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2019 (11) TMI 598 - AT - Income TaxRectification of mistake u/s 154 - deduction u/s 80IB disallowed - HELD THAT - An identical issue has come up before the Tribunal in the assessee s own case for assessment year 2011-12 wherein also the Assessing Officer had withdrawn the deduction allowed under section 80IB of the Act, which has been upheld by the ld. CIT(A) and the Tribunal vide its order dated 30/10/2018, relying on various case laws, cancelled the rectification order passed under section 154 of the Act and allowed the appeal of the assessee, holding that the Assessing Officer had no jurisdiction to pass order under section 154 of the Act. Main grievance of the ld. D.R. with regard to the allowability of deduction u/s 80IB subject to filing of return within the time prescribed under section 139(1) of the Act, has been considered by the Hon'ble Kerala High Court in the case of Chirakkal Services Co-operative Bank vs. CIT 2016 (4) TMI 826 - KERALA HIGH COURT and allowed deduction claimed by the assessee, albeit under section 80P of the Act, on which judgment reliance has been placed by the Lucknow Bench of the Tribunal while allowing the deduction under section 80IB of the Act to the assessee in the assessee s own case for assessment year 2011-12. Since the allowability of deduction under section 80IB of the Act has been considered by the Tribunal in the assessee's own case, on facts exactly similar, mutatis mutandis, to those present for the year under consideration, for assessment year 2011-12 and the Tribunal has decided the issue in favour of the assessee, vide order dated 30/10/2018, following the view taken by the Lucknow Bench of the Tribunal in the assessee's own case (supra), we confirm the order of the ld. CIT(A), cancelling the rectification order passed by the Assessing Officer under section 154 of the Act. Accordingly, all the grounds taken by the Department in its appeal are rejected.
Issues Involved:
1. Jurisdiction of the Assessing Officer (AO) under Section 154 of the Income Tax Act. 2. Allowability of deduction under Section 80IB when the return is filed beyond the time allowed under Section 139(1). 3. Applicability of the Kerala High Court decision in Chirakkal Services Coop Bank vs. CIT. 4. Ignoring the binding decision of the Kolkata High Court in CIT Siliguri vs. Shelcon Properties Pvt. Ltd. 5. Interpretation of incentive provisions of Section 80IB read with Section 80AC. Detailed Analysis: 1. Jurisdiction of the Assessing Officer (AO) under Section 154: The primary issue is whether the AO had jurisdiction to rectify the order under Section 154 of the Income Tax Act. The Tribunal noted that the AO initially allowed the deduction under Section 80IB despite the return being filed beyond the prescribed time under Section 139(1). The AO later rectified this by disallowing the deduction under Section 154, citing it as a "mistake apparent from record." However, the Tribunal held that since the issue was debatable, it could not be rectified under Section 154. This view aligns with the Supreme Court's ruling in T.S. Balram vs. Volkart Brothers, which states that a debatable point of law is not a mistake apparent from the record. 2. Allowability of Deduction Under Section 80IB: The Tribunal examined whether the deduction under Section 80IB could be allowed when the return was filed beyond the time allowed under Section 139(1). The Tribunal referred to the Kerala High Court's decision in Chirakkal Services Coop Bank vs. CIT, which held that deductions could be considered for belated returns if they were otherwise eligible. The Tribunal found this decision applicable, despite the Revenue's argument that it pertained to Section 80P and not Section 80IB. 3. Applicability of Kerala High Court Decision in Chirakkal Services Coop Bank vs. CIT: The Tribunal upheld the CIT(A)'s reliance on the Kerala High Court's decision in Chirakkal Services Coop Bank vs. CIT. The Revenue argued that this decision was not applicable as it pertained to Section 80P, which does not have a specific provision requiring the return to be filed within the time allowed under Section 139(1). However, the Tribunal found that the principles laid out in the Chirakkal case were relevant and applicable to the issue at hand. 4. Ignoring the Binding Decision of the Kolkata High Court: The Revenue contended that the CIT(A) ignored the binding decision of the Kolkata High Court in CIT Siliguri vs. Shelcon Properties Pvt. Ltd., which held that no deduction under Section 80IB was allowable if the return was not filed within the time allowed under Section 139(1). The Tribunal acknowledged this decision but noted that there were conflicting views from different High Courts, making the issue debatable. Therefore, it could not be rectified under Section 154. 5. Interpretation of Incentive Provisions of Section 80IB read with Section 80AC: The Tribunal also addressed the Revenue's argument that the provisions of Section 80IB read with Section 80AC should be strictly interpreted, as per the Supreme Court's decision in Commissioner of Customs Mumbai vs. M/s Dilip Kumar & Company. The Tribunal noted that the issue of whether the provisions are mandatory or directory was debatable and had been interpreted differently by various High Courts and Tribunals. Therefore, the AO could not rectify the order under Section 154 on this ground. Conclusion: The Tribunal concluded that the AO did not have the jurisdiction to pass the order under Section 154, as the issue was debatable. It upheld the CIT(A)'s order canceling the rectification order passed by the AO. The appeal of the Revenue was dismissed, and the Tribunal confirmed that the deduction under Section 80IB was allowable despite the return being filed beyond the time prescribed under Section 139(1), based on the principles laid out in the Chirakkal Services Coop Bank vs. CIT case.
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