2023 (12) TMI 1267 - HC - Income Tax

Deduction u/s 80IB(10) - As original return was filed by the assessee beyond the period prescribed u/s 139(1) of the Act. Hence, deduction u/s 80IB(10) could not be allowed to it in view of bar imposed u/s 80 AC - ITAT allowing certain deductions to the assessee under Section 80IB(10) even though its return of income for assessment year 2006-2007 was filed beyond the period prescribed under Section 139(1) of the Act and the deductions were claimed only in the revised return furnished later - HELD THAT - As decided in Prakash Nath Khanna and another 2004 (2) TMI 3 - SUPREME COURT Court cannot read anything into a statutory provision which is plain and unambiguous - A statute is an edict of the Legislature. The language employed in the statute is determinative factor of legislative intent. Provisions of Section 276-CC are in clear terms. There is no scope of uncertainty. The interpretation sought to be put on Section 276-CC to the effect that a return filed under Section 139(4) would meet requirement of filing a return under Section 139(1), cannot be accepted. The time within which a return is to be furnished is indicated in Section 139(1) and not in 139(4). That being so, even if a return is filed in terms of Section 139(4), that would not dilute the infraction in not furnishing the return in due time as prescribed under Section 139(1). Otherwise, the use of words in due time would lose their relevance and it cannot be said that the said expression was used without any purpose. Therefore, a return of income filed under Section 139(4) cannot be said to be meeting the requirements of Section 139(1) in context of Section 80AC of the Act, which specifically insists upon filing of return by the due date prescribed under Section 139(1) for availing the admissible deductions. In the instant case, the assessee is a statutory organization created by the State for providing develop housing infrastructure. It took up a defence of late audit for belated filing of its return of income. The veracity of ground so put forth for late filing of return has not been disputed by the appellant. The assessee deals with public money, the State exchequer. Commissioner of Income Tax and the Income Tax Appellate Tribunal have concurrently held on facts after undertaking a lengthy pain staking exercise that the assessee was actually entitled to deductions under Section 80IB(10) of the Act. The specific amount of deduction admissible to it has also been computed. The ground put forth by the assessee for not filing the return of income within the time provided under Section 139(1) having been accepted on facts by the appellant, we in the given facts are inclined to hold, in this case, that the assessee had a reasonable bonafide cause for not filing the return of income within the time permitted under Section 139(1). We are in agreement with the view of the learned ITAT that once in the given facts, the assessee has been held entitled to claim the specifically computed deductions, then it should not be burdened with taxes which it is otherwise not liable to pay under law.

Summary

Issues Involved:
1. Whether the deduction claimed under Section 80IB in a non-est return can be allowed.
2. Whether the deduction claimed by the assessee before the appellate authority, which was not claimed originally due to delayed audit, can be allowed.

Summary:

Issue 1: Deduction under Section 80IB in a Non-Est Return

The revenue filed an appeal against the ITAT's order allowing deductions under Section 80IB(10) of the Income Tax Act, despite the assessee filing the return beyond the period prescribed under Section 139(1) and claiming deductions in a revised return. The Assessing Officer (AO) and the Commissioner of Income Tax (Appeals) [CIT(A)] had declined the deduction, citing the bar under Section 80AC, which mandates filing the return by the due date specified under Section 139(1). The ITAT held that a non-est return does not exist in the eyes of law and cannot be acted upon. However, it also stated that the CIT should have considered the claim in its appellate jurisdiction if the assessee was otherwise entitled to the deduction.

Issue 2: Deduction Claimed Before Appellate Authority Due to Delayed Audit

The assessee, a statutory organization, claimed that the delay in filing the return was due to the local Audit Department's delay. The ITAT held that the CIT(A) and ITAT had concurrently found the assessee entitled to certain deductions under Section 80IB(10). The only contention was the timing of the original return. The court noted that Section 139(4) allows filing a return before the end of the assessment year or before the completion of the assessment, whichever is earlier. The court referenced the Supreme Court's judgment in Prakash Nath Khanna, which stated that a return filed under Section 139(4) does not meet the requirements of Section 139(1) in the context of Section 80AC.

The court also considered the Delhi High Court's decision in B.U. Bhandari Nandgude Patil Associates, which emphasized that statutory time limits must be adhered to unless compelling reasons are shown. In this case, the assessee's reason for delay, late audit, was accepted by the appellant. The court held that the assessee had a reasonable and bona fide cause for the delay and should not be burdened with taxes it is not liable to pay under law.

For these reasons, the appeal was dismissed, and all pending applications were disposed of.