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The Assistant Commissioner of Income Tax, Circle 1 (1) , Mangalore. Versus M/s. Megha Fruit Processing Pvt. Ltd.,

Deduction u/s. 80IB(11A) - provisions of Sec.80AC ignored - whether no deduction under this section shall be allowed to an assessee who does not furnish a return of his income on or before the due date specified under sub-section (1) of section 139? - CIT(A) allowed the claim - Held that:- In the light of the decision of the Special Bench in the case of Saffire Garments (2012 (12) TMI 193 - ITAT RAJKOT) and Avasarala Technologies Ltd.(2013 (3) TMI 644 - ITAT BANGALORE), the plea raised on behalf .....

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RAHAM P. GEORGE, ACCOUNTANT MEMBER For The Appellant : Smt. Nandini Das, Jt. CIT(DR) For The Respondent : Smt. Pratibha, R., Advocate ORDER Per N.V. Vasudevan, Judicial Member This appeal by the Revenue is against the order dated 2.1.2015 of the CIT(Appeals), Mangalore relating to assessment year 2011-12. 2. The effective grounds of appeal raised by the Revenue reads as follows:- 2.1 The Ld. C.I.T (Appeals) erred in allowing the deduction u/s 80IB ignoring the provisions of Sec.8OAC. 2.2 The ld. .....

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r AY 2011-12 was, admittedly, 30.9.2011. In view of the provisions of section 80AC of the Act, the return which was processed by the CPC denied the claim of assessee for deduction u/s. 80IB(11A). The Assessee filed application u/s. 154 praying for rectification of the error in processing the assessee s return of income whereby claim for deduction u/s. 80IB(11A) was denied. The said rectification application was dismissed by an order dated 30.9.13. 4. Against the order of the AO, the assessee fil .....

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.2011 and there was almost a fortnight delay in filing of return. However, the return was field within the due date u/s 139(4). The only reason for which the appellant was denied deduction u/s 80IB (11A) was this delay in filing of return u/s 139(1) which is however filed within the time u/s.139(4) for the A.Y.2011-12. This is the only reason for which the deduction was denied and admittedly, the appellant satisfied all other conditions. In the earlier years and subsequent years, the filing was .....

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turn of income on or before the due date specified in Sec.139(1) of the Act. The said provisions reads as follows: "80AC. Deduction not to be allowed unless return furnished-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 80-IA or section 80-IAB or section 80-IB or section 80-IC or section 80-ID or section 80-IE, no suc .....

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he ITAT, Rajkot Bench, in the case of Saffire Garments Vs. ITO (2013) 140 ITD 6 (Rajkot)(SB) had an occasion to examine identical provisions such as Sec.80AC viz., proviso to Sec.10A(1A) of the Act, as to whether the same were directory or mandatory. The provisions of Sec.10A(1A) of the Act are as follows: "[(1A) Notwithstanding anything contained in sub-section (1), the deduction, in computing the total income of an undertaking, which begins to manufacture or produce articles or things or .....

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as the case may be, and thereafter, fifty per cent of such profits and gains for further two consecutive assessment years, and thereafter; (ii) for the next three consecutive assessment years, so much of the amount not exceeding fifty per cent of the profit as is debited to the profit and loss account of the previous year in respect of which the deduction is to be allowed and credited to a reserve account (to be called the "Special Economic Zone Reinvestment Allowance Reserve Account") .....

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fore the due date u/s.139(1) of the Act was levy of interest u/s.234A of the Act 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 and such interest is payable from the date immediately following the due date for filing return of income and is payable up to the date on which such return of income was furnished by the assessee. Payment of interest u/s.234A of the Act was a conse .....

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mandatory consequence. The Special Bench accordingly held that provisions of the proviso to section 10A(1A) are mandatory and not directory, thus deduction u/s 10A(1A) could not be allowed to an assessee who fails to furnish a return of income on or before the due date specified u/s 139(1). 9. The decisions rendered by the division bench of Tribunal on which the CIT(A) placed reliance are no longer good law in view of the later decision of the Special Bench referred to above. 10. The learned DR .....

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