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TMI Blog2016 (9) TMI 992X X X X Extracts X X X X X X X X Extracts X X X X ..... rectification application under section 154 of the Act contending that the disallowance of the assessee's claim for deduction under section 80IB(10) of the Act was beyond the scope of provisions of section 143(1) of the Act. The assessee's application was rejected by the ACIT (CPC) vide order under section 154 of the Act dated 16.08.2013 on the ground that the assessee's claim for deduction under section 80IB(10) of the Act was not allowable as per provisions of section 80AC of the Act as the return of income for A.Y. 2012-13 was filed beyond the due date specified under section 139(1) of the Act. 2.3 Aggrieved by the order under section 154 of the Act dated 16.08.2013 for A.Y. 2012-13 rejecting the assessee's claim for being allowed deduction under section 80IB of the Act as claimed, the assessee preferred an appeal before the CIT(A)-1, Thane. After considering the arguments put forth and the judicial pronouncements cited, the learned CIT(A) observed that in the cited decisions of the Hon'ble Bombay High Court, and of the ITAT, Mumbai, Bangalore and Ahmadabad Benches, even in cases where the return of income was filed beyond the due date specified under section 139(1) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s beyond the scope of permitted adjustments while processing the return of income under section 143(1) of the Act as it was neither an arithmetic error nor an incorrect claim apparent from the record. It is contended that since the deduction under section 80IB(10) is to be allowed on fulfilment of conditions stipulated therein, the same can be allowed/disallowed only after examination of these conditions and since there could be two conceivable views on the merits of the assessee's claim, the issue is debatable and therefore the disallowance of the assessee's claim under section 143(1) of the Act could not have been made and was untenable. 3.3.2 The learned A.R. for the assessee further submitted that the issue in the case on hand is whether when the assessee has not filed the return of income within the period stipulated under section 139(1) of the Act, but filed the same within the extended period under section 139(4) of the Act, can the assessee's claim for deduction under section 80IB(10) of the Act be disallowed under section 143(1) in view of the provisions of section 143(1)(a)/143(1) of the Act. It is contended that various judicial pronouncements have interpreted these pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... u/s 801B(10) be disallowed u/s 143(1)(a) in terms of provisions of section 80AC. The provisions of section 80AC are reproduced as under for ready reference - Deduction not to be allowed unless return furnished. 80AC Where in computing the total income of an assessee of the previous year relevant to the assessment year commencing on the 1st day of April, 2006 or any subsequent assessment year, any deduction is admissible under section 80- 1A or section 80-IAB or section 80-IB or section 80-IC [or section 80-1D or section 80-IE], no such deduction shall be allowed to him unless he furnishes a return of his income for such assessment year on or before the due date specified under subsection (1) of section 139.] 9. A perusal of the above provisions reveals that when the return of income is filed beyond the time allowed u/s. 139(1), then deduction u/s. 801B(10) is not allowable to the assessee. However, various judicial authorities have interpreted these provisions to mean that section 139(1) is directory not mandatory and that section 139(1) has to be read with section 139(4). Hon'ble Mumbai High Court in the case of Trustees of Tulsidas Gopalji Charitable & Chaleshwar Tem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t appeal, has held as under - The relevant ground of appeal was as under - "III. On the facts and in the circumstances of the case and in law, whether the Ld CIT(A) was right in allowing assessee's claim of deduction u/s. 801B(10) when the assessee has not filed return of income within the time limit u/s. 139(1) and when section 80AC specifically, provides that no deduction shall be allowed unless return is furnished within time limit of section 139(1)." The ITAT held as under - 6. It is also relevant to state that in respect of delay in .filing the return of income on the basis of which the AO also denied deduction us. 80IB(10) of the Act in respect of assessment year 2008-09, which are Ground Nos. 3 and 4 of the appeal taken by department, the ld. CIT(A) has stated that the assessee filed return within extended time prescribed u/s. 139(4) of the Act and the said return be treated as the one filed within the time limit prescribed u/s. 139(1) of the Act and referred the decision of the Hon'ble Apex Court in the case of Kulu Valley Transport Co. P. Ltd. V/s CIT [1970] 77 ITR 518. Ld CIT(A) has stated that similar issue in the context of section 54F also came befo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h Court in the case of Trustees of Tulsidas Gopalji Charitable & Chaleshwar Temple Turst (supra) which has been considered by the ld CIT(A) while deciding the same in favour of assessee and respectfully .following the same, we hold that there is no reason to interfere with the order of ld. CIT(A). Therefore, the Ground No. 3 and 4 of the appeal taken by the department for assessment year 2008-09 ar also rejected by confirming the order of the learned CIT(A)." 11. In view of the above discussion and the decisions of the Hon'ble jurisdictional Mumbai High Court, the decisions of the Ahmedabad and Bangalore Benches of the ITAT and the jurisdictional ITAT, Mumbai, it is seen that even in cases where the return of income was filed beyond the due date as prescribed u/s. 139(1), deduction u/s. 80IB(10) was either allowed or the case was set aside to the CIT(A)/AO with the directions that the deduction should not be disallowed merely on the ground that the return of income was filed beyond the time allowed u/s 139(1) of the Act. Thus section 80AC was a subject matter of discussion and interpretation as held in various case laws. Therefore, the disallowance of deduction u/s. 801B(10) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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