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TMI Blog2016 (3) TMI 906X X X X Extracts X X X X X X X X Extracts X X X X ..... ounting year and not to the payments already made during the year. For this proposition, he places reliance on the decision of the co-ordinate Bench of this Tribunal in the case of N. PalaniveluVs. ITO (40 ITR (Trib) 325 [Chennai]). 4. Departmental Representative vehemently supports the orders of the lower authorities and submits that no details have been furnished as to whether the payments have been made during the year or payments are outstanding by the end of the accounting year and for this purpose the matter should go back to the Assessing Officer for verification. 5. Heard both the parties. Perused the orders of lower authorities. This Bench is consistently holding that in case of disallowance under section 40(a)(ia) for non-deduction of tax at source the amounts outstanding as on 31st March of the accounting year only have to be disallowed and not the amounts which were already paid during the year, in view of the decision of Special Bench of the Tribunal in the case of Merliyn Shipping & Transports Vs. ACIT (136 ITD 23). In the case of N. Palanivelu Vs. ITO (supra) as relied on by the counsel, the co-ordinate Bench held as under:- "3. We have heard both the sides and pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee is approaching the Board seeking permission for condonation of delay. 9. Departmental Representative places reliance on the Rajkot Special Bench decision in the case of M/s. Saffire Garments Vs. ITO (140 ITD 6) and submits that an identical issue has been decided by the Special Bench in favour of the Revenue. 10. We have heard both the parties. Perused orders of lower authorities and the decisions relied on. The issue in appeal is whether the assessee is entitled for deduction under section 10B even though the assessee filed return of income belatedly and not before the due date specified under section 139(1) of the Act. This issue has been elaborately considered by the Special Bench in the case of M/s. Saffire Garments (supra), wherein it is held that proviso to section 10A(1A) is mandatory and not merely directory. The decision rendered by the Special Bench cited above though in the context of proviso to section 10A(1A) is identical to the proviso to section 10B of the Act and consequently applies to the facts of the assessee's case. The Special Bench while holding so held as under:- "2. The assessee is a partnership firm. The assessee filed return of income declaring t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee on 31.01.2007. It was submitted by the Ld. A.R. before us that the audit report was filed within the due date allowed u/s 139(1) of the Income tax Act, 1961. He placed reliance on the following judicial pronouncements, copies of which are given in paper book III: (a) CIT v. HardeodasAgarwalla Trust [1992] 198 ITR 511(Cal.) (b) Church's Auxiliary for Social Action v. DGIT (Exemption) [1993] 2 325 ITR 362(Delhi) (c) CIT v. Gujarat Oil & Allied Industries [1993] 201 ITR 325(Guj.) (d) CIT v. Shivanand Electronics [1994] 209 ITR 63/ 75 Taxman 93(Bom.). (e) ITO v. VXL India Ltd. [2009] 312 ITR 187(Guj.) (f) Bajaj Tempo Ltd. v. CIT [1992] 196 ITR 188/ 62 Taxman 480(SC) 4.1 Synopsis of contentions of the assessee was also filed and the same was also duly considered. 5. As against this, it was submitted by the Ld. D.R. that the fourth proviso to section 139(1) is specific which shall prevail on general provisions. He also placed reliance on the judgement of Hon'ble Apex Court rendered in the case of Prakash Nath Khanna v. CIT [2004] 266 ITR 1/135 Taxman 327. Reliance was also placed on the Tribunal decision rendered in the case of Bal Kishan Dhawan HUF v. ITO [2012] 5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cent of profits and gains derived from the export of such articles or things or computer software for a period of five consecutive assessment years beginning with the assessment year relevant to the previous year in which the undertaking begins to manufacture or produce such articles or things or computer software, 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 Re-investment Allowance Reserve Account") to be created and utilised for the purposes of the business of the assessee in the manner laid down in sub-section (1B) : Provided that 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." 9. We are also required to consider Section 139(1) and the 4th provis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r BOI and Artificial Judicial (sic) Person, the requirement is this 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. We find that the provisions of the proviso to Section 10A(1A) is nothing but a consequence of failure of the assessee to file the return of income within the due date prescribed u/s 139(1) of the Income tax Act, 1961. For such a failure of the assessee to file his return of income within the due date prescribed u/s 139(1) of the Income tax Act, 1961, this is not the only consequence. One consequence of such failure is prescribed in Section 234A of the Income tax Act, 1961 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 return of income and is payable up to the date on which such return of income was furnished by the assessee and if the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eturn of income within the due date as required u/s 139(1) of the Income tax Act, 1961. One of such consequence is the provisions of Section 276CC as per which if the assessee fails to file the return of income within the due date prescribed under sub-section (1) of Section 139 of the Act then he shall be punishable for rigorous imprisonment along with fine and the quantum of such imprisonment and fine is dependent on the amount of tax which would have been evaded if the failure had not been detected. This issue was examined by Hon'ble Apex Court in the case of Prakash Nath Khanna (supra) as cited by the learned DR and it was held by the Hon'ble Apex Court in that case that even if the return of income is filed in terms of subsection (4) of Section 139 and it does not dilute infraction in not furnishing return in due time as prescribed u/s 139(1) of the Act. This judgement also supports the view taken by us while answering question NO.1 as per above paras. When even for the purpose of prosecution also, it was held by the Hon'ble Apex Court that even if the return of income furnished by the assessee within the time allowed u/s 139(4), it does not dilute infraction in not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under Chapter VIA, it cannot be said that this requirement of filing return of income is a procedural aspect. 15. Regarding various judgments cited by the Ld. A.R. in this regard, we find that some of these judgments are rendered by the division bench of the Tribunal and hence not binding on us. Regarding other judgements of various High Courts and Hon'ble Apex Court, we find that the same are not in respect of failure of the assessee for filing the return of income within the due date prescribed u/s 139(1) of the Income tax Act, 1961 and hence not applicable. Still, we discuss, each of those judgments cited before us as under : - The first judgement submitted in paper book II is the judgement of Hon'ble Apex Court rendered in the case of Director of Inspection of Income Tax v. Pooran Mall & Sons [1974] 96 ITR 390. In that case, the issue involved was regarding the validity of the order passed by the A.O. u/s 132(5) for retaining the seized assets and hence, this judgement is not relevant in the present case. - The 2nd judgement cited is the judgement of Hon'ble Madhya Pradesh High court rendered in the case of CIT v. Panama Chemical Works [2000] 113 Taxman 717. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee was entitled to deduction. Since the facts are different, this judgement of Hon'ble Apex Court is also not relevant in the present case. - The next judgement cited before us is the judgement of Hon'ble Calcutta High court rendered in the case of HardeodasAgarwalla Trust's case (supra). In that case, the issue in dispute was regarding furnishing of audit report along with return of income for the purpose of claiming exemption u/s 11 of the Income tax Act, 1961 and not the dispute was not regarding filing of return of income u/s 139(1) of the Act and hence, this judgement of Hon'ble Calcutta High Court is also not applicable in the present case. - The next judgement cited before us is the judgement of Hon'ble Delhi High Court rendered in the case of Church's Auxiliary for Social Acton's case (supra). In that case, the dispute was regarding deduction u/s 80G of the Income tax Act, 1961 and as per the facts of that case, the objection was regarding failure of assessee in rendering accounts to the competent authority within the prescribed period and it was held that such a requirement is directory and not mandatory. In the present case, the dispute ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8 ITR 838. The conclusion as per this judgment is reproduced below from the Head notes: "Loss return can be filed within time specified by s.139(4) and once that return is filed within time it would be deemed to be in accordance with law and loss had to be determined and carried forward." In view of this conclusion in this judgment that loss return can be filed within time specified u/139(4), this judgement is also not applicable in the present case because in the present case, the dispute is regarding filing of return of income within time allowed u/s 139(1) of the Income tax Act, 1961 and not u/s 139(4) of the Income tax Act, 1961 and hence, this judgement is also not applicable in the present case. 16. We have discussed all the judgments which were cited by the Ld. A.R. in the synopsis as well as copies of which are submitted in the paper book II and III and we have seen that none of these judgments is relevant in the present case. 17. In view of our above discussion, we have no hesitation in holding that the provisions of proviso to Section 10A(1A) is mandatory and not merely directory. 18. Now, we examine the 2nd question (b). In our considered opinion, since we have answ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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