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TMI Blog2017 (10) TMI 1285X X X X Extracts X X X X X X X X Extracts X X X X ..... of Section 80AC and rejected assessee's claim of deduction u/s. 80IB(10) of the Act. Further, the Assessing Officer held that built up area of four residential units i.e. D-601, D-602, E-601 & E-602 exceed maximum built up area of 1500 sq. ft. as laid down under Clause (c) of Section 80IB (10) and hence, rejected assessee's claim of deduction u/s. 80IB(10) in respect of aforesaid housing project, "Hill View". Aggrieved by the assessment order dated 31.03.2014, the assessee filed appeal before Commissioner of Income Tax (Appeals) assailing the findings of Assessing Officer, inter alia holding assessee to be ineligible for claiming deduction u/s.80IB(10) of the Act for filing return of income beyond the period prescribed u/s. 139(1) and for having built up area of four residential units exceeding 1500 sq. ft, including terrace. The Commissioner of Income Tax (Appeals) partly accepted the appeal of the assessee, however, the grounds with respect to assessee's eligibility for claiming deduction u/s. 80IB(10) for filing return of income beyond the period specified in subsection (1) of Sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... leged excess built up area of four residential units i.e. D-601, D-602, E-601 & E-602, the ld. AR submitted that the built up area including terrace of the aforesaid four flats is alleged to be exceeding 1500 sq. ft each. The ld. AR referring to building plan at page 236 of the paper book submitted that the said building plan has been approved by Pune Municipal Corporation. The built up area of all flats in the building is within the prescribed limit as specified in Clause (c) of Section 80IB (10) of the Act. The ld. AR further submitted that as per definition of "built up area" given in sub-section (14) of Section 80IB, 'built up area' means the inner measurements of residential unit at floor level, including the projections and balconies. The definition does not include 'terrace'. Terrace is not the same as projection and balcony. Therefore, the word 'terrace' cannot be read into the definition of 'built up area'. 4.3 The ld. AR further submitted that the Commissioner of Income Tax (Appeals) denied benefit or deduction u/s. 80IB (10) in respect of four residential units on the ground that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... allowed where the return of income has been filed within the time specified u/s. 139(1) of the Act. If return of income is filed beyond the due date as specified u/s. 139(1), the assessee is not eligible for claiming benefit of deduction u/s. 80IB (10) of the Act. The ld. DR to strengthen his submissions placed reliance on the following decisions: i) Umesh Chandra Dalakoti Vs. ACIT in ITA No. 07/2012 decided on 27.08.2012, Hon'ble Uttarakhand High Court. ii) DCIT Vs. Siroya Developers, 78 taxmann.com 19 (Mumbai-Trib.) 6. Controverting the submissions made by the DR, the ld. AR furnished written submissions; the same are reproduced herein below: "1. The written submissions presented before Your Honours are in relation to the aforesaid appellant and in response to the submission made by the learned DR vide letter dated 08.08.2017. 2. In Para 5 of the letter dated 08.08.2017 the learned DR has pointed out that the Department has not filed appeal against the order of the Hon. Mumbai ITAT in case of Yash Developers (Pages 164 to 170 of Paper Book) on account of low tax effect. 3. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Kullu Valley Transport Co. P. Ltd. and observed that there was no obstacle before their Lordships in that case as the one created by section 80AC of the Income Tax Act, 1961. (e) It is submitted with respect that the distinction sought to be drawn is feeble. The impediment even before the Hon. Apex Court was very much there in terms of section 22(2A) which said that in order to get the benefit of s. 24(2) the assessee must submit his loss return within the time specified by s. 22(1). (d) It is further significant to note that the Hon. Apex Court held that "the provision must be r/w s. 22(3) for the purpose of determining the time within which a return has to be submitted. It can well be said that s. 22(3) is merely a proviso to s. 22(1). Thus, a return submitted at any time before the assessment is made is a valid return. In considering whether a return made is within time sub-s. (1) of s. 22 must be read along with sub-s (3) of that section. A return whether it is a return of income, profits or gains or of loss must be considered as having been made within the time prescribed if it is&n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Sun Engineering Works (P) ltd. (SC) 198 ITR 0297 for the proposition that the judgment of Prakashnath Khanna must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before this Court. A decision of this Court takes its colour from the questions involved in the case in which it is rendered and, while applying the decision to a later case, the Courts must carefully try to ascertain the true principle laid down by the decision of this Court and not to pick out words or sentences from the judgment. ( f ) The only way in which we can harmoniously interpret both these judgments is that these decisions deal with two different issues and ratio decidendi of these decisions must be construed accordingly. 9. In so far as the decision of the Rajkot Special Bench in Saffire Garments (140 ITD 6), it is submitted with respect that - (a ) reliance on the decision in Prakash Nath Khanna is on grounds of non-dilution of infraction in the context of prosecution and not in the context of an incentive provision. (b ) The judgments in CIT Vs J ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (ITA No. 2317/2010), the Tribunal in the context of Section 10B has held that in spite of the proviso to section 10B(1), deduction has to be allowed for a return filed beyond that the time provided u/s. 139(1). This has been done after observing that the proviso is directory and not mandatory (Para 6.6) after considering and relying on the Delhi HC decision in Web Commerce India Pvt. Ltd. (318 ITR 135) and after appreciating that the Act allows relief u/s. 119(2)(b) (Para 6.12)." 7. We have heard the submissions made by representatives of rival sides and have perused the orders of authorities below. We have also considered the decisions on which both sides have placed reliance and written submissions filed by respective parties. The core issue raised in the appeal is : Whether in view of provisions of Section 80AC, the assessee is eligible for claiming deduction u/s. 80IB (10) if return of income is filed beyond due date as specified u/s. 139(1) of the Act, but within the extended time specified u/s. 139(4) of the Act. Before proceeding further on this issue, it would be releva ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 system. By trying to retrieve the data for 4 days the required data could not be retrieved and the backed up data were available only up to 31st January, 2008 in the CD and the entire data for the two months period, February and March, 2008, had to be re-entered into the computer system again. On preparation of the final accounts and fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a), 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 reassessment 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, for 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.1 4 8 issued by the Assessing Officer. In this view of the matter, respectfully following the decision of the jurisdictional High Court cited above, among others, we find no jurisdiction to&nb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nch of Karnataka and Gauhati High Courts in Fatima Bai's case (supra) and Rajesh Kumar Jalan's cases (supra) respectively." 11. The ld. DR has placed reliance on the decision of Hon'ble Calcutta High Court in the case of CIT Vs. Shelcon Properties Pvt. Ltd (supra.), wherein, the Hon'ble High Court rejected assessee's claim of deduction u/s. 80IB(10), where return of income was not filed within the time specified u/s. 139(1). The questions of law before the Hon'ble High Court for consideration was : "(a) Whether the deduction under section 80-IB(10) of the Income tax Act can be allowed when the return was not filed on or before the due date specified under section 139(1) of the Income tax Act? (b) Whether section 80AC of the Income Tax Act can be said to have left any room for discretion in the case of delayed filing of returns?" The Hon'ble High Court after taking into consideration various decisions including; CIT Vs. Kullu Valley Transport Co. Ltd. (supra.); Fertilizer Corporation of India Vs. State of Bihar (68 STC 158)(SC); CIT Vs. Berger Paints (India) Ltd. (254 ITR 503) ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 139 of the Act, in sub-section (4) of Section 139 permission has been granted to furnish the return even after expiry of the due date for furnishing return specified under sub section (1) of Section 139 of the Act; and at the same time in section 80AC, it has been provided that only when the return has been furnished on or before the due date specified under sub section (1) of Section 139, the assessee concerned will be entitled to the deductions admissible under Section 80IB or Section 80IC of the Act." 13. The Mumbai Bench of Tribunal in the case of DCIT Vs. Siroya Developers (supra.) has held that deduction under section 80-IB can be allowed only when return is filed on or before due date specified under section 139(1); if return is filed belatedly assessee will not be entitle to such deduction. However, while coming to such conclusion, the Tribunal took support from the decisions rendered in the case of CIT Vs. Shelcon Properties Pvt. Ltd. (supra.) and Umesh Chandra Dalakoti Vs. ACIT (supra.). The decision rendered by Hon'ble Andhra Pradesh High Court in the case of CIT Vs. Sri S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... asurement of the residential unit at the floor level, including the projections and balconies, as increased by the thickness of the walls but does not include the common areas shared with other residential units." A perusal of the definition shows that projections and balconies are to be included while computing built up area. However, there is no mention of terrace in the said definition. 16. The Hon'ble Gujrat High Court in the case of CIT Vs. M/s. Amaltas Associates reported as 389 ITR 175 has held that the term 'balcony' would not include an open terrace adjoining a bedroom or any other constructed area of penthouse. Terrace is not projection. The relevant extract of the observations of Hon'ble High Court differentiating 'balcony' from 'terrace' is as under: "8. Section 80(14) of the Act contains definitions for the purpose of the said section. Clause (a) thereof provides that built up area means the inner measurements of the residential unit at the floor level, including the projections and balconies, as increased by the thickness of the walls, but does not include the common are ..... X X X X Extracts X X X X X X X X Extracts X X X X
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