Income Tax Appellate Tribunal - Ahmedabad
Mahavir Construction, Nadiad vs Assessee on 26 September, 2016
IN THE INCOME TAX APPELLATE TRIBUNAL
AHMEDABAD "A" BENCH
(BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT
MEMBER & SHRI S. S. GODARA, JUDICIAL MEMBER)
IT(SS)A. No: 59/AHD/2012
(Assessment Year: 2009-10)
M/s. Mahavir Construction V/S DCIT, Central Circle-2,
107, City Point, Nr. Paras Baroda
Cinema Nadiad-387001
(Appellant) (Respondent)
PAN: AANFM0076D
Appellant by : Shri P. M. Mehta, AR
Respondent by : Shri R. I. Patel, CIT/D.R.
(आदे श)/ORDER
Date of hearing : 23 -09-2016
Date of Pronouncement : 26 -09-2016
PER N.K. BILLAIYA, ACCOUNTANT MEMBER:
1. This appeal by the Assessee is preferred against the order of Ld. CIT(A)-IV, Ahmedabad dated 25.11.2011 pertaining to A.Y. 2009-10.
2. The substantive grievance of the assessee reads as under:-
2 IT(SS)A No. 59/Ahd/2012. A.Y. 2009-10
1. In law and in the facts and circumstances of the appellant's case, the ld. CIT(A) has grossly erred in upholding disallowance of deduction u/s. 80-IB(10) even though, as he had himself categorically held in the impugned order, the appellant fulfilled al the conditions stipulated in that provision u/s. 80-IB. Hence, rejection of appellants claim for deduction u/s. 80IB could not be sustained on the ground that its return had not been furnished on or before the due date specified in sub- section(10 of Section 139 as required by Section 80AC.
2. In law and in the facts and circumstances of the appellant's case, the ld. CIT(A) has grossly erred in dismissing Ground No. 7 of the appellant's appeal challenging levy of interest u/s. 234A, 234B and 234C on the ground that it was mandatory and consequential in nature.
3. While scrutinizing the return of income of the assessee for the year under consideration, the A.O. found that the assessee has claimed deduction u/s 80-IB(10) of the Act. The A.O. further noticed that the assessee did not file the return of income on or before the due date of filing of the return as per the provisions of section 139(1) of the Act. Invoking the provisions of Section 80AC of the Act, the A.O. denied the claim of deduction u/s 80-IB(10) of the Act.
4. Assessee carried the matter before the ld. CIT(A) but could not convince the First Appellate Authority so far as the claim of deduction is concerned. While confirming the assessment order, the First Appellate Authority came to the conclusion that provisions of Section 80AC of the Act which were introduced with effect from 01.04.2006 squarely apply on the facts of the case. The ld. CIT(A) also denied the claim of deduction u/s 80-IB(10) of the Act.
3 IT(SS)A No. 59/Ahd/2012. A.Y. 2009-10
5. Aggrieved by this, the assessee is before us. The ld. counsel for the assessee fairly conceded that an identical issue was decided by the Co- ordinate Bench against the assessee in the case of Anoli Holding Pvt. Ltd. in ITA No. 1042/Ahd/2012 dated 03/08/2016. The copy of the order was placed before us. The ld. D.R. strongly relied upon the decision of the Tribunal (supra).
6. We have carefully gone through the orders of the authorities below. The details of return of income filed by the assessee is tabulated as under:-
A.Y. Date of filing Due Date of Delay/Remarks Date of Date of of Return of filing of return notice filing of R/I income as per of income issued/served in response U/s 139(1) of u/s. 153C of to notice u/s the Act the Act 153C of the Act 2007-08 29-10-2007 31-07-2007 03 months 29-08-2008 19-03-2010 03-09-2008 2008-09 31-03-2010 30-09-2008 18 months 29-08-2008 31-03-2010 03-09-2008 2009-10 12-10-2010 30-09-2009 The return is -- --
filed in
response to
notice issued
u/s 142(1) of
the Act dated
30-10-2009( 12
months)
7. It can be seen from the above that the assessee has filed the return of income u/s 139(1) after a long delay without any justifiable cause.4 IT(SS)A No. 59/Ahd/2012
. A.Y. 2009-10
8. The Co-ordinate Bench in the case of M/s. Anoli Holding Pvt. Ltd. on identical facts has held as under:-
13. We have given a thoughtful consideration to the rival contentions; we have also carefully perused the orders of the authorities below. The undisputed fact is that the return of income for the year under consideration was not furnished on or before the due date as per the provisions of Section 139(1) of the Act. In our considered opinion, provisions of Section 80AC of the Act squarely apply on the facts of the case in hand, Section 80AC reads as under:-
"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 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 specified under sub-section (1) of section 139].
14. The Special Bench of the Tribunal at Rajkot had the occasion to consider the following facts in the case of Saffire Garments (supra):-
• The assessee, a partnership firm, filed its return of income claiming deduction under section 10A in respect of its profit derived from the export of articles produced in SEZ.
• The Assessing Officer, however, noted that the assessee had filed its return on 31.01.2007 whereas the extended due date for filing return of income for the assessee, being a firm, under the provisions of section 139(1) was 31.12.2006.
• The Assessing Officer, further noted that as per proviso to sub-section (1A) of section 10A, introduced with effect from 1-4-2006, no deduction should be allowed to assessee who does not furnish return of income on or before the due date.
5 IT(SS)A No. 59/Ahd/2012. A.Y. 2009-10 • Accordingly, applying proviso to section 10A(1A), Assessing Officer denied deduction under section 10A.
• On appeal by the assessee, the Commissioner (Appeals) upheld the order of Assessing Officer.
• On further appeal by the assessee. the Tribunal held provisions of the proviso to subsection (1A) of section 10A to be merely directory and not mandatory and, therefore, on that basis held that even if return of income was not filed within the time-limit prescribed by section 139(1), the assessee could not be denied deduction under section 10A. • Instant Special Bench of the Tribunal was constituted to consider the following questions.
15. On the aforementioned facts, the Special Bench held as under:-
Scheme of the Act with regard to filing of returns In order to decide the issue, I he whole scheme of the Act needs to be considered. The assessee is required to file the return of income within the prescribed time as per the provisions of section 139(1). This provision of section 139(1) is applicable to all companies and firms irrespective of the fact as to whether they are earning taxable income or not for the current year i.e. from 1-4-2006. In respect of other persons such as individual, HUF, AOP or BOI and artificial Juridical person, the requirement is that if such a person is having taxable income before giving effect to the provisions of section 10A, then also, he is required to file return of income before the due date even if this person is not having taxable income after giving effect to the provisions of section 10A. [Para 11] Consequences of failure to file return within due date It is found that the provisions of the proviso to section 10A(IA) is nothing but a consequence of failure of the assessee lo file the return of income within the due date prescribed under section 139(1). For such a failure of the assessee to file his return of income within the due date prescribed under section 139(
1), this is not the only consequence. One consequence of such failure is 6 IT(SS)A No. 59/Ahd/2012 . A.Y. 2009-10 prescribed in section 234A also as per which, the assessee is liable to pay interest on the tax payable by him after reducing advance tax and TDS/TCS if any paid by him apart from some other reductions. Such interest is payable from the date immediately following the due date for filing the return of income and is payable up to the date on which such return of income was furnished by the assessee and if the assessee has not furnished any return of income then the interest is payable till the date of completion of the assessment under section 144. It is held that above is also one of the consequences of not filing return of income by the assessee within the due date. [Para 11]
16. A similar issue was also considered by the Co-ordinate Bench of Chandigarh in the case of Lakshmi Energy & Foods Ltd. (supra), the relevant facts and findings of the Co-ordinate Bench read as under:-
" However, Hon'ble Supreme Court in case of Prem Nath Khanna (supra) held - that "due date" would mean due date as provided u/s 139(1). Therefore we are of the opinion that the decision of CIT Vs. MS Jagriti Aggarwal (supra) is not applicable particularly because there is a specific provision u/s 80AC which prohibits deduction under Part "C" of Chapter VI A unless the returns are filed within time prescribed u/s 139(1). W hen a specific provision is there in the statute same cannot be interpreted in a way to make the provision redundant. Therefore in our opinion, principle laid down by the Hon'ble High Court in case of CIT Vs. MS. Jagriti Aggarwal (Supra) cannot be applied while interpreting the provision of Sec 80AC.
32 The Ld. Counsel for the assessee has also relied on the decision of ACIT Vs. Dhir Global Industrial Pvt. Ltd (supra) wherein it was observed that though the proviso to Sec l0B for filing of return u/s 139(1) for claiming deduction but the same was of directory nature and not mandatory. In our opinion, this judgment of Division Benches is no more valid after pronouncement of the decision of Special Bench in case off Saffire Garments Vs. ITO (supra). Similarly in ITO Vs. S. 7 IT(SS)A No. 59/Ahd/2012 . A.Y. 2009-10 Venktaya(supra), Hyderabad Bench of the Tribunal held that if return was filed late then despite the provisions of section 80AC the deduction was held to be allowable if such delay is beyond the control of the assessee. This position also stands reversed after the decision of Special Bench in case of Saffire Garments Vs. 1TO (supra) wherein it is clearly held that the provisions of section 8oAC are of mandatory nature. As far as decision of Hon'ble Delhi High Court is concerned, the same is distinguishable on facts because in that case the assessee did not have positive gross total income in the initial year, therefore could not claim the deduction for such initial year. Thereafter for Assessment year 2001-02 the assessee did not claim deduction despite of the positive profits. This omission was noticed somewhere in 2004 by which time filing of revised return has elapsed and the assessee moved a petition u/s 264 which was held to be maintainable because the deduction was not claimed because of bonafide mistake. Therefore clearly on these facts the applicability of provisions of section 8oAC was not there for consideration because this provision was introduced only from Assessment year 2006-07 and therefore this case is distinguishable. 33 The Ld. D.R. for the Revenue has rightly pointed out to the decision of Amritsar Bench of the Tribunal in case of Balkishan Vs. ITO (supra) wherein it was clearly observed that provisions of section 80AC are mandatory. Head note reads as under:
"Sec 80IB r.w.s. 80AC of the Income-tax Act, 1961 deduction - profits and gains from industrial undertaking other than infrastructure development undertakings -Assessment year 2006-07 and 2007-08 - where an assessee wants to avail deduction u/s 80IB, he has to necessarily furnish his return of income containing such claim before due date specified in Sec 139(1) - held Yes"
Therefore in view of the above legal position and discussion it is clear that once the return is filed late beyond due date provided u/s .139(1) in Section 80AC then deduction u/s 8oIB cannot be allowed.
8 IT(SS)A No. 59/Ahd/2012. A.Y. 2009-10
17. If, we consider the facts of the case in hand in the light of the decisions mentioned hereinabove, we find similarity in the facts. Therefore, respectfully following the decisions of the Special Bench and the Co-ordinate Bench (supra), we confirm the findings of the ld. CIT(A). Ground no. 1 is dismissed.
9. The second grievance relates to the levy of interest u/s 234A, 234B & 234C of the Act.
10. The levy of interest is mandatory, though consequential in nature. We, accordingly, direct the A.O. to charge interest as per the provisions of the law.
11. The assessee has also challenged the initiation of penalty proceedings u/s 271(1)(c) of the Act. This grievance of the assessee is premature and is accordingly dismissed.
12. In the result, the appeal filed by the Assessee is dismissed.
Order pronounced in Open Court on 26 - 09- 2016.
Sd/- Sd/-
(S. S. GODARA) (N. K. BILLAIYA)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Ahmedabad: True Copy
Rajesh
Copy of the Order forwarded to:-
1. The Appellant.
2. The Respondent.
3. The CIT (Appeals) -
4. The CIT concerned.