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TMI Blog2015 (3) TMI 579X X X X Extracts X X X X X X X X Extracts X X X X ..... nal reversing the order passed by the Commissioner of Income-tax (Appeals) and allowing the claim for deduction under section 80-IB(10) of the Income-tax Act, 1961. The facts and circumstances of the case, briefly stated, are as follows : The assessee is engaged in the business of construction of housing projects. The assessee filed its return of income for the assessment year 2009-10 on February 11, 2010, showing the gross income of ₹ 1,47,06,878. The assessee claimed deduction of ₹ 94,67,987 under section 80-IB(10) of the Income-tax Act. The Assessing Officer completed the assessment under section 143(3) of the Income-tax Act without allowing the deduction claimed by the assessee. The assessee preferred an appeal which was dis missed by the Commissioner of Income-tax (Appeals). Under section 80-IB(10) of the Income-tax Act, the amount of deduction in the case of an undertaking engaged in developing and building housing projects, approved before March 31, 2008, by a local authority, shall be 100 per cent. of the profits derived in the previous year. The allowability of the aforesaid deduction is, however, subject to the following important preconditions : ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he lack of negligence on the part of the assessee, it appears that an affidavit was filed before the Commissioner of Income-tax (Appeals) wherein it was, inter alia, alleged that : The work relating to online submission of the return of the asses see was entrusted to Ms. Dipsikha Das, a junior advocate employed by them. She suddenly resigned her job in the second week of October, 2009, and left Siliguri. Mrs. Bhargava, learned advocate appearing in support of the appeal, submitted that the learned Tribunal misdirected itself in trying to find out whether the assessee was negligent or there was sufficient reason which prevented the assessee from filing the return in time or within the due date. She submitted that this question can be gone into in those cases where the statute has left any scope for discretion. Section 80AC of the Income-tax Act, she added, is very specific. In case the assessee wanted to avail of himself of the benefit of the deduction under section 80-IB(10) of the Income-tax Act the return must have been filed on or before the due date. When the return was admittedly not filed on or before the due date, the consequence is that the assessee is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n (3) of section 22. Obviously, in the case before their Lordships, there was no obstacle as the one before us created by section 80AC of the Income-tax Act. Therefore, the first judgment cited by Mr. Khaitan is of no assistance in deciding the issue. In the case of Fertilizer Corporation of India Ltd. v. State of Bihar [1988] 68 STC 158 (SC), the question arose whether the benefit of section 15 of the Bihar Sales tax Act, 1959, by which rebate of one per cent. is available to the assessee could be claimed when the return was not filed within the prescribed time frame or within the extended time. Their Lordships answered the question as follows : The return was admittedly not filed within the time prescribed under section 14(1). Has it been filed, then, within the extended period ? In answering this question, certain features of the Act have to be kept in mind. The first is that the Act does not set out any particular procedure for obtaining extension of time. It does not prescribe any form of application. It does not say that such application must be filed before the expiry of the prescribed period. It does not require that the prescribed authority must pas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d not to frustrate it. Mr. Khaitan contended that 100 per cent. deduction permitted under section 80-IB(10) of the Income-tax Act is with the laudable object of promoting housing projects which is likely to be frustrated if the deductions are to be denied for lack of a ministerial job in time. We are unable to accept this submission. It is also not possible for us to hold that any liberal construction is appropriate in the facts of this case. The fourth judgment cited by Mr. Khaitan is in the case of CIT v. Berger Paints (India) Ltd. The question arose, whether the deductions under section 32AB and under section 80HHC of the Income-tax Act not permissible in a case where the audit report in the prescribed form duly signed and verified by the accountant was not submitted along with the return of income as required by sub-section (5) of section 32AB and sub-section (4) of section 80HHC of the Income-tax Act. This question was answered by the Division Bench of this court in favour of the assessee. The Division Bench was of the opinion that it was not required to interpret the words 'shall not be permissible' as mandatory . It was further observed that the audit report ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d accomplish the reasonable objectives for which it was passed. Fiscal statute generally seeks to preserve the need to comply strictly with regulatory requirements that are important, especially when a party seeks the benefits of an exemption clause that are important. Substantial compliance with an enactment is insisted upon, where mandatory and directory requirements are lumped complied with, it will be proper to say that the enactment has been substantially complied with notwithstanding the non-compliance of directory requirements. In cases where substantial compliance has been found, there has been actual compliance with the statute, albeit procedurally faulty. The doctrine of substantial compliance seeks to preserve the need to comply strictly with the conditions or requirements that are important to invoke a tax or duty exemption and to forgive non-compliance for either unimportant and tangential requirements or requirements that are so confusingly or incorrectly written that an earnest effort at compliance should be accepted. The test for determining the applicability of the substantial compliance doctrine has been the subject of a myriad of cases and quite often, the criti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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