the context and other clauses thereof so that the construction to be put on a particular provision makes a consistent enactment of the whole statute. This would be more so if literal construction of a particular clause leads to manifestly absurd or anomalous results which could not have been intended by the legislature. "An intention to produce an unreasonable result", said Danckwerts, L.J., in Artemiou v. Procopiou (1966 (1) QB 878), "is not to be imputed to a statute if there is some other construction available". Where to apply words literally would "defeat the obvious intention of the legislation and produce a wholly unreasonable result", we must "do some violence to the words" and so achieve that obvious intention and produce a rational construction. (Per Lord Reid in Luke v. IRC {1963 AC 557} where at AC p.577 he also observed: "This is not a new problem, though our standard of draftin....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Patil Associates v. Central Board of Direct Taxes [2018] 91 taxmann.com 241/255 Taxman 60 (Delhi)/[Writ Petition (Civil) No. 6537 of 2017, dated 12-3-2018], by the Delhi High Court, the return of Assessment Year due under section 139(1) on 31-10-2006 was actually filed on 30-3-2007 before expiry of the assessment year in question as per extended time provided under section 139(4). The deductions claimed under section 80IB were disallowed relying upon section 80AC on the ground that return of income had not been filed within the time limit specified under section 139(1). The issue before the Delhi High Court pertained to order passed in the assessee's application under section 119(2)(6) of the Act seeking extension of time for filing of return. The ground forwarded for late filing of the return was delay in audit. The Court considered the case for condonation of delay as under :- "9. The main issue raised by the assessee in this case is that the delay in audit has led to delay in filing of return which had led to his claim of 80IB(10) being disallowed and this had caused genuine hardship to him. It should be noted first that disallowance of any claim will normally lead to har....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ve delayed at least a few more audits." 15. We have considered the said findings recorded by the CBDT, which are primarily factual and also lucid and cogent. Deduction under section 80IB was not examined and considered on merits by the Assessing Officer. The contention that if the petitioner had followed percentage completion method claim for issue of deduction under section 80IB would have arisen in subsequent year was a hypothetical. Petitioner was required and CBDT was justified in asking the petitioner to establish the reason propounded. In the absence of details of alleged illness and a single document to support the bland assertion, we are not inclined to hold that the impugned order suffers from perversity or error in decision making process in reaching the conclusion. Impugned order is not arbitrary or whimsical, to justify interference in exercise of our power of judicial review. The respondent authorities have taken all the arguments and materials into consideration. Procedural flaw is not alleged. 16. The findings recorded in the impugned order and the facts discussed above reveal :- (i) Return for the assessment year 2006-07, which was to be filed under section 13....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tension of time have to be proved and established. Any indulgence on the pretext that the petitioner has been denied benefit under section 80IB, which on merits would have been allowed, would be contrary to law, if it is held that there was no reasonable ground or reason for extension of time in filing of the return". 4.(iv)(c) Fiberfill Engineers v. Dy. CIT [2017] 85 taxmann.com 27/299 CTR 173 Delhi was a case where a re-assessment notice was issued to the assessee on the ground that it could not be granted deduction under section 80IC because of belated filing of return of income. However, it was noted that on merits, assessee's claim for deduction was justified. In the circumstances, the Delhi High Court held in favour of asessee that since entitlement of assessee to deduction had not been questioned by the department on merits, there was no justification for not viewing delay in filing the return to be bonafide. 4.(iv)(d) In the instant case, the assessee is a statutory organization created by the State for providing & develop housing infrastructure. It took up a defence of late audit for belated filing of its return of income. The veracity of ground so put forth for la....