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TMI Blog2024 (7) TMI 1578X X X X Extracts X X X X X X X X Extracts X X X X ..... g reliance on a case law whose facts are not applicable in the instant case. 4. The learned CIT (A) has erred in placing reliance on a case law stating the same to be Jurisdictional whereas the same is not. 5. For these and other wounds that may be adduced at the time of hearing, it is prayed that the order of the learned CIT (A) may be set aside and that of the Assessing Officer restored. As is evident, the sole issue that arises for our consideration is assessee's claim of deduction u/s 10AA in the light of the fact the requisite Form No. 56F as required by the statute was filed belatedly. 2. The Registry has noted delay of 4 days in the appeal, the condonation of which has been sought by the Ld. Sr. DR. Considering the period of delay, we condone the delay and admit the appeal for adjudication on merits. 3. The Ld. Sr. DR, at the outset, referred to the recent judgment of Hon'ble Supreme Court in the case of Pr. CIT Vs Wipro Ltd. (2022) 140 Taxmann.com 223 (SC) as well as other decisions in Checkmate Services P. Ltd Vs. CIT (2022) 143 Taxmann.com 178 (SC) & Britannia Industries Ltd Vs. CIT (2005) 148 Taxman 468 (SC) to support the case of the revenue that de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... support the submissions. 6. The Ld. CIT(A), following the decision of Kolkata Tribunal in the case of DIC Fine Chemicals P. Ltd Vs. DCIT in ITA No. 2502/Kol/2018 dated 12-06-2018 and the decision of Hyderabad Tribunal in ACIT vs. Hind Speed Technologies (ITA No. 1600/Hyd/2014 dated 08-12-2017), concurred with the claim of the assessee and directed Ld. AO to allow the impugned deduction. Aggrieved as aforesaid, the revenue is in further appeal before us. Our findings and Adjudication 7. From the facts, it is very much clear that the assessee has filed original return of income within extended due date. In this return, the assessee has claimed impugned deduction u/s 10AA. It could thus be seen that no new claim was made by the assessee and this claim was very much made at the time of filing or original return of income only which has been filed within extended due date. The only deficiency on the part of the assessee is that it has failed to file requisite Form No. 56F along with the return of income. 8. The provisions of Sec. 10AA provide for certain deduction to an assessee who begins to manufactures or produce certain article / things within prescribed perio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion was not claimed u/s 10B and the assessee claimed carry-forward of loss. The Ld. AO rejected the withdrawal of such exemption holding that the assessee did not furnish the declaration in writing before the due date of filing of return of income, which was 31- 10-2001. Finally, Ld. AO denied carry forward of loss u/s 72. The Ld. CIT (A) upheld the action of Ld. AO. The Tribunal decided this issue in assessee's favour by observing that the requisite declaration as required u/s 10B (8) was filed by the assessee before due date as specified u/s 139(1). The Hon'ble High Court dismissed the appeal of the revenue and the revenue preferred furrier appeal to Hon'ble Supreme Court. It was submitted on behalf of the revenue that the requisite declaration as required under Sec. 10B(8) was filed beyond the due date of filing of return income and therefore, the assessee was not entitled to claim carry forward of losses u/s 72. The Tribunal wrongly noted that such declaration was filed before the due date. It was also contended that Hon'ble High Court erred in observing that the requirement of Sec. 10B (8) was a procedural requirement. Further, Hon'ble High Court did not properly appreciate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icate remained exactly the same after withdrawal of the claim made u/s 10B and the respondent making the claim for carry forward of loss. It was also submitted that there was no claim for any deduction u/s 10B(1) at any time. The assessee also referred to various case laws including the decision of Hon'ble Supreme Court in the case of CIT v. G.M. Knitting Industries (P.) Ltd. (376 ITR 456) and submitted that the principle laid down therein would apply to the interpretation of Sec. 10B(8) also. The provisions of Sec. 10B(8) enables an assessee to exclude the applicability of the deduction u/s 10B by filing a declaration to that effect before the last date in which the return of income is required to be filed. It was further submitted that as held in G.M. Knitting Industries (P.) Ltd. (supra), the requirement that the Form should be submitted by a certain deadline is directory, though the submission of the Form itself may be regarded as mandatory. Further, the basic premise is that a substantive claim, which the assessee considers to be more beneficial, must be allowed to be made until the conclusion of assessment and the time within which any form which enables the claim should be f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ompliance of twin conditions under section 10B (8) of the IT Act, namely, the declaration under section 10B (8) was not submitted along with the original return of income, the assessee shall not be entitled to the exemption/benefit under section 10B (8) of the IT Act. According to the Revenue, furnishing of declaration under section 10B (8) before the due date of filing original return of income is also mandatory. On the other hand, it is the case on behalf of the assessee, which has been accepted by the High Court, that the requirement of submission of declaration under section 10B (8) is mandatory in nature, but the time limit within which the declaration is to be filed is directory in nature. 8. While considering the issue involved, whether the time limit within which the declaration is to be filed as provided under section 10B (8) is mandatory or directory, Section 10B (8) is required to be referred to, which reads as under: "10B (8) Notwithstanding anything contained in the foregoing provisions of this section, where the assessee, before the due date for furnishing the return of income under subsection (1) of Section 139, furnishes to the Assessing Officer a declaration ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rward or set-off of any loss. Filing a revised return under section 139(5) of the IT Act and taking a contrary stand and/or claiming the exemption, which was specifically not claimed earlier while filing the original return of income is not permissible. By filing the revised return of income, the assessee cannot be permitted to substitute the original return of income filed under section 139(1) of the IT Act. Therefore, claiming benefit under section 10B (8) and furnishing the declaration as required under section 10B(8) in the revised return of income which was much after the due date of filing the original return of income under section 139(1) of the IT Act, cannot mean that the assessee has complied with the condition of furnishing the declaration before the due date of filing the original return of income under section 139(1) of the Act. As observed hereinabove, for claiming the benefit under section 10B (8), both the conditions of furnishing the declaration and to file the same before the due date of filing the original return of income are mandatory in nature. 10. Even the submission on behalf of the assessee that it was not necessary to exercise the option under section 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urely procedural time requirement regarding the filing of the declaration under section 10B(8) as being mandatory also has no substance. As observed hereinabove, the exemption provisions are to be strictly and literally complied with and the same cannot be construed as procedural requirement. 13. So far as the submission on behalf of the assessee that against the decision of the Delhi High Court in the case of Moser Baer India Ltd. (supra), a special leave petition has been dismissed as withdrawn and the revenue cannot be permitted to take a contrary view is concerned, it is to be noted that the special leave petition against the decision of the Delhi High Court in the case of Moser Baer India Ltd. (supra) has been dismissed as withdrawn due to there being low tax effect and the question of law has specifically been kept open. Therefore, withdrawal of the special leave petition against the decision of the Delhi High Court in the case of Moser Baer (supra) cannot be held against the revenue. 14. In view of the above discussion and for the reasons stated above, we are of the opinion that the High Court has committed a grave error in observing and holding that the requirement of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... turn of income were mandatory in nature. The Hon'ble Court distinguished the case law of G.M. Knitting Industries (P.) Ltd. (supra) and held that Sec. 10B (8) is an exemption provision which could not be compared with claiming an additional depreciation u/s 32(1)(iia) of the Act. As per the settled position of law, an assessee claiming exemption has to strictly and literally comply with the exemption provisions. The provisions of Chapter III and Chapter VIA of the Act operate in different realms and principles of Chapter III, which deals with "incomes which do not form a part of total income", could not be equated with mechanism provided for deductions in Chapter VIA, which deals with "deductions to be made in computing total income". Finally, it was held that Hon'ble High Court erred in observing that the requirement of furnishing a declaration u/s 10B(8) was mandatory but the time limit within which the declaration was to be filed was not mandatory but mere directory. The same was erroneous and contrary to the unambiguous language contained in Sec. 10B(8) of the Act. It was finally held that to claim the benefit u/s 10B(8) of the IT Act, the twin conditions of furnishing a declar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly supported by the decision of jurisdictional High Court in the case of CIT Vs Jayanthilal Patel (2001) (248 ITR 199) wherein it was held that sub-section (6A) of section 80J requiring filing of report along with return would be directory and not mandatory. Similarly, Hon'ble Delhi High Court in the case of CIT Vs. Web Commerce India Pvt. Ltd (2009) (318 ITR 135) held that the provisions of Section 10B(5) would be directory and not mandatory. It was held by Hon'ble Court that as long as the audit report is filed before framing of the assessment, the provisions of section 80-IA(7) would be complied with inasmuch as the same are directory and not mandatory. 15. The Ld. AR has also referred to the case law of Hon'ble Gujarat High Court in the case of CIT (E) vs. Gujarat Energy Development Agency (TCA No. 35 of 2024 dated 15-01-2024) which has distinguished the case law in Wipro Ltd. (supra). This case law deal with a case where the assessee was a Trust registered u/s 12A of the Act. The deduction claimed by the assessee u/s 11 was denied by CPC since Audit Report in Form No. 10B was not e-filed along with the return of income. The Ld. CIT (A) held the filing of form was p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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