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2015 (8) TMI 647 - AT - Income TaxRevision u/s 263 - issue of applicability of claim of deduction under section 80IC not examined by AO - Held that - The language of Section 80AC is negatively worded in as much as it provides in clear terms that deduction u/s 80IC shall not be allowed if the return of income containing such claim is not furnished by the due date specified in Section 139(1). In the face of such clear language of Section 80AC, there can be no hesitation in holding that the provisions of section 80AC are mandatory in nature and therefore failure to furnish the return of income filed in due date specified in Section 139(1) would disentitle the assessee from the claim of deduction u/s 80IC. It is admitted fact that return of income filed by assessee was late. Therefore, the Assessing Officer should have examined this aspect at the stage of assessment while granting deduction to the assessee. Since the Assessing Officer has not examined this aspect of late return filed by the assessee, therefore, Ld. Commissioner of Income Tax was justified in invoking jurisdiction under section 263 of the Act and was justified in holding that the assessment order is erroneous as wel l as prejudicial to the interest of revenue. The Ld. Commissioner of Income Tax, therefore, rightly directed the Assessing Officer to pass fresh assessment order in accordance with law. The appeal of the Act has no merit and the same is accordingly, dismissed. - Decided against assessee.
Issues:
1. Applicability of claim of deduction under section 80IC of the Income Tax Act. 2. Validity of late filing of return of income by the assessee. 3. Jurisdiction of the Ld. Commissioner of Income Tax under section 263 of the Act. 4. Compliance with the provisions of Section 80AC for claiming deductions under Section 80IC. Analysis: Issue 1: Applicability of claim of deduction under section 80IC The case involved the assessee, engaged in manufacturing Electronic Medical Diagnostic Equipments, filing a return of income declaring a certain amount. The Assessing Officer completed the assessment without examining the claim of deduction under section 80IC amounting to a significant sum. The Ld. Commissioner of Income Tax found the assessment order to be erroneous and prejudicial to the revenue's interest due to the failure to consider this claim, leading to the direction for a fresh assessment order. Issue 2: Validity of late filing of return The Ld. Commissioner emphasized the mandatory nature of filing the return of income within the due date specified under Section 139. The provisions of Section 80AC were analyzed, which clearly stated the consequences of not filing the return containing the claim for deduction under section 80IC before the due date. The Ld. Commissioner held that the late filing of the return disqualified the assessee from claiming the deduction under section 80IC, as per the statutory requirements. Issue 3: Jurisdiction under section 263 of the Act The Ld. Commissioner invoked jurisdiction under section 263 based on the finding that the assessment order was both erroneous and prejudicial to the revenue's interest. The failure to address the late filing of the return and its impact on the claim for deduction under section 80IC led to the direction for a fresh assessment order to be passed by the Assessing Officer. Issue 4: Compliance with Section 80AC for claiming deductions under Section 80IC The Ld. Commissioner highlighted the mandatory nature of Section 80AC, emphasizing that the deduction under section 80IC cannot be allowed if the return of income containing the claim is not filed within the specified due date. The assessee's argument regarding reasons for the delay in filing the return was deemed irrelevant, as the statutory provisions were clear and did not provide for exceptions to the application of Section 80AC. In conclusion, the appeal by the assessee was dismissed as the late filing of the return impacted the claim for deduction under section 80IC, rendering the assessment order erroneous and prejudicial to the revenue's interest. The Ld. Commissioner's direction for a fresh assessment order was upheld based on the statutory provisions and legal precedents cited in the judgment.
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