Mukand Poly Products, Guwahati V. Deputy Commissioner of Income Tax, Circle-4, Guwahati

ITA 258/GTY/2019

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 0702 (ITAT-GUWAHATI)
• Duration Of Justice: 3 year(s) 4 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-10-2022
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 24-07-2022
• Assessment Year: 2015-2016
• Appeal Filed On: 13-06-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Condonation of delay; Set aside; CHAPTER IV
• Section: 142(1); 119(2)(b); 250; 80IC; 143(2); 139(1); 80IC; 119

Judgement Text

आयकर अपील य अ धकरण, कोलकाता पीठ - ‘GAUHATI’ IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA BENCH-GAUHATI आभासी मा यम से Through Virtual Medium सम : ड . मनीष बोरड , लेखा सद य एवं ी संजय शमा या यक सद य Before: DR. MANISH BORAD, ACCOUNTANT MEMBER & SHRI SONJOY SARMA, JUDICIAL MEMBER आयकर अपील सं.य / ITA No. 258/GAU/2019 नधा रण वष ः Assessment Year:2015-16 Mukand Poly Products 3 rd Fl., Royal Arcade, B. Baruah Road, Ulubari, Guwahati, Kamrup, Assam-781 007. बनाम / V/s . Deputy /Assistant Commissioner of Income Tax, Circle-4, Guwahati, Aaykar Bhawan, Christian Basti, G.S Road, Guwahati- 781005. PAN: AAQFM8419F अपीलाथ /Appellant .. यथ /Respondent अपीलाथ क ओर से/By Appellant Shri Uttam Kumar Borthakur, Advocate, Ld.AR यथ क ओर से/By Respondent Shri N.T Sherpa, JCIT, Ld.DR स ु नवाई क तार ख/Date of Hearing 25-07-2022 घोषणा क तार ख/ Date of Pronouncement 17-10-2022 ITA No. 258/Gau/2019 AY 2015-16 Mukand Poly Products Page 2 आदेश / O R D E R PER MANISH BORAD, ACCOUNTANT MEMBER: The above captioned appeal is directed at the instance of the assessee against the order dated 28-03-2019 of the Ld. Commissioner of Income-tax, Appeals [hereinafter referred to as ‘CIT(A)’], Guwahati-2, Guwahati passed u/s. 250 of the Income-tax Act, 1961 hereinafter referred to as ‘the Act’ for the AY 2015-16. 2. The assessee has raised the following grounds of appeal :- 1. For that, on the facts and in the circumstances, the learned Commissioner of Income Tax (Appeals), Guwahati-2, Guwahati [ “ CIT(A)" for short hereafter] has erred in law and in fact, in dismissing the appeal and in confirming the additions/disallowances challenged before him, by passing the order under section 250 post haste without considering the relevant grounds, submissions and prayers, by holding that he found no infirmity in the order passed by the learned Assessing Officer ['AO" for short hereafter] denying the claim of deduction under section 80-IC or 801E. The impugned order is liable to be set aside and the learned CIT(A) may be directed to dispose of the appeal on merit after considering the relevant grounds, submissions and prayers. 2. For that, on the facts and in the circumstances, the learned Commissioner of Income Tax (Appeals), Guwahati-2, Guwahati ["CIT(A)" for short hereafter] has erred in law and in fact, in dismissing the appeal and in confirming the additions/ disallowances challenged before him, by passing the order under section 250 post haste prior to the disposal of the petition for condonation of delay in filing the return pending before the ITA No. 258/Gau/2019 AY 2015-16 Mukand Poly Products Page 3 Honourable Central Board of Direct Taxes ["CBDT" for short hereafter]. The impugned order is liable to be set aside and the learned CIT(A) may be directed to dispose of the appeal on merit after the Hon'ble CBDT disposes of the aforesaid petition pending before it. 3. For that, on the facts and in the circumstances, the learned CIT(A) has erred in law and in fact in sustaining the assessment order that was passed by the learned AO rejecting the claim of deduction u/s 80lC or 80lE of the Act, without taking any authorization/ direction/ instructions from the CBDT, as prayed for, and by ignoring the application filed by the appellant before the said authority. 4. For that, the learned CIT(A) has erred in law and in fact, in sustaining the assessment order whereby the claim of deduction u/s 80lC or 80lE of the Act for the amount of Rs.2, 45, 81, 837/-was rejected for not submitting the return of income within due date prescribed u/s 139(1) of the Act without considering the mitigating circumstances. 5. For that, on the facts and in the circumstances, .the learned CIT(A) has erred in law and in fact in sustaining the assessment order wherein the income was assessed at Rs.2, 47, 72, 660/- against the returned income of Rs. NIL, in spite of the fact that the entire assessed income was entitled to deduction u/s 80IC or 80lE of the Act in any view of the matter. 6. For that, the appellant begs leave of putting forward additional ground/grounds in addition to, modification/ substitution of the above ground of appeal before or at the time of hearing. 3. Brief facts of the case as culled out from records are that the assessee is a partnership firm engaged in manufacturing business. E- return of income declaring Nil income for the AY 2015-16 filed on 26-02- 2016, which is a belated return. In this belated return the assessee has ITA No. 258/Gau/2019 AY 2015-16 Mukand Poly Products Page 4 claimed deduction u/s. 80IE of Rs. 2,45,81,837/-. Case of the assessee selected for scrutiny under CASS followed by service of notices u/s. 143(2) and 142(1) of the Act. In the course of assessment proceedings the ld.AO apart from other addition/disallowance also disallowed claim of deduction u/s. 80IC of the Act at Rs.2,45,81,837/- on the ground that the assessee failed to file the said return within the due date prescribed u/s. 139(1) of the Act and, therefore, hit by the provisions of section 80AC of the Act. 4. Aggrieved, the assessee preferred appeal before the ld. CIT(A), but failed to succeed. 5. Aggrieved, now the assessee is in appeal before this Tribunal. 6. The sole grievance of the assessee in ground nos. 1 to 5 only relates to deduction u/s. 80IC denied by both the lower authorities. 7. Learned Counsel for the assessee referred to certain judicial decisions in support of his contention that even if the return is belated, the assessee’s claim for deduction u/s. 80IC of the Act is to be allowed. 8. Per contra, the Learned Departmental Representative vehemently argued supporting the orders of both the lower authorities. 9. We have heard the rival contentions and perused the material placed before us. The audit report in form 10CCB for claim of deduction u/s. 80 IC of the Act has been filed on 21-09-2015 i.e. within the prescribed time limit for filing return u/s. 139(1) of the Act. The undisputed fact is that return of income for the year under consideration is filed on 26-02-2016 claiming deduction u/s. 80 IC of the Act is a belated return . 10. Now the only question before us is that in case of belated return whether the assessee can claim deduction u/s. 80IC of the Act?. Provisions of section 80 AC has a direct bearing on the said issue and ITA No. 258/Gau/2019 AY 2015-16 Mukand Poly Products Page 5 before the amendment brought in Finance Act 2018. Section 80AC reads as under:- Deduction not to be allowed unless return furnished. Where in computing the total income of an assessee of any previous year relevant to the assessment year commencing on or after— (i) the 1st day of April, 2006 but before the 1st day of April, 2006 or any subsequent assessment year any deduction is admissible under section 80- IA or section 80-IAB or section 80-IB or section 80-IC or section 80- ID or section 80-IE;, 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. 11. On perusal of the above section 80AC of the Act, we find that is mandatory/statutory to furnish the return before the due date u/s. 139(1) of the Act. In assessee’s case due date for filing of return as contemplated u/s. 139(1) of the Act is 30 th September of the assessment year. The year under appeal is AY 2015-16, therefore, due date for filing of return u/s. 139(1) of the Act for the assessee is 30 th Sept., 2015. But the assessee has filed its e-return on 26-02-2016. Therefore, the return of income of the assessee is belated. Though the assessee has referred to various judicial pronouncements, but they could be helpful only if two plausible view were possible from the interpretation of the provisions. In our humble understanding the provisions of section 80AC of the Act as referred above are very clear. There is a statutory and mandatory requirement of filing return of income before the due date prescribed u/s. 139(1) of the Act. This is one of the most important conditions to be complied/fulfilled by the assessee for claiming the alleged deduction. We do not disregard to the contention of the assessee that there was genuine hardship, which prevented the assessee from filing return before the due date, but the power to relax this condition i.e filing return after the due date for deduction under Chapter VI/VIA of the Finance Act are with the Central Board of Direct Taxes ( in short, ‘Board’) and are provided ITA No. 258/Gau/2019 AY 2015-16 Mukand Poly Products Page 6 under clause (b) and ( c ) of section 119(2) of the Act, which reads as under:- “Section 119(2)(c ): Instructions to subordinate authorities. 119. (1) (a) & ( b) *** *** *** (2) (a) ) *** *** *** (b) the Board may, if it considers it desirable or expedient so to do for avoiding genuine hardship" in any case or class of cases, by general or special order, authorise 13[ any income-tax authority, not being a 14[···] Commissioner (Appeals)] to admit an application or claim for any exemption, deduction, refund or any other relief under this Act after the expiry of the period specified by or under this Act for making such application or claim and deal with the same on merits in accordance with law; (c) the Board may, if it considers it desirable or expedient so to do for avoiding genuine hardship in any case or class of cases, by general or special order for reasons to be specified therein, relax any requirement contained in any of the provisions of Chapter IV or Chapter VI-A, where the assessee has failed to comply with any requirement specified in such provision for claiming deduction thereunder, subject to the following conditions, namely:— (i) the default in complying with such requirement was due to circumstances beyond the control of the assessee; and (ii) the assessee has complied with such requirement before the completion of assessment in relation to the previous year in which such deduction is claimed : Provided that the Central Government shall cause every order issued under this clause to be laid before each House of Parliament. 12. On going through the provisions of clause (b) and ( c) of sub-section (2) of section 119 of the Act, we find that the assessee(s) who are unable to file the return before the due date provided u/s. 139(1) of the Act for the purpose of claiming deduction under Chapter IV/VIA of the Act, then a window is available u/s. 119(2)(b) and 119 (2) ( c) of the Act, wherein the assessee can move an application to the Central Board of Direct Taxes ( short, the ‘Board’), which may if considering desirable or expedient so to do for avoiding genuine hardship in any case or clause of cases either may authorize any Income-tax authority not being the ITA No. 258/Gau/2019 AY 2015-16 Mukand Poly Products Page 7 Commissioner (Appeals), to admit such application and deal with the same in accordance with law or itself pass a general or special order and if the assessee’s application is accepted in the manner provided above, then the deduction under Chapter IV/VIA may be allowed. However, in the instant case the assessee has failed bring forth any such communication or any order condoning such delay in filing return of income before the due date specified u/s. 139(1) of the Act 13. We, therefore, under the given facts and circumstances of the case are of the considered view are that since the assessee has filed belated return, the claim of deduction under section 80IC of the Act cannot be entertained/allowed as the assessee is directly hit by provisions of section 80AC of the Act. We, thus, fail to find any infirmity in the finding of the ld. CIT(A) denying assessee’s claim of deduction u/s. 80IC of the Act. However, if deemed fit, the assessee can still approach the Board for consideration of its case and if the Board finds merit in the reason for genuine hardship of the assessee for filing the return belatedly, the case of the assessee may be considered sympathetically. If such permission is granted by the Board, then the ld. AO can allow claim of deduction of the assessee u/s.80IC of the Act in accordance with law. 14. In the result, the appeal of assessee is dismissed. आदेश ख ु ले यायपीठ म दनांक 17-10- 2022 को उ घो षत। Order pronounced in open court on 17 -10-2022 Sd/- Sd/- (SONJOY SARMA) (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER Kolkata/ कोलकाता Date/ दनांकः- 17 /10/2022 ITA No. 258/Gau/2019 AY 2015-16 Mukand Poly Products Page 8 **PP/Sr.PS आदेश क त ल प अ े षत / Copy of Order Forwarded to:- 1. अपीलाथ /Appellant- Mukand Poly Products,3 rd Fl., Royal Arcade, B. Baruah Road, Ulubari, Guwahati, Kamrup, Assam-781 007. 2. यथ /Respondent- Deputy /Assistant Commissioner of Income Tax, Circle-4, Guwahati, Aaykar Bhawan, Christian Basti, G.S Road, Guwahati-781005. 3. . संबं धत आयकर आय ु त / Concerned CIT 4. आयकर आय ु त- अपील / CIT (A) 5. वभागीय त न ध, आयकर अपील य अ धकरण कोलकाता / DR, ITAT,Guwahati. 6. गाड फाइल / Guard file. /True Copy/ By order/आदेश से, सहायक पंजीकार आयकर अपील य अ धकरण,कोलकाता ।