2022 (3) TMI 960 - AT - Income Tax

Deduction u/s.80IA - claim denied as Assessee company failed to follow the due procedure in filing of Form No.10CCB electronically - Assessee had not claimed deduction in the original return filed but made a fresh claim by filing a letter dated 17.09.2015 and the due procedure for filing of Form 10CCB was not followed - as per AO the provisions of Section 80AC of the Act is mandatory - HELD THAT - We have noted that the provisions of Section 80IA(5) only requires filing of return of income but nowhere it states that the claim should be made in the original return and not by way of original return - when the original return was filed within the due date, then the revised return filed, thereafter, before the completion of assessment proceedings, is to be considered by the AO, because the Act has given an opportunity to the Assessee to file his return u/s.139(4) of the Act for the removal of defects or omission in the original return. Here, in the present case, the Assessee has made a claim by filing a letter during the course of the Assessment proceedings and once the claim is made during the course of the assessment proceedings, the Assessing Officer has to consider the same and decide. We noted that there is no dispute as regards to merits of the claim of deduction u/s.80IA of the Act. Hence, we find not infirmity in the order of the Commissioner of Income Tax (Appeals) and the same affirmed. - Decided against revenue.

Summary

Issues:
- Whether the Assessee's claim of deduction made by filing a letter dated 17.09.2015 and not claimed in the original return of income is allowable.
- Whether the provisions of Section 80AC of the Income Tax Act, 1961 mandate the claim for deduction u/s.80IA to be made only by furnishing the return of income on or before the due date specified u/s.139(1) of the Act.

Analysis:

Issue 1: Assessee's claim of deduction not claimed in the original return:

The case involved an appeal by the Revenue against the order of the Commissioner of Income Tax (Appeals) allowing the Assessee's claim of deduction u/s.80IA made by filing a letter dated 17.09.2015, which was not claimed in the original return of income for the Assessment Year 2013-2014. The Assessing Officer disallowed the claim as the Assessee failed to follow the due procedure of filing Form No.10CCB electronically. However, the Commissioner of Income Tax (Appeals) allowed the claim, citing the mandatory requirement under Section 80AC to file the return of income as stipulated u/s.139(1) of the Act. The Commissioner referred to relevant decisions and directed the Assessing Officer to entertain the claim after due verification of genuineness.

Issue 2: Interpretation of Section 80AC and original return filing requirement:

The Revenue argued that Section 80AC mandates any deduction claimed u/s.80IA to be made by furnishing the return of income on or before the due date specified u/s.139(1) of the Act. The Revenue contended that the claim made during assessment proceedings and non-electronic filing of Form No.10CCB rendered the claim impermissible. However, the Assessee's Counsel relied on various decisions to support the contention that filing the original return within the due date suffices, and subsequent claims made during assessment proceedings should be considered. The Counsel highlighted the Mumbai Tribunal's decision in favor of the Assessee in a similar case, emphasizing that the original return filing within the due date allows for subsequent claims to be entertained.

Conclusion:

The Tribunal upheld the order of the Commissioner of Income Tax (Appeals), dismissing the Revenue's appeal. It was observed that the Assessee's claim made during the assessment proceedings should be considered by the Assessing Officer, especially when the original return was filed within the due date specified under the Act. The Tribunal found no infirmity in the Commissioner's decision, affirming the allowance of the Assessee's claim of deduction u/s.80IA. The judgment emphasized the importance of following statutory provisions while interpreting the eligibility criteria for deductions under the Income Tax Act.