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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 ..... there is no direct decisions on the issue by Hon’ble Jurisdictional High Court, the view in favour of assessee has to be followed [CIT Vs. Vegetables Products (1973 (1) TMI 1 - SUPREME Court). Thus assessee is eligible for claiming deduction u/s. 80IB(10) of the Act. Whether four residential units i.e. D-601, D-602, E-601 & E-602 in the housing project, “Hill View” developed by assessee have built up area beyond 1500 sq.ft and hence, ineligible for claiming deduction u/s. 80IB(10)? - Held that:- A perusal of the building plan at page No. 236 of the paper book shows that open area mentioned adjoining to the living room and bedroom is ‘terrace’ and not ‘balcony’. The open area which has been included while computing ‘built up area’ of flat is terrace and not balcony. The definition of ‘built up area’ does not include terrace and in the case of CIT Vs. Amaltas Associates (2016 (10) TMI 359 - GUJARAT HIGH COURT) has held that terrace is different from balcony. Thus, open area of terrace would not form part of built up area of flats in question. Accordingly, second issue i.e. Ground no. 1.b. raised in the appeal is decided in favour of the assessee. - ITA No. 1606/PUN/2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... following grounds : a. That the return of income is not filed within the time u/s. 139(1) of the Income tax Act, 1961. b. That the built up area of each of the four units exceeds 1500 sq.ft when the area of the terrace is included. 2. The appellant craves leave to amend or alter the grounds or act to the same being necessary. 4. Shri V.L Jain appearing on behalf of the assessee submitted that it is an undisputed fact that assessee filed its return of income for assessment year 2011-12 beyond the time specified u/s. 139(1) of the Act. However, return was filed within extended time granted u/s. 139(4) of the Act. The assessee could not file return of income within due date as envisaged under Section 139(1) i.e. 30.09.2011, on account of dispute amongst the directors and non cooperation from Auditors. As a result, accounts and audit report for assessment year 2011-12 were obtained by the assessee on 17.09.2012. Assessee filed return of income on 30.09.2012. The ld. AR contended that the assessee filed petition u/s. 119(2)(b) of the Act with CBDT on 19.10.2012 for condonation of delay. The said petition has not been disposed of by CBDT till date. 4. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the assessee for filing return of income beyond the period specified u/s. 139(1) of the Act. The ld. DR submitted that a bare perusal of provision of section 80AC would clearly show that the benefit of deduction u/s. 80IB(10) cannot be granted to the assessee if, return of income is not furnished before due date as specified under sub-section (1) of Section 139 of the Act. Thus, there is no scope of exceeding time beyond the period as given u/s. 139 (1) of the Act for being eligible for claiming deduction u/s. 80IB(10) of the Act. 5.1 The ld. DR placing reliance on the decision of Britania Industries Ltd. vs. CIT, 278-ITR-546(SC) submitted that when the language of a statute is clear and unambiguous, the courts are to interpret the same in its literal sense and not to give a meaning which would cause violence to the provisions of the statute. It is a well settled principle of law that the court cannot read anything into a statutory provision or a stipulated condition which is plain and unambiguous. The ld. DR to further buttress his submissions placed reliance on following decisions: 1) Union of India vs. Dharmendra Textiles Processors and Others 306-ITR-2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hearing on 04.09.2017.(CLC Page No.1) Thus, the decision of Dwarkadas Panchmatiya has not yet attained finality and cannot be relied upon in preference to the earlier decision. (c) The decision has merely relied upon the Special Bench (Rajkot) decision in Sapphire Garments (140ITD 628) (See Para 3.2 of the decision). However, the Special Bench decision held the jurisdictional Bombay High Court decision in Trustees of Tulsidas Gopalji Charitable Chaleshwar Temple Trust and the decision of the P H High Court in Jagriti Agarwal (Pages 186 to 192 of Paper Book) to be irrelevant as it is of a different High Court. (d). It may be noted that the Hon. Mumbai Tribunal did not independently consider these decisions at all. 5. (a) The second decision relied upon by the learned DR is of the Uttarakhand High Court in Umesh Chandra Dalakoti Vs. ACIT (ITA No. 07/2012). (b) A perusal of the decision shall make it abundantly clear that it has not considered any of the judicial precedents and, with respect it is submitted, merely read the provisions as they appear. This decision is, it is submitted, therefore not relevant to the issue at hand. 6. (a) The last decision r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court has held that s. 22(3) is merely a proviso to s. 22(1) and that 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 .... In other words, if s. 22(3) is complied with, s. 22(1) also must be held to have been complied with . 8. (a) The decision of the Hon. Supreme Court in Prakashnath Khanna (266 ITR 1) is in the context of due date in the context of prosecution under section 276CC.(b) The Hon. Apex Court observed that the decision in Kullu Valley Transport was rendered in a conceptually different situation, and had no relevance so far as the dispute before it was concerned. (c ) It is therefore abundantly clear that the decision in Prakashnath Khanna does not overturn the decision in Kullu Valley Transport. (d) Lastly, the decision in Prakashnath Khanna is a two judge judgement while the decision of Hon. Apex Court in the case of MIs Kullu Valley Transport is a three judge judgement. Thus, the decision of a larger bench would be adopted in preference to the decision of the Division Bench comprising of two judges. (e ) We place reliance on the Hon. SC decision in CIT vs. Sun Engineering ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Balkishan Dhawan HUF Vs. ITO(18 taxmann.com 234) (Amr), it is respectfully submitted that (a) It does not take into account the decision of the Hon. Supreme Court in Kullu Valley Transport and various other decisions. (b) It only distinguishes the decision of P H High Court in CIT Vs. Jagriti Aggarwal ( 203 ITR 203) on the ground that it is with reference to the provisions of section 54 and not section 80AC. and that section 80AC provides a consequence which section 54 does not. (c) It is submitted that like 80 AC does not allow deduction if return is not furnished in time, section 54 denies the exemption from capital gains if the amount is not deposited within time of furnishing return.(d) the decision does not even discuss the decision of the Hon. Bombay HC in Trustees of Tulsidas Gopalji Charitable Chaleshwar Temple Trust, though it is cited in the course of argument. 11. In ACIT Vs. Dhir Global India (Del) (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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting to assessee s eligibility for claiming deduction u/s. 80IC, where the return was filed beyond due date as specified u/s. 139(1) of the Act held that the assessee s claim cannot be denied on technicalities when the assessee is legally otherwise entitled for deduction. The ground before the Tribunal for consideration was: 3. The CIT(A) ought to have appreciated that the AO had rightly disallowed the deduction claimed u/s.80IC following the provisions of section 80AC. The Tribunal decided the ground in favour of assessee by observing as under: 13. We have heard both the parties and perused the material on record. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT(A) in the impugned order, that though filing of audit report in Form 10CCB is mandatory and pre- requisite for deduction under S. 80IB, non-filing of the same along with the return of income is only a curable defect, and assessee sclaim for deduction has to be considered on its merits as and when the defect is cured 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 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ision is not an independent provision, but relates to time contemplated under sub-section (1) of section 139. Therefore, such sub-section (4) has to be read along with sub-section (1). Similar is the view taken by the Division Bench 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 Va ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1) of 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. Venkataiah was not brought to the notice of the Tribunal. 14. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 areas shared with other residential units. Thus, the built up area would include inner measurements of a residential unit on the floor level added by thickness of a wall as also projections and balconies. This would however, exclude the common areas shared with other residential uni ..... X X X X Extracts X X X X X X X X Extracts X X X X
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