2019 (10) TMI 235 - AT - Income Tax

Claim u/s 80IC - return was not filed u/s 139(1) - belated return of income was filed u/s 139(4) - HELD THAT - Considering the peculiar facts and circumstances of the case and position of law as canvassed by the parties before the Bench, we hold that the claim of the assessee could not be ousted on the fact that the return was filed within the extended period of sub section(4) of Section 139. Accordingly, we hold that the assessee deserves to succeed in principle. See M/S SYMBIOSIS PHARMACEUTICALS P. LTD. VERSUS THE DCIT, CIRCLE, YAMUNA NAGAR 2017 (11) TMI 1361 - ITAT CHANDIGARH - Decided in favour of the assessee.

Summary

Issues Involved:
1. Rejection of claim under section 80IC of the Income Tax Act, 1961.
2. Disallowance of claim due to late filing of return under section 139(1).
3. Legal and factual basis for disallowance of claim.

Issue-wise Detailed Analysis:

1. Rejection of claim under section 80IC of the Income Tax Act, 1961:
The primary grievance of the Assessee was the rejection of their claim under section 80IC, which provides for deductions for certain undertakings. The Assessee had filed the return of income late, and the claim was rejected because the return was not filed within the time allowed under section 139(1). The Assessee argued that the provisions of Section 139(1) should be read along with Section 139(4), which allows for an extended period for filing returns. The A.O. and the Ld. CIT(A) both rejected this argument, leading to the appeal.

2. Disallowance of claim due to late filing of return under section 139(1):
The Assessee's return was filed within the extended period allowed under Section 139(4), but not within the original due date specified under Section 139(1). The A.O. disallowed the claim based on Section 80AC, which mandates that deductions under section 80IC will not be allowed if the return is not furnished on or before the due date specified under Section 139(1). The Ld. CIT(A) upheld this decision. The Assessee contended that the delay was due to reasons beyond their control, involving a dispute with their tax consultant, which was supported by an affidavit detailing the circumstances.

3. Legal and factual basis for disallowance of claim:
The Tribunal considered the Assessee's argument, supported by previous ITAT rulings, including the case of M/s Symbiosis Pharmaceuticals P. Ltd. Vs. DCIT, which had similar facts. It was noted that all supporting documents for the deduction claim were filed within the extended period under Section 139(4). The Tribunal held that the procedural requirements of Section 80AC should be interpreted in a manner that allows for reasonable causes for delay. The Tribunal emphasized that the provisions being machinery provisions should be interpreted to avoid unjust denial of legitimate claims, especially when the delay was not attributable to the Assessee.

Conclusion:
The Tribunal concluded that the Assessee's claim under section 80IC should not be rejected solely because the return was filed within the extended period under Section 139(4) rather than the original due date under Section 139(1). The matter was remanded to the A.O. for verification, with instructions to provide the Assessee a reasonable opportunity of being heard. The appeal was allowed in favor of the Assessee.

Final Judgment:
The appeal of the Assessee was allowed, with the issue being decided in favor of the Assessee, and the matter was remanded to the A.O. for further verification.