TMI Blog2017 (4) TMI 1609X X X X Extracts X X X X X X X X Extracts X X X X ..... for deduction u/s.10B also as the mandatorily required audit report in Form 56G was not filed by the assessee alongwith the return of income u/s.139(1) of the Act. Therefore, we set aside the order of the CIT(A) and restore the order of the Assessing Officer and allow the ground of appeal of the revenue. - ITA No. 50/CTK/2015 - - - Dated:- 26-4-2017 - S/SHRI N.S SAINI, ACCOUNTANT MEMBER AND KULDIP SINGH JUDICIAL MEMBER For the Assessee : Shri Bibek Mohanty, AR For the Revenue : Shri Kunal Singh, CIT DR ORDER Per N.S.Saini, AM This is an appeal filed by the assessee against the order of CIT(A)- II, Bhubaneswar, dated13.11.2014, for the assessment year 2011-12. 2. The sole issue involved in this appeal is that the ld CIT(A) erred in deleting the addition of Rs. 3,67,15,136/- as wrong claim of deduction u/s.10A of the I.T.Act. 3. We have heard the rival submissions and perused the orders of lower authorities and materials available on record. The undisputed facts of the case are that the assessee filed its e-return of income for the assessment year 2011-12 on 27.9.2011 showing income of Rs.14,80,454/- after claiming deduction of Rs.3,93,09,436/- u/s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income u/s.139(1) of the Act has been considered and decided by the Rajkot Special Bench Bench of the Tribunal in the case of Saffire Garments Versus Income-tax Officer, 140 ITD 6 (SB)(Raj), wherein, it has been held as under: 11. The 1st question raised before us is this as to whether this proviso to Section 10A(1A) of the Income tax Act, 1961, is mandatory or merely directory. In order to decide this issue, we feel that we have to consider the whole scheme of the Act. 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 01.04.2006. In respect of other persons such as individual, HUF, AOP or BOI and Artificial Judicial 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 39(1) of the Income tax Act, 1961. This is by now a settled position of law that charging of interest under various sections including u/s 234A of the Income tax Act, 1961, is mandatory. When one of the consequences for not filing return of income within the due date prescribed u/s 139(1) of the Income tax Act, 1961 is mandatory then, other consequence of the same failure of the assessee cannot be directory and the same is also mandatory. In our considered opinion and in view of our above discussion, the provisions of the proviso to Section 10A(1A) is mandatory and not directory and, therefore, question (a) referred to us is answered in negative and it is held that this proviso to Section 10A(1A) of the Income tax Act, 1961 is mandatory. 12. We now examine and discuss other consequences also for the failure of the assessee to file the return 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on ble Apex Court cited by the Ld. D.R. 14. The 2nd submission of the Ld. A.R. in the written submission is this that requirement of filing of return of income is procedural aspect and, therefore, it should be considered as directory and not mandatory. In support of this contention also, reliance has been placed on various decisions submitted by the assessee in the paper book II and III. We do not find any merit in these submissions of the assessee also because when consequences of not filing the return of income within the due date prescribed u/s 139(1) of the Income tax Act, 1961 are so grave i.e. charging of interest u/s 234A, possibility of prosecution u/s 276CC and denial of various deductions u/s 10A, 10B, 10BA and various sections 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 fil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ispute in the earlier decision of Hon ble Delhi High Court rendered in the case of Axis Computers (India) (P) Ltd. (supra) and for the same reasons, this judgement is also not applicable in the present case. The next judgement cited before us is the judgment of Hon ble Apex Court rendered in the case of Bajaj Tempo Ltd. v. CIT (62 Taxman 480). In that case, the dispute before the Hon ble Apex Court was regarding allowability of deduction u/s 15C of 1922 Act corresponding to Section 80J of Income tax Act, 1961 and the facts were that the industrial undertaking was established in a building taken on lese, which was used previously for other business. Under these facts, it was held that the assessee 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 CIT v. Hardeodas Agarwala Trust (198 ITR 511). 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 disp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dit report along with return of income for deduction u/s 80J(via) and it was held that it is not mandatory in strict sense. In the present case, the dispute is regarding filing of return of income within due date prescribed u/s 139(1) of the Income tax Act, 1961 and hence, this judgement is also not relevant in the present case. The next judgment is the judgement of Hon ble Gujarat High Court rendered in the case of ITO v. VXL India Ltd. (312 ITR 187). In that case also, dispute was regarding filing of audit report and hence, this judgement is also not relevant. The next judgement cited before us is the judgement of Hon ble Calcutta High court rendered in the case of Presidency Medical Centre (P) Ltd. v. CIT (108 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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