DCIT, Bhubaneswar V. M/s. Discoverture Solutions (India) Pvt. Ltd., Bhubaneswar

ITA 50/CTK/2015

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 3867 (ITAT-CUTTACK)
• Duration Of Justice: 2 year(s) 2 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-04-2017
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 24-04-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 09-02-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: KUNAL SINGH
• Assessee Lawyers: BIBEK MOHANTY
• Keywords: Wrong claim; Competent authority
• Section: 143(3); 234B; 80G; 10B; 263; 144; 11; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH , CUTTACK BEFORE S/SHRI N.S SAINI, ACCOUNTANT MEMBER AND KULDIP SINGH JUDICIAL MEMBER ITA NO.50/CTK/2015 ASSESSMENT YEAR : 2011 - 12 DCIT, CORPORATE CIRCLE 1(1), BHUBANESWAR. VS. M/S. DISCOVERTURE SOLUTIONS (INDIA) PVT LTD., E/48, INFOCITY, CHANDRASEKHARPUR, BHUBANESWAR. PAN/GIR NO. (APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY : SHRI BIBEK MOHANTY, AR REVENUE BY : SHRI KUNAL SINGH, CIT DR DATE OF HEARING : 24 /04/ 2017 DATE OF PRONOUNCEMENT : /04/ 2017 O R D E R PER N.S.SAINI, AM THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) - II, BHUBANESWAR , DATED 13.11.2014 , FOR THE ASSESSMENT YEAR 2011 - 12 . 2. THE SOLE ISSUE INVOLVED IN THIS APPEAL IS THAT THE LD CIT(A) ERRED IN DELETING THE ADDITION OF RS. 3,67,15,136/ - AS WRONG CLAIM OF DEDUCTION U/S.10A OF THE I.T.ACT. 2 ITA NO.50/CTK/2015 ASSESSMENT YEAR : 2011 - 12 3. W E HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF LOWER AUTHORITIES AND MATERIALS AVAILABLE ON RECORD. THE UNDISPUTED FACTS OF THE CASE ARE THAT THE ASSESSEE FILED ITS E - RETURN OF INCOME FOR THE ASSESSMENT YEAR 2011 - 12 ON 27.9.2011 SHOWING INCOME OF RS.14,80,454/ - AFTER CLAIMING DEDUCTION OF RS.3,93,09,436/ - U/S.10A OF THE ACT. THE ASSESSING OFFICER FOUND THAT THE ASSESSEE WAS CLAIMING DEDUCTION U /S.10B AS AGAINST U/S.10A SINCE ASSESSMENT YEAR 2004 - 05 AND ONLY IN THE IMPUGNED ASSESSMENT YEAR 2011 - 12, THE ASSESSEE HAS CLAIMED EXEMPTION U/S.10A OF THE ACT. THE ASSESSING OFFICER ALSO OBSERVED THAT THE ASSESSEE HAD FILED FORM 56F IN THE AUDIT REPORT F OR CLAIMING DEDUCTION U/S.10A OF THE ACT. IN REPLY TO SHOW CAUSE NOTICE, THE ASSESSEE SUBMITTED ON 30.12.2013 THAT WITH REGARD TO CLAIM U/S.10B OF THE ACT, THE ASSESSEE COMPANY IS A 100% EOU AND WHILE SUBMITTING THE DOCUMENTS EARLIER, THERE WAS TYPOGRAPHICAL ERROR ON THE PART OF THE ASSESSEES TAX AUDITOR AND IT WAS WRONGLY MENTIONED DEDUCTION U/S.10A IN STEAD OF 10B IN THE COMPUTATION SHEET. THE ASSESSING OFFICER OBSERVED THAT THESE ARE CONTRADICTORY FACTS AS IN THE RETURN OF INCOME, THE ASSESSEE HAS CLAIMED DEDUCTION U/S 10A AND FILED FORM 56F IN THE AUDIT REPORT AND SUBSEQUENTLY VIDE SUBMISSION DATE D 30.12.2013, THE ASSESSEE IS CLAIMING EXEMPTION U/S.10B OF THE ACT. THEREFORE, THE ASSESSING OFFICER DISALLOWED DEDUCTION U/S.10A ON THE GROUND THAT IT WAS AVAILABLE ONLY TO UNIT ESTABLISHED UNDER SPECIAL ECONOMIC ZONE AND THAT IN THE CASE OF THE ASSESSE E IT WAS NOT SO. HE ALSO OBSERVED THAT DEDUCTION U/S.10B CANNOT BE ALLOWED TO THE ASSESSEE AS THE ASSESSEE 3 ITA NO.50/CTK/2015 ASSESSMENT YEAR : 2011 - 12 HAD NOT SUBMITTED THE AUDIT REPORT IN FORM NO.56G FOR ASSESSMENT YEAR 2011 - 12. HENCE, HE DISALLOWED DEDUCTION OF RS.3,67,15, 136.19 CLAIMED BY THE A SSESSEE U/S.10A AND ALSO DID NOT ALLOW DEDUCTION U/S.10B OF THE ACT TO THE ASSESSEE. 4. BEING AGGRIEVED, THE ASSESSEE FILED APPEAL BEFORE THE CIT(A). 5. THE CIT(A) ALLOWED THE CLAIM OF THE ASSESSEE AND DIRECTED THE ASSESSING OFFICER TO ALLOW THE CLAIM OF E XEMPTION OF RS.3,67,15,136.19 AFTER CONSIDERING THE RELATIVE MERITS OF ITS APPLICABILITY U/S.10A OR 10B OF THE ACT. ACCORDINGLY, FORM 56F/FORM 50G IS TO BE ADMITTED AND TAKEN ON RECORD IN THE INTEREST OF JUSTICE AND EQUITY PARTICULARLY IN THE LIGHT OF TH E FACT THAT THE CONTENTS OF FORM 56F AND 56G ARE LARGELY SIMILAR. 6. BEING AGGRIEVED AGAINST THIS ORDER OF THE CIT(A), THE REVENUE IS IN APPEAL BEFORE US. 7. LD D.R. RELIED ON THE ORDER OF THE ASSESSING OFFICER. 8. LD A.R. RELIED ON THE ORDER OF THE CIT(A) . 9. WE FIND THAT THE ISSUE WHETHER DEDUCTION U/S.10A OR 10B CAN BE ALLOWED WITHOUT FILING THE MANDATORY FORM 56F OR 56G BY THE ASSESSEE ALONGWITH RETURN OF INCOME U/S.139(1) OF THE ACT HAS BEEN C ONSIDERED AND DECIDED BY THE RAJKOT SPECIAL BENCH BENCH OF THE TRIBUNAL IN THE CASE OF SAFFIRE GARMENTS VERSUS INCOME - TAX OFFICER , 140 ITD 6 (SB )(RAJ) , WHEREIN, IT HAS BEEN HELD AS UNDER: 4 ITA NO.50/CTK/2015 ASSESSMENT YEAR : 2011 - 12 11. THE 1ST QUESTION RAISED BEFORE US IS THIS AS TO WHETHER THIS PROVISO TO SECTION 10A( 1A) OF THE INCOME TAX ACT, 1961, IS MANDATORY OR MERELY DIRECTORY. IN ORDER TO DECIDE THIS ISSUE, WE FEEL THAT WE HAVE TO CONSIDER THE WHOLE SCHEME OF THE ACT. THE ASSESSEE IS REQUIRED TO FILE THE RETURN OF INCOME WITHIN THE PRESCRIBED TIME AS PER THE PROV ISIONS OF SECTION 139(1). THIS PROVISION OF SECTION 139(1) IS APPLICABLE TO ALL COMPANIES AND FIRMS IRRESPECTIVE OF THE FACT AS TO WHETHER THEY ARE EARNING TAXABLE INCOME OR NOT FOR THE CURRENT YEAR I.E. FROM 01.04.2006. IN RESPECT OF OTHER PERSONS SUCH AS INDIVIDUAL, HUF, AOP OR BOI AND ARTIFICIAL JUDICIAL PERSON, THE REQUIREMENT IS THIS THAT IF SUCH A PERSON IS HAVING TAXABLE INCOME BEFORE GIVING EFFECT TO THE PROVISIONS OF SECTION 10A, THEN ALSO, HE IS REQUIRED TO FILE RETURN OF INCOME BEFORE THE DUE DAT E EVEN IF THIS PERSON IS NOT HAVING TAXABLE INCOME AFTER GIVING EFFECT TO THE PROVISIONS OF SECTION 10A. WE FIND THAT THE PROVISIONS OF THE PROVISO TO SECTION 10A(1A) IS NOTHING BUT A CONSEQUENCE OF FAILURE OF THE ASSESSEE TO FILE THE RETURN OF INCOME WITH IN THE DUE DATE PRESCRIBED U/S 139(1) OF THE INCOME TAX ACT, 1961. FOR SUCH A FAILURE OF THE ASSESSEE TO FILE HIS RETURN OF INCOME WITHIN THE DUE DATE PRESCRIBED U/S 139(1) OF THE INCOME TAX ACT, 1961, THIS IS NOT THE ONLY CONSEQUENCE. ONE CONSEQUENCE OF S UCH FAILURE IS PRESCRIBED IN SECTION 234A OF THE INCOME TAX ACT, 1961 ALSO AS PER WHICH, THE ASSESSEE IS LIABLE TO PAY INTEREST ON THE TAX PAYABLE BY HIM AFTER REDUCING ADVANCE TAX AND TDS/TCS IF ANY PAID BY HIM APART FROM SOME OTHER REDUCTIONS. SUCH INTER EST IS PAYABLE FROM THE DATE IMMEDIATELY FOLLOWING THE DUE DATE FOR FILING RETURN OF INCOME AND IS PAYABLE UP TO THE DATE ON WHICH SUCH RETURN OF INCOME WAS FURNISHED BY THE ASSESSEE AND IF THE ASSESSEE HAS NOT FURNISHED ANY RETURN OF INCOME THEN THE INTER EST IS PAYABLE TILL THE DATE OF COMPLETION OF THE ASSESSMENT U/S 144. IN OUR CONSIDERED OPINION, THIS IS ALSO ONE OF THE CONSEQUENCES OF NOT FILING RETURN OF INCOME BY THE ASSESSEE WITHIN THE DUE DATE. ONE MAY RAISE THIS ARGUMENT THAT INTEREST U/S 234A IS PAYABLE ONLY IF THE ASSESSEE HAS NOT PAID HIS ADVANCE TAX AND, THEREFORE, THIS IS INTEREST FOR THE FAILURE OF THE ASSESSEE TO PAY ADVANCE TAX AS PER THE REQUIREMENT OF THE ACT AND NOT FOR THE DELAY IN FILING RETURN OF INCOME. BUT IN OUR CONSIDERED OPINION, THIS IS NOT SO. FOR THE FAILURE OF THE ASSESSEE TO PAY ADVANCE TAX AS PER THE REQUIREMENT O THE ACT, INTEREST IS CHARGEABLE U/S 234B OF THE INCOME TAX ACT, 1961 IF SUCH ADVANCE TAX PAID BY THE ASSESSEE IS LESS THAN 90% OF THE ASSESSED TAX. SUCH INTEREST U /S 234B IS PAYABLE FROM THE FIRST DAY OF APRIL OF THE RELEVANT ASSESSMENT YEAR TILL THE DATE OF DETERMINATION OF THE TOTAL INCOME EITHER U/S 143(1) OR U/S 143(3) OF THE ACT. THE INTEREST U/S 234A IS PAYABLE FROM A DATE AFTER THE DUE DATE FOR FILING THE RET URN OF INCOME AND IS PAYABLE UP TO THE DATE ON WHICH THE RETURN OF INCOME IS FURNISHED BY THE ASSESSEE AND IF NO RETURN IS FURNISHED BY THE ASSESSEE AT ALL THEN ONLY, THE INTEREST IS PAYABLE TILL THE DATE OF COMPLETION OF THE ASSESSMENT U/S 144 OF THE ACT. UNDER THIS FACTUAL AND LEGAL POSITION, WE HAVE NO HESITATION IN HOLDING THAT THE INTEREST PAYABLE BY THE ASSESSEE U/S 234A IS FOR HIS FAILURE TO FILE THE RETURN OF INCOME WITHIN THE DUE DATE PRESCRIBED U/S 139(1) OF THE INCOME TAX ACT, 1961. THIS IS BY NO W A SETTLED POSITION OF LAW THAT CHARGING OF INTEREST UNDER VARIOUS SECTIONS INCLUDING U/S 234A OF THE INCOME TAX ACT, 1961, IS MANDATORY. WHEN ONE OF THE CONSEQUENCES FOR NOT FILING RETURN OF INCOME WITHIN THE DUE DATE PRESCRIBED U/S 139(1) OF THE INCOME TAX ACT, 1961 IS MANDATORY THEN, OTHER CONSEQUENCE OF THE SAME FAILURE OF THE ASSESSEE CANNOT BE DIRECTORY AND THE SAME IS ALSO MANDATORY. IN OUR CONSIDERED OPINION AND IN VIEW OF OUR ABOVE DISCUSSION, THE PROVISIONS OF THE PROVISO TO SECTION 10A(1A) IS MA NDATORY AND NOT DIRECTORY AND, THEREFORE, QUESTION (A) REFERRED TO US IS ANSWERED IN NEGATIVE AND IT IS HELD THAT THIS PROVISO TO SECTION 10A(1A) OF THE INCOME TAX ACT, 1961 IS MANDATORY. 12. WE NOW EXAMINE AND DISCUSS OTHER CONSEQUENCES ALSO FOR THE FAILU RE OF THE ASSESSEE TO FILE THE RETURN OF INCOME WITHIN THE DUE DATE AS REQUIRED U/S 139(1) OF THE INCOME TAX ACT, 1961. ONE OF SUCH CONSEQUENCE IS THE PROVISIONS OF 5 ITA NO.50/CTK/2015 ASSESSMENT YEAR : 2011 - 12 SECTION 276CC AS PER WHICH IF THE ASSESSEE FAILS TO FILE THE RETURN OF INCOME WITHIN THE DU E DATE PRESCRIBED UNDER SUB - SECTION (1) OF SECTION 139 OF THE ACT THEN HE SHALL BE PUNISHABLE FOR RIGOROUS IMPRISONMENT ALONG WITH FINE AND THE QUANTUM OF SUCH IMPRISONMENT AND FINE IS DEPENDENT ON THE AMOUNT OF TAX WHICH WOULD HAVE BEEN EVADED IF THE FAIL URE HAD NOT BEEN DETECTED. THIS ISSUE WAS EXAMINED BY HONBLE APEX COURT IN THE CASE OF PRAKASH NATH KHANNA ( SUPRA ) AS CITED BY THE LEARNED DR AND IT WAS HELD BY THE HONBLE APEX COURT IN THAT CASE THAT EVEN IF THE RETURN OF INCOME IS FILED IN TERMS OF SUB - SECTION (4) OF SECTION 139 AND IT DOES NOT DILUTE INFRACTION IN NOT FURNISHING RETURN IN DUE TIME AS PRESCRIBED U/S 139(1) OF THE ACT. THIS JUDGEMENT ALSO SUPPORTS THE VIEW TAKEN BY US WHILE ANSWERING QUESTION NO.1 AS PER ABOVE PARAS. WHEN EVEN FOR THE PU RPOSE OF PROSECUTION ALSO, IT WAS HELD BY THE HONBLE APEX COURT THAT EVEN IF THE RETURN OF INCOME FURNISHED BY THE ASSESSEE WITHIN THE TIME ALLOWED U/S 139(4), IT DOES NOT DILUTE INFRACTION IN NOT FURNISHING THE RETURN IN DUE TIME AS PRESCRIBED UNDER SUB - SECTION(1) OF SECTION 139, THEN IT CANNOT BE ACCEPTED THAT SUCH FURNISHING OF RETURN OF INCOME WITHIN TIME ALLOWED U/S 139(4) WILL DILUTE THE PROVISIONS CONTAINED IN THE PROVISO TO SECTION 10A(1A) OF THE INCOME TAX ACT, 1961. 13. REGARDING VARIOUS SUBMISSI ONS OF THE LD. A.R. AND VARIOUS JUDGEMENTS ON WHICH RELIANCE HAS BEEN PLACED BY THE LD. A.R., WE WOULD LIKE TO OBSERVE THAT THESE SUBMISSIONS DO NOT HAVE MERIT IN VIEW OF OUR ABOVE DISCUSSION. THE FIRST SUBMISSION IS THIS THAT THE PROVISION OF SECTION 139( 4) ARE CONSIDERED AS PROVISO TO SECTION 139(1) AND IF THE ASSESSEE HAS FILED RETURN OF INCOME U/S 139(4), THE SAME SHOULD BE CONSIDERED AS RETURN FILED U/S 139(1) OF THE INCOME TAX ACT, 1961. ON THIS ASPECT, WE HAVE ALREADY SEEN THE JUDGEMENT OF HONBLE AP EX COURT CITED BY THE LD. D.R. HAVING BEEN RENDERED IN THE CASE OF PRAKASH NATH KHANNA ( SUPRA ), WHERE IT WAS HELD BY HONBLE APEX COURT THAT THE FILING OF RETURN OF INCOME WITHIN THE TIME ALLOWED U/S 139(4) OF THE INCOME TAX ACT, 1961 CANNOT DILUTE THE INF RACTION IN NOT FURNISHING RETURN IN DUE TIME AS PRESCRIBED U/S 139(1) OF THE INCOME TAX ACT, 1961. IN VIEW OF THIS JUDGEMENT OF HONBLE APEX COURT IN THIS REGARD, THE JUDGMENTS CITED BY THE LD. A.R. I.E. CIT V. JAGARITI AGRAWAL ( SUPRA ) AND TRUSTEES OF TULS IDAS GOPALJI CHARITABLE & CHALESHWAR TEMPLE TRUST ( SUPRA ) ARE OF NO RELEVANCE BECAUSE THESE JUDGEMENTS ARE OF TWO DIFFERENT HIGH COURTS BUT THIS ASPECT OF THE MATTER IS COVERED AGAINST THE ASSESSEE BY THE JUDGEMENT OF HONBLE APEX COURT CITED BY THE LD. D. R. 14. THE 2ND SUBMISSION OF THE LD. A.R. IN THE WRITTEN SUBMISSION IS THIS THAT REQUIREMENT OF FILING OF RETURN OF INCOME IS PROCEDURAL ASPECT AND, THEREFORE, IT SHOULD BE CONSIDERED AS DIRECTORY AND NOT MANDATORY. IN SUPPORT OF THIS CONTENTION ALSO, RELI ANCE HAS BEEN PLACED ON VARIOUS DECISIONS SUBMITTED BY THE ASSESSEE IN THE PAPER BOOK II AND III. WE DO NOT FIND ANY MERIT IN THESE SUBMISSIONS OF THE ASSESSEE ALSO BECAUSE WHEN CONSEQUENCES OF NOT FILING THE RETURN OF INCOME WITHIN THE DUE DATE PRESCRIBED U/S 139(1) OF THE INCOME TAX ACT, 1961 ARE SO GRAVE I.E. CHARGING OF INTEREST U/S 234A, POSSIBILITY OF PROSECUTION U/S 276CC AND DENIAL OF VARIOUS DEDUCTIONS U/S 10A, 10B, 10BA AND VARIOUS SECTIONS UNDER CHAPTER VIA, IT CANNOT BE SAID THAT THIS REQUIREMEN T OF FILING RETURN OF INCOME IS A PROCEDURAL ASPECT. 15. REGARDING VARIOUS JUDGMENTS CITED BY THE LD. A.R. IN THIS REGARD, WE FIND THAT SOME OF THESE JUDGMENTS ARE RENDERED BY THE DIVISION BENCH OF THE TRIBUNAL AND HENCE NOT BINDING ON US. REGARDING OTHER JUDGEMENTS OF VARIOUS HIGH COURTS AND HONBLE APEX COURT, WE FIND THAT THE SAME ARE NOT IN RESPECT OF FAILURE OF THE ASSESSEE FOR FILING THE RETURN OF INCOME WITHIN THE DUE DATE PRESCRIBED U/S 139(1) OF THE INCOME TAX ACT, 1961 AND HENCE NOT APPLICABLE. ST ILL, WE DISCUSS, EACH OF THOSE JUDGMENTS CITED BEFORE US AS UNDER : 6 ITA NO.50/CTK/2015 ASSESSMENT YEAR : 2011 - 12 THE FIRST JUDGEMENT SUBMITTED IN PAPER BOOK II IS THE JUDGEMENT OF HONBLE APEX COURT RENDERED IN THE CASE OF DIRECTOR OF INSPECTION OF INCOME TAX V. POORAN MALL & SONS (96 ITR 390). IN THAT CASE, THE ISSUE INVOLVED WAS REGARDING THE VALIDITY OF THE ORDER PASSED BY THE A.O. U/S 132(5) FOR RETAINING THE SEIZED ASSETS AND HENCE, THIS JUDGEMENT IS NOT RELEVANT IN THE PRESENT CASE. THE 2ND JUDGEMENT CITED IS THE JUDGEMENT OF HONBLE MADHY A PRADESH HIGH COURT RENDERED IN THE CASE OF CIT V. PANAMA CHEMICAL WORKS (113 TAXMAN 717). IN THAT CASE, THE ISSUE INVOLVED WAS REGARDING FILING OF AUDIT REPORT IN FORM 10CCB. THE SAME WAS REQUIRED TO BE FILED ALONG WITH THE RETURN OF INCOME FILED BY THE ASSESSEE BUT IN THAT CASE, THE SAME WAS FILED DURING ASSESSMENT PROCEEDINGS. UNDER THESE FACTS, IT WAS HELD THAT THE CLAIM OF THE ASSESSEE REGARDING DEDUCTION U/S 80 - I CANNOT BE REJECTED IF THE REQUIRED REPORT IN FORM 10CCB WAS FILED IN THE COURSE OF ASSES SMENT PROCEEDINGS. IN THE PRESENT CASE, THE DISPUTE IS NOT REGARDING FILING OF SOME REPORT ALONG WITH RETURN OF INCOME BUT THE DISPUTE IS REGARDING FILING OF RETURN OF INCOME ITSELF WITHIN DUE DATE AND HENCE, THIS JUDGMENT IS ALSO NOT RELEVANT IN THE PRESE NT CASE. THE 3RD JUDGEMENT CITED IS THE JUDGEMENT OF HONBLE DELHI HIGH COURT RENDERED IN THE CASE OF CIT V. AXIS COMPUTERS (INDIA) (P) LTD. (178 TAXMAN 143). IN THAT CASE ALSO, THE DISPUTE WAS REGARDING THE REQUIREMENT OF FILING OF AUDIT REPORT ALONG WITH RETURN OF INCOME AND NOT REGARDING FILING OF RETURN OF INCOME WITHIN THE DUE DATE AND HENCE, THIS JUDGEMENT OF HONBLE DELHI HIGH COURT IS ALSO NOT APPLICABLE IN THE PRESENT CASE. THE NEXT JUDGEMENT CITED IS THE JUDGEMENT OF HONBLE APEX COURT RENDERED IN THE CASE OF CIT V. NATIONAL TAJ TRADERS (2 TAXMAN 546). IN THAT CASE, THE DISPUTE WAS REGARDING PASSING OF ORDER BY CIT U/S 33B OF 1922 ACT CORRESPONDING TO SECTION 263 OF THE PRESENT ACT AND HENCE, THIS JUDGEMENT IS ALSO NOT RELEVANT IN THE PRESENT CASE. THE NEXT JUDGEMENT CITED BEFORE US IS THE JUDGEMENT OF HONBLE DELHI HIGH COURT RENDERED IN THE CASE OF CIT V. WEB COMMERCE (INDIA) (P) LTD. (178 TAXMAN 310). THE DISPUTE IN THAT CASE IS ALSO SIMILAR TO THE DISPUTE IN THE EARLIER DECISION OF HONBLE DELHI HIGH COURT RENDERED IN THE CASE OF AXIS COMPUTERS (INDIA) (P) LTD. ( SUPRA ) AND FOR THE SAME REASONS, THIS JUDGEMENT IS ALSO NOT APPL ICABLE IN THE PRESENT CASE. THE NEXT JUDGEMENT CITED BEFORE US IS THE JUDGMENT OF HONBLE APEX COURT RENDERED IN THE CASE OF BAJAJ TEMPO LTD. V. CIT (62 TAXMAN 480). IN THAT CASE, THE DISPUTE BEFORE THE HONBLE APEX COURT WAS REGARDING ALLOWABILITY OF DEDUCTION U/S 15C OF 1922 ACT CORRESPONDING TO SECTION 80J OF INCOME TAX ACT, 1961 AND THE FACTS WERE THAT THE INDUSTRIAL UNDERTAKING WAS ESTABLISHED IN A BUILDING TAKEN ON LESE, WHICH WAS USED PREVIOUSLY FOR OTHER BUSINESS. UNDER THESE FACTS, IT WAS HELD THAT THE ASSESSEE WAS ENTITLED TO DEDUCTION. SINCE THE FACTS ARE DIFFERENT, THIS JUDGEMENT OF HONBLE APEX COURT IS ALSO NOT RELEVANT IN THE PRESENT CASE. THE NEXT JUDGEMENT CITED BEFORE US IS THE JUDGEMENT OF HONBLE CALCUTTA HIGH COURT RENDERED IN TH E CASE OF CIT V. HARDEODAS AGARWALA TRUST (198 ITR 511). IN THAT CASE, THE ISSUE IN DISPUTE WAS REGARDING FURNISHING OF AUDIT REPORT ALONG WITH RETURN OF INCOME FOR THE PURPOSE OF CLAIMING EXEMPTION U/S 11 OF THE INCOME TAX ACT, 1961 AND NOT THE DISPUTE WA S NOT REGARDING FILING OF RETURN OF INCOME U/S 139(1) OF THE ACT AND HENCE, THIS JUDGEMENT OF HONBLE CALCUTTA HIGH COURT IS ALSO NOT APPLICABLE IN THE PRESENT CASE. THE NEXT JUDGEMENT CITED BEFORE US IS THE JUDGEMENT OF HONBLE DELHI HIGH COURT RENDERE D IN THE CASE OF CHURCHS AUXILIARY FOR SOCIAL ACTON AND 7 ITA NO.50/CTK/2015 ASSESSMENT YEAR : 2011 - 12 ANR V. DIRECTOR GENERAL OF INCOME TAX (EXEMPTION) & OTHERS (325 ITR 362). IN THAT CASE, THE DISPUTE WAS REGARDING DEDUCTION U/S 80G OF THE INCOME TAX ACT, 1961 AND AS PER THE FACTS OF THAT CASE, THE OBJECTION WAS REGARDING FAILURE OF ASSESSEE IN RENDERING ACCOUNTS TO THE COMPETENT AUTHORITY WITHIN THE PRESCRIBED PERIOD AND IT WAS HELD THAT SUCH A REQUIREMENT IS DIRECTORY AND NOT MANDATORY. IN THE PRESENT CASE, THE DISPUTE IS REGARDING FILING OF RETURN OF INCOME ITSELF WITHIN THE DUE DATE AND HENCE, THIS JUDGEMENT OF HONBLE DELHI HIGH COURT IS ALSO NOT RELEVANT IN THE PRESENT CASE. THE NEXT JUDGEMENT CITED BEFORE US IS THE JUDGMENT OF HONBLE GUJARAT HIGH COURT RENDERED IN THE CASE O CIT V. GUJARAT OIL AND ALLIED INDUSTRIES (201 ITR 325). IN THAT CASE ALSO, THE DISPUTE WAS REGARDING THE REQUIREMENT OF FILING OF AUDIT REPORT AS TO WHETHER THE SAME IS MANDATORY OR DIRECTORY AND AS DISCUSSED IN ABOVE PARAS, THIS JUDGMENT IS ALSO NOT RELEVANT IN THE PRES ENT CASE. THE NEXT JUDGEMENT CITED BEFORE US IS THE JUDGEMENT OF HONBLE DELHI HIGH COURT RENDERED IN THE CASE OF CONTINENTAL CONTRACTION LTD. V. UNION OF INDIA AND OTHERS (185 ITR 230). THIS JUDGEMENT IS ALSO NOT APPLICABLE IN THE PRESENT CASE BECAUSE IN THAT CASE, THE ISSUE WAS THIS AS TO WHEN CBDT HAD APPROVED AGREEMENT FOR SUCH A PROJECT FOR THE PURPOSE OF SECTION 80 O WHILE IN FACT SECTION 80HHB WAS FOUND APPLICABLE AND IT WAS HELD THAT ASSESSEE HAS TO BE GIVEN AN OPPORTUNITY FOR COMPLYING WITH TH E PROVISIONS OF SUB - SECTION (3) OF SECTION 80HHB. SINCE THE FACTS ARE DIFFERENT, THIS JUDGEMENT IS ALSO NOT RELEVANT IN THE PRESENT CASE. THE NEXT JUDGEMENT CITED BEFORE US IS THE JUDGEMENT OF HONBLE BOMBAY HIGH COURT RENDERED IN THE CASE OF CIT V. SHI VANAND ELECTRONICS (209 ITR 63). VERY STRONG RELIANCE WAS PLACED BY THE LEARNED AR ON THIS JUDGMENT BUT WE FIND THAT FOR THE SAME REASONS AS DISCUSSED ABOVE IN RESPECT OF VARIOUS JUDGEMENTS, THIS JUDGEMENT IS ALSO NOT APPLICABLE IN THE PRESENT CASE BECAUSE IN THAT CASE ALSO, THE ISSUE IN DISPUTE WAS REGARDING REQUIREMENT OF FILING OF AUDIT REPORT ALONG WITH RETURN OF INCOME FOR DEDUCTION U/S 80J(VIA) AND IT WAS HELD THAT IT IS NOT MANDATORY IN STRICT SENSE. IN THE PRESENT CASE, THE DISPUTE IS REGARDING FILI NG OF RETURN OF INCOME WITHIN DUE DATE PRESCRIBED U/S 139(1) OF THE INCOME TAX ACT, 1961 AND HENCE, THIS JUDGEMENT IS ALSO NOT RELEVANT IN THE PRESENT CASE. THE NEXT JUDGMENT IS THE JUDGEMENT OF HONBLE GUJARAT HIGH COURT RENDERED IN THE CASE OF ITO V. VXL INDIA LTD. (312 ITR 187). IN THAT CASE ALSO, DISPUTE WAS REGARDING FILING OF AUDIT REPORT AND HENCE, THIS JUDGEMENT IS ALSO NOT RELEVANT. THE NEXT JUDGEMENT CITED BEFORE US IS THE JUDGEMENT OF HONBLE CALCUTTA HIGH COURT RENDERED IN THE CASE OF PRES IDENCY MEDICAL CENTRE (P) LTD. V. CIT (108 ITR 838). THE CONCLUSION AS PER THIS JUDGMENT IS REPRODUCED BELOW FROM THE HEAD NOTES: LOSS RETURN CAN BE FILED WITHIN TIME SPECIFIED BY S.139(4) AND ONCE THAT RETURN IS FILED WITHIN TIME IT WOULD BE DEEMED TO BE IN ACCORDANCE WITH LAW AND LOSS HAD TO BE DETERMINED AND CARRIED FORWARD. IN VIEW OF THIS CONCLUSION IN THIS JUDGMENT THAT LOSS RETURN CAN BE FILED WITHIN TIME SPECIFIED U/139(4), THIS JUDGEMENT IS ALSO NOT APPLICABLE IN THE PRESENT CASE BECAUSE IN THE P RESENT CASE, THE DISPUTE IS REGARDING FILING OF RETURN OF INCOME WITHIN TIME ALLOWED U/S 139(1) OF THE INCOME TAX ACT, 1961 AND NOT U/S 139(4) OF THE INCOME TAX ACT, 1961 AND HENCE, THIS JUDGEMENT IS ALSO NOT APPLICABLE IN THE PRESENT CASE. 8 ITA NO.50/CTK/2015 ASSESSMENT YEAR : 2011 - 12 16. WE HAVE DIS CUSSED ALL THE JUDGMENTS WHICH WERE CITED BY THE LD. A.R. IN THE SYNOPSIS AS WELL AS COPIES OF WHICH ARE SUBMITTED IN THE PAPER BOOK II AND III AND WE HAVE SEEN THAT NONE OF THESE JUDGMENTS IS RELEVANT IN THE PRESENT CASE. 17. IN VIEW OF OUR ABOVE DISCUSSI ON, WE HAVE NO HESITATION IN HOLDING THAT THE PROVISIONS OF PROVISO TO SECTION 10A(1A) IS MANDATORY AND NOT MERELY DIRECTORY. 10 . THE LANGUAGE OF SEC TION 10A & 10B ARE PARA MAERIA AND, THEREFORE, THE ABOVE QUOTED DECISION OF RAJKOT TRIBUNAL SPECIAL BENCH IN THE CASE OF SAFFIRE GARMENTS ( SAFFIRE GARMENTS ( SUPRA) SQUARELY APPLIES TO THE FACTS OF ASSESSEES CASE. IT IS NOT IN DISPUTE THAT THE ASSESSEE SINCE ASSESSMENT YEAR 2004 - 05 HAD BEEN CLAIMING DEDUCTION U/.S.10B OF THE ACT. FURTHER, THE ASSESSEE IS NOT A UNIT ESTABLISHED UNDER SPECIAL ECONOMIC ZONE AND, THEREFORE, PROVISIONS OF SECTION 10A ARE NOT APPLICABLE. SO FAR AS DEDUCTION 10B IS CONCERNED, IN VIEW OF ABOVE QUOTED DECISION OF THE TRIBUNAL IN THE CASE OF SAFFIRE GARMENTS (SUPRA) THE ASSESSEE IS NOT ENTITLED FOR DEDUCTION U/S.10B ALSO AS THE MANDATORILY REQUIRED AUDIT REPORT IN FORM 56G WAS NOT FILED BY THE ASSESSEE ALONGWITH THE RETURN OF INCOME U/S.139(1) OF THE ACT. THEREFORE, WE SET ASIDE THE ORDER OF THE CIT(A) AND RESTORE THE ORDER OF THE AS SESSING OFFICER AND ALLOW THE GROUND OF APPEAL OF THE REVENUE. 11. IN THE RESULT, THE AP PEAL FILED BY THE REVENUE IS ALLOWED. ORDER PRO NOUNCED IN THE OPEN COURT ON 26 /04/2017 IN THE PRESENCE OF PARTIES. SD/ - SD/ - (KULDIP SINGH) ( N.S SAINI) JUDICIAL MEMBER A CCOUNTANT MEMBER CUTTACK; DATED 26 /04/2017 9 ITA NO.50/CTK/2015 ASSESSMENT YEAR : 2011 - 12 B.K.PARIDA, SPS COPY OF THE ORDER FORWARDED TO : BY ORDER, SR.PRIVATE SECRETARY ITAT, CUTTACK 1. THE APPELLANT : DCIT, CORPORATE CIRCLE 1(1), BHUBANESWAR. THE RESPONDENT. M/S. DISCOVERTURE SOLUTIONS (INDIA) PVT LTD., E/48, INFOCITY, CHANDRASEKHARPUR, BHUBANESWAR 3. THE CIT(A) - 11, BHUBANESWAR. 4. PR.CIT - II, BHUBANESWAR. 5. DR, ITAT, CUTTACK 6. GUARD FILE. //TRUE COPY//