2013 (1) TMI 286 - AT - Income Tax

Whether manual filed return is a valid return under Income Tax Act, whereas e-filling is mandatory as per CBDT - Assessee has filed the return manually before the due date prescribed u/s 139(1) - The electronic return alone was filed after the due date - The CBDT has prescribed to file the returns electronically - Deduction u/s 80IC Deduction not allowed by virtue of Sec. 80AC Held that - Yes, that return is absolutely valid in law. This compulsion has been made as a result of the direction issued by the CBDT. The direction of the CBDT cannot go beyond the Act and Rules. It cannot overtake the apparent words of the statute. Therefore, filing of return electronically is a directory provision and if the return is filed manually on or before due date, such return cannot be ignored. The maximum the A.O. can ask the assessee is to file the return again electronically, so that the technicality of processing is satisfied. This is only for the administrative convenience of the Income-tax department. The statute consisting of Act and Rules speak of filing of return before due date and contents of that must be furnished in that return. The format has been prescribed by the Rules and also the contents have been prescribed by the Rules. Filing of the return also has been prescribed by the Act. Nowhere in the Act or Rules, there is a mandatory provision that the return must be filed only electronically. Therefore, the claim of the assessee for deduction u/s 80IC cannot be denied on the ground of law stated in Sec.80AC. In favour of assessee

Summary

Issues:
- Disallowance of deduction claimed under sec.80IC due to the mode of filing the return.
- Interpretation of sec.80AC in relation to filing returns manually and electronically.
- Validity of manual return filed before the due date for sec.80IC deduction.
- Compliance with CBDT's direction on electronic filing versus statutory provisions.
- Remittance of the issue on merit of sec.80IC deduction back to the Assessing Officer.

Analysis:

The appeal involved the disallowance of a deduction claimed under sec.80IC by the assessee due to the mode of filing the return. The Assessing Officer disallowed the deduction as the return filed manually by "TAPAL" before the due date was not considered valid, and only the return filed electronically beyond the due date was recognized. The Commissioner of Income-tax (Appeals) upheld this decision, leading to the second appeal before the Tribunal.

The assessee argued that the CBDT's prescription of electronic filing beyond the due date was ultra vires the Act, as sec.139(1) only requires filing in the prescribed form and manner, not specifically electronically. The counsel contended that the CBDT's direction should not override statutory provisions, and the manual return filed before the due date should be accepted as valid under sec.292B, thus challenging the application of sec.80AC.

The Tribunal disagreed with the lower authorities, emphasizing that the Act and Rules mandate filing before the due date without specifying electronic submission. They deemed electronic filing as directory, not mandatory, and upheld the validity of the manual return filed within the deadline. Consequently, the Tribunal directed the Assessing Officer to accept the manual return as valid for all Income-tax Act purposes, overturning the disallowance under sec.80AC.

Regarding the sec.80IC deduction itself, the Tribunal remitted the issue back to the Assessing Officer for a merit-based examination, instructing a thorough review of all relevant materials and details to determine the entitlement and extent of the deduction. The Tribunal allowed the appeal in favor of the assessee, highlighting the importance of statutory compliance over administrative directives.

In conclusion, the Tribunal's decision focused on upholding statutory provisions over administrative directions, ensuring that valid manual returns filed before the due date are recognized, and remitting the merit-based assessment of the sec.80IC deduction back to the Assessing Officer for a lawful determination.