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TMI Blog2012 (12) TMI 1056X X X X Extracts X X X X X X X X Extracts X X X X ..... consequential in nature. The remaining grounds relate to the following issues, namely: (1) (Gr.No.2) that the order was passed without providing reasonable opportunity to the assessee; (2) (Gr.Nos.4 & 5) that the CIT (A) ought to have held that the assessee being a company need not file a return of income u/s 139(1)(b) of the Act; (3) (Gr.No.6, 7 & 8) that the CIT (A) erred in invoking the provisions of s. 80AC of the Act; - that the CIT (A) also erred in confirming the disallowance of deduction made u/s 80IB of the Act. 3. The issues, in brief, are discussed as under: The assessee company ['the assessee' hence-forth] is engaged in the construction and real estate business. The assessee's premise was subjected to a survey u/s 133A of the Act on 4.1.2008. For the assessment year under consideration, the assessee had filed its return of income on 25.4.2009, admitting an income of Rs. 1,05,58,731/- and claimed deduction of Rs. 1,18,65,656/- under s. 80-IB of the Act. The return was initially processed u/s 143(1) of the Act and, subsequently, took up for scrutiny. According to the AO, notices were issued posting the case for hearing on a number of occasions. There w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... its and providing tax incentives; that in every budget speech, the Finance Ministers have made every endeavour to address the problem of acute shortage of dwelling units - primarily for less privileged sections of the society. The predominant objective of this incentive provision is, therefore, to encourage better availability of the dwelling units at affordable rates for low and middle class segments of the society and, thus it is a beneficial provision for the assessees; - that s. 80AC of the Act provides that deduction u/s 80 IB shall be allowed to assessee only if the assessee furnishes a return of his income on or before the due date specified under sub-section 139(1); - that s.139(1) of the Act provides for due dates for filing the return of income. Accordingly, the due date for filing the return of income of any corporate entity is Sep. 30 of the relevant AY. However, s. 139(4) of the Act carves out an exception (extension) to the time limit under section 139(1) for filing the return of income; - that as per the provisions of s. 139(4), it is clear, that the time limit for filing the return of income is neither inflexible nor inelastic. The question that arises, Page 5 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the assessee had filed its return of income electronically u/s 139(1B) of the Act. S. 139(1B) provides that a corporate entity may furnish the return of income u/s 139(1), at its option, on or before the due date electronically in accordance with the Electronic Furnishing of return of income Scheme, 2007 [EFRIS 2007] - Notification No.SO1281(E) dated 27.7.2007; - that the EFRIS 2007 provides that eligible person may at its option furnish his return of income which he is required to furnish u/s 139.....' of the Act for AY 2007-- 08 or any subsequent AY to an e-return intermediary who shall digitize the data of such return and transmit the same electronically to a server designated for this purpose by the e-return Administrator on or before the due date; - that the time limit provided under EFRIS 2007 [Notification No. SO1281(E) dated 27.07.2007) is not restricted to time limit provided u/s 139(1), but, it extends to the time limit allowed u/s 139(4) (belated return). Relies on case laws: * Fathima Bai v. ITO (2009) 32 DTR (Kar); * CIT v. Tarnetar Corporation (Tax Appeal No.1241 of 2011 - Gujarat High court; * ITO v. Mahaveer Calyx (IT Appeal Nos.153 & 998(Bang) of 201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and CIT (A) due to following reasons: (i) We were not properly advised in the proceedings before the lower authorities and it did not have the services of an Advocate at our command; (ii) During the relevant AY, there was confusion prevalent with regard to claim of deduction under sec. 80 IB of the Act. Assessee's, professionals and even for that matter the Income-tax Department was not very clear as to deduction u/s 80IB (10) would be available on a year to year basis where an assessee is showing profit on partial completion or if it would be available only in the year of completion of the project. It was subsequently clarified by the Board (by) way of Instruction No.4 of 2009 dated 30th June, 2009. 5. Under these circumstances, it is requested that the Hon'ble Tribunal be pleased to: (i) admit the additional evidences; (ii) hear and dispose of the appeal in accordance with law; and (iii) pass such other order as the Hon'ble Tribunal deems fit and proper and thus render justice. 5.1.1. In addition, the assessee furnished an affidavit dated 31.10.2012 wherein, the director of the assessee's had solemnly affirmed on oath as under: "1. Return of income of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 009 through electronic filing mechanism. As no enclosures to be given while e-filing of the returns, the same has been not filed along with the return of income; 4. During the course of the hearing before the AO and the Ld. CIT (A), sufficient opportunity was not provide to the appellant to furnish the Form 10CCB. Ld. AO completed the assessment under sec. 144 of the Act where as Ld. CIT (A) dismissed the appeal only on the ground that the return of income was filed belatedly. Therefore, there was no occasion for the appellant to file Form 10 CCB before the lower authorities. 5. under these circumstances, it is requested that the Hon'ble Tribunal be pleased to - (i) admit the additional evidences; (ii) hear and dispose of the appeal in accordance with law; and (iii) pass such other order as the Hon'ble Tribunal deems fit and proper and thus render justice. In conclusion, the learned A R submitted that since the impugned order of the learned CIT (A) is suffering from infirmity which requires to be cured by rescinding the same. To substantiate his claim, the learned A R came up with a paper book containing 1 - 41 pages which, inter alia, consist of various case laws. 5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd to reject the same. - that from the petition, there does not appear to be existence of any reasonable cause for filing the return of income belatedly; and that the reasons advanced in the affidavit are not acceptable for the following: (i) that the assessee was not properly advised in the proceedings before the AO / CIT (A) was too simplistic to be accepted/believed; and similarly the contention that the assessee did not have the services of an Advocate was not acceptable and cannot be belied and that the assessee was represented before the CIT(A) by a qualified CA; (ii) that the plea of its Accountant left the work abruptly and the Computer system could not be operated was a very vague explanation as proof of its Accountant having employed with it was not forth-coming. If it were to be so in filing the return belatedly, the same should have been submitted before the authorities below. As the explanation submitted was very vague and devoid of any merit, the same cannot be construed as a genuine hardship which prevented the assessee from filing its return of income in time. - that the case law cited by the assessee [ITO v. S. Venkataiah- ITA No.984/Hyd/2011] is not applicable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ribunal after due consideration of the same as genuine and valid reason for the delay in filing the return. However, in the case of the present assessee, the claim for deduction was u/s 80IB and the application of provisions of s. 80AC. 5.4. In conclusion, the learned D R submitted that there was no reasonable cause for the assessee to file the return belated, the case laws relied on by the assessee are distinguishable and cannot be applied to the case on hand. It was, therefore, pleaded that there was no any infirmity in the findings of the CIT (A) which requires the intervention of this Bench. 6. We have carefully considered the rival submissions, diligently perused the relevant case records and also various case laws on which both the parties have placed strong reliance. 6.1. The multiplicity of the issues raised by the assessee are dealt with one by one as under: I. Asst. order was passed without providing sufficient opportunity: (i) On a perusal of the assessment order, it is observed that notice u/s 143(2) dated 21.8.2009, posting the case for hearing on 4.9.2009, was issued which was followed by notices u/s 142(1) of the Act on 24.5.2010 and on 30.8.2010 posting the cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on u/s 80IB (10) of the Act was, accordingly, sustained. (iii) The stand of the CIT (A) was challenged by the assessee in this appeal. During the course of hearing, the learned AR conceded that s. 80AC of the Act provides that deduction u/s 80IB shall be allowed to the assessee only if the assessee furnishes a return of its income on or before the due date as specified under sub-section 139(1) of the Act. However, the learned AR had pointed out that the CIT (A) had failed to take recourse to s. 139(4) of the Act. For appreciation of facts and clarity, the relevant portion of s. 139(4) which has been substituted by the Direct Tax Laws (Amendment) Act, 1987 w.e.f. 1.4.1989 is extracted as below: "(4) Any person who has not furnished a return within the time allowed to him under section (1), or within the time allowed under a notice issued under sub-section (1) of section 142, may furnish the return for any previous years at any time before the expiry of one year from the end of the relevant assessment year or before the completion of the assessment, whichever is earlier." (iv) As per s. 139(4) of the Act, it is abundantly implicit that the time limit for filing the return was nei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... epted as a valid return by the AO. The reasonable cause attributed by the assessee for the delay is that new provision of e-filing of the return was introduced from the current assessment year. There was some problem under the new provisions due to which the date of filing the return had been extended by the CBDT from time to time and from 31st October 2006, the same was extended to 30th November, 2006. The new provision regarding e-filing of return was introduced in this first year; the software did not accept the return, if self-assessment tax was not paid. Assessee's case is that due to some financial problems it could not pay the self-assessment tax on time, as a result of which there was a delay in the payment of tax and consequent filing of return by about 1 ½ months. It was further claimed that subsequently the software has been modified and now returns are being accepted, even when self-assessment tax is not paid. These factual factors have not been disputed by the Revenue. In these circumstances, there was genuine and valid reason for the delay in filing of return and moreover these provisions are directory and not mandatory. Once the validity of the return has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xemption of profits u/s 80IA to 80IE." (i) Taking into account the submission of the assessee and the rebuttal of the learned D R as recorded in its findings, the Hon'ble Tribunal had decided the issues against the Revenue. The relevant portions of findings of the Hon'ble Bench, for appreciation of facts, are extracted as under: "13..........................In this case, admittedly, the assessee filed the return of income on 23.12.2008. The due date for filing the return of income u/s 139(1) of the Act for the assessment year under consideration in the case of the assessee is 31.10.2008. As such, the return filed by the assessee is belated. In this, the assessee claimed deduction u/s 80IC of the Act which was disallowed by the assessing officer as the return of the assessee was not filed within the time as prescribed u/s 139(1) of the Act. The assessee has given reasons for delay in filing the return of income that the assessee was preparing its accounts through computer and the computer got corrupted due to viruses and in spite of continuous efforts by the computer technical personnel to retrieve the data in time for filing the return of income, problem persisted in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ured by filing Form 10CCB. We are fortified in this behalf by the decision of the jurisdictional High Court in the case of Hemsons Industries (supra), relied upon by the learned counsel for the assessee. It is contended by the learned Departmental Representative that the assessee's claim for deduction under s. 80IB can be entertained and examined on merits, when the audit report is filed before the completion of assessment, which has not been done in the present case, since the audit report was filed only during the course of re-assessment proceedings initiated by the assessing officer, which cannot end up giving additional deductions/benefits to the assessee. We do not find merit even in this contention of the learned Departmental Representative. In the case of Hemsons Industries (supra) before the jurisdictional High Court, of one of the years under appeal before Hon'ble High Court, viz., assessment year 1979-80, audit report was filed during the course of re-assessment proceedings and in response to the show-cause notice under s. 148 issued by the assessing officer. In this view of the matter, respectfully following the decision of the jurisdictional High Court cited abo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as well as the objection raised by the Revenue. 7.2.1. To drive home its point, the Revenue had extensively quoted the rule 29 of Appellate Tribunal Rules 1963. Let us now deal with the issue as under: Rule 29 of Appellate Tribunal Rules, 1963 says as under: "Rule 29: The parties to the appeal shall not be entitled to produce additional evidence either oral or documentary before the Tribunal, but, if the Tribunal requires any document to be produced or any witness to be examined or any affidavit to be filed to enable it to pass orders or for any other substantial cause, or, if the income-tax authorities have decided the case without giving sufficient opportunity to the assessee to adduce evidence either on points specified by them or not specified by them or not specified by them, the Tribunal, for reasons to be recorded, may allow such document be produced or witness to be examined or affidavit to be filed or may allow such evidence to be adduced." 7.3. In the present case, the assessee submitted that there was sufficient cause for filing its return of income belatedly and to substantiate its stand, the assessee sought the permission of this Bench to lay its reasoning. One of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rried on in the business premises of the appellant on 04.01.2008; (e) Therefore, it took quite some time for us to reconstruct the financial statements and submit to the Income-tax Department. Thus, there was delay in 207 days for filing the return of income for the AY 2008-09; In its affidavit dated 13.11.2012,it was affirmed on oath that: (i) The statutory audit accounts of the appellant for the previous year 2007-08 relevant to the AY 2008-09are completed on 12.9.2008. However, tax audit u/s 44AB of the Act was completed only on 22.4.2009; (ii) Audit report under sec. 80IB of the Act in Form 10CCB was obtained on 22.9.2008 7.5. Considering the facts as narrated in assessee's petition and also in the affidavits furnished by the director of the assessee, we are of the considered view that the additional evidences furnished and reasons furnished for delayed filing of return need to be taken on record. 7.6. As pointed out earlier and also in conformity with the findings of the (i) Hon'ble Delhi Bench of the Tribunal (supra) that [at the cost of repetition] "Proviso fourth to s. 10B(1) which prohibits deduction under this section if the return is not furnished on or befo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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