2011 (12) TMI 321 - AT - Income Tax

Deduction under 80IB - Return filed on 9.01.07 against due date on 31.10.06 - Assessee 139(4) was in the nature of proviso to section 139(1) and that the due date for furnishing return of income u/s 139 would automatically get extended by period prescribed u/s 139(4) - Held That - Judgment of CIT v. Jagriti Aggarwal 2011 (10) TMI 279 - PUNJAB AND HARYANA HIGH COURT , is in respec to Sec 54 and has no in the instant case. Decided against assessee.

Summary

Issues Involved:
1. Disallowance of deduction under Section 80IB of the Income-tax Act, 1961.
2. Interpretation and application of Section 80AC and Section 139(1) of the Income-tax Act, 1961.
3. Charging of interest under Sections 234A, 234B, 234D, and 244A of the Income-tax Act, 1961.

Detailed Analysis:

1. Disallowance of Deduction under Section 80IB:
The assessee's appeals for AY 2006-07 and AY 2007-08 were consolidated due to identical facts and grounds. The primary issue was the disallowance of deductions claimed under Section 80IB because the returns were filed beyond the due date specified in Section 139(1). The AO disallowed the deductions, which was upheld by the CIT(A). The assessee argued that the accounts were complete and audited before the due date, and the provisions of Section 80IB should be liberally construed to promote incentives. However, the Tribunal confirmed that the return of income was filed late, thus disqualifying the assessee from claiming the deduction under Section 80IB as per Section 80AC.

2. Interpretation and Application of Section 80AC and Section 139(1):
The Tribunal examined the statutory requirements under Section 80AC, which mandates that deductions under Section 80IB are not allowable unless the return is filed by the due date specified in Section 139(1). The assessee contended that Section 139(4) extends the due date for filing returns, and thus the returns filed within this extended period should be considered timely. The Tribunal rejected this argument, stating that Section 80AC explicitly requires compliance with the due date in Section 139(1). The Tribunal emphasized that the language of Section 80AC is clear and unambiguous, making its provisions mandatory. The Tribunal also distinguished the case from other judgments cited by the assessee, noting that those cases did not deal with the specific requirements and consequences outlined in Section 80AC.

3. Charging of Interest under Sections 234A, 234B, 234D, and 244A:
The assessee also contested the interest charged under Sections 234A, 234B, 234D, and 244A. However, since the primary issue of the disallowance of the deduction under Section 80IB was upheld, the Tribunal found no merit in the arguments against the interest charges. Consequently, the interest charges were upheld as per the provisions of the Income-tax Act.

Conclusion:
The Tribunal dismissed the appeals and stay applications filed by the assessee for both assessment years. The disallowance of the deduction under Section 80IB was confirmed due to the late filing of returns, and the mandatory nature of Section 80AC was upheld. The interest charges under Sections 234A, 234B, 234D, and 244A were also maintained.