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Income Tax Officer-3 (4) , Thane (W) Versus M/s. Uma Developers Shop No. 2, Mayur CHS Ltd.

2016 (9) TMI 992 - ITAT MUMBAI

Allowability of deduction claimed u/s 80IB(10) - contravention of the provisions of section 80AC of the Act in not filing the return of income for A.Y. 2012-13 within the period stipulated under section 139(1) - Held that:- CIT(A) has considered at length the issue of whether the AO’s disallowance of the assessee’s claim for deduction under section 80IB(10) of the Act, for the reason that the return of income for A.Y. 2012-13 was filed beyond the due date stipulated under section 139(1) of the A .....

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ted under section 139(1) of the Act, the deduction should not be disallowed under section 143(1) of the Act merely in view of the provisions of section 80C of the Act. - We also find on a perusal of the provisions of section 143(1) of the Act, that the AO’s action in disallowing the assessee’s claim for deduction under section 80IB(10) of the Act, since the return of income was filed beyond the period stipulated under section 139(1) of the Act in view of the provisions of section 80AC, is b .....

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16 - Shri Jason P. Boaz, Accountant Member and Shri Sandeep Gosain, Judicial Member For The Appellant : Shri A.K. Dhondial For The Respondent : Shri Vijay Mehta ORDER Per Jason P. Boaz, A.M. This appeal by Revenue is directed against the order of the CIT(A)-1, Thane dated 05.09.2014 for A.Y. 2012-13. 2. The facts of the case, briefly, are as under: - 2.1 The assessee firm filed its return of income for A.Y. 2012-13 on 31.03.2013 after claiming deduction of ₹ 3,53,17,770/- under section 80I .....

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section 154 of the Act contending that the disallowance of the assessee s claim for deduction under section 80IB(10) of the Act was beyond the scope of provisions of section 143(1) of the Act. The assessee s application was rejected by the ACIT (CPC) vide order under section 154 of the Act dated 16.08.2013 on the ground that the assessee s claim for deduction under section 80IB(10) of the Act was not allowable as per provisions of section 80AC of the Act as the return of income for A.Y. 2012-13 .....

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and of the ITAT, Mumbai, Bangalore and Ahmadabad Benches, even in cases where the return of income was filed beyond the due date specified under section 139(1) of the Act, the deduction under section 80IB(10) was either allowed or was set aside to the files of the authorities below for consideration of the eligibility of the claim with the direction that the claim for deduction should not be denied merely on the ground that the return of income was filed beyond the time specified under section .....

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fficer (AO) was not justified in denying the assessee its claim for deduction under section 80IB(10) thereunder. In that view of the matter, the learned CIT(A) directed the AO to delete the disallowance of the assessee s claim for deduction under section 80IB(10) of the Act and thereby allowed the assessee s appeal. 3.1 Aggrieved by the order of the CIT(A)-1, Thane dated 04.09.2014, Revenue has preferred this appeal raising the following grounds: - 1. Whether on the facts and in the circumstance .....

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sions of section 80AC of the Act in not filing the return of income for A.Y. 2012-13 within the period stipulated under section 139(1) of the Act. 3.3.1 Per contra, the learned A.R. for the assessee supported the finding rendered by the learned CIT(A) in the impugned order. The learned A.R. reiterated the submissions put forth before the learned CIT(A) in the impugned order. According to the learned A.R. the learned CIT(A) has correctly held that the adjustment made by the AO for disallowing the .....

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able views on the merits of the assessee s claim, the issue is debatable and therefore the disallowance of the assessee s claim under section 143(1) of the Act could not have been made and was untenable. 3.3.2 The learned A.R. for the assessee further submitted that the issue in the case on hand is whether when the assessee has not filed the return of income within the period stipulated under section 139(1) of the Act, but filed the same within the extended period under section 139(4) of the Act .....

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(Bom) and of the Coordinate Bench of this Tribunal in the case of Yash Developers (ITA No. 809/Mum/2011). It was submitted that in view of the above, the learned CIT(A) s order allowing the assessee s appeal be upheld. 3.4.1 We have heard the rival contentions of both the parties and perused and carefully considered the material on record, including the judicial pronouncements cited. In the impugned order, the learned CIT(A) has held as under at paras 6 to 11, while allowing the assessee s appe .....

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ation in the return. In this regard, the relevant provisions of section 143(1) are reproduced as under for ready reference - 143. [(1) Where a return has been made under section 139, or in response to a notice under sub-section (1) of section 142, such return shall be processed in the following manner, namely:- (a) the total income or loss shall be computed after making the following adjustments, namely.- (i) any arithmetical error in the return, or (ii) an incorrect claim, if such incorrect cla .....

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s not filed return of income within the time allowed u/s 139(1) but has filed the same within the time allowed u/s 139(4), can deduction u/s 801B(10) be disallowed u/s 143(1)(a) in terms of provisions of section 80AC. The provisions of section 80AC are reproduced as under for ready reference - Deduction not to be allowed unless return furnished. 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 .....

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B(10) is not allowable to the assessee. However, various judicial authorities have interpreted these provisions to mean that section 139(1) is directory not mandatory and that section 139(1) has to be read with section 139(4). Hon'ble Mumbai High Court in the case of Trustees of Tulsidas Gopalji Charitable & Chaleshwar Temple Trust (supra) held as under - 5. On a careful reading of s. 139 of the Act, we are of the clear opinion that sub-ss. (1) and (4,) of s. 139 have to be read together .....

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d. 6. Similar controversy came up before the Supreme Court in CIT vs. Kulu Valley Transport Co. Pvt. Ltd. (1970) 77 ITR 518 (SC). In that case, a dispute arose in regard to the right of an assessee to get the benefit of losses being set off and carried forward under s. 24(2) of the IT Act, 1922 which provided that in order to get the benefit of s. 24(2), the assessee must submit his loss return within the time specified by s. 22(1) (corresponding to s. 139(1) of 1961 Act.] Sec. 22(3) of the 1922 .....

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with s. 22(3) for the purpose of determining the time within which the return has to be submitted. It was observed that s. 22(3) was merely a proviso to s. 22(1). On the aforesaid reasoning, it was held that a return of income profits or gains or of a business must be considered as having been made within the time prescribed if it is made within the time specified in s. 22(3). In other words, if s. 22(3) is complied with, s. 22(1) must also be held to have been complied with. If compliance has .....

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n of income within the time limit u/s. 139(1) and when section 80AC specifically, provides that no deduction shall be allowed unless return is furnished within time limit of section 139(1)." The ITAT held as under - 6. It is also relevant to state that in respect of delay in .filing the return of income on the basis of which the AO also denied deduction us. 80IB(10) of the Act in respect of assessment year 2008-09, which are Ground Nos. 3 and 4 of the appeal taken by department, the ld. CIT .....

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Agarwal (339 ITR 610) (P&H) and it was held that subsection (4) of section 139 has to be read along with sub-section (1) of section 139 and therefore due date for ,furnishing the return of income according to section 139 was subject to extended period provided u/s. 139(4) of the Act. Ld. CIT(A) stated that similar issue was also considered by the Hon'ble Jurisdictional High Court in the case of Trustees of Tulsidas Gopalji Charitable & Chaleshwar Temple Trust V/s CIT [1994] 207 ITR .....

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However, it is relevant to state that the ITAT, Ahmadabad Bench also considered similar issue in the case of Parmeshwar Cold Storage P. Ltd. V/s ACIT (08 1TR (Trib) 172 (Ahmd) in the context of claim of deduction u/s. 80IB wherein also the return was not .filed within the time prescribed u/s. 80AC of the Act but the Tribunal held that the claim of deduction u/s. 80IB of the Act should be adjudicated on merits and the matter was restored to CIT(A). The ld. CIT(A) has in para 9 also considered th .....

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scribed as per section 139(1) of the Act. In view of above, the department is in further appeals before the Tribunal. 9. In respect of grounds No. 3 and 4, the relevant facts which we have already discussed hereinabove, we observe that the aid issue is covered in favour of assessee by the decision of Hon'ble Bombay High Court in the case of Trustees of Tulsidas Gopalji Charitable & Chaleshwar Temple Turst (supra) which has been considered by the ld CIT(A) while deciding the same in favou .....

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it is seen that even in cases where the return of income was filed beyond the due date as prescribed u/s. 139(1), deduction u/s. 80IB(10) was either allowed or the case was set aside to the CIT(A)/AO with the directions that the deduction should not be disallowed merely on the ground that the return of income was filed beyond the time allowed u/s 139(1) of the Act. Thus section 80AC was a subject matter of discussion and interpretation as held in various case laws. Therefore, the disallowance of .....

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lip;. 3.4.2 On an appreciation of the findings rendered by the learned CIT(A) while allowing the assessee s appeal (supra), we observe that the learned CIT(A) has considered at length the issue of whether the AO s disallowance of the assessee s claim for deduction under section 80IB(10) of the Act, for the reason that the return of income for A.Y. 2012-13 was filed beyond the due date stipulated under section 139(1) of the Act (but was filed within the time allowed under section 139(4) of the Ac .....

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