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TMI Blog2016 (8) TMI 1392X X X X Extracts X X X X X X X X Extracts X X X X ..... n directing the AO to allow, if the employees contributions to ESI is paid before the due date of filing of return. Employee contributions are not covered by section 43B of the Act, but covered u/s 36(1)(v) r.w.s. 2(24)(x) of the Act. Parliament has provided separate section to disallowance for "employees Contribution", if not paid within the time allowed under the relevant Act. 4. The Id. CIT(A) erred in law and on facts in deleting the disallowance of Rs. 1,80,634/- on account of depreciation on electrical installation. 3. The assessee company is running Multiplex Theatre along with Related Services. The return of income was filed on 31.03.2010 declaring total income of Rs. 86,28,840/-. The return was selected for scrutiny assessment and accordingly statutory notices were issued and served upon the assessee. 4. While scrutinizing the return of income, the A.O. noticed that the Assessee has claimed deduction u/s. 80IB of the Act at Rs. 73,09,275/-. Drawing support from the provisions of Section 80AC, the A.O. was of the firm belief that the deduction u/s. 80IB is not allowable unless the return of income is furnished on or before due date specified u/s. 139(1) of the Act. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Special Bench by the judgment of the Tribunal in the case of Lakshmi Energy & Foods Ltd. It is the say of the ld. D.R. that the decisions relied upon by the ld. CIT(A) relates to the filing of the audit report during the course of the assessment proceedings and not relating to the delay in filing of the return of income. The ld. D.R. continued by stating that even the Tribunal in assessee's own case in A.Y. 2005-06 allowed the claim of deduction because the audit report was filed during the course of the assessment proceedings. Relying upon the decision of the Hon'ble jurisdictional High Court in the case of Gujarat Oil and Allied Industries 201 ITR 325. The ld. D.R. pointed out that in none of these cases; there was a delay in filing of the return of income. The ld. D.R. strongly stated that during the year under consideration, there is a delay in filing of the return of income as the return has not been filed within the due date prescribed by the provisions of Section 139(1) of the Act. Therefore, the claim of deduction u/s. 80IB of the Act is directly hit by the provisions of Section 80AC of the Act. 12. Per contra, the ld. counsel for the assessee reiterated what has been sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee could not be denied deduction under section 10A. * Instant Special Bench of the Tribunal was constituted to consider the following questions. 15. On the aforementioned facts, the Special Bench held as under:- Scheme of the Act with regard to filing of returns In order to decide the issue, I he whole scheme of the Act needs to be considered. The assessee is required to file the return of income within the prescribed time as per the provisions of section 139(1). This provision of section 139(1) is applicable to all companies and firms irrespective of the fact as to whether they are earning taxable income or not for the current year i.e. from 1-4-2006. In respect of other persons such as individual, HUF, AOP or BOI and artificial Juridical person, the requirement is 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. [Para 11] Consequences of failure to file return within due date It is found that the provisions of the proviso to section 10A(IA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITO (supra). Similarly in ITO Vs. S. Venktaya(supra), Hyderabad Bench of the Tribunal held that if return was filed late then despite the provisions of section 80AC the deduction was held to be allowable if such delay is beyond the control of the assessee. This position also stands reversed after the decision of Special Bench in case of Saffire Garments Vs. 1TO (supra) wherein it is clearly held that the provisions of section 8oAC are of mandatory nature. As far as decision of Hon'ble Delhi High Court is concerned, the same is distinguishable on facts because in that case the assessee did not have positive gross total income in the initial year, therefore could not claim the deduction for such initial year. Thereafter for Assessment year 2001-02 the assessee did not claim deduction despite of the positive profits. This omission was noticed somewhere in 2004 by which time filing of revised return has elapsed and the assessee moved a petition u/s 264 which was held to be maintainable because the deduction was not claimed because of bonafide mistake. Therefore clearly on these facts the applicability of provisions of section 8oAC was not there for consideration because this provis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . CIT(A) has followed the decision of the Hon'ble High Court of Rajasthan in the case of RG Ispat Ltd. 272 ITR 383 and also the decision of the Tribunal in the case of Ahmedabad Benches in the case of Marwar Hotels Ltd.
21. We find that an identical issue was considered by the Tribunal in assessee's own case in ITA No. 3175/Ahd/2010 for A.Y. 2005-06, the relevant findings of the Tribunal read as under:-
9. We have heard the rival contentions and perused the material on record. It is undisputed that electrical items are fitted with projector and other film exhibition systems. Without electrical items, the projector as well as exhibition systems cannot be run. Therefore, it is a part and parcel of the plant and machinery. Thus, the assessee is entitled to higher rate @ 25%. We confirm the order of the CIT(A) and dismiss the Revenue's appeal on this ground.
22. Respectfully following the findings of the Co-ordinate Bench, we decline to interfere with the findings of the ld. CIT(A). Ground no. 4 is accordingly dismissed.
23. In the result, the appeal filed by the Revenue is partly allowed.
Order pronounced in Open Court on 03- 08- 2016. X X X X Extracts X X X X X X X X Extracts X X X X
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