2011 (6) TMI 824 - AT - Income Tax

Summary

Issues involved: Appeal by Revenue against CIT(Appeals) order for assessment year 2008-09 regarding disallowance of claim of exemption u/s 10B for late filing of return of income.

Details of the Judgment:

1. Grounds of Appeal by Revenue:
- Revenue raised grounds against CIT(A) order, contending that the claim of exemption u/s 10B was wrongly allowed due to late filing of return of income.
- CIT(A) relied on a decision of ITAT, Delhi Bench, regarding delay in filing without reasonable cause, which Revenue found unacceptable.

2. Arguments by Revenue and Assessee:
- Revenue argued that the assessee, a manufacturing and trading company, filed the return after the due date, leading to disallowance of deduction u/s 10B by AO.
- CIT(A) allowed the appeal based on a decision of ITAT, Delhi Bench, considering the proviso to section 10B(1) as directory, not mandatory.
- Revenue had no objection to the issue being sent back to AO for re-examination of the claim of exemption u/s 10B.

3. Judgment and Decision:
- ITAT Chennai held in favor of the assessee regarding the delay in filing the return of income, following the decision of ITAT, Delhi Bench.
- The issue of delay was not to be reconsidered by the Assessing Officer, but the claim of deduction u/s 10B was to be re-adjudicated after granting the assessee a fair hearing.
- The appeal of the Revenue was partly allowed for statistical purposes, with the order pronounced on 30/06/2011.

This judgment by ITAT Chennai addressed the grounds raised by the Revenue against the CIT(A) order, focusing on the disallowance of the claim of exemption u/s 10B for late filing of the return of income. The decision highlighted the importance of following precedents and providing the assessee with a fair opportunity to present their case, ultimately leading to a partial allowance of the Revenue's appeal.