2019 (1) TMI 29 - AT - Income Tax

Claim deduction u/s.80IA - income derived from power generation using wind energy - return filled beyond the due date for filing the return u/s 139(1) - mandation of filling return of income on time - Held that - Referring to Special Bench of the Tribunal in the case of M/s. Saffire Garments 2012 (12) TMI 193 - ITAT RAJKOT we hold that the provisions under section 80AC requiring the assessee to furnish the return of income before due date specified under section 139(1) is mandatory and not directory. In view of the above discussion and considering the facts and circumstances of the case, we do not find any error or illegality in the orders of authorities below. Consequently, the appeal by the assessee is dismissed.

Summary

Issues:
1. Claim for deduction u/s.80IA of the Income Tax Act, 1961 based on the due date for filing the return.
2. Interpretation of the provision of section 80AC of the Act as mandatory or directory.
3. Comparison with the decision in Saffire Garments Vs. ITO regarding a similar provision under Sec.10A(1A) of the Act.
4. Analysis of the argument regarding Sec.139(4) as a proviso to Sec.139(1) and its relevance.
5. Application of the Special Bench ruling to the provisions of Sec.80AC of the Act.

Detailed Analysis:

1. The Assessee claimed deduction u/s.80IA for profits derived from power generation using wind energy. The Assessing Officer (AO) disallowed the deduction as the return was filed beyond the due date specified under section 139(1) of the Act for that Assessment Year.

2. The Assessee contended that the provision of section 80AC was directory, not mandatory. However, the Tribunal disagreed, citing the decision in Saffire Garments Vs. ITO, where a similar provision under Sec.10A(1A) was held to be mandatory.

3. In Saffire Garments case, it was established that the proviso to Sec.10A(1A) mandated filing the return within the prescribed time under section 139(1). Failure to do so not only led to disallowance of deduction but also attracted interest under section 234A, establishing the mandatory nature of the provision.

4. The argument regarding Sec.139(4) being a proviso to Sec.139(1) was rejected, emphasizing that filing the return within the extended time limit did not negate the non-compliance with the original due date under Sec.139(1).

5. Applying the principles from Saffire Garments, the Tribunal concluded that the provisions of Sec.80AC, similar to Sec.10A(1A), required the Assessee to file the return before the due date specified under section 139(1), deeming it mandatory. Consequently, the appeal was dismissed, upholding the decision of the lower authorities.

In conclusion, the Tribunal's judgment affirmed the mandatory nature of filing the return within the prescribed due date for claiming deductions under sections like 80IA, emphasizing compliance with statutory timelines as a prerequisite for availing such benefits under the Income Tax Act.