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2023 (3) TMI 256 - AT - Income TaxDeduction u/s 80IA - Disallowance of claim as assessee failed to file its return of income within the time prescribed under subsection (1) of Section 139 - filing of the return within such stipulated period was pre-requisite for claim of deduction under this section - CIT-A deleted the addition - HELD THAT - In the present case, however, the return of income of the assessee for AY 2012-13 was filed beyond the prescribed time limit u/s 139(1) of the Act. For that the ld.CIT(A) has recorded a categorical finding that the assessee was prevented by sufficient cause in filing the return within the prescribed time limit perhaps due to weak responsive Departmental website. Even in a situation the return of income of the assessee for AY 2012-13 is treated as belated return beyond the prescribed time limit provided u/s 139(1) of the Act, then also, as per the judgement of the Hon ble Supreme Court in the case of G.M. Knitting Industries Pvt. Ltd. 2015 (11) TMI 397 - SC ORDER which was followed by the coordinate Bench of the ITAT, Pune in the case of Krushi Vibhag Karmchari Vrund Sahakari Pat Sanstha 2022 (10) TMI 348 - ITAT NAGPUR , the assessee is very well entitled to claim deduction u/s 80IA(4) of the Act. Therefore, we are unable to find any valid reason to interfere with the findings arrived at by the ld.CIT(A). Thus, we uphold the same. Accordingly, the sole ground of the Revenue dismissed. Deduction u/s 80IA - denial of deduction as conditions prescribed for claiming deductions u/s 80IA has not been complied with by the assessee because (i) there was no development of any infrastructure facility; (ii) the appellant had been treating bio medical waste which was not covered in the definition of infrastructure facility as per Explanation to section 80IA(4) of the Act and (iii) the appellant was paying rent for plant machinery which indicate that the facility was not owned by the appellant - HELD THAT - On being asked by the Bench, rebutting the allegation of the AO that the assessee do not own any plant and machinery as it had paid rent thereon, the ld. Counsel submitted the copies of the financial statements including balance sheet and chart of relevant FY showing claim of depreciation which reveals that the assessee has deployed and set up plant and machinery and had also claimed depreciation thereon which was allowed by the AO without any dispute or doubt, thus, inadvertent mentioning of rent payment in P L Account on plant machinery does not raise any bar regarding claim of deployment of plant machinery by the assessee for setting up of infrastructure facility on which claim of deduction u/s 80IA(4) has been made. We are in agreement that the conclusion drawn by the ld.CIT(A) that the appellant assessee has set up bio-medical facility as per the provisions of section 80IA(4) of the Act, there is no monetary restriction on the amount of investment required to set up eligible infrastructure facility the appellant assessee has carried out the work contract with various hospitals and local government bodies relating to treatment, management and disposal of bio-medical waste as per the terms and conditions entered with various authorities which has been noted by the ld.CIT(A) in the first appellate order. He rightly noted that it is not an allegation of the AO that any of the prescribed conditions have not been met or else the appellant has not carried out the work relating to biomedical waste treatment in accordance with the terms and conditions prescribed in the contracts. After recording the above findings, the ld.CIT(A) finally observed that the infrastructure facility set up by the appellant in the form of bio-medical waste treatment plant is entitled to deduction u/s 80IA(4) - Decided in favour of assessee.
Issues Involved:
1. Disallowance of deduction under section 80IA due to late filing of return. 2. Eligibility of the assessee's business activities for deduction under section 80IA. 3. Ownership and operational status of the infrastructure facility for the purpose of section 80IA. Detailed Analysis: 1. Disallowance of Deduction Under Section 80IA Due to Late Filing of Return: The Revenue argued that the assessee's claim for deduction under section 80IA was invalid as the return was not filed within the time prescribed under section 139(1). The assessee contended that the return was initially filed on time but due to technical issues, the acknowledgment could not be generated, and the return was re-uploaded after the due date. The CIT(A) accepted the assessee's explanation, noting that the delay was due to technical problems and that the assessee had complied with all other requirements timely. The Tribunal upheld this view, referencing the Supreme Court's decision in CIT vs. GM Knitting Industries Pvt. Ltd., which held that while making a claim for deduction is mandatory, the timing is directory. Therefore, the claim made during the assessment proceedings should be allowed. 2. Eligibility of the Assessee's Business Activities for Deduction Under Section 80IA: The Revenue contended that the assessee was not engaged in developing, operating, or maintaining infrastructure facilities as defined under section 80IA(4), specifically arguing that bio-medical waste treatment does not qualify as a "solid waste management system." The CIT(A) and Tribunal disagreed, referencing various definitions and rules, including the Bio-Medical Waste Management Rules, 2016, and the Solid Waste Management Rules, 2016, which classify bio-medical waste as a type of solid waste. The Tribunal also cited the ITAT Mumbai decision in EA Infrastructure Operations and the Bombay High Court decision in Continental Warehousing Corporation, which supported the view that bio-medical waste treatment facilities qualify as infrastructure facilities under section 80IA. 3. Ownership and Operational Status of the Infrastructure Facility: The Revenue argued that the assessee did not own the infrastructure facility as it paid rent for the plant and machinery, implying that the facility was not eligible for deduction under section 80IA. The CIT(A) and Tribunal found this argument unconvincing, noting that the assessee had set up the infrastructure facility and claimed depreciation on the plant and machinery, which was allowed by the AO. The Tribunal emphasized that the nature of the investment and the contractual terms indicated that the assessee was indeed operating and maintaining the infrastructure facility, fulfilling the requirements of section 80IA. Conclusion: The Tribunal upheld the CIT(A)'s decision to allow the deduction under section 80IA for the assessee, dismissing the Revenue's appeals for all the assessment years involved. The Tribunal found that the assessee had demonstrated sufficient cause for the delayed filing of the return, was engaged in eligible business activities under section 80IA, and had set up and operated the infrastructure facility as required by the statute.
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