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2016 (9) TMI 802 - ITAT BANGALORE

2016 (9) TMI 802 - ITAT BANGALORE - TMI - Deduction u/s. 80IB - AO disallowed by the AO on the ground that the return was not filed before the due date prescribed u/s. 139(1) of the Act in the light of provisions of section 80AC of the Act - Held that:- The provisions of section 80AC are very clear that if the return is not filed before the due date specified under sub-section (1) of section 139 of the Act, no deduction u/s. 80IB can be allowed to the assessee. The provisions of section 80AC wer .....

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esan, CA For The Respondent by : Shri K.R. Narayana, Jt. CIT(DR) ORDER Per Sunil Kumar Yadav, Judicial Member This is an appeal preferred by the assessee against the order of the CIT(Appeals)-III, Bangalore dated 19.10.2012 for the assessment year 2009-10 inter alia on the following grounds:- 1. The orders of the authorities below in so far as they are against the appellant are opposed to law, equity, weight of evidence, probabilities, facts and circumstances of the case. 2. The learned CIT[A] i .....

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the Act and there is no justification for invoking the provisions of Section 80AC of the Act, to deny the legitimate claim u/s.80IB of the Act. 3. Without prejudice to the above, the provisions of Section 80AC of the Act are only directory and not mandatory and should be construed so as to advance the intention of the legislature to grant the incentive u/s.80IB of the Act and therefore, Section 80IB of the Act should have been liberally construed so long the return is filed validly u/s.139[4] of .....

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n of the Hon'ble Supreme Court in the case of MEERA & CO., reported in 224 ITR 635 and such income is chargeable in its hands and not in the hands of the appellant, such share of income attributable to appellant after the grant of deduction u/s.80OB of the Act, is entitled to rebate in view of provisions to section 86 of the Act and at any rate there is no liability to tax. 5. Without prejudice to the right to seek waiver with the Hon'ble CCIT/DG, the appellant denies itself liable t .....

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f hearing, the ld. counsel for the assessee has moved an application with a request for admission of the following additional ground:- 1. The authorities below have erred in assessing the income from the joint development under the agreement dated 18/03/2004 for the assessment year under appeal, even though the income from joint development agreement does not relate to the previous year relevant to the assessment year under appeal having regard to the ratio of the decision of the Hon ble Karnata .....

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Karnataka High Court in the case of Dr. T.K.Dayalu reported in 60 DTR 403, which was noticed by the CIT [Appeals]. 4. The request for admission of additional grounds is strongly opposed by the ld. DR with the submission that the appellant right from the stage of filing of the return of income till the appeal before the CIT(Appeals), had admitted that it is involved in the business of development of housing projects, accordingly it has claimed deduction u/s. 80IB(10) of the Act. But now through t .....

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deduction u/s. 80IB(10) after recording the fact that the assessee has not filed return of income within the time laid down u/s. 139(1) of the Act, following the provisions of section 80AC. Now the assessee has sought relief on the ground that the provisions of section 80AC are only directory and not mandatory. Therefore, the return filed u/s. 139(4) is in time and assessee is entitled to deduction u/s. 80IB(10) of the Act. 6. The ld. DR submitted that this issue is squarely covered by the orde .....

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tending that he has entered into joint development agreement since beginning, but it was not taken into account by the AO. Since all evidences are available in this regard, the additional ground should be admitted and adjudicated at the threshold. 8. So far as the provisions of section 80AC are concerned, the ld. counsel for the assessee submitted that this provision is directory and not mandatory and if the assessee has filed return u/s. 139(4) claiming deduction u/s. 80IB of the act, the deduc .....

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the assessee is engaged in the business of real estate developers and builders and it has claimed deduction u/s. 80IB of the Act and deduction u/s. 80IB of the Act can only be claimed, when the assessee offers its income on the construction of the project. But it was disallowed by the AO and before the CIT(Appeals) the assessee has reiterated its contentions. Nowhere the assessee has made out a case that it entered into joint development agreement with the third party and it has earned capital .....

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on 80AC are very clear that if the return is not filed before the due date specified under sub-section (1) of section 139 of the Act, no deduction u/s. 80IB can be allowed to the assessee. The contention of the assessee that the provisions of section 80AC is directory and not mandatory was examined by the Tribunal in the case of ITO v. Dr. K. Balaraman (supra) and the Tribunal has conclusively held that the provisions of section 80AC were mandatory and not only directory. The relevant observatio .....

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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 consequence for failure to file return of before the due date u/s. 139(1) and the same is mandatory. The Special Bench held 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 pr .....

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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. 07. The learned DR also brought to our notice the decision rendered by the ITAT Bangalore Bench in the case of Avasarala Technologies Ltd. Vs. DCIT ITA No.951 to 954/Bng/2011 order dated 8.3.2013, wherein in the context of deduction u/s.80-IB(10) of the Act, the decision of the Special Bench in the case of Saffi .....

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