TMI Blog2017 (8) TMI 730X X X X Extracts X X X X X X X X Extracts X X X X ..... ntial impugned assessment order dated 17th March, 2015 passed by the AO under Section 147 of the Act is also therefore set aside. Any order by the CIT (A) in the further appeal filed against the said order by the Assessee will also therefore not survive. If any further appeal has been filed before the ITAT, then appropriate orders will accordingly be passed in the said appeal. - Decided in favour of assessee. - W.P. (C) No. 3935/2015 - - - Dated:- 10-8-2017 - S. MURALIDHAR PRATHIBA M. SINGH JJ. Petitioner Through: Mr. Gautam Jain Mr. Piyush Kumar, Advocates. Respondent Through: Mr. Rahul Chaudhary, Senior Standing Counsel with Mr. Sanjay Kumar, Junior Standing Counsel for the Revenue. O R D E R Dr. S. Muralidhar, J.: 1. The Petitioner, M/s Fiberfill Engineers, has filed this petition under Article 226 of the Constitution of India challenging an order dated 17 th March, 2015 passed by the Respondent/Deputy Commissioner of Income Tax [hereafter the Assessing Officer ( AO )] under Section 147 of the Income Tax Act, 1961 ( Act ) for Assessment Year ( AY ) 2011-12. Background facts 2. The background to the present petition is that the Petitioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th April, 2014 its counsel was supplied the reasons for reopening the proceedings under Section 148 of the Act on 26th May, 2014. The said reasons read thus: Reasons for Re-opening the case of M/s Fiberfill Engineers .... Date of filing of return:- filed as per record on 16-11-2011 belatedly. For the AY 2011-12, it is seen from the records that the Assessee has declared income of ₹ 4,86,l6,350/- from business, out of which ₹ 2,62,49,797/- has been claimed exempt by the assessee u/s 80IC of the Act. However, this claim of the assessee is not correct, because assessee has filed his return of income on 16-11-2011 after due date (30.09.2011) of filing the return, In view of the provisions of section 80AC of the Income Tax Act which is reproduced as under:- .......... It is quite apparent that the provisions contained in section 80AC are mandatory in nature. Also it specifically provides for consequences that would follow if the return of Income is not furnished, within the time limit specified in section 139(1) of the Act. As well as in view of the decision of the Amritsar bench of the ITAT in Bal Kishan Dhawan HUF v. Income tax Offi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the AO. The first writ petition 10. At that stage the Petitioner filed its first writ petition in this Court on 19th March, 2015 challenging the notice dated 25th March, 2014 issued under Section 148 of the Act and the order dated 25th February, 2015 rejecting the objections filed by the Petitioner thereto. However, this writ petition was not numbered as it was lying in defect and, therefore, was not immediately listed before the Court. The present writ petition 11. Even before the above writ petition was numbered, the AO proceeded with the re-assessment proceedings and passed the order dated 17th March, 2015 adding to the returned income the sum claimed as deduction under Section 80 IC of the Act. This order dated 17th March 2015 was then challenged by the Petitioner by filing the present writ petition on 16th April, 2015. 12. The writ petition filed earlier by the Petitioner on 19th March, 2015 was numbered as W. P. (C) No. 4109 of 2015 whereas the present writ petition, which was filed subsequently was numbered as W.P. (C) No.3935/2015. This is because, as pointed out earlier, the writ petition filed on 19th March, 2015 was lying in defect and perhaps the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said decision of the CBDT be placed on record by the Petitioner or the Respondent. 3. List on 10th August, 2017. The order of the CBDT 16. Today, the Court has been shown by the counsel for the Petitioner a copy of the order dated 9th August, 2017 passed by the CBDT on the application filed by the Petitioner pursuant to the above order dated 17th May, 2017. The CBDT has declined to condone the delay of 46 days in the Petitioner filing its income tax return for AY 2011-12. One reason noted by the CBDT in the said order are that the Petitioner did not make an effort to file the return in time although, the audit report, the profit and Loss (P L) Account, the balance sheet and computation of income were ready by 28th September, 2011 i.e. much before the due date of filing of return and even the TDS certificates were all dated much earlier than September, 2011. Further, the TDS mismatch amount was only ₹ 14,067 whereas the refund claimed in the return was ₹ 14,82,945. Thirdly, the specific details regarding the Petitioner not having received the confirmation from the parties about the TDS deducted, were not mentioned and, therefore, could not be verified. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... whether the time limit under Section 80AC of the Act would override Section 139 (4) of the Act. 20. Mr. Jain contended that with the claim for deduction for AY 2010-11 under Section 80IC of the Act being allowed on merits, there would be no justification to deny such deduction for the immediately following year, i.e., AY 2011-12. This was an additional factor which, according to Mr. Jain, ought to have been taken note of by the CBDT. Mr. Jain pointed out that the claim of the Petitioner for deduction under Section 80 IC of the Act was otherwise a bona fide one which could not be denied. He placed reliance on the decision of the Bombay High Court in Sitaldas K. Motwani v. Director General of Income Tax (International Taxation), New Delhi (2010) 323 ITR 223 (Bom). Assessment proceedings for AY 2010-11 21. In the first place, it requires to be noticed that for AY 2010-11, during the assessment proceedings, the AO had called upon the Assessee to furnish the justification for the delay in filing the return. The Assessee had then contended that Section 139 (4) of the Act was nothing but an extension of Section 139 (1) and, therefore, compliance with the former should be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hose conditions are met, then return filed by the assessee would for all technical purposes be considered being filed u/s 139(1). Thus, keeping in view the various decisions noted earlier, we do not find any reason to deny the claim of assessee on the ground of filing the return belatedly. 26. Thus, the ITAT allowed the appeal of the Assessee for AY 2010-11 both on merits as well as on the ground of the delay in filing the return. Department's appeal for AY 2010-11 27. A perusal of the memorandum of ITA No. 405 of 2016 filed by the Department in this Court against the above mentioned order of the ITAT dated 25th February, 2016 shows that there were four questions urged by it. All these questions pertained to the non-filing of the return by the Petitioner within time with reference to Section 80 AC and Section 139 (4) of the Act. No question was urged by the Department regarding the entitlement of the Petitioner to the deduction under Section 80 IC of the Act on merits. When the said appeal of the Department was admitted by this Court on 15th May, 2017 only two questions of law were framed. Both pertained to the delay in filing of the return by the Assessee for AY ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the other side cannot claim to have vested right in injustice being done because of a non-deliberate delay. 32. In the present case, since the entitlement of the Petitioner to the deduction under Section 80 IC of the Act even for AY 2010-11 has not been questioned by the Department on merits, there is no justification for not viewing the delay of 46 days in filing the return to be bona fide. It is not one of those cases where the delay is so extraordinary so as to not be condoned. 33. Consequently, the Court sets aside the order dated 9th August, 2017 passed by the CBDT under Section 119 (2) (b) of the Act. The result is that the claim of the Petitioner for deduction under Section 80IC of the Act cannot be defeated on the ground of delay in filing the return. Conclusion 34. Since this was the principal reason for reopening of the assessment, the notice dated 25th March 2014 issued by the AO under Section 148 of the Act and the order dated 25th February 2015 passed by the AO rejecting the Petitioner's objections to the reopening of the assessment are set aside. The consequential impugned assessment order dated 17th March, 2015 passed by the AO under Section 14 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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