Mrs. Hansa Dalakoti, Uttrakhand V. ACIT, Uttrakhand

ITA 3352/DEL/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 58522 (ITAT-DELHI)
• Duration Of Justice: 6 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-01-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 27-12-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 27-06-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SALIL MISHRA
• Assessee Lawyers: V RAJA KUMAR S
• Keywords: Opportunity of being heard; Reasonable cause
• Section: 10B; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : C : NEW DELHI BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER ITA NO.3352/DEL/2011 ASSESSMENT YEAR : 2008-09 HANSA DALAKOTI, DALAKOTI COMPOUND, RAMPUR ROAD, DISTT. NAINITAL, UTTARAKHAND. PAN : AAQPD5559F VS. ACIT, HALDWANI DISTT., UTTARAKHAND. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI K. SAMPATH AND SHRI V. RAJA KUMAR, ADVOCATES REVENUE BY : SHRI SALIL MISHRA, SR. DR ORDER PER I.P. BANSAL, JUDICIAL MEMBER THIS IS AN APPEAL FILED BY THE ASSESSEE. IT IS DIRECTED AGAINST THE ORDER PASSED BY THE CIT (A) DATED 11 TH MAY, 2011 FOR ASSESSMENT YEAR 2008-09. THE GROUNDS OF APPEAL READ AS UNDER:- 1. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. COMMISSIONER OF INCOME TAX (APPEALS-II), DEHRADUN HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE ACTION OF THE LD. A.O. IN MAKING DISALLOWANCE OF CLAIM OF RS.10,36,56 7/- U/S 80IC ON A/C OF NOT FILING OF THE INCOME TAX RETURN ON DUE D ATES COMPLETELY IGNORING THE REASONABLENESS OF THE DELAYED FILING WHICH WAS ATTRIBUTED TO THE FAULT OF THE COUNSEL AND NOT THE ASSESSEE. 2. THAT THE APPELLANT CRAVES TO ADD, MODIFY, AMEND OR D ELETE ANY OF THE GROUNDS OF APPEAL AT THE TIME OF HEARING AND ALL THE ABOVE GROUNDS ARE WITHOUT PREJUDICE TO EACH OTHER. ITA NO.3352/DEL/2011 2 2. THE ASSESSEE IN THE PRESENT CASE HAS FILED HER RETURN O F INCOME ON 31 ST MARCH, 2009 AS AGAINST THE DUE DATE PRESCRIBED U/S 139 (1) OF 31 ST AUGUST, 2008. IN THE RETURN OF INCOME THE ASSESSEE CLA IMED DEDUCTION OF ` 10,36,567/- UNDER THE PROVISIONS OF SE CTION 80IC OF THE INCOME-TAX ACT (THE ACT). THE ASSESSING OFFICER DISALLO WED THAT CLAIM REFERRING TO THE PROVISIONS OF SECTION 80AC, ACCORDIN G TO WHICH UNLESS THE RETURN IS FILED WITHIN THE PRESCRIBED DATE, THE C LAIM INTER ALIA INCLUDING CLAIM U/S 80IC SHALL NOT BE ALLOWED. BEFOR E CIT (A), IT WAS SUBMITTED BY THE ASSESSEE THAT SHE HAS GOT HER ACCOUNTS AUD ITED BY CA BEFORE THE DUE DATE OF FILING THE RETURN AND COP Y OF ITR DULY SINGED WAS DELIVERED TO THE COUNSEL MR. SUDHANSHU SRIVASTAVA, ADVOCATE WHO FAILED TO SUBMIT THE RETURN WITH THE DEPARTMENT ON O R BEFORE THE DUE DATE. SINCE ALL THE PAPERS WERE GIVEN TO THE COUNSEL , THE ASSESSEE WAS UNDER BONA FIDE BELIEF THAT THE RETURN WAS FILED AS W AS BEING DONE IN THE PAST AND THE ASSESSEE SHOULD NOT BE PENALIZED FOR DEF AULT OF PROFESSIONAL WHO IS WELL VERSED WITH THE PROVISIONS OF LA W. IN CONTINUATION OF THE AFOREMENTIONED SUBMISSIONS, THE ASSESSE E ALSO SUBMITTED THAT COPY OF RECEIPTS OF AUDITED ACCOUNTS AL ONG WITH RELEVANT AUDITED REPORT FOR CLAIM OF 80IC WAS FILED WITH THE DEPARTMENT BEFORE THE DUE DATE OF FILING THE RETURN. THE RETURN COUL D NOT BE FILED IN TIME IN THE CIRCUMSTANCES NARRATED BY THE COUNSEL OF THE ASSE SSEE IN HIS AFFIDAVIT WHICH IS SELF-EXPLANATORY. IT WAS SUBMITTED THAT FURNISHING OF RETURN WITHIN DUE TIME AS SPECIFIED IN SECTION 80IC W AS A NEW PROVISION APPLICABLE FROM ASSESSMENT YEAR 2006-07 AND THE SAME WAS NOT IN THE KNOWLEDGE OF THE ASSESSEE AND HIS COUNSEL. THE CLAIM OF THE ASSESSEE COULD NOT BE DISALLOWED ON TECHNICAL GROUNDS AND REFE RENCE WAS MADE TO THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF BAJAJ TEMPO LTD. VS. CIT 196 ITR 188. REFERENCE WAS ALSO MADE TO THE DECISION OF ITAT DELHI BENCH IN THE CASE OF ACIT VS. DHIR GLOBAL INDUSTRIES PVT. LTD. 43 SOT 640 WHEREIN INTERPRETING THE SIMILAR PROVISION CONTAINED IN SECTION 10B(1), THE DELAY IN FILING THE RETURN OF 1 MONTH WAS ITA NO.3352/DEL/2011 3 CONSIDERED TO BE A TECHNICAL DEFAULT AND IT WAS HELD THAT DEDUCTION COULD NOT BE DISALLOWED FOR SUCH A DEFAULT AND WHILE HOLDING SO RELIANCE WAS PLACED ON THE DECISION OF DELHI HIGH COURT IN THE CASE OF CIT VS. INTEGRATED DATABASES INDIA LTD. 178 TAXMAN 432 (DEL). IN THIS MANNER, IT WAS CLAIMED THAT THE ASSESSEE WAS PREVENTED BY REASONAB LE CAUSE AND THE RELEVANT DOCUMENTS AND FORMS ALONG WITH THE A UDIT REPORT WERE SUBMITTED BEFORE THE DUE DATE OF FILING THE RET URN. THE PROOF OF FILING THOSE DOCUMENTS WAS ALSO SUBMITTED AND IT WAS CLAI MED THAT THE CLAIM OF DEDUCTION COULD NOT BE DISALLOWED. ON CONSI DERATION OF ALL THESE SUBMISSIONS, LEARNED CIT (A) HAS HELD THAT PRIMARY FACTS, PARTICULARLY, FILING OF THE RETURN REMAINS UN-CONTRO VERTED. THE CASE LAWS RELIED UPON BY THE ASSESSEE CANNOT HELP HER BECAUSE THOSE CASE LAWS LAID DOWN GENERAL PRINCIPLES WHICH ARE NOT APPLI CABLE TO THE FACTS OF THE CASE. THE LAW DOES NOT PROVIDE ANY RELIEF ON ACCOUNT OF REASONABLE CAUSE RESULTING IN DELAY IN FILING THE RETU RN OF INCOME AND, IN THIS MANNER, LEARNED CIT (A) HAS DISMISSED THE APPEAL FILED BY THE ASSESSEE. THE ASSESSEE IS AGGRIEVED, HENCE, IN APPEAL. 3. THE SUBMISSIONS MADE BY THE ASSESSEE BEFORE THE CIT (A) HAVE BEEN REITERATED BEFORE US. IN THE PAPER BOOK FILED B Y THE LEARNED AR COPIES OF SUBMISSIONS MADE BEFORE THE CIT (A) ARE ENCLOSE D. ALONG WITH THAT THE RECEIPT OF DOCUMENTS SUBMITTED BY THE A SSESSEE IN THE SHAPE OF FORM 10CCB AND 3CB/3CD FOR THE YEAR UNDER C ONSIDERATION ON 30 TH SEPTEMBER, 2008 IS ENCLOSED. COPY OF AFFIDAVIT FILE D BY THE LD. COUNSEL OF THE ASSESSEE IS ALSO ENCLOSED. RELYING ON THESE DOCUMENTS AND THE SUBMISSIONS MADE BY THE ASSESSEE BEFORE THE CIT (A) AND THE CASE LAW RELIED UPON BEFORE HIM, IT WAS PLEADED BY TH E LEARNED AR THAT THE RELIEF SHOULD BE ALLOWED TO THE ASSESSEE. IT WAS FUR THER SUBMITTED BY THE LEARNED AR THAT THE PROVISIONS OF 80AC ARE IN THE NATURE OF DIRECTORY AND MACHINERY PROVISIONS WHICH CANNOT BE TR EATED TO BE MANDATORY AND REFERENCE WAS MADE TO THE DECISION OF H ONBLE ITA NO.3352/DEL/2011 4 SUPREME COURT IN THE CASE OF CIT VS. NATIONAL TAJ TRA DERS 121 ITR 535 (SC) WHEREIN IT WAS OBSERVED BY THE HONBLE SUPREME C OURT THAT IT IS WELL SETTLED PRINCIPLE THAT THE FISCAL STATUTE SHOULD B E CONSTRUED STRICTLY IS APPLICABLE ONLY TO TAXING PROVISIONS SUCH AS CHARGING PROVISION OR A PROVISION IMPOSING PENALTY AND NOT TO THOSE PARTS OF TH E STATUTE WHICH CONTAINED MACHINERY PROVISIONS AND BY NO STRETCH COULD SECTION 33B BE REGARDED AS A CHARGING PROVISION. THUS, IT WAS THE CONTENTION OF THE LEARNED AR THAT THAT THE PRINCIPLE OF STRICT INTERPR ETATION IS APPLICABLE ONLY TO THE CHARGING PROVISIONS AND THE PROVISIONS IMPO SING PENALTY AND THEY ARE NOT APPLICABLE TO THE MACHINERY PROVISI ONS. HE SUBMITTED THAT THE PROVISIONS OF 80AC ARE MACHINERY PROVISIONS IN THE NATURE, HENCE, LEARNED CIT (A) WAS WRONG IN NOT ADMITTING TH E CLAIM OF THE ASSESSEE. 4. ON THE OTHER HAND, THE LEARNED DR RELYING UPON T HE ORDER OF ASSESSING OFFICER AND CIT (A) CONTENDED THAT THE PROVISI ONS OF SECTION 80AC ARE MANDATORY IN NATURE. AS THE ASSESSEE FAILED TO SUBMIT THE RETURN OF INCOME WITHIN THE DUE DATE PRESCRIBED U/S 1 39 (1) LEARNED CIT (A) WAS JUSTIFIED IN UPHOLDING THE ACTION OF THE ASSESSIN G OFFICER AND HIS ORDER SHOULD BE UPHELD. 5. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIONS IN THE LIGHT OF THE MATERIAL PLACED BEFORE US. IT WILL BE RELEVANT TO REPRODUCE THE PROVISIONS OF SECTION 80AC WHICH DEBARS THE CLAIM OF D EDUCTION INTER ALIA INCLUDING DEDUCTION U/S 80IC:- 80AC. 80AC. 80AC. 80AC. WHERE IN COMPUTING THE TOTAL INCOME OF AN ASSESSE E OF THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR COMMEN CING ON THE 1ST DAY OF APRIL, 2006 OR ANY SUBSEQUENT ASSESS MENT 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 ASSESSM ENT YEAR ON ITA NO.3352/DEL/2011 5 OR BEFORE THE DUE DATE SPECIFIED UNDER SUB-SECTION (1) OF SECTION 139 . 6. SIMILAR PROVISION IS CONTAINED IN SECTION 10B(1) I N THE 4 TH PROVISO WHICH DEBARS THE GRANT OF EXEMPTION IN CASE RETURN IS NOT FILED WITHIN THE DUE DATE PRESCRIBED UNDER THE ACT. THE SAID PROV ISO IS REPRODUCED BELOW:- PROVIDED ALSO PROVIDED ALSO PROVIDED ALSO PROVIDED ALSO THAT NO DEDUCTION UNDER THIS SECTION SHALL BE ALLOWED TO AN ASSESSEE WHO DOES NOT FURNISH A RETURN O F HIS INCOME ON OR BEFORE THE DUE DATE SPECIFIED UNDER SUB- SECTION (1) OF SECTION 139 . 7. THE LANGUAGE OF BOTH THE PROVISIONS ARE PARI MATERIA . BOTH OF THESE SECTIONS DEBARS THE ASSESSEE FROM CLAIMING DEDUCTION U/S 80IC AND EXEMPTION U/S 10B, IN A CASE WHERE RETURN OF INCO ME IS NOT FILED BY THE ASSESSEE WITHIN THE PRESCRIBED STATUTORY TIME U/S 139( 1). THE PROVISIONS OF SECTION 10B (1) WERE CONSIDERED BY THE C OORDINATE BENCH OF THIS TRIBUNAL IN THE AFOREMENTIONED DECISION OF AC IT VS. DHIR GLOBAL INDUSTRIES PVT. LTD. 43 SOT 640. ACCORDING TO THE F ACTS OF THE SAID CASE, THERE WAS A DELAY OF 1 MONTHS. CONSIDERING THE FACTS THAT THE PROVISION WAS NEW AND THERE WAS REASONABLE CAUSE FOR LAT E FILING OF THE RETURN, THE TRIBUNAL DIRECTED THE ASSESSING OFFICER TO CONSIDER THE CLAIM OF THE ASSESSEE U/S 10B IRRESPECTIVE OF THE FACT THAT THE RETURN HAS BEEN FILED LATE BY 1 MONTHS. THE DIRECTIONS OF THE TRIBUNAL ARE AS UNDER:- 6.13 HOWEVER, WE FIND THAT LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ACCEPTED THE ASSESSEES SUBMISS ION, THAT THE DELAY IN FILING OF RETURN SHOULD NOT BE A REAS ON TO DENY THE ASSESSEES CLAIM OF EXEMPTION U/S 10B(1). HOWEVER, THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS NOT CONSIDE RED THE FACTUAL ASPECTS OF THE MERITS OF THE CASE. ASSESSING OFFICER ALSO DISALLOWED THE ASSESSEES CLAIM BY STATING THAT THE RETURN WAS FILED ON TIME. HE ALSO HAD NOT GONE INTO THE OTHER A SPECTS OF THE MERITS OF THE CASE. IN THIS REGARD, WE RE FER THE DECISION OF THE HONBLE APEX COURT DECISION IN THE CASE OF KAPURCHAND SHRIMAL VS. CIT, 131 ITR 451 WHEREIN I T WAS HELD THAT THE APPELLATE AUTHORITY HAS JURISDICTION AS WELL AS THE DUTY ITA NO.3352/DEL/2011 6 TO CORRECT THE ERRORS IN THE PROCEEDINGS UNDER APPEAL AND TO ISSUE OF NECESSARY, APPROPRIATE DIRECTIONS TO THE A UTHORITY AGAINST WHOSE DECISION APPEAL IS PREFERRED TO DISP OSE OF THE WHOLE OR ANY PART OF THE MATER AFRESH, UNLESS FORBIDDEN FROM DOING SO BY STATUTE. 6.14 IN THE BACKGROUND OF THE AFORESAID DISCUSSION AND PRECEDENT, WE REMIT THIS ISSUE TO THE FILES OF THE ASSESSING OFFICER. HE SHALL EXAMINE THE MERITS OF THE ASSE SSEEES CLAIM OF EXEMPTION U/S 10B. WE MAKE IT CLEAR THAT WE HAVE ALREADY ADJUDICATED THE ISSUE REGARDING DELAY IN FILING OF RETURN OF INCOME IN ASSESSEES FAVOUR IN THE FORGOING PAR AGRAPHS, THE SAME SHALL NOT AGAIN FORM PART OF ADJUDICATION B Y THE ASSESSING OFFICER. NEEDLESS TO ADD THAT THE ASSESSE E SHOULD BE GIVEN ADEQUATE OPPORTUNITY OF BEING HEARD. 7. IN THE RESULT, THE APPEAL FILED BY THE REV ENUE IS ALLOWED FOR STATISTICAL PURPOSES. 8. IN OUR OPINION, THE FACTS OF THE PRESENT CASE ARE A LMOST IDENTICAL. THE ASSESSEE IN THE PRESENT CASE, HAD FILED ALL THE NECESSA RY DOCUMENTS WHICH WERE SUPPORTING THE CLAIM OF THE ASSESSEE FOR DEDUCTIONS U/S 80IC BEFORE DUE DATE OF FILING THE RET URN. THE DEFAULT OF THE ASSESSEE FOR NOT FILING THE RETURN WAS ONLY A TECHNI CAL DEFAULT AS THE RETURN WAS NOT FILED, BUT SUPPORTING DOCUMENTS WER E FILED. THEREFORE WE ARE OF THE OPINION THAT THE CLAIM OF T HE ASSESSEE SHOULD BE CONSIDERED ON MERITS AND IT SHOULD NOT BE REJECTED FOR THE REASON THAT THE ASSESSEE DID NOT FILE HER RETURN OF INCOME WIT HIN THE PRESCRIBED DATE. APPLYING THE AFOREMENTIONED RATIO OF THE DECISION OF THE TRIBUNAL, WE HOLD THAT THE CLAIM OF THE ASSESSEE U/ S 80IC CANNOT BE DENIED SIMPLY FOR THE REASON THAT THE RETURN OF INCOM E WAS NOT FILED WITHIN THE DUE DATE AS PRESCRIBED U/S 139(1) BY KEEPIN G IN VIEW THE FACT THAT THE ASSESSEE HAD SUBMITTED THE NECESSARY DOCUMEN TS WITH THE DEPARTMENT BEFORE THE DUE DATE OF FILING THE RE TURN AND THE DEFAULT OF THE ASSESSEE WAS ONLY A TECHNICAL DEFAULT. HOWEVER, KEEPING IN VIEW THE FACT THAT THE ASSESSING OFFICER HAS NOT EXAMINED THE CLAIM OF THE ASSESSEE ON MERITS THAT WHETHER OR NOT THE ASSESSEE IS FULFIL LING THE CONDITIONS LAID DOWN IN SECTION 80IC, WE RESTORE THE MATTER BACK TO THE ITA NO.3352/DEL/2011 7 FILE OF ASSESSING OFFICER TO EXAMINE THAT WHETHER THESE CONDITIONS ARE SATISFIED BY THE ASSESSEE. EXACTLY SIMILAR POSITION HAS BEE N DISCUSSED BY THE TRIBUNAL IN THE AFOREMENTIONED CASE. WE DIRE CT ACCORDINGLY. 9 . IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS AL LOWED IN THE MANNER AFORESAID. THE ORDER PRONOUNCED IN THE OPEN COURT ON 25.01.2 012. SD/- SD/- [SHAMIM YAHYA] [I.P. BANSAL] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED, 25.01.2012. DK COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT TRUE COPY BY ORDER, DEPUTY REGISTRAR, ITAT, DELHI BENCHES