2022 (12) TMI 1447 - AT - Income Tax

Deduction u/s 80P - Assessee had not filed it s return within the due date u/s 139(1) - HELD THAT - We make it clear that the assessee has indeed quoted Section 80AC(ii) of the Act that although it has been prescribed in the relevant statute to claim the impugned deduction only after filing Section 139(1) return before the due date this tribunal s recent coordinate bench in the case of M/s. Krushi Vibhag Karmchari Vrund Sahakari Path Sanstha 2022 (10) TMI 348 - ITAT NAGPUR has held the foregoing condition(s) as directory and not a mandatory one. We find no merit in assessee s foregoing arguments claiming Section 80AC(ii) of the Act as a mere directory provision in the light of Commissioner vs. Dilip Kumar Company 2018 (7) TMI 1826 - SUPREME COURT that provisions in a taxing statute (including deductions) have to be strictly interpreted only. We next observe that the legislature has interpreted no such deduction and unless in Section 80AC(ii); for the period after 01.04.2018 by way of negative covenants which forms a mandatory stipulation only in light of PRINCIPLES OF STATUTORY INTERPRETATION by Justice G.P. Singh (termed as the treatise on the subject of statutory constructions) under Chapter 5 thereof. So far as the assessee s reliance on this tribunal s learned coordinate bench s decision (supra) is concerned the same hardly forms a binding precedent once dealing with assessment year 2009-10 only i.e. before 01.04.2018. We thus uphold the learned lower authorities action under challenge therefore denying sec.80P deduction in issue

Summary

Issues:
1. Appeal against NFAC Delhi's orders for A.Ys. 2018-19 & 2019-20 regarding Section 143(1) proceedings.
2. Dispute over Section 80P deduction claims due to late filing of returns under Section 139(1) of the Income Tax Act, 1961.

Analysis:
The judgment by the Appellate Tribunal ITAT Cochin involved twin appeals against the National Faceless Appeal Centre (NFAC) Delhi's orders for the assessment years 2018-19 and 2019-20 under Section 143(1) of the Income Tax Act, 1961. The primary issue revolved around the denial of Section 80P deduction claims by the assessee due to late filing of returns under Section 139(1) of the Act. The assessee contended that the lower authorities erred in law and on facts by rejecting the deduction claims totaling Rs. 14,54,100/- for A.Y. 2018-19 and Rs. 35,91,710/- for A.Y. 2019-20, resulting in demands raised against them.

During the hearing, the counsel representing the assessee argued that the lower authorities' decision was incorrect, emphasizing that the requirement to file returns within the due date under Section 139(1) should not be a strict condition for claiming the deduction under Section 80P. However, the Tribunal, after considering the submissions, ruled against the assessee's stand. It referenced Section 80AC(ii) of the Act, which mandates filing returns before the due date for claiming deductions, but cited a previous decision by a coordinate bench to deem this requirement as "directory" rather than mandatory.

The Tribunal further analyzed the legal principles governing the interpretation of taxing statutes and deductions, citing the case of Commissioner vs. Dilip Kumar & Company (2018) 9 SCC 1 (SC) (FB) to emphasize the need for strict interpretation of provisions. It highlighted that the legislature's language in Section 80AC(ii) post-01.04.2018 constituted a mandatory stipulation, as per established principles of statutory interpretation. The Tribunal dismissed the assessee's reliance on a previous decision by a coordinate bench, noting that it was not binding as it pertained to a different assessment year.

Ultimately, the Tribunal upheld the lower authorities' decision to deny the Section 80P deduction claims, citing the strict interpretation required for provisions in taxing statutes. The twin appeals by the assessee were consequently dismissed by the Tribunal, and the judgment was pronounced on 13th December 2022.