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TMI Blog2010 (7) TMI 619X X X X Extracts X X X X X X X X Extracts X X X X ..... . This appeal by the revenue is directed against the order of the Ld. Commissioner of Income-tax (Appeals) dated 3-3-2010 pertaining to assessment year 2006-07. 2. The issue raised reads as under:- On the facts and circumstances of the case and in law, the Ld. Commissioner of Income Tax (Appeals) has erred by directing Assessing Officer to allow the statutory deduction u/s 10B in spite of the fact that Income-tax Act, 1961 clearly speaks that no such deduction shall be allowed to an assessee who does not furnish a return on or before the due date as specified under sub-section (1) of section 139. 3. The Assessing Officer in this case observed that during the year consideration, the assessee has claimed exemption u/s 10B of the Income Tax Act of Rs. 2,06,36,797. He found that as per the proviso to section 10B(1), which has been inserted by the Finance Act, 2006, w.e.f. A.Y. 2006-07, no deduction under the provisions of section 10B shall be allowed to an assessee if the return of income is not furnished on or before the due date specified under sub-section (1) of section 139 of the Income-tax Act, i.e., 30-11-2007 in the case of the assessee. 3.1 Assessing Officer refer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed and allowed in the preceding years and even in subsequent years also. However, in the year under reference, the Assessing Officer has disallowed the statutory claim on the ground that requisite conditions were not satisfied and reference was made to the proviso to section 10B which was introduced w.e.f. 1-4-2006. It was further submitted that validity of return filed is also not in dispute as the assessment has been completed on the basis of same return. It was further claimed that section 10B has been introduced to promote export and consequently benefit is required to allow, as per the scheme of the Act. It was argued that the word shall has not been correctly interpreted by the Assessing Officer and the same has been applied in the mechanical manner. It was further argued that the word shall has not been used in absolute terms as in appropriate cases, where there is genuine reasons, the delay has to be taken into consideration. It was claimed that in the year under consideration, the date for filing the return as per section 139(1) is 31-10-2006, but on the basis of extension allowed from time to time, the due date was extended to 30-11-2006. It was further claimed that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dentical circumstances and in the context of provisions of section 10(5), wherein also similar condition of filing of prescribed form was laid down, the Hon ble Delhi High Court has concluded that these conditions are directory and not mandatory. In this regard, Ld. Commissioner of Income-tax (Appeals) referred the case laws of CIT v. Integrated Database India Ltd. [2009] 178 Taxman 432 (Delhi) and CIT v. Web Commerce (India) (P.) Ltd. [2009] 318 ITR 1353 (Delhi). 4.4 Considering the above Ld. Commissioner of Income Tax (Appeals) held the Assessing Officer was directed to allow the statutory benefit u/s 10B. 5. Against this order the revenue is in appeal before us. 6. Ld. Departmental Representative pointed out that in section 10(b)(i) by Finance Act, 2006 a proviso has been inserted from 1-4-2006 which specifically provides that no deduction under this section shall be allowed to assessee who has not furnished any return of income on or before the due date specified under sub-section (1) of section 139. He claimed that the said proviso was very much applicable in the year under consideration. He argued that the language of the Act was very clear and since the assessee has no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Finance Act, 2006. This is the first assessment year from which the said proviso has been introduced. Now section 139(1) provides as under:- 139(1). Every person - (a) being a company (or a firm) or (b) being a person other than a company (for a firm), if his total income or the total income of any other person in respect of which he is assessable under this Act during the previous year exceeded the maximum amount which is not chargeable to income-tax, shall on or before the due date, furnish a return of his income or the income of such other person during the previous year, in the prescribed year, in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed. 6.3 We further that another proviso has been inserted in section 139(1) w.e.f. 1-4-2006 by Finance Act, 2005 which reads as under:- Provided also that every person, being an individual or a Hindu undivided family or an associated or an association of persons or a body of individuals, whether incorporated or not, or an artificial juridical person, if his total income or the total income of previous year, without giving effect to the provisions of secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contention of the Revenue was that unless and until the audit report is filed along with the return, the benefit of section 10A cannot b available to the assessee. Recently, we have considered the identical provisions of section 80-IA(7) in the case of CIT v. Contimeters Electricals (P.) Ltd. (2009) 317 ITR 249 (Delhi) I.T.A. 1366/2008 decided on December 2, 2008, and held that as long as the audit report is filed before the framing of the assessment, the provisions of section 80-IA(7) would be complied with inasmuch as the same are directory and not mandatory. A similar view would have to be taken in the present case also inasmuch as the provisions are the same. Consequently, we do not find any fault with the conclusions arrived at by the Tribunal. No substantial question of law arises for our consideration. The appeal is dismissed. 6.8 We find that the proviso in section 10(b)(1) which has been inserted regarding filing of return which we are considering now is akin to the provision of section 10(5) considered by the Hon ble High Court as above. Hon ble High Court had clearly held that such provision is directory and not mandatory. 6.9 Now in the present case, we find that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bjective of the provision and not to frustrate. 6.10 Now we deal with the Ld. Departmental Representative s submission that assessee s remedy lied in applying to the CBDT under section 119(2)(b). The said section reads under:- The Board may, if it considers it desirable or expedient so to do for avoiding hardship in any case or class or cases, by general or special order, authorize [any income tax authority, not being a Commissioner (Appeals)] to admit an application or claim for any exemption, deduction, refund or any other relief under this Act after the expiry of the period specified by or under this Act for making such application or claim and deal with the same on merits in accordance with law. 6.11 The said provision makes it clear that the Board cannot give direction to appellate authorities. Further the Act does not prohibit that, relief in this regard when genuine hardship is faced, cannot be granted by Appellate Authority. We have already given a finding in preceding paragraph that there was genuine hardship on the part of the assessee, under which circumstances the return was filed after a marginal delay. 6.12 Further the very fact that the Act envisages that ..... 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