M/s Shelcon Properties (P) Ltd., Siliguri V. JT.CIT (OSD), Siliguri

ITA 1586/KOL/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 3070 (ITAT-KOLKATA)
• Duration Of Justice: 5 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-04-2013
• Appeal Filed By: Assessee
• Bench Allotted: C
• Assessment Year: 2009-2010
• Appeal Filed On: 01-11-2012
• Court: TRIBUNAL
• Department Lawyers: TANUJ KR NEOGI
• Assessee Lawyers: S K TULSIYAN
• Keywords: Reasonable cause; Corroborative evidences
• Section: 143(3); 142(1); 80IB; 10B

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH C , KOLKATA [ () . .. . . .. . , ,, , , !' #! $'# #! $'# #! $'# #! $'#, ,, , ] ]] ] [BEFORE HONBLE SRI K.K.GUPTA, AM & HONBLE SRI MAHAVIR SINGH, JM] '& '& '& '& /ITA NO.1586/KOL/2012 $'( !)*/ ASSESSMENT YEARS : 2009-10 (,- / APPELLANT ) - !' - ( /0,- /RESPONDENT) M/S.SHELCON PROPERTIES (P) LTD. . J.C.I.T.(OSD),C IRCLE-3 SILIGURI -VERSUS- SILIGURI (PAN:AAHCS 6766 R) ,- 1 2 / FOR THE APPELLANT: SHRI S.K.TULSIYAN, ADVOCATE /0,- 1 2 / FOR THE RESPONDENT: SHRI TANUJ KR.NEOGI, SR.DR '!3 1 4 /DATE OF HEARING : 11.04.2013 5) 1 4 /DATE OF PRONOUNCEMENT : 19.04.2013. 6 / ORDER PER SHRI K.K.GUPTA, AM THIS IS AN APPEAL FILED BY THE ASSESSEE RAISING TH E FOLLOWING GROUNDS :- 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE, THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ORDERS OF THE LD. A.O. REJECTING THE ASSESSEES CLAIM OF DEDUCTION OF RS.94,67,987/- U/S 80-IB OF THE I.T.ACT FOR A..2009 -10. 2. THAT, THE LD. CIT(A) WAS NOT JUSTIFIED IN OBSERV ING THAT THERE WAS NO REASONABLE CAUSE FOR DELAYED SUBMISSION OF THE ASSESSEES RETURN FOR A.Y. 2009-10. 3. THAT THE LD. CIT(A) ERRED IN HOLDING THAT SECTIO N 80AC OF THE I.T.ACT WAS NOT A PROCEDURAL AND MACHINERY PROVISION AND CONSEQUENTLY THE CONDITION CONTAINED IN THE SAID SECTION RELATING TO THE SUBMISSION OF RETURN W ITHIN THE DUE DATE SPECIFIED IN SEC.139(1) OF THE I.T.ACT IS NOT DIRECTORY BUT MAND ATORY. 4. THAT WHILE REJECTING THE ASSESSEES CLAIM OF DED UCTION U/S 80-IB READ WITH SECTION 80AC OF THE I.T.ACT, THE LD. CIT(A) OVERLOOKED THE FACT THAT THE INCENTIVE PROVISION FOR PROMOTING GROWTH AND DEVELOPMENT IS REQUIRED TO BE INTERPRETED LIBERALLY SO AS TO SUB- SERVE THE PURPOSE FOR WHICH IT IS INTENDED. 2. THE BRIEF FACTS AS HAVE BEEN BROUGHT ON RECORD A RE THAT THE APPELLANT COMPANY, ENGAGED IN THE BUSINESS OF UNDERTAKING CONSTRUCTION OF HOUSING PROJECTS DULY APPROVED BY THE LOCAL AUTHORITY AFTER COMPLETING AL L THE REQUIREMENTS AND CONDITIONS ITA NO. 1586/KOL/2012 2 U/S 80IB(10) OF THE INCOME TAX ACT, 1961, FILED ITS RETURN OF INCOME FOR A.Y. 2009-10 ON 11.02.2010 SHOWING GROSS INCOME OF RS.1,47,06,87 8.00 AND CLAIMING DEDUCTION OF RS.94,67,987.00 U/S 80IB(10) OF THE ACT. THE CASE W AS SELECTED FOR SCRUTINY AND NOTICES U/S 143(2) & 142(1) WERE ISSUED, WHICH WERE DULY COMPLIED WITH. THE ASSESSMENT WAS ULTIMATELY COMPLETED U/S 143(3) OF T HE ACT, ON 29.12.2011, AT THE FIGURE OF TOTAL INCOME OF RS.1,47,06.880.00. 3. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO FOUND THE CLAIM OF THE ASSESSEE FOR DEDUCTION U/S 80IB(10) OF THE ACT TO B E IN ORDER AND ADMISSIBLE. HE, HOWEVER, DENIED THE SAID CLAIM ON THE GROUND THAT T HE RETURN OF INCOME HAD NOT BEEN FILED WITHIN THE TIME LIMIT ALLOWED U/S 139(1) OF T HE ACT. IN THIS REGARD, THE AO REFERRED TO THE PROVISIONS OF SECTION 80AC OF THE A CT. BEING AGGRIEVED BY THE ABOVE ACTION OF THE AO THE ASSESSEE APPELLANT HAS PREFERR ED AN APPEAL BEFORE THE LD. CIT(A). THE LD. CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE LD. AR BEFORE HIM DELIBERATED ON THE ISSUE AS TO HOW THE VARIOUS CLAUSES TO MEET THE LIMITATION OF TIME EVEN DEALT WITH BY VARIOUS AUTHORITIES CONSIDERED THE NON CONS IDERATION OF THE RETURN FILED BY THE ASSESSEE ON TIME, IN SO FAR AS, HE HELD THAT SECTIO N 80AC IS NOT DIRECTLY LINKED WITH THE RESTRICTION OF GRANTING INCENTIVE TO THE ASSESSEE. HE CONSIDERED THAT THE GRANTING OF 80IB(10) OF THE ACT IS EMBEDDED IN THE SECTION ITSE LF WITHOUT INVITING TO CONSIDER THE TIMELY FILING OF THE RETURN U/S 139(1) OF THE ACT, IN SO FAR AS, DISTINGUISHED THE HONBLE SUPREME COURTS DECISION IN THE CASE OF BAJAJ TEMPO LTD. VS CIT REPORTED IN 196 ITR 188 THAT THE PROVISION AS WELL AS RESTRICTION IN RE SPECT OF THE BENEFICIAL SECTION SHOULD BE INCORPORATED LIBERALLY. HE HELD THAT FILING OF R ETURN THROUGH ELECTRONIC MEDIA WAS DONE AWAY WITH WHEN ALL THE ANNEXURES WHICH WERE TO BE FILED AS HARD COPY WHILE THE ASSESSEE APPELLANT SUBMITTED THAT BY WAY OF THE CHA RTERED ACCOUNTANT OF THE ASSESSEE WHO HAD CERTIFIED AND COMPUTED THE DEDUCTION U/S 80 IB OF THE ACT THAT IT WAS PURELY A BLUNDER IN THE OFFICE OF THE CHARTERED ACCOUNTANT W HO DEPENDED ON ITS STAFF AFTER HAVING SIGNED THE AUDIT REPORT OF CLAIMING OF DEDUC TION TO SEE THAT THE RETURN IS FILED WHEN THE PARTICULAR STAFF RESIGNED IN THE MONTH OF OCTOBER NEGLECTING THE CLAIM OF THE ASSESS APPELLANT, IN SO FAR AS IT WAS PROFESSIONAL INAPTNESS AND NOT ASSESSEES NEGLIGENCE. HE SUBMITTED THAT FILING OF RETURN BY E LECTRONIC MEDIA HAS TO BE IN ITA NO. 1586/KOL/2012 3 ACCORDANCE WITH THE DIRECTIONS WHEN THE SIGNATURES OF THE CHARTERED ACCOUNTANT CERTIFYING ARE ALSO AVAILABLE FOR THE PURPOSE OF FI LING SUCH DOCUMENTS FOR CLAIMING OF DEDUCTION THEREAFTER WAS TO TAKE A CLUE TO THE PROV ISION OF SECTION 80AC. HE HELD THAT SHALL IS DUTY BOUND AND DOES NOT LEAVE CONDITION FOR DEDUCTION NOT TO BE ALLOWED UNLESS THE RETURN IS FURNISHED. HE CONFIRMED THE DE NIAL OF THE DEDUCTION U/S 80IB(10) OF THE ASSESSEE. 4. THE LD. COUNSEL FOR THE ASSESSEE ARGUED THAT AN AFFIDAVIT WAS SUBMITTED BY THE CHARTERED ACCOUNTANT TO THE AUTHORITIES BELOW INDIC ATING THAT THE ASSESSEE HAD FILED THE RETURN AND CLAIMED THE DEDUCTION U/S 80IB(10) O F THE ACT IN ACCORDANCE WITH THE PROVISION OF THE INCOME TAX ACT IN SO FAR AS NOT FI LING THE RETURN IN TIME WAS NOTED BY THE OFFICE OF THE CHARTERED ACCOUNTANT. ONE OF THE EMPLOYEES OF THE CHARTERED ACCOUNTANT FIRM RESIGNED WHO WAS ENTRUSTED WITH THE FILING OF THE RETURN AFTER HAVING COMPUTED THE DEDUCTION U/S 80IB OF THE AC WHEN IT W AS NOTED AND RETURN FILED IN FEBRUARY, 2010 U/S 139(1) OF THE ACT. FOR THAT PROP OSITION HE HAD PRODUCED THE DOCUMENTS RELATING TO THE SIGNATORY TO THE AUDIT R EPORT WHICH WAS VERIFIED BY THE INSPECTOR OF THE AO, IN SO FAR AS, THE LD. COUNSEL SUBMITTED THAT HAVING FILING THE CLAIM OF DEDUCTION APPROPRIATE IT WAS ONLY THAT THE ASSES SE HAD FILED THE RETURN ON 11 TH FEBRUARY, 2010 BEYOND THE TIME PERMISSIBLE UNDER TH E PROVISION OF SECTION 139(1) OF THE ACT THE LD. A.O. HELD CANNOT BE ENTITLED FOR DE DUCTION U/S 80IB OF THE ACT. 5. THE LD. CIT(A) PERUSED THE ORDER OF THE AO IN WH ICH IT HAD ACCEPTED THE INCOME AS PER THE RETURNED INCOME BUT DENIAL OF THE CLAIM OF DEDUCTION U/S 80IB OF THE ACT AT RS.94,67,987/-. COMING TO THE CONFIRMATION THEREIN BY THE LD. CIT(A) ON FILING OF THE RETURN IN TIME, THE LD. COUNSEL FOR THE ASSE ESSEE RELIED ON THE DECISION OF THE ITAT DELHI BENCH IN THE CASE OF ACIT VS DHIR GLOBAL INDUSTRIAL (P) LTD. REPORTED IN 43 SOT 640 (DELHI) WHEREIN IN THE CASE OF GENERAL H ARDSHIP RELIEF CAN BE GRANTED TO THE ASSESSEE U/S 10B OF THE ACT EVEN IF THE RETURN WAS NOT FURNISHED ON OR BEFORE U/S 139(1) OF THE IT ACT. SIMILARLY IN ANOTHER DECISION OF ITAT HDERABAD BENCH IN THE CASE OF ITO, WARD-11(2) HYDERABAD VS VENKATAIAH 22 TAXMANN.COM IT WAS FOUND THAT THE ASSESSEES COMPUTER GOT INFECTED BY VIRUS AND T HE DATA WAS NOT AVAILABLE FOR MORE ITA NO. 1586/KOL/2012 4 THAN TEN MONTHS WHICH WAS RE-ENTERED AND THEREFORE DEDUCTION U/S 80IC WAS TO BE ALLOWED SIMPLY BECAUSE ON TECHNICAL GROUND IT HAD D ELAYED TO FILE THE RETURN. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT IN ANOTHER DECISION OF ITAT BANGALORE IN THE CASE OF M/S. VANSHEE BUILDERS & DEVELOPERS VS ITO T HE DISALLOWANCE U/S 80IB OF THE ACT SIMPLY CANNOT BE DENIED TO THE ASSESSEE IN SO F AR AS THE PROVISION OF THE ACT RELATING TO THE EXEMPTED INCOME SHOULD BE INCORPORA TED LIBERALLY AND BROADLY. HE PRAYED THAT THE AUTHORITIES BELOW BE DIRECTED TO AL LOW DEDUCTION CLAIMED IN THE RETURN WHICH RETURN WAS NOT FOUND DEFECTIVE FOR THE PURPOS E OF TAXATION IN ACCORDANCE WITH THE PROVISION OF THE INCOME TAX ACT. 6. THE LD. DR SUPPORTED THE ORDERS OF THE AUTHORITI ES BELOW. HE SUPPORTED THE ORDERS THAT HAVE ANALYSED THE REASON FOR DENYING TH E ASSESSEE OF NOT FILING THE RETURN IN TIME AS HAS BEEN POINTED OUT IN SO FAR AS THE AFFID AVIT OF THE CHARTERED ACCOUNTANT AUTHENTICATING THE DEDUCTION TO BE CLAIMED IS A SEL F SUPPORTING EVIDENCE. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULL Y PERUSED THE MATERIALS AVAILABLE ON RECORD. ON A CAREFUL PERUSAL OF THE FA CTS AND CIRCUMSTANCES OF THE CASE, WE ARE INCLINED TO HOLD THAT THE BELATED FILING OF THE RETURN CANNOT BE ASSIGNED ON THE NEGLIGENCE ON THE PART OF THE ASSESSEE. THE ASSESSE E HAD BEEN PAYING ADVANCE TAX IN ACCORDANCE WITH THE INCOME TAX ACT WHICH HAS BEEN R ETURNED BY THE ASSESSEE THOUGH BELATEDLY WHEN HE WAS DEPENDENT ON THE CHARTERED AC COUNTANT FOR COMPUTING THE DEDUCTION TO BE CLAIMED UNDER THE PROVISION OF SECT ION 80IB OF THE ACT WHICH THE AO HAS VERIFIED THE FINANCIAL STATEMENTS IN PURSUANCE TO PROVISIONS OF SECTION 143(3). THE DEDUCTION SO COMPUTED HAS BEEN VERIFIED ON THE BASI S OF THE INSPECTORS REPORT WHEN THE CLAIM HAS NOT BEEN FOUND UNTENABLE. THE ONLY REASON THAT THE AO HAS DENIED THE ASSESSEE THE CLAIM OF DEDUCTION THAT THE RETURN WAS TO BE FILED U/S 139(1) OR 139(4) OF THE ACT. WHEN IT WAS FILED ON 10 TH FEBRUARY, 2010 WHETHER CAN BE CONSIDERED A RETURN FILED ON TIME FOR CLAIMING DEDUCTION IN ACCORDANCE WITH THE PROVISION OF SECTION 80AC OF THE ACT WAS CONSIDERED BY THE LD. A.O. AND THE L D. CIT(A). WE DO FIND MERIT IN THE CONTENTION OF THE ASSESSEE AS THE CASE LAWS CITED B Y THE LD.COUNSEL HAVE HELD THIS TECHNICAL DEFAULT WHICH PROCEDURAL DELAY CANNOT BE CONSIDERED FOR DENIAL OF THE ITA NO. 1586/KOL/2012 5 DEDUCTION GENUINELY CLAIMED AS ASCERTAINED BY THE A UTHORITIES BELOW. THE ASSESSEE CAN FILE THE RETURN UPTO 31 ST MARCH BUT IN OCTOBER WAS BASED WITH REASONING OF T HE CHARTERED ACCOUNTANT WHEN THE RETURN REMAINED UNFIL ED BUT ALL MATERIALS RELATING TO THE CLAIM OF DEDUCTION WERE AVAILABLE IN THE OFFICE OF CHARTERED ACCOUNTANT AS HAS BEEN VERIFIED IN THE AFFIDAVIT. THE SAME HAS BEEN A CCEPTED BY THE AO IN THE RETURN AND IN VIEW OF THE E-FILE OF THE RETURN DELAY HAD TO PR OCEED FOR VERIFICATION AT THE TIME OF HEARING. THE DELAY THEREFORE WAS BONA FIDE AND GENU INE WHICH HAS NOT BEEN REBUTTED BY THE AUTHORITIES BELOW. THE CASE LAWS BY PLACING RELIANCE ON TRIBUNALS DECISION HAVE BEEN PERUSED BY US, IN SO FAR AS, VARIOUS CASE LAWS ALSO HAVE BEEN DEALT WITH BY THE TRIBUNAL UPHOLDING THE CLAIM OF DEDUCTION ON THE BA SIS OF BELATED FILING OF THE RETURN WAS TO CONSIDER LIBERALLY IN SO FAR AT NO POINT OF TIME THE ASSESSEE HAD INVALID REASONS TO FILE THE RETURN BELATEDLY. HAVING PAID THE TAX O N TIME, HAVING OBTAINED AUDIT REPORT ON TIME, HAVING COMPUTED THE CLAIM OF DEDUCTION ON TIME IT WAS NOBODYS CASE THAT THE SAME SHOULD BE HELD BACK TO THE DETRIMENT OF THE AS SESSEE ITSELF. IT WAS NOT THE INTENTION ON THE PART OF THE ASSESSEE BUT ONLY DUE TO THE CIRCUMSTANCES WHICH WERE BEYOND THE CONTROL OF THE ASSESSEE. IT HAS BEEN CAT EGORICALLY HELD THAT THIS PROVISION AS MADE OUT, THE TIME LIMIT SHOULD NOT WORK AS PUNITIV E IN SO FAR AS THE PURPOSE BEHIND THE RELIEF IS NOT DENIED WAS ALSO CONSIDERED BY THE HONBLE APEX COURT IN THE CASE OF CIT VS KULU VALLEY TRANSPORT CO. (P) LTD. 77 ITR 5 18 (SC) . IN RESPECT OF SECTION 80AC IS CONCERNED THE CIT(A) APPEARS TO HAVE BEEN S WAYED BY THE WORD SHALL WHICH PLACES MORE OF A DUTY TO BE ANALYSED WAS CONS IDERED BY THE TRIBUNAL FOR DEDUCTIONS U/S 80AC CHAPTER-VIA ARE TO BE ASSESSED AND THEREFORE CAN ONLY BE CLAIMED WHEN A RETURN IS FILED. HERE THE RETURN HAS BEEN FILED BELATEDLY HAS BEEN DENIED OF THE DEDUCTION WHICH OTHERWISE IS IN ACCOR DANCE WITH THE PROVISION OF THE INCOME TAX ACT. HAVING PAID THE ADVANCE TAX AND HAV ING COMPUTED THE DEDUCTION SO CLAIMED THE RETURN WAS TO BE FILED WITHIN THE DUE D ATE AS PRESCRIBED WHICH DUE DATE WERE AS PER THE NOTIFICATION PROBABLY FOR RESPECTIV E ASSESSMENT YEARS CANNOT BE LOST SIGHT OF . HERE THE NEGLIGENCE ON THE PART OF THE A SSESSEE HAS NOT BEEN ESTABLISHED IN SO FAR AS IT WAS NOT IN THE INTEREST OF THE ASSESSEE T O BE INCLUDED NEGLIGENT WHEN HE WAS DEPENDENT ON THE PROFESSIONAL SERVICES WHICH THE PR OFESSIONAL SERVICE IS REQUIRED FOR DOCUMENTING THE CLAIM OR DEDUCTION AS PER LAW. IN T HIS VIEW OF THE MATTER WE ARE OF ITA NO. 1586/KOL/2012 6 THE CONSIDERED VIEW THAT THERE IS NO MERIT IN THE C ONTENTION OF THE AUTHORITIES BELOW WHEN NO CONTRARY DECISION HAS BEEN POINTED OUT BY T HE LD. DR IN SO FAR AS ON THE SUBMISSION OF THE LD. COUNSEL THE THREE DECISIONS O F THE TRIBUNAL ARE DIRECTLY ON THE ISSUE OF UPHOLDING THE CLAIM OF DEDUCTION EVEN WHEN THE RETURN HAS BEEN FILED BELATEDLY ON THE BASIS OF THE FACTS AND CIRCUMSTANC ES LEADING TO SUCH DELAY. IN THIS VIEW OF THE MATTER WE HAVE NO HESITATION TO SET ASI DE THE ORDER OF THE LD. CIT(A) AND DIRECT THE AO TO ACCEPT THE RETURN AS FILED BY THE ASSESSEE AND ALLOW THE CLAIM OF DEDUCTION U/S 80IB(10) OF THE IT ACT. 8. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLO WED. ORDER PRONOUNCED IN THE COURT ON 19.04.2013. SD/- SD/- [ .#! $'# , ] [ .., ,, , ] [MAHAVIR SINGH ] [K.K.GUPTA] JUDICIAL MEMBER ACCOUNTANT MEMBER ( (( (4 4 4 4) )) ) DATE: 19.04.2013. R.G.(.P.S.) 6 1 /$$7 87)9- COPY OF THE ORDER FORWARDED TO: 1. M/S. SHELCON PROPERTIES (P)LTD., 7 TH FLOOR, NILADRI SIKHAR, HILCART ROAD, SILIGURI- 734001. 2 J.C.I.T., (OSD), CIRCLE-3, SILIGURI. 3 . CIT KOLKATA 4 . CIT(A)-SILIGURI. 5. CIT(DR), KOLKATA BENCHES, KOLKATA. 07 /$/ TRUE COPY, 6'/ BY ORDER, DEPUTY /ASST. REGISTRAR , ITAT, KOLKATA BENCHES