2019 (7) TMI 2019 - HC - Income Tax

Validity of order passed by the Settlement Commission - Revenue submits that the Settlement Commission has wrongly allowed deductions u/s 80-IA (4) as the returns were filed after the period prescribed by law - HELD THAT - It is observed that the issue of filing of returns after the date prescribed by law was taken up by the respondent before this Court in M/S DILIP BUILDCON LTD. VERSUS UNION OF INDIA OTHERS 2016 (7) TMI 215 - MADHYA PRADESH HIGH COURT allowed the petition setting aside the order passed by the Central Board of Direct Taxes and condoned the delay on the part of the respondent in filing returns. Admittedly, the order passed by this Court supra has attained finality as the same has not been assailed or challenged by the petitioner before any higher Court. Thus the issue regarding delay in filing the return does not survive and has been finally settled in favour of the respondent. In view of the order passed by this Court, the contention of the learned counsel for the petitioner that the Settlement Commission has wrongly allowed deductions under Section 80- IA (4) of the Act, without taking into consideration the aspect of delay, has no merit and does not survive for either being raised or adjudicated. Also contention of revenue that the respondent was only involved in construction of roads as a contractor and, therefore, as he was only a works contractor, the benefit of the provisions relating to work undertaken for infrastructural development would not have been availed by the respondent and has wrongly been allowed by the Settlement Commission, is to be rejected as Settlement Commission has discussed these aspects extensively - The aforesaid finding in favour of the respondent, is a finding of fact and does not warrant any interference by this Court in writ proceedings.

Summary

Issues:
1. Interpretation of Section 80-IA (4) of the Income Tax Act for deduction eligibility based on timely filing of returns.
2. Validity of deductions allowed by Settlement Commission.
3. Eligibility of works contractor for infrastructural development benefits.
4. Finality of previous court order on filing return delay issue.

Interpretation of Section 80-IA (4) for Deduction Eligibility:
The petitioner challenged the Settlement Commission's order allowing deductions under Section 80-IA (4) of the Income Tax Act, contending that the deductions could only be considered if the income tax return was filed by the due date under Section 139 (1) of the Act. The High Court noted that a previous court order had already addressed and resolved the issue of delayed filing of returns, which had been condoned. As this previous order had attained finality and was not challenged further, the issue of delay in filing returns was settled in favor of the respondent. Consequently, the petitioner's argument against the deductions based on the delay in filing returns was deemed meritless and not subject to further adjudication.

Validity of Deductions Allowed by Settlement Commission:
The Settlement Commission's decision to allow deductions under Section 80-IA (4) was challenged by the petitioner. However, the High Court found that the Settlement Commission had extensively discussed and analyzed the relevant aspects in its order, particularly from paragraph 13 onwards. The court emphasized that the finding in favor of the respondent regarding the eligibility for deductions was a factual determination made by the Settlement Commission. As such, the court held that there was no justification for interference in these factual findings through writ proceedings. Consequently, the court dismissed the petitioner's challenge to the validity of the deductions allowed by the Settlement Commission.

Eligibility of Works Contractor for Infrastructural Development Benefits:
The petitioner argued that the respondent, being a works contractor involved in road construction, should not have been eligible for benefits related to infrastructural development under the provisions. However, the High Court observed that the Settlement Commission had thoroughly examined and addressed this issue in its order, specifically in paragraph 13.4. The court considered the Settlement Commission's finding on this matter as a factual determination, which did not warrant intervention by the court in writ proceedings. Therefore, the court concluded that the petitioner's contention regarding the respondent's eligibility for infrastructural development benefits lacked merit, leading to the dismissal of the writ petition.

Finality of Previous Court Order on Filing Return Delay Issue:
The High Court emphasized the significance of a previous court order, dated 30.6.2016, which had addressed and resolved the issue of delay in filing returns by the respondent. Notably, this order had not been challenged or appealed further, resulting in its finality. Given the conclusive nature of the previous court order on the filing return delay issue, the High Court determined that this matter had been settled in favor of the respondent. Consequently, the court considered the petitioner's arguments related to the delay in filing returns as devoid of merit and not open for further consideration or adjudication.