2015 (10) TMI 950 - HC - Income Tax

Benefit of deduction under Section 80IB (10) - CIT initiated proceedings under Section 263 and proceeded to withdraw the deduction claimed by the Assessee under Section 80IB(10) was whether the requirement under Section 80AC, that the return had to be filed within the time prescribed under Section 139(1) of the Act, was mandatory - ITAT concluded that there was no justification for CIT to have invoked the jurisdiction Section 263 - Held that - As far as the present case is concerned, the Court is satisfied that at the time when the CIT passed the order dated 6th February, 2012 under Section 263 of the Act there was a conflict of opinions of the various benches of the ITAT on whether 80AC was mandatory. Consequently, the ITAT was not in error in reversing the order of the CIT as far as the question of exercising jurisdiction under Section 263of the Act was concerned. No substantial question of law arises on the said issue. It is clarified that the question whether the requirement under Section 80AC of the Act is mandatory is left open for consideration in an appropriate case. - Decided against revenue.

Summary

Issues:
1. Delay in refiling the appeal
2. Interpretation of Section 80AC regarding the time limit for filing the return under Section 139(1) of the Income Tax Act
3. Conflict of opinions on the mandatory nature of Section 80AC between different High Courts and ITAT benches

Delay in Refiling the Appeal:
The High Court condoned a delay of 296 days in refiling the appeal. The application for delay was disposed of accordingly.

Interpretation of Section 80AC:
The appeal by the Revenue was against an order passed by the Income Tax Appellate Tribunal (ITAT) regarding the deduction claimed under Section 80IB(10) for the Assessment Year 2008-09. The issue revolved around whether the requirement under Section 80AC, stating that the return must be filed within the time specified under Section 139(1) of the Act, was mandatory. The ITAT allowed the appeal by the Assessee, citing a cleavage of opinion within the ITAT on this matter. The Revenue relied on decisions from various High Courts and ITAT benches supporting the mandatory nature of Section 80AC, while the Assessee cited decisions favoring a different interpretation.

Conflict of Opinions:
The High Court noted conflicting opinions on the mandatory nature of Section 80AC among different High Courts and ITAT benches. While decisions from the Uttarakhand High Court and Calcutta High Court supported the Revenue's stance, the High Court observed a lack of authoritative pronouncement on this matter. The Court concluded that at the time of the CIT's order under Section 263, there was a conflict of opinions within the ITAT, justifying the ITAT's decision to reverse the CIT's order. The Court clarified that the question of whether Section 80AC is mandatory remains open for consideration in a suitable case, dismissing the appeal without any substantial question of law arising on the issue.