2014 (8) TMI 1165 - AT - Income Tax

Eligibility to claim of deduction u/s 80IB(10) - assessee has not filed return of income within the time limit u/s 139(1) and when section 80AC - mandation of filing of return under section 139(1) within the due date - Held that - Issue raised in the present appeal is squarely covered against the assessee by the decision of the Special Bench of the Tribunal in the case of Saffire Garments Vs. ITO (2012 (12) TMI 193 - ITAT RAJKOT) wherein it has been held that the restriction provided by way of the proviso to section 10A(1A) is mandatory as the matter governs filing of the return of income within the due date provided under section 139(1). Therefore, we find that the said decision of the Special Bench applies not only to section 10A, but also to sections 10B and 80AC. Thus filing of return under section 139(1) within the due date prescribed under law is a mandatory provision. If the assessees wants to claim deduction under section 80IB(10), it is necessary that the assessees must file the returns of income before the due date prescribed under section 139(1) of the Income-tax Act, 1961. - Decided in favour of revenue.

Summary

Issues: Appeal against order allowing deduction u/s 80IB(10) when return not filed within time limit u/s 139(1); Justification of CIT(A) relying on previous decisions; Interpretation of section 80AC; Applicability of Special Bench decision.

Analysis:
1. The appeal was filed by the Revenue against the order of the Ld.CIT(A) allowing the deduction claimed by the assessee u/s 80IB(10) despite the return not being filed within the time limit u/s 139(1) for the Assessment Year 2008-09.

2. The Revenue contended that section 80AC specifies that no deduction shall be allowed unless the return is furnished within the time limits of section 139(1). The Ld.CIT(A) relied on Mumbai ITAT and Punjab High Court decisions, which the Revenue argued were distinguishable from the present case.

3. The assessee filed the return after the due date, and the AO disallowed the deduction. The Ld.CIT(A) directed the AO to allow the claim, citing that the return was filed within the extended time available u/s 139(4). The Revenue challenged this decision.

4. During the appeal, the Ld.DR argued that the Ld.CIT(A)'s order contravened section 80AC, while the Assessee's Counsel cited various decisions supporting the assessee's position.

5. The Tribunal noted that the issue was covered against the assessee by the Special Bench decision in Saffire Garments case, holding that filing the return within the due date under section 139(1) is mandatory for claiming deductions under sections 10A, 10B, and 80AC. The Tribunal overturned the Ld.CIT(A)'s order, emphasizing the importance of filing the return within the prescribed time limit.

6. The Tribunal clarified that the decisions relied on by the assessee were not applicable to the present case, as the dispute centered on filing the return within the time allowed u/s 139(1), not u/s 139(4). Consequently, the assessee was not entitled to claim the deduction u/s 80IB(10), and the appeal filed by the Revenue was allowed.

This detailed analysis of the judgment highlights the key issues raised, arguments presented, and the Tribunal's decision based on the interpretation of relevant provisions and precedents.