2016 (9) TMI 802 - AT - Income Tax

Deduction u/s. 80IB - AO disallowed by the AO on the ground that the return was not filed before the due date prescribed u/s. 139(1) of the Act in the light of provisions of section 80AC of the Act - Held that - The provisions of section 80AC are very clear that if the return is not filed before the due date specified under sub-section (1) of section 139 of the Act, no deduction u/s. 80IB can be allowed to the assessee. The provisions of section 80AC were mandatory and not only directory. Since the impugned issue is covered by the aforesaid judgments, the deduction u/s. 80IB of the Act cannot be allowed as the claim of the assessee is hit by the provisions of section 80AC of the Act. Therefore, we confirm the order of the CIT(Appeals) in this regard. - Decided against assessee.

Summary

Issues:
1. Denial of deduction u/s. 80IB of the Act due to late filing of return.
2. Admission of additional ground related to income assessment from joint development agreement.
3. Interpretation of provisions of Section 80AC of the Act as mandatory or directory.

Issue 1: Denial of deduction u/s. 80IB of the Act due to late filing of return:
The appellant challenged the denial of deduction u/s. 80IB by authorities citing late filing of the return. The appellant argued that the return was validly filed u/s. 139(4) and the due date should be considered as per this section. The appellant contended that Section 80AC should not be used to deny the legitimate claim u/s. 80IB. The Tribunal examined the matter and referred to previous judgments emphasizing that if the return is not filed before the due date specified under section 139(1), no deduction u/s. 80IB can be allowed. The Tribunal held that the provisions of Section 80AC are mandatory, not directory, thus disallowing the appellant's claim for deduction u/s. 80IB.

Issue 2: Admission of additional ground related to income assessment from joint development agreement:
The appellant sought to admit an additional ground challenging the assessment of income from a joint development agreement. The appellant argued that the income did not relate to the relevant previous year. However, the Departmental Representative opposed the admission of this additional ground, highlighting that the appellant's claim contradicted its earlier stance. The Tribunal agreed with the Departmental Representative, stating that the additional ground required factual verification and was contrary to the appellant's initial position, thus rejecting its admission.

Issue 3: Interpretation of provisions of Section 80AC of the Act as mandatory or directory:
The appellant contended that Section 80AC should be construed as directory, allowing deduction u/s. 80IB if the return was filed u/s. 139(4). However, the Tribunal referred to previous decisions, including the Special Bench rulings, which held that Section 80AC was mandatory, not directory. The Tribunal emphasized that the provisions of Section 80AC were clear that no deduction u/s. 80IB could be allowed if the return was not filed before the due date specified under section 139(1). Consequently, the Tribunal upheld the denial of the deduction u/s. 80IB based on the provisions of Section 80AC.

In conclusion, the Tribunal dismissed the appeal of the assessee, upholding the denial of deduction u/s. 80IB due to late filing of the return and the mandatory nature of Section 80AC provisions. The additional ground related to income assessment from a joint development agreement was not admitted, and the Tribunal's decision was based on the legal interpretations and precedents established in similar cases.