2023 (2) TMI 855 - AT - Income Tax

Allowability of sec.80IA deduction - want of a valid return filed so as to comply with the rigor of sec.80A(5) r.w.s.80AC - mere filing a letter or a belated revised return - Whether the assessee could claim sec.80IA deduction without even filing a return but by way of mere letter in assessment year 2014- 15 and by filing a belated revised return in assessment year 2015-16 - HELD THAT - We first of all quote hon ble jurisdictional high court s decision in EBR Enterprises vs. Union of India 2019 (6) TMI 484 - BOMBAY HIGH COURT that filing of the return for claiming the impugned deduction is a mandatory condition u/s.80A(5) of the Act. The assessee s arguments in assessment year 2014-15 stands rejected on the very analogy by adopting stricter interpretation as accepting such an argument would indeed lead to frustration of the said specific statutory embargo. The legal position would hardly be any different for the latter assessment year 2015-16 as well wherein the assessee s revised return could not have been accepted u/s.139(5) of the Act in light of hon ble apex court s landmark decision in PCIT vs. Wipro Ltd. 2022 (7) TMI 560 - SUPREME COURT settling the issue in department s favour. A revised return could be filed only if there is an omission or a wrong statement but a claim which was not earlier raised could not be raised at a latter stage. Learned counsel at this stage quoted sec.139(4) of the Act as applicable in the relevant assessment year which does not cover any of the specified twin eventualities i.e. the assessee having not furnished any return earlier who is allowed to do so within the time prescribed in sec.142(1) notice. We make it clear that the AO had issued his sec.142(1) notices on 6th and 17th October, 2017 whereas the assessee had submitted its alleged revised return very well before that on 04.02.2017. Faced with the situation, we exercise our statutory jurisdiction vested u/s.254(1) of the Act in wider terms to reject the assessee s letter claiming sec.80IA deduction dated 07.11.2016 for assessment year 2014-15 and revised return dated 04.02.2017 in assessment year 2015-16 as non-est in the eye of law in above terms by adopting stricter construction in light of CIT vs. Dilip Kumar 2018 (7) TMI 1826 - SUPREME COURT as reiterated in PCIT vs. Wipro Ltd. (supra). Decided against assessee.

Summary

Issues:
Allowability of sec.80IA deduction claim(s) for assessment years 2014-15 and 2015-16 without valid return filed.

Analysis:

1. The appeals before the ITAT Pune involved twin appeals for assessment years 2014-15 and 2015-16 regarding the allowability of sec.80IA deduction claim(s) by the assessee. The issue pertained to the compliance with sec.80A(5) r.w.s.80AC of the Income Tax Act, 1961. The parties were heard at length, and the case files were perused.

2. The primary issue was the allowability of the sec.80IA deduction claim(s) of the assessee for the respective assessment years. The counsel for the assessee presented detailed written submissions and cited various case laws to support the claim. The argument was based on the interpretation of the deduction provisions by the legislature to promote economic development and the tribunal's jurisdiction to entertain new prayers under sec.254(2) of the Act.

3. The Revenue, on the other hand, relied on the assessment discussions and contended that the belated claims by the assessee were not maintainable under sec.80AC of the Act. The Revenue cited relevant IT Rules and tribunal's inherent jurisdiction under sec.254(1) to support its position.

4. The ITAT Pune reviewed the factual background of the case for the assessment years in question. The assessee had filed returns and subsequently claimed sec.80IA deduction through a letter and a belated revised return. The Assessing Officer accepted the income in one assessment year but rejected the deduction claim in the other citing sec.80AC of the Act.

5. The ITAT Pune analyzed the arguments presented by both parties and referred to relevant case laws. It was observed that filing a return for claiming the deduction was a mandatory condition under sec.80A(5) of the Act. The tribunal held that the assessee's claims were not maintainable as they did not comply with the statutory requirements for filing returns and revised returns under the Act.

6. The ITAT Pune dismissed the assessee's appeals, ruling in favor of the Revenue's position regarding the denial of sec.80IA deduction claims. The tribunal emphasized the importance of complying with statutory provisions and rejected the belated claims made by the assessee. The orders were pronounced in open court on 20.02.2023.