2015 (5) TMI 638 - AT - Income Tax

Non compliance of provisions of section 80AC while claiming the Deduction u/s. 80IB - Held that - The filing of return before the due date specified under section 139(1) is a mandatory condition for availing the deduction interalia under section 80IB as required under section 80AC of the Act. The requirement of law thus is of filing a physical return, which is not dispensed with, but only relaxed under the condition of an assessee choosing to file an e-return, perhaps with a view to encourage the same. The assessee in such a case can, instead of filing the physical return along with or by the due date specified u/s.139(1), do so within a period of 15 days, and where so done, the same would be deemed to have been filed on the date of filing the e-return. Where not so, the date of filing the return would be the actual date of filing the physical return. Where then is the controversy? A physical return filed within 15 days of an e-filing would, by legal fiction, be deemed to have been filed on the date of the former. The same is only per the scheme itself. Likewise, it being considered as filed on the date of furnishing the physical return is again per the said scheme. That is, the relaxation extends only to the deeming of the date of the filing the return and not to its form and, further, does not extend beyond 15 days. It would thus be only correct to say that the benefit of the scheme extends to the physical filing of the return within an extended period of 15 days. There is, accordingly, no question of any flexibility or extending the scope or ambit of the deeming; it itself contemplating the assessee being not able to file the return within the extended period, the consequences for which are specified. The enlargement in scope, as being sought to be canvassed, is thus uncalled for and inconsistent with the terms of the law, the rules and the scheme, which are observed to be in consistence and harmony. The absence of a digital signature, so that the e-return is not verified, stands already emphasized. The requirement of law, i.e., per section 80AC r/w ss. 139(1) and 139 (1B) are, therefore, not satisfied in the instant case. - Decided against assessee.

Summary

Issues Involved:

1. Compliance with Section 80AC for claiming deduction under Section 80IB.
2. Interpretation of delay in filing physical ITR-V and its impact on deductions under Chapter VI-A.

Issue-wise Detailed Analysis:

1. Compliance with Section 80AC for claiming deduction under Section 80IB:

The primary issue revolves around whether the assessee complied with Section 80AC while claiming a deduction under Section 80IB. The assessee filed an e-return on 30/09/2008, the due date under Section 139(1), but submitted the physical ITR-V on 16/10/2008, one day late. The AO denied the deduction under Section 80IB(10) due to non-compliance with Section 80AC, which mandates filing the return on or before the due date specified under Section 139(1). The CIT(A) upheld this decision, stating that the e-return is considered filed on the date of physical submission of the verified ITR-V, which was beyond the permissible period.

The Tribunal examined the provisions of Section 80AC, which clearly states that deductions under sections including 80IB shall not be allowed unless the return is furnished on or before the due date specified under Section 139(1). The Tribunal referenced the Special Bench decision in the case of M/s. Saffire Garments vs. ITO, which held that such provisions are mandatory and not directory. Consequently, the Tribunal concluded that the assessee's return, deemed filed on 16/10/2008, did not meet the requirement of Section 80AC, thus disqualifying the claim for deduction under Section 80IB.

2. Interpretation of delay in filing physical ITR-V and its impact on deductions under Chapter VI-A:

The second issue pertains to whether a one-day delay in filing the physical ITR-V should be considered a venial breach and whether a liberal interpretation should be applied given the benevolent nature of Chapter VI-A deductions. The assessee argued that the e-return filing within the due date should suffice for compliance with Section 80AC, and the physical submission is merely a procedural requirement. The Tribunal, however, emphasized that Section 139(1) requires the return to be filed in the prescribed form and verified in the prescribed manner, which includes the submission of the duly verified ITR-V within 15 days of the e-return filing.

The Tribunal referred to the Electronic Furnishing of Return of Income Scheme, 2007, which mandates that the date of filing the return is deemed to be the date of submitting the ITR-V if done within 15 days of the e-return. If submitted later, the actual submission date is considered the filing date. Since the assessee submitted the ITR-V on 16/10/2008, the return was deemed filed on that date, missing the due date under Section 139(1). The Tribunal dismissed the argument for a liberal interpretation, citing that the statutory language is clear and unambiguous, and the length of the delay is inconsequential.

The Tribunal also noted that the absence of a digital signature on the e-return necessitated the physical submission of ITR-V, reinforcing that the verification process is integral to the return's validity. The Tribunal upheld the CIT(A)'s decision, confirming that the assessee's failure to comply with the mandatory provisions of Section 80AC disqualified the deduction under Section 80IB.

Conclusion:

The Tribunal dismissed the appeal, affirming that the provisions of Section 80AC are mandatory, and the one-day delay in submitting the physical ITR-V resulted in non-compliance with Section 139(1), thereby disqualifying the deduction under Section 80IB. The decision emphasized the importance of adhering to statutory deadlines and the clear language of tax provisions.