2013 (8) TMI 1074 - AT - Income Tax

Summary

Issues Involved:
1. Disallowance of deduction u/s 80IA.
2. Charging of interest u/s 234A, 234B, and 234C.
3. Deletion of disallowance u/s 14A r.w. Rule 8D.

Summary:

1. Disallowance of Deduction u/s 80IA:
The assessee filed its return electronically on 29.9.2009 but did not send the signed ITR-V form, leading the Assessing Officer to treat the return as invalid and disallow the deduction u/s 80IA. The CIT(A) upheld this decision. The ITAT noted that no defect notice u/s 139(9) was served on the assessee, and the Department's instructions required the ITR-V to be sent by ordinary post. Citing the Bombay High Court's decision in M/s. Crawford Bayley, the ITAT directed the Assessing Officer to treat the return as valid upon submission of the signed ITR-V form and allow the deduction u/s 80IA.

2. Charging of Interest u/s 234A, 234B, and 234C:
The assessee argued computational errors in charging interest u/s 234B and 234C and claimed that interest u/s 234A should not be levied as self-assessment tax was paid before the due date. The ITAT, referencing the Supreme Court's decision in CIT vs. Pranoy Roy, directed the Assessing Officer to recompute the interest, ensuring compliance with the law and the Supreme Court's ruling.

3. Deletion of Disallowance u/s 14A r.w. Rule 8D:
The Revenue challenged the CIT(A)'s deletion of disallowance u/s 14A, arguing that the assessee's expenditure claim for earning exempt income was insufficient. The ITAT found that the Assessing Officer did not record objective satisfaction regarding the assessee's claim, as required by section 14A(2). The ITAT upheld the CIT(A)'s decision, noting the absence of evidence that interest-bearing funds were used for investments yielding exempt income.

Conclusion:
The appeal of the assessee was allowed for statistical purposes, directing the Assessing Officer to treat the return as valid and recompute interest charges. The Revenue's appeal was dismissed, upholding the deletion of disallowance u/s 14A.