2022 (2) TMI 1356 - AT - Income Tax

Eligibility of deduction u/s 80-IA as made for the first time in the return filed u/s 153A - additional plea beyond the Revenue s grounds that the assessees four returns herein deserve to be treated as belated ones since filed beyond the due date prescribed u/s.139(1) Explanation 2(1)-(vii) r.w.s.153(1)(a) of the Act - HELD THAT - We see no substance in the Revenue s instant additional technical argument in light of the tribunal s decision in Mahindra Mahindra 2009 (4) TMI 207 - ITAT BOMBAY-H that a departmental representative cannot raise an argument beyond the assessment findings. We wish to make it clear that the AO herein has nowhere treated the assessee s four returns as belated ones. As per the assessee s stand that it had received the AO s corresponding Section 153A notices on 10-06-2013 which stood duly complied on 09-07-2013 as it chose to file returns wherein the time prescribed only which have been accepted through out as valid ones . No rebuttal to this clinching factual aspect has come from the departmental side. We thus decline the Revenue s instant technical argument. Whether the assessee could raise a fresh claim of Section 80-IA deduction in a return filed u/s.153(1)(a) of the Act for the first time or not even if it had chosen not to do so in Section 139(1) regular return submitted before search ? - We wish to reiterate here that the Revenue s case strongly relies upon Section 80-IA r.w.s.80AC of the Act inter alia stipulating that where the assessee fails to make a claim in his return of income for any deduction, no deduction shall be allowed to him thereunder and that no such deduction shall be allowed to him unless he furnishes a return of his income for such assessment year on or before the due date specified under sub-section(1) of Section 139 We find no merit in the Revenue s instant technical argument as Section 153A nowhere draws any distinction of an abated or un-abated assessment so far as an assessee s eligibility to raise a new deduction claim under Chapter-VI therein is concerned. We thus uphold the CIT(A) s lower appellate findings in principle. Both the AO as well as the CIT(A) have nowhere examined the assessee s entitlement to claim Section 80-IA deduction in the light of the alleged projects undertaken / developed in all these four assessment years on merits. Faced with this situation, we deem it appropriate to restore the instant sole issue back to the Assessing Officer for his afresh adjudication on merits in light of all legal and factual requirements enshrined in Section 80-IA of the Act. Needful shall be done within three effective opportunities of hearing. Ordered accordingly.

Summary

Issues:
- Whether deduction u/s 80-IA claimed for the first time in return filed u/s 153A is allowable?
- Interpretation of provisions of section 153A to 153C for fresh claims or deductions.
- Application of principles laid down by the Hon'ble Supreme Court in reassessment proceedings.
- Utilizing section 153A to reopen concluded assessments.
- Claiming deduction u/s 80IA in return filed u/s 153A post the due date specified under section 139.
- Treatment of returns filed u/s 153A as belated ones.

Analysis:

Issue 1: Deduction u/s 80-IA in return filed u/s 153A
The Revenue argued that the assessee cannot claim deduction u/s 80-IA in the return filed u/s 153A as it should have been claimed in the original return u/s 139(1). However, the tribunal found no merit in this argument as the assessee had not claimed the deduction in the original returns, and the Section 153A proceedings were initiated after the time limit for filing the original returns had elapsed. The tribunal held that the assessee was eligible to claim the deduction in the returns filed u/s 153A.

Issue 2: Fresh claims or deductions under sections 153A to 153C
The Revenue contended that fresh claims or deductions cannot be allowed in returns filed u/s 153A. However, the tribunal disagreed, citing precedents and legislative provisions that supported the assessee's right to raise new claims in returns filed u/s 153A. The tribunal highlighted that Section 153A overrides other sections, allowing for the consideration of new claims.

Issue 3: Principles laid down by the Hon'ble Supreme Court
The tribunal analyzed the principles laid down by the Hon'ble Supreme Court in reassessment proceedings and found that the assessee could indeed claim deductions in returns filed u/s 153A, even if not claimed in the original assessment. The tribunal emphasized the benefit of doubt to the assessee in such proceedings.

Issue 4: Reopening concluded assessments
The tribunal addressed the argument that using section 153A to reopen concluded assessments was not permissible. However, the tribunal clarified that the assessee's fresh claim of deduction u/s 80-IA in the returns filed u/s 153A was valid and did not amount to reopening concluded assessments.

Issue 5: Claiming deduction post due date specified under section 139
The Revenue raised concerns about the deduction claimed u/s 80IA in returns filed u/s 153A post the due date specified under section 139. The tribunal dismissed this argument, stating that the assessee's returns were valid and eligible for consideration, rejecting the Revenue's technical argument.

Issue 6: Treatment of returns filed u/s 153A as belated
The Revenue argued that the returns filed u/s 153A should be treated as belated due to non-compliance with the due date specified in the Assessing Officer's notice. However, the tribunal rejected this argument, noting that the Assessing Officer did not treat the returns as belated, and the returns were accepted as valid within the prescribed time.

In conclusion, the tribunal upheld the assessee's right to claim the deduction u/s 80-IA in the returns filed u/s 153A and directed the Assessing Officer to examine the assessee's entitlement to the deduction on merits. The appeals were partly allowed, and the order was pronounced on 22nd February 2022.