2022 (3) TMI 376 - AT - Income Tax

Deduction u/s 80IC/80IE - delay in filing of return of income both the authorities below declined the deduction as claimed - HELD THAT - In this case that the Assessee before the filing the return of income on dated 03.09.2013 filed its audit report on dated 31.10.2013 which was before the stipulated period or due date of filing of return on 30.11.2013 and from the judgments referred above it is clear that even return of income filed belatedly u/s 139(4) of the Act also cannot be denied for claiming the deduction u/s 80IC/ 80IE - The Hon ble Jurisdictional High Court in Fiberfill Engineers case 2016 (4) TMI 562 - ITAT DELHI categorically held that when the deduction u/s 80IC of the Act has not been questioned by the department on merits there is no justification for not viewing the delay of 46 days in filing the return to be bona fide. In this case there is nothing contrary on record on merit qua deduction of claim. Hence, on the basis of aforesaid analyzations and respectfully following the judgments referred above, we are inclined to allow the claim of the Assessee. Consequently, the addition made by the AO and sustained by the ld. Commissioner is deleted. - Decided in favour of assessee.

Summary

Issues:
1. Claim of deduction u/s 80IC/80IE denied due to delay in filing return of income.
2. Reasonableness of cause for delay in filing return.
3. Interpretation of law regarding filing of return beyond due date for claiming deductions.
4. Comparison of different judicial precedents on similar issues.

Analysis:
1. The appeal was filed against an order by the Commissioner of Income Tax (Appeals) disallowing the deduction claimed u/s 80IC/80IE due to the Assessee filing the return of income beyond the specified due date of 30.11.2013, resulting in an addition of ?77,38,729. The Commissioner relied on a previous ITAT Mumbai judgment to support the disallowance.

2. The Assessee provided reasons for the delay, citing unawareness of new tax liability under section 115JC of the Act, which was discovered during the audit process. The Assessee had a history of claiming deductions regularly and had complied with other tax audit requirements within due dates. However, the Commissioner did not accept the reasons for delay as a reasonable cause, emphasizing that such cause was irrelevant to the deduction claim under sections 80IC/80IE.

3. The ITAT Delhi analyzed conflicting judgments, including the Mumbai Tribunal's decision and subsequent decisions by the Delhi High Court and the High Court of Kerala. The Delhi High Court and the Kerala High Court emphasized that a return filed beyond the due date could still be valid for claiming deductions if certain conditions were met, and the delay was not extraordinary. The ITAT aligned with these judgments and allowed the Assessee's claim, noting that the deduction had not been questioned on merit by the department.

4. Ultimately, the ITAT Delhi allowed the Assessee's appeal, overturning the addition made by the Assessing Officer and upheld by the Commissioner. The ITAT's decision was based on the Assessee's compliance with audit requirements within due dates, the lack of questioning the deduction on merit, and the alignment with the interpretations of law by the Delhi High Court and the High Court of Kerala. The ITAT's decision highlighted the importance of meeting statutory conditions for deductions, even if the return of income was filed beyond the specified due date.

This detailed analysis showcases the legal intricacies involved in the judgment, emphasizing the significance of compliance with statutory requirements for claiming deductions under the Income Tax Act.