Amith Software Technologies Private Limited , Bangalore V. The Income Tax Officer Ward-1(1)(2), Bangalore

ITA 2805/BANG/2018

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 8928 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 9 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-07-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 29-07-2020
• Assessment Year: 2008-2009
• Appeal Filed On: 05-10-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R PREMI
• Assessee Lawyers: N O N E
• Keywords: Additional evidence; Condonation of delay; Revised return; Set aside
• Section: 143(3); 119(2)(b); 139(1); 147

Judgement Text

ITA NO.2805/BANG/2018 AMITI SOFTWARE TECHNOLOGIES LTD., BANGALORE IN THE INCOME TAX APPELLATE TRIBUNAL CBENCH: BANGALORE BEFORE SHRI N.V. VASUDEVAN, VICE PRESIDENTAND SHRI B.R. BASKARAN, ACCOUTANT MEMBER ITA NO.2805/BANG/2018 ASSESSMENTYEAR:2008-09 AMITI SOFTWARE TECHNOLOGIES PRIVATE LIMITED NO.68, 4 TH CROSS, PANDURANGANAGAR BANNERGHATTA ROAD ABOVE CUPPA COFFEE SHOP BANGALORE-560076 PAN NO :AAECA2799K VS. THE ITO WARD-1(1)(2) BANGALORE APPELLANT RESPONDENT A PPELLANT BY : N O N E RESPONDENT BY : SMT. R. PREMI, D.R. DATE OF HEARING : 29.07.2020 DATE OF PRONOUNCEMENT : 31.07.2020 O R D E R PER B.R. BASKARAN, ACCOUNTANT MEMBER: THE APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINS T THE ORDER DATED 31.7.2018 PASSED BY LD. CIT(A)-12, BENGALURU AND IT RELATES TO THE ASSESSMENT YEAR 2008-09. THE ASSESSEE IS AGG RIEVED BY THE DECISION OF LD.CIT(A) IN CONFIRMING THE DISALLOWANC E OF CLAIM MADE BY THE ASSESSEE U/S10A OF THE ACT. ITA NO.2805/BANG/2018 AMITI SOFTWARE TECHNOLOGIES LTD., BANGALORE PAGE 2 OF 8 2. NONE APPEARED ON BEHALF OF THE ASSESSEE, EVEN TH OUGH THE ADJOURNMENTS WERE GRANTED ON SEVERAL OCCASIONS AT T HE SPECIFIC REQUEST OF THE ASSESSEE. IT WAS NOTICED THAT THE A SSESSEE HAS AGAIN MOVED A PETITION SEEKING ADJOURNMENT OF THE CASE. H ENCE, WE REJECT THE ADJOURNMENT REQUEST OF THE ASSESSEE AND PROCEED TO DISPOSE OF THE APPEAL EX-PARTE, WITHOUT THE PRESENCE OF THE AS SESSEE. 3. THE FACTS OF THE CASE ARE THAT THE ASSESSEE IS A SOFTWARE DEVELOPMENT COMPANY AND IS 100% EXPORT-ORIENTED UNI T REGISTERED WITH STPI BENGALURU. THE ASSESSEE HAS BEEN CLAIMING DEDUCTION U/S 10A OF THE INCOME-TAX ACT,1961 ['THE ACT' FOR S HORT] AND IT HAS BEEN GRANTED TO THE ASSESSEE IN THE EARLIER YEARS. FOR THE YEAR UNDER CONSIDERATION ALSO, THE ASSESSEE CLAIMED DEDUCTION U/S 10A OF THE ACT. THE DUE DATE FOR FILING RETURN OF INCOME FOR T HE YEAR UNDER CONSIDERATION I.E. ASSESSMENT YEAR 2008-09 WAS 30.9 .2008. HOWEVER, THE RETURN OF INCOME OF THE ASSESSEE CAME TO BE FILED ON 1.10.2008. ACCORDING TO THE ASSESSEE, THE FILING OF RETURN WAS DELAYED BY 10 MINUTES IN THE NIGHT OF 30 TH SEPTEMBER DUE TO TECHNICAL ISSUES AND HENCE THE DATE OF FILING WAS T AKEN AS 1.10.2008. SUBSEQUENT THERETO THE ASSESSEE FILED A REVISED RETURN OF INCOME ON 30.9.2009. THE REVISED RETURN WAS TAKEN U P FOR SCRUTINY AND THE ORDER U/S 143(3) OF THE ACT WAS PASSED ON 2 9.12.2010, WHEREIN THE CLAIM MADE BY THE ASSESSEE U/S 10A OF T HE ACT WAS DISALLOWED. THE ASSESSEE CHALLENGED THE SAME BY FIL ING APPEAL BEFORE LD. CIT(A), BUT COULD NOT SUCCEED. THE ASSES SEE THEN FILED APPEAL BEFORE THE INCOME TAX APPELLATE TRIBUNAL AND THE ITAT, VIDE ITA NO.2805/BANG/2018 AMITI SOFTWARE TECHNOLOGIES LTD., BANGALORE PAGE 3 OF 8 ITS ORDER DATED 7.2.2014 PASSED IN ITA NO.540/BANG/ 2012 ALLOWED THE APPEAL OF THE ASSESSEE. 4. THERE AFTER, THE A.O. RE-OPENED THE ASSESSMENT U /S 147 OF THE ACT BY ISSUING NOTICE TO THE ASSESSEE ON 24.3.2015. THE A.O. APPEARS TO HAVE RE-OPENED THE ASSESSMENT ON THE GRO UND THAT THE DEDUCTION U/S10A OF THE ACT COULD NOT BE ALLOWED TO THE ASSESSEE SINCE THE RETURN OF INCOME HAS BEEN FILED BEYOND TH E DUE DATE PRESCRIBED U/S139(1) OF THE ACT. IN THE RE-OPENED A SSESSMENT, THE A.O. DISALLOWED THE CLAIM MADE BY THE ASSESSEE U/S 10A OF THE ACT. 5. THE ASSESSEE CHALLENGED THE ORDER SO PASSED BY T HE A.O. IN THE RE-OPENED ASSESSMENT BY FILING APPEAL BEFORE LD. CI T(A). IN THE MEANTIME, THE ASSESSEE ALSO MOVED AN APPLICATION U/ S 119(2)(B) OF THE ACT BEFORE THE CENTRAL BOARD OF DIRECT TAXES (C BDT) TO CONDONE THE DELAY IN FILING RETURN OF INCOME. THE CBDT, VID E ITS ORDER DATED 29.5.2017, CONDONED THE DELAY IN FILING RETURN OF I NCOME FOR THE YEAR UNDER CONSIDERATION, I.E., ASSESSMENT YEAR 200 8-09. THE ORDER OF CBDT WAS RECEIVED SUBSEQUENT TO PASSING OF ASSES SMENT ORDER AND THE ASSESSEE PLACED THE SAME BEFORE LD. CIT(A) AS AN ADDITIONAL EVIDENCE. THE LD. CIT(A) ADMITTED THE SAME AND FORW ARDED IT TO THE A.O. CALLING FOR A REMAND REPORT. IN THE REMAND REP ORT, THE A.O. EXPRESSED THE VIEW THAT THE CONDONATION OF DELAY IN FILING RETURN OF INCOME WILL NOT AMOUNT TO ACCEPTANCE TO CLAIMS IN T HE RETURN OF INCOME. ACCORDINGLY, HE EXPRESSED THE VIEW THAT THE DEDUCTION U/S 10A OF THE ACT CANNOT BE ALLOWED TO THE ASSESSEE, S INCE THE RETURN OF ITA NO.2805/BANG/2018 AMITI SOFTWARE TECHNOLOGIES LTD., BANGALORE PAGE 4 OF 8 INCOME WAS NOT FILED WITHIN THE DUE DATE SPECIFIED U/S 139(1) OF THE ACT. THE A.O. ALSO PLACED HIS RELIANCE ON THE DECIS ION RENDERED BY ITAT SPECIAL BENCH, RAJKOT IN THE CASE OF M/S. SAFF IRE GARMENTS VS. ITO (ITA NO.397/RJT/2009 DATED 30.11.2012). THE LD. CIT(A) ACCEPTED THE VIEW EXPRESSED BY A.O. AND ACCORDINGLY HELD THAT: (A) ORDER PASSED BY CBDT U/S 119(2)(B) OF THE ACT D OES NOT MENTION SUO MOTO ACCEPTANCE OF CLAIM (B) WITH THE SAID ORDER, THE OBLIGATION U/S 10A OF THE ACT CANNOT BE DISPENSED WITH (C) FURNISHING A RETURN ON OR BEFORE THE DUE DATE I S MANDATORY (D) EXEMPTION CLAUSES ARE TO BE INTERPRETED STRICTL Y. ACCORDINGLY, THE LD. CIT(A) DISMISSED THE APPEAL OF THE ASSESSEE. 6. WE HEARD LD. D.R. AND PERUSED THE RECORD. WE NOT ICE THAT THE DUE DATE PRESCRIBED U/S 139(1) OF THE ACT FOR FILIN G RETURN OF INCOME FOR ASSESSMENT YEAR 2008-09 IS 30.9.2008. HOWEVER, THE ASSESSEE HAS FILED THE RETURN OF INCOME ON 1.10.2008. ACCOR DING TO THE ASSESSEE, THE RETURN OF INCOME WAS UPLOADED IN THE INTERNET IN THE NIGHT OF 30.9.2008 AND THE SAME GOT DELAYED BY 10 M INUTES DUE TO TECHNICAL ISSUES AND HENCE THE COMPUTER SYSTEM TOOK THE DATE OF FILING OF RETURN AS 1.10.2008. HENCE, THE ASSESSEE MOVED AN APPLICATION BEFORE THE CBDT U/S 119(2)(B) OF THE AC T. 7. THE PROVISIONS OF SECTION 119(2)(B) OF THE ACT READS AS UNDER: 119(2) (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 ITA NO.2805/BANG/2018 AMITI SOFTWARE TECHNOLOGIES LTD., BANGALORE PAGE 5 OF 8 GENERAL OR SPECIAL ORDER, AUTHORISE ANY INCOME- TAX AUTHORITY, NOT BEING A DEPUTY COMMISSIONER (APPEALS) OR COMMISSIONER (AP PEALS)] TO ADMIT AN APPLICATION OR CLAIM FOR ANY EXEMPTION, DE DUCTION, 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. 8. A CAREFUL PERUSAL OF THE ABOVE SAID PROVISION WO ULD SHOW THAT THE BOARD, IN ORDER TO AVOID GENUINE HARDSHIP IN AN Y CASE OR CLASSES OF CASES, BY SPECIFIC OR GENERAL ORDER, MAY AUTHORI ZE AN INCOME TAX AUTHORITY, NOT BEING COMMISSIONER (APPEALS) TO ADMI T AN APPLICATION OR CLAIM FOR ANY EXEMPTION, DEDUCTION, ETC. AFTER THE EXPIRY OF THE PERIOD SPECIFIED BY OR UNDER THIS ACT FOR MAKING SUCH AN APPLICATION OR CLAIM AND DEAL WITH THE SAME ON MERITS IN ACCORDANCE WITH LAW. HENCE, AN APPLICATION COULD BE MADE U/S 119(2)(B) OF THE ACT FOR ALLOWING ANY EXEMPTION OR DEDUCTION AFTER THE EXPIRY OF PRESCRIBED PERIOD FOR MAKING THE SAID CLAIM. 9. IN THE INSTANT CASE, THE ASSESSEE HAS CLAIMED DEDUCTION U/S 10A OF THE ACT THROUGH THE RETURN OF INCOME. AS PER THE PROVISO BELOW SEC.10(1A) OF THE ACT, THE DEDUCTION U/S 10A IS NOT ALLOWABLE, IF THE RETURN OF INCOME IS NOT FILED WITHIN THE DUE DATE PRESCRIBED U/S 139(1) OF THE ACT FOR FILING RETURN OF INCOME. WE HAVE NOTICED EARLIER THAT THE DUE DATE FOR FILING RETURN OF INCO ME FOR THE YEAR UNDER CONSIDERATION WAS 30-09-2008 AND IT CAME TO B E FILED ON 01- 10-2008 DUE TO TECHNICAL GLITCHES IN COMPUTER SYSTE M. HENCE THE ITA NO.2805/BANG/2018 AMITI SOFTWARE TECHNOLOGIES LTD., BANGALORE PAGE 6 OF 8 ASSESSEE HAS FILED AN APPLICATION BEFORE CBDT REQUE STING IT TO CONDONE THE DELAY OF 1 DAY IN FILING RETURN OF INCO ME. ADMITTEDLY, THE PURPOSE OF MAKING THE SAID APPLICATION WAS TO R EQUEST THE CBDT TO AUTHORIZE THE A.O. TO ADMIT THE CLAIM FOR D EDUCTION U/S 10A OF THE ACT, SINCE THE RETURN OF INCOME THROUGH WHICH THE CLAIM WAS MADE WAS FILED BEYOND THE DATE PRESCRIBED FOR C LAIMING THE DEDUCTION. THE CBDT ALSO, IN PURSUANCE OF THE SAID APPLICATION FILED BY THE ASSESSEE, HAS PASSED THE FOLLOWING ORD ER: AN APPLICATION WAS FILED BY M/S. AMITI SOFTWARE TECHNOLOGIES PVT. LTD. UNDER SECTION 119(2)(B) OF T HE INCOME TAX ACT, 1961 (THE ACT) FOR CONDONATION OF DELAY IN F ILING THE RETURN OF INCOME FOR THE A.Y. 2008-09. THE ROI WAS FILED ON 1.10.2008 AGAINST THE DUE DATE 30.9.2008. THE MATTER HAS BEEN EXAMINED BY THE CENTRAL BOARD O F DIRECT TAXES (CBDT). AFTER CONSIDERING THE MATTER, THE DELAY IN FILING THE RETURN OF INCOME IS HEREBY CONDONED U/S 119(2)(B) OF THE ACT FOR THE A.Y. 2008-09 AND THE JURISDICTIONAL INCOME TAX AUTHORITIES ARE AUTHORIZED TO ADMIT THE RETURN OF I NCOME FOR A.Y. 2008-09 FILED ON 1.10.2008. IT IS HOWEVER CLARIFIE D THAT THE CONDONATION OF DELAY IN FILING THE RETURN WILL NOT AMOUNT TO ACCEPTANCE OF CLAIMS MADE IN THE CONCERNED ROI OF T HE APPLICANT AND THE ASSESSING OFFICER WILL BE AUTHORI ZED TO DEAL WITH IT ON THE MERITS. 10. WE NOTICE THAT THE TAX AUTHORITIES HAVE EXPRESS ED THE VIEW THAT THE CBDT HAS EXPRESSLY STATED THAT THE CONDONATION OF DELAY IN FILING THE RETURN WILL NOT AMOUNT TO ACCEPTANCE OF CLAIMS MADE IN THE RETURN OF INCOME AND HENCE THE SAID CONDONATION WILL NOT ABSOLVE THE ASSESSEE FROM COMPLYING WITH THE CONDIT ION PRESCRIBED UNDER THE PROVISO TO SECTION 10A(1A) OF THE ACT, WH ICH MANDATES FURNISHING OF RETURN OF INCOME ON OR BEFORE THE DUE DATE SPECIFIED ITA NO.2805/BANG/2018 AMITI SOFTWARE TECHNOLOGIES LTD., BANGALORE PAGE 7 OF 8 U/S 139(1) OF THE ACT. WE ARE OF THE VIEW THAT THE TAX AUTHORITIES HAVE MISUNDERSTOOD THE OBJECTIVE OF SEC.119(2)(B) O F THE ACT AS WELL AS THE ORDER PASSED BY CBDT. IN OUR VIEW, THE ORDE R PASSED BY THE CBDT ONLY STATES THAT THE SAME SHOULD NOT BE CONSTR UED AS AUTOMATIC ACCEPTANCE OF CLAIM FOR DEDUCTION U/S 10A OF THE ACT. HENCE, THE ORDER SPECIFICALLY MAKES IT CLEAR THAT T HE A.O. WILL BE AUTHORIZED TO DEAL WITH THE CLAIMS MADE IN THE RETU RN OF INCOME ON MERITS. SO, IN OUR VIEW, THE CBDT HAS IN FACT RELA XED THE CONDITION PRESCRIBED IN THE PROVISO TO SECTION 10A(1A) (REFER RED ABOVE) BY CONDONING THE DELAY IN FILING RETURN OF INCOME. AC CORDINGLY, WE ARE OF THE VIEW THAT THE ASSESSEE SHALL BE DEEMED TO HA VE BEEN COMPLIED WITH THE CONDITION PRESCRIBED IN THE PROVISO TO SEC TION 10(1A) OF THE ACT WITH REGARD TO THE FILING OF RETURN OF INCOME. 11. IN VIEW OF THE FOREGOING DISCUSSIONS, WE SET ASIDE THE ORDER PASSED BY LD. CIT(A) ON THIS ISSUE AND RESTORE THE MATTER TO THE FILE OF THE A.O. FOR EXAMINING THE CLAIM MADE BY THE ASS ESSEE U/S 10A OF THE ACT ON MERITS IN ACCORDANCE WITH LAW. 12. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 31.07.2020. SD/- (N.V. VASUDEVAN) VICE PRESIDENT SD/- (B.R. BASKARAN) ACCOUNTANT MEMBER BANGALORE, DATED 31 ST JULY,2020. VG/SPS ITA NO.2805/BANG/2018 AMITI SOFTWARE TECHNOLOGIES LTD., BANGALORE PAGE 8 OF 8 COPY TO: 1. THE APPLICANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASST. REGISTRAR, ITAT, BANGALORE.