2022 (12) TMI 440 - AT - Income Tax

Revision u/s 263 - Deduction u/s 10A - HELD THAT - CIT by exercising the power conferred under section 263 of the Act, directed the AO to disallow the claim of deduction u/s 10A - Now the CBDT by order u/s 119(2)(b) for the assessment year 2010- 11 condoned the delay and also clarified that the condonation of delay in filing the return of income will not amount to acceptance of claims made in the concerned ROI of the assessee and the AO shall deal with it on merits. We are of the considered opinion that the AO has to examine the claim of the assessee under section 10A of the Act in accordance with law - we set aside the order passed by the ld. CIT(A) and remit the matter back to the file of the AO to decide the claim of the assessee under section 10A of the Act. Accordingly, the appeal in is allowed for statistical purposes. Deduction u/s 10A - There was delay in filing the return of income - HELD THAT - As gone through the decision in the case of Saffire Garments 2012 (12) TMI 193 - ITAT RAJKOT wherein, the Special Bench has held that to claim a benefit under section 10A of the Act, the return of income has to be filed under section 139 of the Act and it is a mandatory and not directory. Respectfully following the decision of the Rajkot Special Bench, we reject the arguments of the ld. Counsel for the assessee and the appeals filed by the assessee for the assessment years 2011- 12 and 2012-13 are dismissed. So far as appeal for the assessment year 2009-10 is concerned, the assessee has not filed petition for condonation of delay before the CBDT. In view of our decision hereinabove, the return of income has to be filed as per section 139 of the Act and it is mandatory. Therefore, the claim of the assessee cannot be entertained. Accordingly, the appeal filed for the assessment year 2009-10 is dismissed.

Summary

Issues:
1. Delay in filing appeals before the Tribunal.
2. Validity of deduction claim under section 10A of the Income Tax Act.
3. Assessment for various assessment years.
4. Mandatory vs. directory nature of filing return of income under section 139.

Issue 1: Delay in filing appeals before the Tribunal:
The appeals filed by the assessee were delayed, with appeals in I.T.A. Nos. 521 to 524/Chny/2018 delayed by 4 days and I.T.A. No. 254/Chny/2016 delayed by 274 days. The assessee filed petitions to condone the delay, which were accepted after finding sufficient cause for the delay. The Tribunal admitted the appeals for adjudication.

Issue 2: Validity of deduction claim under section 10A of the Income Tax Act:
The assessee, a private limited company providing Call Support Services to foreign companies, claimed deduction under section 10A of the Act. The Commissioner found the initial assessment allowing the deduction to be erroneous and prejudicial to revenue as the return was filed late. The Commissioner directed the Assessing Officer to revise the assessment, disallowing the deduction. The Tribunal remitted the matter back to the Assessing Officer for fresh examination of the claim under section 10A.

Issue 3: Assessment for various assessment years:
For the assessment years 2011-12 and 2012-13, the Assessing Officer denied the deduction claim under section 10A due to delayed filing of the return of income. The Tribunal dismissed the appeals based on the mandatory nature of filing the return under section 139, following the decision of the Rajkot Special Bench. For the assessment year 2009-10, the appeal was dismissed as the assessee did not file a petition for condonation of delay.

Issue 4: Mandatory vs. directory nature of filing return of income under section 139:
The Tribunal held that filing the return of income under section 139 is mandatory to claim benefits under section 10A of the Act. The decision of the Rajkot Special Bench was followed, emphasizing the mandatory nature of filing under section 139. Consequently, appeals for the assessment years 2011-12, 2012-13, and 2009-10 were dismissed based on this interpretation.

In conclusion, the Tribunal allowed the appeal in I.T.A. No. 522/Chny/2018 for statistical purposes, remitted the matter back to the Assessing Officer for the assessment year 2010-11, and dismissed the appeals for the other assessment years based on the mandatory nature of filing returns under section 139 for claiming deductions under section 10A of the Income Tax Act.