DY. Commissioner of Income Tax, Central Circle-1, Kanpur V. Rama Medicare Limited, Kanpur

ITA 183/LKW/2019

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 3979 (ITAT-LUCKNOW)
• Duration Of Justice: 7 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-11-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 13-03-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K MADHUK
• Assessee Lawyers: P K KAPOOR
• Keywords: Rectification of order; Question of law; Reasonable cause; Set aside
• Section: 143(3); 142(1); 80IB; 80P; 80IA; 201; 80IC; 139(1); 139(4); 263; 10; 154; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B, LUCKNOW BEFORE SHRI. A. D. JAIN, VICE PRESIDENT AND SHRI T. S. KAPOOR, ACCOUNTANT MEMBER ITA NO. 183/LKW/2019 ASSESSMENT YEAR: 2012 - 13 DY. CIT CENTRAL CIRCLE 1 KANPUR V. M/S RAMA MEDICARE LI MITED 117K/137, SARVODAYA NAGAR KANPUR TAN/PAN: AAECR4680A (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI S. K. MADHUK, D.R. RESPONDENT BY: SHRI P. K. KAPOOR, C.A. DATE OF HEARING: 07 11 201 9 DATE OF PRONOUNCEMENT: 08 11 201 9 O R D E R PER A. D. JAIN, V.P.: THIS IS REVENUES APPEAL AGAINST THE ORDER OF THE LD. CIT(A)-IV, KANPUR, DATED 12/12/2018, FOR ASSESSMENT YEAR 2012- 13, TAKING THE FOLLOWING GROUNDS: 1. WHETHER THE LD. CIT(A) WAS JUSTIFIED IN LAW AND ON FACTS IN ALLOWING THE APPEAL BY HOLDING THAT THE ISSUE BEING DEBATABLE, THE ASSESSING OFFICER HAD NO JURISDICTION TO PASS ORDER U/S154, WITHOUT APPRECIATING THAT IN VIEW OF THE SPECIFIC PROVISIONS OF 80IB R/W SECTION80AC OF THE I.T ACT, THE DEDUCTION WAS ALLOWABLE ONLY WHEN THE RETURN WAS FILED WITHIN, TIME ALLOWED U/S 139(1) AND ALLOWANCE OF DEDUCTION BY THE AO INITIALLY INSPITE OF RETURN FILED BEYOND TIME U/S 139(1) WAS A MISTAKE APPARENT FROM RECORD, RECTIFIABLE U/S 154 BY THE AO. 2. WHETHER THE LD. CIT(A) WAS JUSTIFIED IN LAW AND ON FACTS TO HOLD THAT IN VIEW OF DECISION IN CASE OF CHIRAKKAL SERVICES COOP BANK VS. C1T 384 ITR 90(KER), THE ISSUE OF ALLOWANCE OF DEDUCTION U/S 80IB, WHEN THE RETURN WAS ITA NO.183/LKW/2019 PAGE 2 OF 16 NOT FILED WITHIN TIME ALLOWED U/S 139(1), WAS DEBATABLE ONE WITHOUT APPRECIATING THAT THE AFORESAID DECISION WAS IN CONTEXT OF SECTION 80P WHEREIN NO SPECIFIC PROVISION REQUIRING THE ASSESSES TO FILE RETURN ; WITHIN TIME ALLOWED U/S 139(1) TO BE ELIGIBLE FOR DEDUCTION U/S 80P HAS BEEN PRESCRIBED UNLIKE THE PROVISIONS OF SECTION 80IB R/W SECTION 80AC WHEREIN IT HAS BEEN SPECIFICALLY PROVIDED THAT TO BE ELIGIBLE FOR DEDUCTION U/S 80IB, THE ASSESSEE HAS TO FILE RETURN WITHIN TIME U/S 139(1). THE ORDER OF LD. CIT(A) THEREFORE SUFFERS FROM PERVERSITY IN AS MUCH AS THE RELIANCE PLACED BY HIM ON DECISION IN RENDERED IN CHIRAKKAL SERVICES COOP. BANK VS. CIT IN CONTEXT OF ENTIRELY DIFFERENT PROVISIONS OF LAW. 3. WHETHER THE LD. CIT(A) WAS JUSTIFIED IN LAW AND ON FACTS TO IGNORE THE DECISION BINDING DECISION OF THE KOLKATA HIGH COURT IN CASE OF CIT SILIGURI VS SHELCON PROPERTIES PVT. LTD IN ITA NO. 3069 OF 2013, WHICH WAS IN CONTEXT OF SECTION 80IB, WHEREIN THE HIGH COURT HAS HELD THAT NO DEDUCTION U/S 80IB WAS ALLOWABLE IF THE RETURN WAS NOT FILED WITHIN TIME ALLOWED U/S 139(1) & THERE BEING NO CONTRARY DECISION ON SAME PROVISIONS BY ANY OTHER HIGH COURT. 4. WHETHER THE LD. CIT(A) WAS JUSTIFIED IN LAW AND ON FACTS IN APPLYING THE PRINCIPLES OF LIBERAL INTERPRETATION OF THE INCENTIVE PROVISIONS OF 80IB R/W SECTION 80AC WHICH ARE UNAMBIGUOUS AND HENCE REQUIRED TO BE STRICTLY INTERPRETED IN VIEW OF THE RECENT DECISION OF THE CONSTITUTIONAL BENCH OF THE SUPREME COURT IN CASE OF COMMISSIONER OF CUSTOMS MUMBAI VS M/S DILIP KURHAR & COMPANY IN CIVIL APPEAL NO 3327 OF 2007. 5. THAT THE ORDER OF THE LD. CIT (A) BEING ERRONEOUS ON FACTS OF THE CASE AND LIABLE TO BE SET ASIDE AND THAT THE ORDER OF AO MAY BE RESTORED. 2. THE BRIEF FACTS OF THE CASE ARE THAT IN THIS CASE THE ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) OF THE ACT ON 31/3/2015 AT A TOTAL INCOME OF RS.10,05,45,770/-, MAKING ITA NO.183/LKW/2019 PAGE 3 OF 16 VARIOUS DISALLOWANCES/ADDITIONS AND ALSO ALLOWING DEDUCTION UNDER SECTION 80IB OF THE ACT. LATER ON, ACCORDING TO THE ASSESSING OFFICER, THE DEDUCTION ALLOWED UNDER SECTION 80IB OF THE ACT WAS IN CONTRAVENTION TO THE PROVISIONS OF SECTION 80AC OF THE ACT, THEREFORE, HE RECTIFIED HIS ORDER DATED 31/3/2015 BY PASSING AN ORDER UNDER SECTION 143(3)/154 OF THE ACT, DATED 8/9/2016, THEREBY DISALLOWING THE DEDUCTION UNDER SECTION 80IB OF THE ACT AT RS.8,21,48,868/-. 3. AGGRIEVED BY THE ORDER OF RECTIFICATION PASSED BY THE ASSESSING OFFICER UNDER SECTION 143(3)/154 OF THE ACT, DATED 8/9/2016, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A), WHO ALLOWED THE APPEAL OF THE ASSESSEE BY CANCELLING THE RECTIFICATION ORDER PASSED UNDER SECTION 143(3)/154 OF THE ACT, DATED 8/9/2016. 4. AGGRIEVED BY THE ORDER OF THE LD. CIT(A), THE REVENUE IS IN APPEAL BEFORE US. THE LD. D.R. SUBMITTED THAT THE LD. CIT(A) WAS NOT JUSTIFIED IN LAW AND ON FACTS IN ALLOWING THE APPEAL BY HOLDING THAT THE ISSUE BEING DEBATABLE, THE ASSESSING OFFICER HAD NO JURISDICTION TO PASS THE ORDER UNDER SECTION 154 OF THE ACT, WITHOUT APPRECIATING THAT IN VIEW OF THE SPECIFIC PROVISIONS OF 80IB READ WITH SECTION 80AC OF THE I.T ACT, THE DEDUCTION WAS ALLOWABLE ONLY WHEN THE RETURN WAS FILED WITHIN THE TIME ALLOWED U/S 139(1) OF THE ACT; THAT THE ALLOWANCE OF DEDUCTION BY THE ASSESSING OFFICER INITIALLY INSPITE OF RETURN FILED BEYOND TIME UNDER SECTION 139(1) OF THE ACT WAS A MISTAKE APPARENT FROM RECORD, WHICH IS RECTIFIABLE UNDER SECTION 154 OF THE ACT, BY THE ASSESSING OFFICER; AND THAT THE LD. CIT(A) WAS NOT JUSTIFIED TO HOLD THAT IN VIEW OF THE DECISION HON'BLE KERALA HIGH COURT IN THE CASE OF CHIRAKKAL SERVICES COOP BANK VS. C1T 384 ITR 90 (KER), THE ISSUE OF ALLOWABILITY OF DEDUCTION UNDER SECTION 80IB OF THE ACT, ITA NO.183/LKW/2019 PAGE 4 OF 16 WHEN THE RETURN WAS NOT FILED WITHIN THE TIME PRESCRIBED UNDER SECTION 139(1) OF THE ACT, WAS DEBATABLE ONE, WITHOUT APPRECIATING THAT THE AFORESAID DECISION WAS IN THE CONTEXT OF SECTION 80P OF THE ACT WHEREIN NO SPECIFIC PROVISION REQUIRING THE ASSESSES TO FILE THE RETURN WITHIN THE TIME ALLOWED UNDER SECTION 139(1) OF THE ACT TO BE ELIGIBLE FOR DEDUCTION UNDER SECTION 80P HAS BEEN PRESCRIBED, UNLIKE THE PROVISIONS OF SECTION 80IB READ WITH SECTION 80AC, WHEREIN, IT HAS BEEN SPECIFICALLY PROVIDED THAT TO BE ELIGIBLE FOR DEDUCTION UNDER SECTION 80IB, THE ASSESSEE HAS TO FILE THE RETURN OF INCOME WITHIN TIME AS PROVIDED UNDER SECTION 139(1) OF THE ACT. THE LD. COUNSEL FOR THE ASSESSEE ACCORDINGLY SUBMITTED THAT THE ORDER OF LD. CIT(A) SUFFERS FROM PERVERSITY INASMUCH AS, THE RELIANCE PLACED BY HIM ON THE DECISION RENDERED IN CHIRAKKAL SERVICES COOP. BANK VS. CIT (SUPRA) IS OF ENTIRELY ON DIFFERENT CONTEXT AND PROVISIONS OF LAW. THEREFORE, THE ORDER OF THE LD. CIT(A) MAY BE SET ASIDE AND THAT THE ORDER OF THE ASSESSING OFFICER PASSED UNDER SECTION 143(3)/154 OF THE ACT MAY BE RESTORED. 5. THE LD. COUNSEL FOR THE ASSESSEE, ON THE OTHER HAND, PLACING RELIANCE ON THE ORDER OF THE LD. CIT(A), HAS SUBMITTED THAT THE LD. CIT(A), FOLLOWING THE JUDGMENT OF THE HON'BLE KERALA HIGH COURT IN CHIRAKKAL SERVICES CO-OPERATIVE BANK VS. CIT (SUPRA) AND ALSO THE DECISION OF THE LUCKNOW BENCH OF THE ITAT IN ITA NO.589/LKW/2016 IN THE ASSESSEES OWN CASE FOR THE PRECEDING ASSESSMENT YEAR, I.E., 2011-12, HAS DECIDED THE ISSUE ON FACTS EXACTLY SIMILAR IN FAVOUR OF THE ASSESSEE. THEREFORE, NO INTERFERENCE IS CALLED FOR IN THE ORDER OF THE LD. CIT(A), WHO HAS RIGHTLY CANCELLED THE RECTIFICATION ORDER, DATED 8/9/2016, PASSED BY THE ASSESSING OFFICER UNDER SECTION 143(3)/154 OF THE ACT. ITA NO.183/LKW/2019 PAGE 5 OF 16 6. HEARD. WE FIND THAT THE ASSESSMENT, IN THE CASE OF THE ASSESSEE, FOR THE YEAR UNDER CONSIDERATION, WAS COMPLETED UNDER SECTION 143(3) OF THE ACT ON 31/3/2015 AT A TOTAL INCOME OF RS.10,05,45,770/-, MAKING VARIOUS DISALLOWANCES/ADDITIONS AND ALSO ALLOWING DEDUCTION UNDER SECTION 80IB OF THE ACT, AND LATER ON, HE RECTIFIED HIS EARLIER ORDER DATED 31/3/2015, BY PASSING AN ORDER UNDER SECTION 143(3)/154 OF THE ACT, DATED 8/9/2016, DISALLOWING THE DEDUCTION UNDER SECTION 80IB OF THE ACT. THE LD. CIT(A), VIDE HIS ORDER, DATED 12/12/2018, PASSED UNDER SECTION 250(6) OF THE ACT, CANCELLED THE ORDER OF THE ASSESSING OFFICER, DATED 8/9/2016 PASSED UNDER SECTION 143(3)/154 OF THE ACT, RELYING ON THE JUDGMENT OF THE HON'BLE KERALA HIGH COURT IN CHIRAKKAL SERVICES CO-OPERATIVE BANK VS. CIT (SUPRA) AND ALSO THE DECISION OF THE LUCKNOW BENCH OF THE ITAT IN ITA NO.589/LKW/2016 IN THE ASSESSEES OWN CASE FOR PRECEDING ASSESSMENT YEAR, I.E., 2011-12. THE LUCKNOW BENCH OF THE TRIBUNAL, WHILE DECIDING THE APPEAL OF THE ASSESSEE IN ITA NO.589/LKW/2016, HAS CONSIDERED THE JUDGMENTS OF THE VARIOUS HIGH COURTS INCLUDING THAT OF THE HON'BLE KERALA HIGH COURT IN CHIRAKKAL SERVICES CO-OPERATIVE BANK VS. CIT (SUPRA) AND DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE, OBSERVING AS BELOW: 9. WE FIND THAT HON'BLE KERALA HIGH COURT IN THE CASE OF CHIRAKKAL SERVICES CO-OPERATIVE BANK VS CIT, (2016) 384 ITR 490 (KER) HAS HELD AS UNDER: 18.QUESTIONS B AND C RELATE TO DENIAL OF EXEMPTION ON GROUND REFERABLE TO BELATED FILING OF RETURN, THAT IS TO SAY, RETURNS FILED BEYOND THE PERIOD STIPULATED UNDER SECTION 139(1) OR SECTION 139 (4), AS THE CASE MAY BE, AS WELL AS SECTION 142 (1) OR SECTION 148, AS THE CASE MAY BE. THERE ARE NO CASES AMONG THESE APPEALS WHERE RETURNS WERE NOT FILED. THERE ARE CASES 'WHERE ITA NO.183/LKW/2019 PAGE 6 OF 16 CLAIMS HAVE BEEN MADE ALONG, WITH THE RETURNS AND THE RETURNS WERE FILED WITHIN TIME. STILL FURTHER, THERE ARE CASES WHERE RETURNS WERE FILED BELATEDLY, THAT IS TO SAY, BEYOND THE PERIOD STIPULATED UNDER SUB SECTION 1 OR 4 OF SECTION 139; AND, THERE ARE ALSO RETURNS FILED AFTER THE PERIOD WITH REFERENCE TO SECTIONS 142(1) AND 148 OF THE IT ACT. 19. SECTION 80A(5) PROVIDES THAT WHERE THE ASSESSEE FAILS TO MAKE A CLAIM IN HIS RETURN OF INCOME FOR ANY DEDUCTION, INTER ALIA, UNDER ANY PROVISION OF CHAPTER VIA UNDER THE HEADING 'C.-DEDUCTIONS IN RESPECT OF CERTAIN INCOMES', NO DEDUCTION SHALL BE ALLOWED TO HIM THEREUNDER. THEREFORE, IN CASES WHERE NO RETURNS HAVE BEEN FILED FOR A PARTICULAR ASSESSMENT YEAR, NO DEDUCTIONS SHALL BE ALLOWED. THIS EMBARGO IN SECTION 80A(5) WOULD APPLY, THOUGH SECTION 80P IS NOT INCLUDED IN SECTION 80AC. THIS IS SO BECAUSE, THE INHIBITION AGAINST ALLOWING DEDUCTION IS WORDED IN QUITE SIMILAR TERMS IN SECTIONS 80A(5) AND 80AC, OF WHICH SECTION 80A(5) IS A PROVISION INSERTED THROUGH THE FINANCE ACT 33/2009 WITH EFFECT FROM 1.4.2013 AFTER THE INSERTION OF SECTION 80AC AS PER THE FINANCE ACT OF 2006 WITH EFFECT FROM 1.4.2006. THIS CLEARLY EVIDENCES THE LEGISLATIVE INTENDIMENT THAT THE INHIBITION CONTAINED IN SUBSECTION 5 OF SECTION 80A WOULD OPERATE BY ITSELF. IN CASES WHERE RETURNS HAVE BEEN FILED, THE QUESTION OF EXEMPTIONS OR DEDUCTIONS REFERABLE TO SECTION SOP WOULD DEFINITELY HAVE TO BE CONSIDERED AND GRANTED IF ELIGIBLE. 20. HERE, QUESTIONS WOULD ARISE AS TO WHETHER BELATED RETURNS FILED BEYOND THE PERIOD STIPULATED UNDER SECTION 139(1) OR SECTION 139(4) AS WELL AS FOLLOWING SECTIONS 142(1) AND 148 PROCEEDINGS COULD BE CONSIDERED FOR EXEMPTION. IF THOSE RETURNS ARE ELIGIBLE TO BE ACCEPTED IN TERMS OF LAW, GOING BY THE PROVISIONS OF THE STATUTE AND THE GOVERNING BINDING PRECEDENTS, IT GOES WITHOUT SAYING THAT THE CLAIM FOR EXEMPTION WILL ALSO STAND EFFECTUATED AS A CLAIM DULY MADE AS PART OF THE RETURNS SO FILED, FOR DUE CONSIDERATION. ITA NO.183/LKW/2019 PAGE 7 OF 16 21. WHEN A NOTICE UNDER SECTION 142(1) IS ISSUED, THE PERSON MAY FURNISH THE RETURN AND WHILE DOING SO, COULD ALSO MAKE CLAIM FOR DEDUCTION REFERABLE TO SECTION SOP. NOT MUCH DIFFERENT IS THE SITUATION WHEN PRE-ASSESSMENT ENQUIRY IS CARRIED FORWARD BY ISSUANCE OF NOTICE UNDER SECTION 142 (1) OR WHEN NOTICE IS ISSUED ON THE PREMISE OF ESCAPED ASSESSMENT REFERABLE TO SECTION 148 OF THE IT ACT. THIS POSITION NOTWITHSTANDING, WHEN AN ASSESSMENT IS SUBJECTED TO FIRST APPEAL OR FURTHER APPEALS UNDER THE IT ACT OR ALL QUESTIONS GERMANE FOR CONCLUDING THE ASSESSMENT WOULD BE RELEVANT AND CLAIMS WHICH MAY RESULT IN MODIFICATION OF THE RETURNS ALREADY FILED COULD ALSO BE ENTERTAINED, PARTICULARLY WHEN IT RELATES TO CLAIMS FOR EXEMPTIONS. THIS IS SO BECAUSE THE FINALITY OF ASSESSMENT WOULD NOT BE ACHIEVED IN ALL SUCH CASES, UNTIL THE TERMINATION OF ALL SUCH APPELLATE REMEDIES. UNDER SUCH CIRCUMSTANCES, THE TRIBUNAL WAS NOT JUSTIFIED IN DENYING EXEMPTION UNDER SECTION SOP OF THE IT ACT ON THE MERE GROUND OF BELATED FILING OF RETURN BY THE ASSESSEE CONCERNED. A RETURN FILED BY THE ASSESSEE BEYOND THE PERIOD STIPULATED UNDER SECTION 139(1) OR 139(4) OR UNDER SECTION 142(1) OR SECTION 148 CAN ALSO BE ACCEPTED AND ACTED UPON PROVIDED FURTHER PROCEEDINGS IN RELATION TO SUCH ASSESSMENTS ARE PE NDING IN THE STATUTORY HIERARCHY OF ADJUDICATION IN TERMS OF THE PROVISIONS OF THE IT ACT. IN ALL SUCH SITUATIONS, IT CANNOT BE TREATED THAT A RETURN FI LED AT ANY STAGE OF SUCH PROCEEDINGS COULD BE TREATED AS NON EST D INVALID FOR THE PURPOSE OF DECIDING EXEMPTION UNDER SECTION 80P OF THE IT ACT. WE THUS ANSWER SUBSTANTIAL QUESTIONS OF LAW B AND C AND ENUMERATED ABOVE.' 10. THE DELHI BENCH OF THE TRIBUNAL IN THE CASE OF ITO VS M/S GOPI CONSTECH PVT. LTD. IN ITA IMO.2384/DEL/2016 ORDER DATED 22.1.2018 HAS HELD AS UNDER: 18. WE HAVE HEARD BOTH OF PARTIES AND THEIR CONTENTION HAVE CAREFULLY BEEN CONSIDERED. ........... THE FIRST GROUND TAKEN BY THE A.O IS THAT THE ASSESSEE HAS ITA NO.183/LKW/2019 PAGE 8 OF 16 FAILED TO MEET THE MANDATORY REQUIREMENT AS SPECIFIED IN SECTION 80AC OF THE ACT FILLING ITS RETURN U/S 139(1) OF THE ACT, THEREFORE, IT IS NOT ELIGIBLE TO CLAIM DEDUCTION U/S 80IA OF THE ACT. THE ID. CIT(A) HAS ADMITTED THE CLAIM OF THE ASSESSEE ON THE GROUND THAT PROVISIONS OF 80AC ARE DIRECTORY IN NATURE, LD. COUNSEL OF THE ASSESSEE HAS RELIED UPON DECISION OF THE COORDINATE BENCH IN THE CASE OF FIBERFILL ENGINEERS (SUPRA) WHEREIN WHILE EXAMINING THE CLAIM OF DEDUCTION U/S 80IC IN A CASE WHERE RETURN WAS NOT FILED WITHIN PRESCRIBED STATUTORY TIME U/S 139(1) OF THE ACT, IT HAS BEEN HELD THAT THE ASSESSEE WOULD BE ELIGIBLE TO CLAIM DEDUCTION AS THE PROVISIONS OF SECTION 80AC OF THE ACT ARE DIRECTORY IN NATURE AND PROVISIONS OF SECTION 80IC OF THE ACT BEING INCENTIVE PROVISIONS HAS TO BE INTERPRETED IN A MANNER SO AS TO ADVANCE THE OBJECTS OF ECONOMIC ACTIVITIES IN THE COUNTRY AND NOT TO DENY THE CLAIM MERELY ON TECHNICAL GROUNDS. THEREFORE, IN THAT CASE, FOR THE RETURN FILED U/S 139(4), IT IS HELD THAT ASSESSEE WOULD BE ELIGIBLE FOR CLAIMING DEDUCTION U/S 80IC. THE RELEVANT OBSERVATIONS FROM THAT DECISION ARE REPRODUCED BELOW: '54. THE THIRD ISSUE FOUR OUR CONSIDERATION IS WHETHER IN VIEW OF THE PROVISION OF SECTION 80AC, THE ASSESSEE IS ENTITLED TO DEDUCTION U/S 80IC ON ACCOUNT OF LATE FILING OF RETURN. SECTION 80AC READS AS UNDER: '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 20 APRIL, 2006 OR ANY SUBSEQUENT OF ASSESSMENT YEAR, ANY DEDUCTION IS ADMISSIBLE UNDER SECTION 80IA OR SECTION 80IAB OR SECTION 80IB OR SECTION 80IC [ OR SECTION 80ID OR SECTION 80IE], 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 SUB-SECTION (1) OF SECTION 139.' ITA NO.183/LKW/2019 PAGE 9 OF 16 55. WHILE REFERRING TO THE FINDING OF ASSESSMENT ORDER, WE HAVE VARIOUS DECISIONS RELIED UPON BY ID. COUNSEL FOR THE ASSESSEE, HELD THAT SECTION 139(4) IS TO BE READ AS PROVISO TO SECTION. IT IS TRUE THAT THE HEADING OF SECTION 80AC CLEARLY SHOWS DEDUCTION IS NOT TO BE ALLOWED UNLESS RETURN IS FURNISHED ON OR BEFORE THE DUE DATE SPECIFIED UNDER SUB- SECTION (1) TO SECTION 139. HOWEVER, IT CANNOT BE DENIED THAT SECTION 80IC IS AN INCENTIVE PROVISION AND IN VIEW OF VARIOUS JUDICIAL PRONOUNCEMENTS PARTICULARLY IN THE CASE OF BAJAJ TEMPO LTD. (SUPRA), THE INCENTIVE PROVISION HAS TO BE INTERPRETED IN A MANNER SO AS TO ADVANCE THE OBJECTS OF ECONOMIC ACTIVITIES IN THE COUNTRY AND NOT TO DENY THE CLAIM MERELY ON TECHNICAL GROUNDS. 56. SECTION 139(4) READS AS UNDER: '139(4) ANY PERSON WHO HAS NOT FURNISHED A RETURN WITHIN THE TIME ALLOWED TO HIM UNDER SUB-SECTION (1), OR WITHIN THE TIME ALLOWED UNDER A NOTICE ISSUED UNDER SUB-SECTION (1) OF SECTION 142, MAY FURNISH THE RETURN FOR ANY PREVIOUS YEAR AT ANY TIME BEFORE THE EXPIRY OF ONE YEAR FROM THE END OF THE RELEVANT ASSESSMENT YEAR OR BEFORE THE COMPLETION OF THE ASSESSMENT, WHICHEVER IS EARLIER. PROVIDED THAT WHERE THE RETURN RELATES TO A PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR COMMENCING ON THE 1ST DAY OF APRIL, 1988, OR ANY EARLIER ASSESSMENT YEAR, THE REFERENCE TO ONE YEAR AFORESAID SHALL BE CONSTRUED AS A REFERENCE TO TWO YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR. '57. A BARE PERUSAL OF THIS SECTION MAKES IT CLEAR THAT THE LEGISLATURE ITSELF HAS ALLOWED THE ASSESSEE TO FILE RETURN BELATEDLY SUBJECT TO FULFILLMENT OF CONDITIONS WRITTEN IN THE SAID SECTION. THEREFORE, ONCE THOSE CONDITIONS ARE MET, THEN RETURN FILED BY THE ASSESSEE WOULD FOR ALL TECHNICAL PURPOSES BE CONSIDERED BEING FILED ITA NO.183/LKW/2019 PAGE 10 OF 16 U/S 139(1). THUS, KEEPING IN VIEW THE VARIOUS DECISIONS NOTED EARLIER, WE DO NOT FIND ANY REASON TO DENY THE CLAIM OF ASSESSEE ON THE GROUND OF FILING THE RETURN BELATEDLY.' 19. IN THE CASE OF CHIRAKAL SERVICES CO-OPERATIVE BANK LTD. KANNUR (SUPRA), RELIED UPON BY LD. AR, IT HAS BEEN HELD THAT EVEN IN THE RETURNS WHICH ARE FILED BELATEDLY, THAT IS TO SAY, BEYOND THE PERIOD STIPULATED UNDER SUB- SECTION (1) OR (4) OF SECTION 139; AND, WHICH ARE RETURNS FILED AFTER THE PERIOD WITH REFERENCE TO SECTIONS 142(1) AND 148 OF THE IT ACT, DEDUCTION CANNOT BE DISALLOWED ON THE GROUND THAT RETURN WAS NOT FILED WITHIN THE STIPULATED PERIOD PRESCRIBED UNDER SECTION 139(1). THEIR LORDSHIPS IN THAT CASE COMPARED THE PROVISIONS OF 80A(5) WITH THE PROVISIONS CONTAINED IN SECTION 80AC AND HAVE REACHED A CONCLUSION THAT IN A CASE WHERE RETURN IS FILED EVEN U/S 148, THE CLAIM OF THE ASSESSEE FOR DEDUCTION HAS TO BE CONSIDERED AND ALLOWED. REFERENCE IN THIS REGARD CAN BE MADE- TO THE RELEVANT OBSERVATIONS REGARDING QUESTIONS OF LAW AND THE DECISION RENDERED THEREON IN THE SAID CASE, WHICH ARE AS UNDER: '(B) WHETHER THE TRIBUNAL IS JUSTIFIED IN DENYING THE EXEMPTION UNDER SECTION 80P OF THE INCOME TAX ACT, 1961, THE MERE GROUND OF BELATED FILING OF RETURN BY THE ASSESSEE? (C) WHETHER A RETURN FILED BY THE ASSESSEE BEYOND THE PERIOD STIPULATED UNDER SECTION 139(L)/(4) OR SECTION 142(1)/148 C AN BE HELD AS NON EST IN LAW AND INVALID FOR THE PURPOSE OF DECIDING EXEMPTION UNDER SECTION SOP OF THE INCOME TAX ACT, 1961?' 20. HERE, QUESTIONS WOULD ARISE AS TO WHETHER BELATED RETURNS FILED BEYOND THE PERIOD STIPULATED UNDER SECTION 139(1) OR SECTION 139(4) AS WELL AS FOLLOWING SECTIONS 142(1) AND 148 PROCEEDINGS COULD BE CONSIDERED FOR EXEMPTION. IF THOSE RETURNS ARE ELIGIBLE TO BE ACCEPTED IN TERMS OF LAW, GOING BY THE PROVISIONS OF THE STATUTE AND THE GOVERNING BINDING PRECEDENTS, IT ITA NO.183/LKW/2019 PAGE 11 OF 16 GOES WITHOUT SAYING THAT THE CLAIM FOR EXEMPTION WILL ALSO STAND EFFECTUATED AS A CLAIM DULY MADE AS PART OF THE RETURNS SO FILED, FOR DUE CONSIDERATION. 21. WHEN A NOTICE UNDER SECTION 142(1) IS ISSUED, THE PERSON MAY FURNISH THE RETURN AND WHILE DOING SO, COULD ALSO MAKE CLAIM FOR DEDUCTION REFERABLE TO SECTION SOP. NOT MUCH DIFFERENT IS THE SITUATION WHEN PRE-ASSESSMENT ENQUIRY IS CARRIED FORWARD BY ISSUANCE OF NOTICE UNDER SECTION 142 (1) OR WHEN NOTICE IS ISSUED ON THE PREMISE OF ESCAPED ASSESSMENT REFERABLE TO SECTION 148 OF THE IT ACT. THIS POSITION NOTWITHSTANDING, WHEN AN ASSESSMENT IS SUBJECTED TO FIRST APPEAL OR FURTHER APPEALS UNDER THE IT ACT OR AIL QUESTIONS GERMANE FOR CONCLUDING THE ASSESSMENT WOULD. BE RELEVANT AND CLAIMS WHICH MAY RESULT IN MODIFICATION OF THE RETURNS ALREADY FILED COULD ALSO BE ENTERTAINED, PARTICULARLY WHEN IT RELATES TO CLAIMS FOR EXEMPTIONS. THIS IS SO BECAUSE THE FINALITY OF ASSESSMENT WOULD NOT BE ACHIEVED IN ALL SUCH CASES, UNTIL THE TERMINATION OF ALL SUCH APPELLATE REMEDIES. UNDER SUCH CIRCUMSTANCES, THE TRIBUNAL WAS NOT JUSTIFIED IN DENYING EXEMPTION UNDER SECTION 80P OF THE IT ACT ON THE MERE GROUND OF BELATED FILING OF RETURN BY THE ASSESSEE CONCERNED. A RETURN FILED BY THE ASSESSEE BEYOND THE PERIOD STIPULATED UNDER SECTION 139(1) OR 139(4) OR UNDER SECTION 142(1) OR SECTION 148 CAN ALSO BE ACCEPTED AND ACTED UPON PROVIDED FURTHER PROCEEDINGS IN RELATION TO SUCH ASSESSMENTS ARE PENDING IN THE STATUTORY HIERARCHY OF ADJUDICATION IN TERMS OF THE PROVISIONS OF THE IT ACT. IN ALL SUCH SITUATIONS, IT CANNOT BE TREATED THAT A RETURN FILED AT ANY STAGE OF SUCH PROCEEDINGS COULD BE TREATED AS NON EST IN LAW AND INVALID FOR THE PURPOSE OF DECIDING EXEMPTION UNDER SECTION SOP OF THE IT ACT. WE THUS ANSWER SUBSTANTIAL QUESTIONS OF LAW B AND C FORMULATED AND ENUMERATED ABOVE.' 20. FROM THE ABOVE POSITION OF LAW, IT EMERGES THAT THE PROVISIONS CONTAINED IN SECTION 80AC ARE DIRECTORY IN NATURE AND IF THE RETURN IS FILED BY THE ASSESSEE UNDER EITHER OF THE SECTIONS 139(1), 139(4), 24 142(1) AND ITA NO.183/LKW/2019 PAGE 12 OF 16 148, THEN THE ASSESSEE WOULD BE ENTITLED TO CLAIM DEDUCTION. 11. FURTHER, WE FIND THAT HON'BLE CALCUTTA HIGH COURT IN THE CASE OF SHELCON PROPERTIES (P) LTD., (SUPRA) HAS HELD THAT THE BENEFIT UNDER SECTION 80IB(1) OF THE INCOME TAX ACT, 1961 CAN ONLY BE AVAILED IN THOSE CASES WHERE THE RETURN HAD BEEN FILED WITHIN THE PERIOD. WHEN THE PROVISION, IS THAT THE BENEFIT CANNOT BE CLAIMED IF THE RETURN HAS NOT BEEN FILED ON OR BEFORE THE PRESCRIBED DATE, IT IS A MANDATORY DIRECTION, WHICH PRESCRIBES THE CONSEQUENCE OF OMISSION TO FILE THE RETURN ON TIME. THE BENEFIT CAN ONLY BE AVAILED OF BY THE ASSESSEE, IF HE HAS FILED HIS RETURN OF INCOME ON TIME. 12. THUS, FROM THE CONTRARY DECISIONS QUOTED ABOVE, IT IS OBSERVED THAT THE ISSUE WHETHER DEDUCTION IS ALLOWABLE TO THE ASSESSEE U/S. 80IB OF THE ACT WHERE THE RETURN IS NOT FILED WITHIN THE TIME PRESCRIBED U/S. 139(1) OF THE ACT IS HIGHLY DEBATABLE. WHERE THE ISSUE IS HIGHLY DEBATABLE, THE SAME CANNOT BE RECTIFIED BY THE ASSESSING OFFICER BY PASSING AN ORDER U/S.154 OF THE ACT. OUR ABOVE VIEW FINDS SUPPORT FROM THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF T.S. BALRAM, INCOME TAX OFFICER, COMPANY CIRCLE BOMBAY VS VOLKART BROTHER AND OTHERS, 82 ITR 50 (SC), WHEREIN, IT WAS HELD THAT W IN SATYANARAYAN LAXMINARAYAN HEGDE VS. MALLIKARJUN BHAVANAPPA TIRUMALE (1960) 1 SCR 890, THIS COURT WHILE SPELLING OUT THE SCOPE OF THE POWER OF A HIGH COURT UNDER ARTICLE 226 OF THE CONSTITUTION RULED THAT AN ERROR WHICH HAS TO BE ESTABLISHED BY A LONG-DRAWN PROCESS OF REASONING ON POINTS WHERE THERE MAY CONCEIVABLY BE TWO OPINIONS CANNOT BE SAID TO BE AN ERROR APPARENT ON THE FACE OF THE RECORD. A DECISION ON DEBATABLE POINT OF LAW IS NOT A MISTAKE APPARENT FROM THE RECORD.' 13. FURTHER, HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS UNITECH LIMITED IN ITA 239/2015 & CM NO. 6678/2015, ORDER DATED 5.10.2015 AS UNDER: ITA NO.183/LKW/2019 PAGE 13 OF 16 ' 5. A SHORT QUESTION BEFORE THE COMMISSIONER OF INCOME TAX (CIT) WHO INITIATED PROCEEDINGS UNDER SECTION 263 AND PROCEEDED TO WITHDRAW THE DEDUCTION CLAIMED BY THE ASSESSEE UNDER SECTION 80IB(10) WAS WHETHER THE REQUIREMENT UNDER SECTION 80AC, THAT THE RETURN HAD TO BE FILED WITHIN THE TIME PRESCRIBED UNDER SECTION 139(1) OF THE ACT, WAS MANDATORY. 6. THE ITAT IN THE IMPUGNED ORDER ALLOWING APPEAL FILED BY THE ASSESSEE NOTED THAT THERE WAS A CLEAVAGE OF OPINION ON THE ISSUE AS WAS EVIDENT FROM TWO LINES OF DECISIONS OF THE ITAT ITSELF. SINCE A POSSIBLE VIEW IN FAVOUR OF THE ASSESSEE COULD BE TAKEN IF ONE LINE OF DECISIONS WAS APPLIED, THE ITAT CONCLUDED THAT THERE WAS NO JUSTIFICATION FOR CIT TO HAVE INVOKED THE JURISDICTION SECTION 263 OF THE ACT. 7. BEFORE THIS COURT MR ROHIT MADAN, LEARNED STANDING COUNSEL FOR THE REVENUE HAS PLACED RELIANCE ON THE DECISION DATED 27TH AUGUST 2012 OF THE UTTARAKHAND HIGH COURT IN ITA NO. 07/2012 (UMESH CHANDRA DALAKOTI V. ASSISTANT COMMISSIONER OF INCOME TAX) AS WELL AS OF THE CALCUTTA HIGH COURT IN CIT V. SHELCON PROPERTIES (P) LTD. [2015] 370 ITR 305 (CAL) BOTH OF WHICH HAVE HELD THE PROVISION UNDER SECTION 80AC OF THE ACT TO BE MANDATORY. HE HAS ALSO REFERRED TO THE DECISIONS OF THE ITAT SPECIAL BENCH IN SAFFIRE GARMENTS V. ITO 20 ITR (TRIB) 623, OF THE ITAT MADRAS BENCH IN 1219-1223/MDS/2012 (ACIT V. SHRI V.N, DEVADOSS), OF THE ITAT CHANDIGARH BENCH IN 250-2511CHD/2003 (LAKSHMI ENERGY AND FOODS LTD. V. ACIT) AND THE DECISION DATED 30TH JANUARY 2015 OF THE ITAT MUMBAI BENCH IN ITA NO. 4727/MUM/2012 (DWARKADAS PANCHMATIYA V. ACIT). 8. MR SALIL AGGARWAL, LEARNED COUNSEL FOR THE ASSESSEE, ON THE OTHER HAND, HAS PLACED RELIANCE ON THE DECISIONS OF THIS COURT IN CIT V. INTEGRATED DATABASES (I) LTD. (2009) 178 TAXMAN 432 (DE!) AND CIT V. CENTIMETERS ELECTRICALS (P) LTD. (2009) 178 TAXMAN422 (DEL). HE ALSO PLACED RELIANCE ON THE DECISION DATED 26TH JUNE 2013 OF THE ANDHRA PRADESH HIGH COURT IN ITTA NO. 114 OF 2013 (CIT V. SRI S VENKATAIAH), THE DECISIONS DATED ITA NO.183/LKW/2019 PAGE 14 OF 16 29TH APRIL 2013 OF THE ITAT MADRAS IN ITA NO. 1214/MDS/2012 (ACIT V. PRECOT MERIDIAN LTD.) AND 4TH FEBRUARY 2013 IN ITA NO. 1219-1223/MDS/2012 (ACIT V. V.N. DEVADOSS), THE DECISIONS OF THE ITAT DELHI DATED 30TH JULY 2010 IN ACIT V. DHIR GLOBAL INDUSTRIAL (P) LTD. 133 TTJ (DEL) 580 AND DATED 25TH JANUARY 2012 IN ITA NO. 3352/DEL/2011(HANSA DALAKOTI V. ACIT), THE DECISION OF THE BANGALORE ITAT DATED 12TH APRIL 2103 IN M/S VANSHEE BUILDERS & DEVELOPERS P. LTD. V. CIT 63 SOT 30 AND THE DECISION OF THE KOLKATA ITAT DATED 19TH APRIL 2013 IN ITA NO. 1586/KOL/2012 (M/S PROPERTIES (P) LTD. V. JOT). 9. THE COURT NOTICES AT THE OUTSET THAT THE DECISIONS OF THIS COURT BOTH IN CIT VS. INTEGRATED DATABASES (I) LTD. (SUPRA) AND CIT V. CENTIMETERS ELECTRICALS (P) LTD. (SUPRA) WERE ON THE QUESTION WHETHER THE PROVISION OF SECTION 10-B (5) OF THE ACT WHICH REQUIRES THE FILING OF A REPORT OF AN ACCOUNTANT ALONG WITH THE RETURN WAS MANDATORY. NEITHER DECISION WAS DIRECTLY ON QUESTION WHETHER THE TIME LIMIT FOR FILING THE RETURN IN TERMS OF ACTION 80AC READ WITH SECTION 139 (1) OF THE ACT WAS MANDATORY. ALTHOUGH THE DECISION OF THE A.P. HIGH COURT IN CIT V. SRI S VENKATAIAH (SUPRA) CONCERNED THIS VERY ISSUE, IT WAS ONE DECLINING TO FRAME A QUESTION OF LAW THEREBY AFFIRMING THE ORDER OF THE ITAT. IT WAS A SHORT ORDER IN THE FACTS OF THE CASE WHERE THE ASSESSEE APPEARS TO HAVE SHOWN 'REASONABLE CAUSE FOR FILING THE RETURN OF INCOME BELATEDLY' AND THAT IT WAS 'BEYOND THE CONTROL OF THE ASSESSEE.' ON THE OTHER HAND, THE DECISIONS OF THE UTTARAKHAND HIGH COURT IN UMESH CHANDRA DALAKOTI (SUPRA) AND OF THE CALCUTTA HIGH COURT IN CIT V. SHELCON PROPERTIES (P) LTD. (SUPRA) APPEAR TO SUPPORT THE CASE OF THE REVENUE THAT SECTION 80 AC IS MANDATORY. HOWEVER, THERE APPEARS TO BE NO AUTHORITATIVE PRONOUNCEMENT OF THIS COURT ON THE INTERPRETATION OF SECTION 80AC OF THE ACT AND WHETHER THE SAID PROVISION IS MANDATORY OR DIRECTORY. 10. AS FAR AS THE PRESENT CASE IS CONCERNED, THE COURT IS SATISFIED THAT AT THE TIME WHEN THE CIT PASSED THE ORDER DATED 6TH FEBRUARY, 2012 UNDER SECTION 263 OF ITA NO.183/LKW/2019 PAGE 15 OF 16 THE ACT THERE WAS A CONFLICT OF OPINIONS OF THE VARIOUS BENCHES OF THE ITAT ON WHETHER 80AC WAS MANDATORY. CONSEQUENTLY, THE ITAT WAS NOT IN ERROR IN REVERSING THE ORDER OF THE CIT AS FAR AS THE QUESTION OF EXERCISING JURISDICTION UNDER SECTION 263OF THE ACT WAS CONCERNED. NO SUBSTANTIAL QUESTION OF LAW ARISES ON THE SAID ISSUE ' 14. IN VIEW OF THE FOREGOING REASONS, WE HOLD THAT THE ASSESSING OFFICER HAD NO JURISDICTION TO PASS ORDER UNDER SECTION 154 OF THE ACT AND HENCE, WE CANCEL THE ORDER DATED 29/1/2016 PASSED BY THE ASSESSING OFFICER AND ALLOW THE APPEAL OF THE ASSESSEE. 7. FROM THE ABOVE, WE FIND THAT AN IDENTICAL ISSUE HAS COME UP BEFORE THE TRIBUNAL IN THE ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2011-12 WHEREIN ALSO THE ASSESSING OFFICER HAD WITHDRAWN THE DEDUCTION ALLOWED UNDER SECTION 80IB OF THE ACT, WHICH HAS BEEN UPHELD BY THE LD. CIT(A) AND THE TRIBUNAL VIDE ITS ORDER DATED 30/10/2018, RELYING ON VARIOUS CASE LAWS, CANCELLED THE RECTIFICATION ORDER PASSED UNDER SECTION 154 OF THE ACT AND ALLOWED THE APPEAL OF THE ASSESSEE, HOLDING THAT THE ASSESSING OFFICER HAD NO JURISDICTION TO PASS ORDER UNDER SECTION 154 OF THE ACT. 8. THE MAIN GRIEVANCE OF THE LD. D.R. WITH REGARD TO THE ALLOWABILITY OF DEDUCTION UNDER SECTION 80IB OF THE ACT, SUBJECT TO FILING OF RETURN WITHIN THE TIME PRESCRIBED UNDER SECTION 139(1) OF THE ACT, HAS BEEN CONSIDERED BY THE HON'BLE KERALA HIGH COURT IN THE CASE OF CHIRAKKAL SERVICES CO-OPERATIVE BANK VS. CIT (SUPRA), AND ALLOWED DEDUCTION CLAIMED BY THE ASSESSEE, ALBEIT UNDER SECTION 80P OF THE ACT, ON WHICH JUDGMENT RELIANCE HAS BEEN PLACED BY THE LUCKNOW BENCH OF THE TRIBUNAL WHILE ALLOWING ITA NO.183/LKW/2019 PAGE 16 OF 16 THE DEDUCTION UNDER SECTION 80IB OF THE ACT TO THE ASSESSEE IN THE ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2011-12. 9. SINCE THE ALLOWABILITY OF DEDUCTION UNDER SECTION 80IB OF THE ACT HAS BEEN CONSIDERED BY THE TRIBUNAL IN THE ASSESSEE'S OWN CASE, ON FACTS EXACTLY SIMILAR, MUTATIS MUTANDIS, TO THOSE PRESENT FOR THE YEAR UNDER CONSIDERATION, FOR ASSESSMENT YEAR 2011-12 AND THE TRIBUNAL HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE, VIDE ORDER DATED 30/10/2018, FOLLOWING THE VIEW TAKEN BY THE LUCKNOW BENCH OF THE TRIBUNAL IN THE ASSESSEE'S OWN CASE (SUPRA), WE CONFIRM THE ORDER OF THE LD. CIT(A), CANCELLING THE RECTIFICATION ORDER PASSED BY THE ASSESSING OFFICER UNDER SECTION 154 OF THE ACT. ACCORDINGLY, ALL THE GROUNDS TAKEN BY THE DEPARTMENT IN ITS APPEAL ARE REJECTED. 10. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 08/11/2019. SD/ - SD/ - [ T. S. KAPOOR ] [ A. D. JAIN ] ACCOUNTANT MEMBER VICE PRESIDENT DATED:08/11/2019 JJ:0711 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR BY ORDER ASSISTANT REGISTRAR