2020 (6) TMI 837 - AT - Income Tax

Deduction u/s. 80-IE - denial of claim on delay in filing of return - delay of 2 months - HELD THAT - A bare perusal of section 139 of the Act makes it clear that the Parliament in its wisdom has allowed the assessee to file return of income belatedly subject to fulfillment of conditions as prescribed in the said section 139 of the Act. Therefore, once those conditions are met/fulfilled by the assessee, then return filed by the assessee should be considered being filed u/s. 139(1) As noted that the AO has accepted the claim of deduction u/s. 80IE for the AY 2013-14 u/s 143(1) of the Act and for the second year for the AY 2014-15 u/s 143(3) of the Act. Since the deduction u/s. 80IE of the Act was otherwise allowable on merits, the assessee should not be denied the deduction merely because the assessee had filed its return of income belatedly. Keeping in mind the ratio laid down in the case of Fiberfil Engineers 2017 (8) TMI 730 - DELHI HIGH COURT we do not find any reason to deny the claim of assessee on the ground of filing return of income belatedly. In the light of above facts, we are of the opinion that the assessee s claim for deduction u/s. 80IE of the Act should be allowed - Assessee appeal allowed.

Summary

Issues:
Appeal against disallowance of deduction u/s. 80-IE due to delay in filing return.

Detailed Analysis:
The appellant, engaged in manufacturing Soya Chunks, appealed against the disallowance of a deduction u/s. 80-IE amounting to Rs. 18,44,653 due to a delay in filing the return of income for AY 2015-16. The Assessing Officer (AO) disallowed the claim as the return was filed after the due date of 30.10.2015, despite the appellant's explanation of facing domestic issues causing mental distress. The AO added the disallowed amount to the total income. The Commissioner of Income Tax (Appeals) upheld the AO's decision, emphasizing the importance of filing the return before the due date for claiming deductions under section 80IE. The appellant contended that the delay should not disqualify them from the deduction, citing a Delhi High Court decision in Fiberfill Engineers Vs. DCIT. The High Court's decision highlighted that a delay in filing the return should be viewed as bona fide if the entitlement to the deduction was not questioned on merits.

The Tribunal noted that the AO accepted the appellant's claim for deduction under section 80IE for previous assessment years and disallowed the current claim solely due to the delay in filing the return. The Tribunal referenced the legislative provision allowing belated filing under section 139 of the Income-tax Act, emphasizing that once the conditions are met, the return should be considered as filed under section 139(1). Relying on the Delhi High Court's decision in Fiberfill Engineers case, the Tribunal concluded that the delay in filing the return should not be a reason to deny the appellant's claim for deduction under section 80IE. The Tribunal directed the AO to allow the appellant's claim for deduction under section 80IE for AY 2015-16, as the deduction was otherwise merited.

In conclusion, the Tribunal allowed the appellant's appeal, emphasizing that the delay in filing the return should not disqualify the appellant from claiming the deduction under section 80IE. The decision was based on the legislative provision allowing belated filing and the precedent set by the Delhi High Court in a similar case.