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TMI Blog2024 (8) TMI 1171X X X X Extracts X X X X X X X X Extracts X X X X ..... ding to law as the due date for filing of return of income u/s 139(1) was 30.11.2014. 2. On the facts and circumstances of the case and in law; The Ld. CIT(Appeals), Nagpur has erred in holding that the original return filed on 01.12.2014 being valid return u/s 139(1) could be validly revised u/s 139(5). 3. On the facts and circumstances of the case and in law; the Ld CIT(Appeals), Nagpur has erred in holding that the assessee was eligible for revising its return of income u/s 139(5) and hence can claim the deduction of Rs. 9,05,20,790/- u/s 80IA(4) of the I.T. Act, 1961 which inadvertently remained to claim in the original return of income filed on 01.12.2014 u/s 139(1) as the return filed on 01.12.2014 is filed after due date and hence as per provisions of section 80AC no deduction u/s 80IA, etc. would be allowed unless the return of income is filed before the due date specified in section 139(1), which was 30.11.2014 in the instant case. 4. On the facts and circumstances of the case and in law; the Ld CIT(Appeals), Nagpur has erred in treating the assessee as contractor but it was seen that the assessee was worked under M/s Doshin Veolia Water Solution Pvt Ltd who is the princip ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unicipal Corporation and Govt. Authorities were in the nature of works contract and not the contract of infrastructure facility as contemplated in section 80IA(4) Explanation (c) i.e., water supply project, water treatment system etc., and hence the assessee was not entitled to claim deduction under section 80IA as provided in Explanation to section 80IA stated after 80IA(13) of the Act. 4. At the very onset, the issue for our adjudication is, whether the benefit under section 80IA of the Act can be granted to the assessee in case of filing of return of income belatedly. In this regard, we find that the Co ordinate Bench of the Tribunal, Nagpur Bench, Nagpur, in SMS Infrastructure Ltd. v/s DCIT, ITA no.566/Nag./2016, vide order dated 03/06/2024, the very same Bench has decided this issue by observing as follows: 7. We have heard the rival arguments, perused the material available on record and gone through the orders of the authorities below It is admitted fact that the assessee has filed a return of income belated and claimed under section 80IA of the Act. The Assessing Officer, without verifying whether the return of income is filed in time or not, allowed the claim. When the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... allowing the claim for deduction under section 80IB(10) of the I.T. Act. 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 11th February, 2010 showing gross income of Rs. 1,47,06,878.00/-. The assessee claimed deduction of Rs. 94,67,987.00/- under section 80IB(10) of the I.T. Act. The Assessing Officer completed the assessment under Section 143(3) of the I.T. Act without allowing the deduction claimed by the assessee. The assessee preferred an appeal which was dismissed by the Commissioner of Income Tax (Appeal). Under section 80IB(10) of the I.T. Act, the amount of deduction in the case of an undertaking engaged in developing and building housing projects, approved before 31.3.2008 by a local authority, shall be 100 percent of the profits derived in the previous year. The allowability of the aforesaid deduction is, however, subject to the following important preconditions. Where in computing the total income of an assessee of the previous year 2006 or any subsequent assessment year, any deduction is admissib ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 I.T. Act, she added, is very specific. In case the assessee wanted to avail himself of the benefit of the deduction under section 80IB(10) of the I.T. 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 no longer entitled to take the advantage of the deduction. She submitted that the learned Tribunal unnecessarily embarked upon an enquiry as to whether there was any negligence. She added that time to file the return expired on 30th September. Even according to the case of the assessee, the lady left the office of the assessee in the second week of October when the time to file return h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 pass an order recording his satisfaction that the time should be extended and granting time. The second is that, under the provisions of the Act three consequences are envisaged where a return is not filed within the prescribed time or extended time : i) the assessee will lose the benefit of rebate under section 15; ii) the assessee will run the risk of a penalty under section 14(4); iii) the assessee will also run the risk of a best judgment assessment under section 16(4); In the present case, the Assessing Authorit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le 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 I.T. 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 in the prescribed form duly verified and signed had been filed at the time of assessment. The filing of return and the filing of the audit report in the prescribed form duly signed and verified are by no means on the same pedestal. The audit report is the evidence by which the claims made in the return are sought to be proved. When the evidence is adduced at the time of scrutiny assessment, the requirement is sufficiently met. But the same thing cannot be said about the filing of the return itself. In the case before us, the benefits under section 80IB(10) of the I.T. Act can only be availed in those cases where the return has been filed within the prescribed period. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 critical question to be examined is whether the requirements relate to the substance or essence of the statute, if so, strict adherence to those requirements is a precondition to give effect to that doctrine. On the other hand, if the requirements are procedural or directory in that they are not of the essence of the thing to be done but are given with a view to the orderly conduct of business, they may be fulfilled by substantial, if not strict compliance. In other words, a mere attempted compliance may not be sufficient, but actual compliance of those factors which are considered as essential . Mr. Khaitan submitted that the provision regarding filing of the return on or before the prescribed day is directo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ries raised by A.O. The A.O.'s claim that since 10CCB report was not filed online along with the return, the assessee is not entitled to claim benefit u/s. 80IA(4) claim is untenable. 6.4 It is claimed by the assessee that there is no option in income tax website to upload online Form 10CCB Audit Report for claiming deduction u/s.80IA and the same could be filed physically before completion of assessment. Further I find that the requirement of filing Form No.10CCB along with the return is merely directory and not mandatory. If the report of auditor in prescribed Form 10CCB is filed during the assessment proceedings, it is a sufficient compliance of section 80IA as held by Hon. Supreme Court in the case of C.I.T. Vs. G.M. Knitting Industries (P) Ltd. and AKS Alloys (P) Ltd. reported in (2015) 376 ITR P.456 (S.C.) and various other decisions of various other High Courts quoted in the said decision. Therefore, I hold that the requirement of section 80IA of filing 10CCB was duly complied. 6.5 Another objection of the A.O. regarding section 80AC that since the original return was not filed before due date of filing return u/s.139(1), the assessee is not entitled to claim deduction u ..... X X X X Extracts X X X X X X X X Extracts X X X X
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