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TMI Blog2012 (12) TMI 193X X X X Extracts X X X X X X X X Extracts X X X X ..... duction u/s. 10A? (c) If the answer to question (b) is in the affirmative, would it not amount to conferring a power on the Tribunal to extend the time-limit for filing the return u/s.139(1) or to condone the delay in filing the same, when no such power is expressly conferred upon it by the Act?" 2. The assessee is a partnership firm. The assessee filed return of income declaring total income of Rs. 2,72,730/- on 31.01.2007 which was processed u/s 143(1) of the Income tax Act, 1961. Thereafter, the case was selected for scrutiny and notice u/s 143(2) of the Income tax Act, 1961 was issued and served on 23.01.2008. The assessee had claimed deduction u/s 10A of the Income tax Act, 1961. When asked to explain this claim, the assessee submitted before the A.O. that it derived profit from export of articles produced in SEZ and the sale proceeds were brought in India in convertible foreign exchange and, therefore, deduction u/s 10A of the Income tax Act, 1961 is allowable to it. Thereafter, it is noted by the A.O. in the assessment order that the assessee had filed its return of income on 31.01.2007 and the extended due date for filing return of income for the assessee's, bei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 139(1) is specific which shall prevail on general provisions. He also placed reliance on the judgement of Hon'ble Apex Court rendered in the case of Prakash Nath Khanna v. CIT as reported in 266 ITR 01 (S.C.). Reliance was also placed on the Tribunal decision rendered in the case of Balkishan Dhawan HUF v. ITO as reported in 50 SOT 49 (ASR)(URO). He also submitted that remedy lies with the Board and not before the Appellate Authorities. He also submitted that there is difference between the provisions of Section 139(1) and Section 139(4) and, therefore, the proviso to section 139(1) should prevail. 5.1 Written submissions were filed by the Ld. D.R. and the same were also duly considered. 6. In the rejoinder, it was submitted by the Ld. A.R. that the judgement cited by the Ld. D.R. are not applicable in the present case because in those cases, the dispute was regarding substantial aspect and not to the procedural aspect. He also placed reliance on the judgement of Hon'ble Bombay High court rendered in the case of CIT v. Shivanand Electronics as reported in 209 ITR 63 and submitted that this judgement supports the case of the assessee. He also submitted that releva ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the purposes of the business of the assessee in the manner laid down in sub-section (1B) : Provided that no deduction under this section shall be allowed to an assessee who does not furnish a return of his income on or before the due date specified under sub-section (1) of section 139." 9. We are also required to consider Section 139(1) and the 4th proviso to Section 139(1) of the Income tax Act, 1961 which read as under:- Section 139(1) "Every Person - (a) being a company or a firm or (b) being a person other than a company or 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 o the income of such other person during the previous year, in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed." 4th Proviso; Provided also that every person, being an individual or a Hindu undivided family or an association of persons or a body of individuals, whether incorporated or not, or an artificial ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee is liable to pay interest on the tax payable by him after reducing advance tax and TDS/TCS if any paid by him apart from some other reductions. Such interest is payable from the date immediately following the due date for filing return of income and is payable up to the date on which such return of income was furnished by the assessee and if the assessee has not furnished any return of income then the interest is payable till the date of completion of the assessment u/s 144. In our considered opinion, this is also one of the consequences of not filing return of income by the assessee within the due date. One may raise this argument that interest u/s 234A is payable only if the assessee has not paid his advance tax and, therefore, this is interest for the failure of the assessee to pay advance tax as per the requirement of the Act and not for the delay in filing return of income. But in our considered opinion, this is not so. For the failure of the assessee to pay advance tax as per the requirement o the Act, interest is chargeable u/s 234B of the Income tax Act, 1961 if such advance tax paid by the assessee is less than 90% of the assessed tax. Such interest u/s 234B is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me as prescribed u/s 139(1) of the Act. This judgement also supports the view taken by us while answering question NO.1 as per above paras. When even for the purpose of prosecution also, it was held by the Hon'ble Apex Court that even if the return of income furnished by the assessee within the time allowed u/s 139(4), it does not dilute infraction in not furnishing the return in due time as prescribed under sub-section(1) of Section 139, then it cannot be accepted that such furnishing of return of income within time allowed u/s 139(4) will dilute the provisions contained in the proviso to Section 10A(1A) of the Income tax Act, 1961. 13. Regarding various submissions of the Ld. A.R. and various judgements on which reliance has been placed by the Ld. A.R., we would like to observe that these submissions do not have merit in view of our above discussion. The first submission is this that the provision of Section 139(4) are considered as proviso to Section 139(1) and if the assessee has filed return of income u/s 139(4), the same should be considered as return filed u/s 139(1) of the Income tax Act, 1961. On this aspect, we have already seen the judgement of Hon'ble Apex Cour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er passed by the A.O. u/s 132(5) for retaining the seized assets and hence, this judgement is not relevant in the present case. - The 2nd judgement cited is the judgement of Hon'ble Madhya Pradesh High court rendered in the case of CIT v. Panama Chemical Works. In that case, the issue involved was regarding filing of audit report in Form 10CCB. The same was required to be filed along with the return of income filed by the assessee but in that case, the same was filed during assessment proceedings. Under these facts, it was held that the claim of the assessee regarding deduction u/s 80-I cannot be rejected if the required report in Form 10CCB was filed in the course of assessment proceedings. In the present case, the dispute is not regarding filing of some report along with return of income but the dispute is regarding filing of return of income itself within due date and hence, this judgment is also not relevant in the present case. - The 3rd judgement cited is the judgement of Hon'ble Delhi High court rendered in the case of CIT v. Axis Computers (India) (P) Ltd. In that case also, the dispute was regarding the requirement of filing of audit rep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 362). In that case, the dispute was regarding deduction u/s 80G of the Income tax Act, 1961 and as per the facts of that case, the objection was regarding failure of assessee in rendering accounts to the competent authority within the prescribed period and it was held that such a requirement is directory and not mandatory. In the present case, the dispute is regarding filing of return of income itself within the due date and hence, this judgement of Hon'ble Delhi High Court is also not relevant in the present case. - The next judgement cited before us is the judgment of Hon'ble Gujarat High Court rendered in the case o CIT v. Gujarat Oil and Allied Industries (201 ITR 325). In that case also, the dispute was regarding the requirement of filing of audit report as to whether the same is mandatory or directory and as discussed in above paras, this judgment is also not relevant in the present case. - The next judgement cited before us is the judgement of Hon'ble Delhi High Court rendered in the case of Continental Contraction Ltd. v. Union of India and others (185 ITR 230). This judgement is also not applicable in the present case because in that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ld. A.R. in the synopsis as well as copies of which are submitted in the paper book II and III and we have seen that none of these judgments is relevant in the present case. 17. In view of our above discussion, we have no hesitation in holding that the provisions of proviso to Section 10A(1A) is mandatory and not merely directory. 18. Now, we examine the 2nd question (b). In our considered opinion, since we have answered the 1st question (a) against the assessee and held that the provisions of the proviso to Section 10A(1A) is mandatory and not merely directory, the 2nd question (b) is not required to be answered because the same would have been required to be answered if we would have found that those provisions are not mandatory but merely directory. Hence, we do not answer the 2nd question. 19. The 3rd (c) question is also not required to be answered by us because the same is to be required to be answered only if our reply to 2nd question would have been in affirmative. Since we have found that this question is not required to be answered in the facts of the present case as per which we have decided the first question against the assessee by holding that the provisions of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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