2012 (4) TMI 264 - AT - Income Tax

Disallowance of claim u/s 80IC - assessee filed return of income after due date claiming deduction u/s 80-IC - AO disallowed the claim as per Section 80AC stating unless the return is filed within the prescribed date, the claim u/s 80IC shall not be allowed - Held that - The assessee in the present case, had filed all the necessary documents which were supporting the claim of the assessee for deductions u/s 80IC before due date of filing the return. The default of the assessee for not filing the return was only a technical default as the return was not filed, but supporting documents were filed - claim of the assessee should be considered on merits and it should not be rejected - AO has not examined the claim of the assessee on merits that whether or not the assessee is fulfilling the conditions laid down in Section 80IC, we restore the matter back to the file of AO to examine that whether these conditions are satisfied by the assessee - Appeal in favour of assessee in the mentioned manner.

Summary

Issues:
- Disallowance of claim under Section 80IC for delayed filing of Income Tax Return.

Analysis:
1. The appeal was against the order of the CIT (A) confirming the disallowance of a claim under Section 80IC due to delayed filing of the Income Tax Return. The assessee filed the return after the due date but claimed that the delay was due to the fault of the counsel, not the assessee. The assessee argued that all necessary documents were submitted before the due date, and the delay was a technical default. The CIT (A) dismissed the appeal, stating that the law does not provide relief for delayed filing due to reasonable cause, despite the submissions made by the assessee.

2. The assessee reiterated their submissions before the ITAT, providing copies of documents submitted before the due date and emphasizing that the delay was not intentional. The AR argued that the provisions of Section 80AC should be construed as directory, not mandatory, citing a Supreme Court decision. The DR, on the other hand, supported the orders of the Assessing Officer and CIT (A), claiming that Section 80AC is mandatory.

3. The ITAT analyzed the provisions of Section 80AC and compared them to similar provisions in Section 10B(1). Both sections disallow deductions if the return is not filed within the prescribed time. Referring to a previous decision, the ITAT held that in cases of reasonable cause for delayed filing, the claim should be considered on merit. The ITAT directed the Assessing Officer to examine the merits of the assessee's claim under Section 80IC.

4. The ITAT concluded that the delay in filing the return was a technical default, as all necessary documents were submitted before the due date. Therefore, the claim under Section 80IC should not be denied solely based on delayed filing. The matter was remitted back to the Assessing Officer to examine whether the conditions for the claim under Section 80IC were satisfied by the assessee. The ITAT allowed the appeal in favor of the assessee, following the precedent set in a similar case.

This detailed analysis of the judgment highlights the main issue of disallowance of a claim under Section 80IC due to delayed filing of the Income Tax Return and provides a comprehensive understanding of the arguments presented, legal provisions involved, and the ITAT's decision.