D.C.I.T. 24(3), MUMBAI V. SIROYA DEVELOPERS, MUMBAI

ITA 7246/MUM/2011

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 1606 (ITAT-MUMBAI)
• Duration Of Justice: 5 year(s) 1 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-11-2016
• Appeal Filed By: Department
• Bench Allotted: E
• Next Hearing Date: 13-08-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 25-10-2011
• Court: TRIBUNAL
• Department Lawyers: ANUPAMA SINGLA
• Assessee Lawyers: DR K SHIVARAM
• Keywords: Principle of natural justice; Additional evidence; Reasonable cause; Deemed dividend
• Section: 143(3); 80IB; 10B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES E, MUMBAI BEFORE SHRI MAHAVIR SINGH (JUDICIAL MEMBER) AND SHRI ASHWANI TANEJA (ACCOUNTANT MEMBER) I.T.A. NO.7246/MUM/2011 - 2008-09 DY.CIT 24(3), MUMBAI VS M/S SIROYA DEVELOPERS 43, SUN VILLA, YASHODHAM GEN. A.K. VAIDYA MARG GOREGAON (E), MUMBAI-63 PAN : AANFS1544G (APPELLANT) (RESPONDENT) I.T.A. NO.4527/MUM/2013 - 2009-10 ACIT,24(3), MUMBAI VS M/S SIROYA DEVELOPERS 43, SUN VILLA, YASHODHAM GEN. A.K. VAIDYA MARG GOREGAON (E), MUMBAI-63 PAN : AANFS1544G (APPELLANT) (RESPONDENT) I.T.A. NO.4031/MUM/2013 - 2009-10 M/S SIROYA DEVELOPERS 43, SUN VILLA, YASHODHAM GEN. A.K. VAIDYA MARG GOREGAON (E), MUMBAI-63 VS DY.CIT 24(3), MUMBAI PAN : AANFS1544G (APPELLANT) (RESPONDENT) ASSESSEE BY DR. K SHIVARAM & SHRI RAHUL HAKANI REVENUE BY MS. ANUPAMA SINGLA DATE OF HEARING : 22-11-2016 DATE OF ORDER : 30 -11-2016 2 SIROYA DEVELOPERS O R D E R PER ASHWANI TANEJA, AM: THESE APPEALS PERTAIN TO SAME ASSESSEE AND INVOLVE IDENTICAL ISSUES. THEREFORE, THESE WERE HEARD TOGETHER AND BEING DISP OSED OF BY THIS COMMON ORDER. 2. FIRST WE SHALL TAKE UP ITA NO.7246/MUM/2011- A.Y . 2008-09: THIS APPEAL BY THE REVENUE IS AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS) DATED 03-09-2011 PASSED AGA INST THE ASSESSMENT ORDER PASSED U/S 143(3) DATED 21-12-2010 AND IS FIL ED ON THE FOLLOWING GROUNDS:- 1. 'ON THE FACTS & IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD.CIT(A) ERRED IN ALLOWING THE DEDUCTION CLAIM ED U/S 80IB(10) BY THE ASSESSEE, IGNORING THE DETAILED REA SONS GIVEN BY THE AO IN THE ASSESSMENT ORDER THAT THE ASSESSEE FA ILED TO FULFIL WITH THE CONDITIONS LAID DOWN FOR THE SAID SECTION. MOREOVER, THE CIT(A) ADMITTED ADDITIONAL EVIDENCES IN CONTRAVENTI ON TO RULE 46A OF THE I.T. RULES, 1962.' 2. 'ON THE FACTS & IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED DELETING THE DISALLOWANCE OF R S.44,28,785/- MADE BY THE AO BEING 25% OF THE PURCHASES WHEN NO R EPLY WAS RECEIVED IN RESPONSE TO NOTICE U/S.133(6) WITHOUT C ONSIDERING THAT THE ASSESSEE FAILED TO DISCHARGE THE PRIMARY ONUS OF PROVING THE IDENTITY AND GENUINENESS OF THE PARTIES . 3. GROUND 1: IN THIS GROUND, THE REVENUE HAS CHALLENGED THE ACTI ON OF LD.CIT(A) IN ALLOWING DEDUCTION CLAIMED U/S 80IB (10) BY THE ASSESSEE, BY ADMITTING ADDITIONAL EVIDENCES BY THE CIT(A) IN CON TRAVENTION OF RULE 46A OF I.T. RULES, 1962. IT HAS ALSO BEEN ALLEGED BY T HE REVENUE THAT THE LD.CIT(A) HAS IGNORED THE DETAILED REASONS GIVEN BY THE AO IN THE 3 SIROYA DEVELOPERS ASSESSMENT ORDER ALLEGING THAT ASSESSEE FAILED TO F ULFIL THE CONDITIONS LAID DOWN U/S 80IB(10). 4. DURING THE COURSE OF HEARING, THE LD. DR SUBMITTED THAT IN THIS CASE ADDITIONAL EVIDENCES HAVE BEEN SUBMITTED BY THE ASS ESSEE WHICH IS EVIDENT FROM THE CERTIFICATE GIVEN IN THE PAPER BOO K. THESE ADDITIONAL EVIDENCES WERE CONSIDERED BY LD. CIT(A) FOR ALLOWIN G DEDUCTION U/S 80- IB(10) TO THE ASSESSEE. BUT NO REMAND REPORT WAS C ALLED FOR FROM THE AO, AND NOR ANY PROPER REASONING WAS GIVEN FOR ADMISSIO N OF THESE EVIDENCES. THUS, THE ORDER PASSED BY THE LD. CIT(A) IS IN VIOL ATION OF PRINCIPLES OF NATURAL JUSTICE AND ALSO CONTRARY TO LAW. 5. PER CONTRA, THE LD. COUNSEL FAIRLY SUBMITTED THAT I N THIS CASE, THE LD. CIT(A) HAS CALLED FOR FEW ADDITIONAL EVIDENCES WHIC H WERE SUBMITTED BY THE ASSESSEE AND THESE WERE CONSIDERED BY HIM BEFOR E ALLOWING RELIEF TO THE ASSESSEE, BUT NO REMAND REPORT WAS CALLED FOR B Y THE LD.CIT(A), AS PER THE KNOWLEDGE OF THE ASSESSEE. 6. WE HAVE CONSIDERED THE ORDERS PASSED BY THE LOWER A UTHORITIES. THE AO DENIED THE BENEFIT OF SECTION 80IB(10) TO TH E ASSESSEE INTER-ALIA ON THE GROUND THAT AREA OF EACH UNIT WAS MORE THAN 100 0 SQ.FT., IN VIOLATION OF SUB CLAUSE (C) OF SUB SECTION (1) OF SECTION 80I B. WHILE ANALYSING THE FACTS OF THE CASE, THE LD. CIT(A) PLACED RELIANCE U PON THE CERTIFICATE OBTAINED FROM BOMBAY MUNICIPAL CORPORATION FOR ARRI VING AT THE CONCLUSION THAT NONE OF THE UNITS WAS HAVING AREA A BOVE 1000 SQ.FT. THUS, THE ADDITIONAL EVIDENCE CONSIDERED BY THE LD. CIT(A ) HAS A MATERIAL BEARING ON THE DECISION TAKEN BY HIM. UNDER THESE CIRCUMSTANCES, IT WAS INCUMBENT UPON HIM TO CONFRONT THESE EVIDENCES TO T HE AO AND SEEK HIS COMMENTS. IN ABSENCE OF THE SAME, THE ORDER PASSED BY THE LD. CIT(A) IS 4 SIROYA DEVELOPERS PASSED IN VIOLATION OF PRINCIPLES OF NATURAL JUSTIC E. AFTER TAKING INTO ACCOUNT ALL THE FACTS AND CIRCUMSTANCES OF THE CASE , WE FIND IT APPROPRIATE TO SEND THIS ISSUE BACK TO THE FILE OF THE AO. THE ASSESSEE SHALL SUBMIT ALL THE EVIDENCES BEFORE THE AO IN SUPPORT OF ITS CLAIM AND SHALL BE FREE TO RAISE ALL LEGAL AND FACTUAL ISSUES BEFORE THE AO. THE AO SHALL GIVE ADEQUATE OPPORTUNITY OF HEARING TO THE ASSESSEE AND SHALL DE CIDE THIS ISSUE AFRESH AFTER CONSIDERING ALL THE DETAILS AND EVIDENCES AND JUDGEMENTS AS MAY BE PLACED BY THE ASSESSEE BEFORE HIM. THE ASSESSEE SH ALL ALSO FILE ITS SUBMISSIONS ALONG WITH REQUISITE EVIDENCES WITH REG ARD TO ALL THE REASONS GIVEN BY THE AO IN THE ASSESSMENT ORDER WHICH SHALL BE DULY CONSIDERED BY THE AO BEFORE DECIDING THIS ISSUE AFRESH. WITH THE SE DIRECTIONS, THIS ISSUE IS SENT BACK TO THE FILE OF THE AO. THIS GROUND MA Y BE TREATED AS ALLOWED FOR STATISTICAL PURPOSES. 7. GROUND 2: IN THIS GROUND, THE REVENUE HAS CHALLENGED THE ACT ION OF LD. CIT(A) IN DELETING THE DISALLOWANCES MADE BY THE AO BEING 25% OF THE PROJECTS. 8. DURING THE COURSE OF HEARING, IT WAS FAIRLY SUBMITT ED BY THE LD. COUNSEL THAT THE OUTCOME OF GROUND 1 SHALL HAVE DIR ECT BEARING ON THIS ISSUE. SINCE WE HAVE RESTORED THE ISSUE IN GROUND 1 TO THE FILE OF THE AO, THIS ISSUE IS ALSO RESTORED TO THE FILE OF THE AO. THE AO SHALL DECIDE THE ISSUE AFTER AFFORDING OPPORTUNITY OF HEARING TO THE ASSESSEE. 9. AS A RESULT, THE APPEAL OF THE REVENUE MAY BE TREAT ED AS ALLOWED FOR STATISTICAL PURPOSES. 10. NOW WE SHALL TAKE UP THE APPEAL IN ITA NO.4031/ MUM/2013 FOR A.Y. 2009-10 FILED BY THE ASSESSEE AGAINST THE ORDER OF COMMISS IONER OF 5 SIROYA DEVELOPERS INCOME-TAX (APPEALS) DATED 25-03-2013 PASSED AGAINS T THE ASSESSMENT ORDER PASSED U/S 143(3) DATED 19-12-2011 ON THE FOL LOWING GROUNDS:- 1. THE LD. CIT(A) ERRED IN CONFIRMING ACTION OF TH E A.O. IN DISALLOWING DEDUCTION U/S 80IB(10) AT RS. 86,69,941 /- WITHOUT PROPERLY APPRECIATING THE FACTS OF THE CASE AND LAW APPLICABLE THERETO. 2. THE LD. CIT(A) ERRED IN CONFIRMING DISALLOWANCE OF DEDUCTION U/S 80IB(10) MERELY ON THE TECHNICAL GROUND THAT TH E RETURN WAS NOT FILED ON TIME. 3. THE LD. CIT(A) FAILED TO APPRECIATE THAT THE DEL AY WAS BONAFIDE AND DUE TO THE REASONS BEYOND THE CONTROL OF THE AS SESSEE, HENCE, SHOULD HAVE BEEN CONDONED. 4. THE APPELLANT PRAYS THAT THE DEDUCTION CLAIMED U /S 80IB(10) IN THE RETURN MAY BE ALLOWED. 11. IN THIS APPEAL ALSO, THOUGH THE ISSUE INVOLVED ON M ERITS IS WITH REGARD TO DENIAL OF BENEFIT OF DEDUCTION U/S 80IB(1 0), BUT THE PRELIMINARY HURDLE IN THIS APPEAL WAS WITH REGARD TO THE REJECT ION OF THE CLAIM U/S 80IB(10) BY APPLYING PROVISIONS OF SECTION 80AC DUE TO NON FILING OF RETURN OF INCOME BY THE ASSESSEE WITHIN DUE DATE AS PRESCR IBED UNDER THE PROVISIONS OF SECTION 139(1) OF THE INCOME-TAX ACT, 1961. IT WAS SUBMITTED BY THE LD. COUNSEL DURING THE COURSE OF HEARING THA T THOUGH THE RETURN COULD NOT BE FILED BY THE ASSESSEE U/S 139(1) OF TH E ACT, BUT THE SAME WAS DULY FILED WITHIN THE TIME LIMIT AS PRESCRIBED U/S 139(4) AND THEREFORE, THE RETURN FILED BY THE ASSESSEE SHOULD BE DEEMED TO HA VE BEEN FILED U/S 139(1) R.W. THE PROVISIONS OF SECTION 139(4) AND TH EREFORE, PROVISIONS OF SECTION 80AC SHOULD NOT BE MADE APPLICABLE UPON THI S CASE. IN SUPPORT OF HIS ARGUMENTS, HE RELIED UPON THE JUDGMENT OF MUMBA I BENCH OF THE TRIBUNAL IN THE CASE OF INCOME TAX OFFICER VS YASH DEVELOPERS DT 31-01- 2014 IN ITA NO.809/MUM/2011 AND INCOME TAX OFFICER VS UMA DEVELOPERS DT 10-08-2016 IN ITA NO.77181/MUM/2014 WHEREIN RETU RN FILED BY THE 6 SIROYA DEVELOPERS ASSESSEE U/S 139(4) WAS ACCEPTED AND BENEFIT OF DED UCTION U/S 80IB(10) WAS HELD AS ALLOWABLE. 12. PER CONTRA, THE LD. DR SUBMITTED WITH RESPECT TO TH IS PRELIMINARY ISSUE THAT SECTION 80AC STIPULATES FILING OF RETURN BY TAN ASSESSEE SPECIFICALLY U/S 139(1) FOR GETTING THE BENEFIT OF DEDUCTION U/S 80IB(10). THUS, IN ABSENCE OF COMPLIANCE OF THIS CONDITION, T HE ASSESSEE SHOULD NOT BE GRANTED THE BENEFIT OF THE DEDUCTION. IN SUPPOR T OF HER ARGUMENTS, SHE RELIED UPON THE JUDGEMENT OF THE SPECIAL BENCH OF T HE TRIBUNAL IN THE CASE OF SAFFIRE GARMENTS VS ITO 140 ITD 6 (RAJKOT)(SB). 13. WE HAVE GONE THROUGH THE ORDERS PASSED BY BOTH THE SIDES AND ALSO JUDGEMENTS PLACED BEFORE US. BEFORE DECIDING THIS APPEAL ON MERITS OF THE ISSUE RAISED, WE FIND IT NECESSARY TO FIRST DECIDE THE PRELIMINARY ISSUE. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, IT WAS NOTED BY THE AO THAT IN THIS CASE THE DUE DATE FOR FILING OF RETURN U/S 139(1) WAS 30-09-2009 WHEREAS THE ASSESSEE FILED ITS RETURN ON 14-10-2010 U/S 139(4). IT WAS HELD BY HIM THAT SINCE THE RETURN WAS FILED U/S 134 9(1), THE ASSESSEE WAS NOT ELIGIBLE FOR DEDUCTION U/S 80IB(10) OF THE ACT. BEFORE THE LD.CIT(A) THE ASSESSEE EXPLAINED THAT THERE WAS DELAY IN FILING O F RETURN OF INCOME BY 379 DAYS ON ACCOUNT OF THE REASONS BEYOND THE CONTR OL OF THE ASSESSEE ON THE GROUND THAT THE ACCOUNTANT OF THE ASSESSEE HAD MET WITH AN ACCIDENT AND GOT HOSPITALISED. HOWEVER, THE RETURN WAS FILE D WITHIN EXTENDED TIME LIMIT PERMITTED UNDER THE LAW AS PRESCRIBED IN SECT ION 139(4). BUT, THE LD. CIT(A) DID NOT AGREE WITH THE SUBMISSIONS OF THE AS SESSEE AND HELD THAT NO REASONABLE CAUSE HAS BEEN EXPLAINED AND DULY SUPPOR TED BY THE ASSESSEE ALONG WITH THE REQUISITE EVIDENCES. THE LD. CIT(A) REFUSED TO INTERFERE IN 7 SIROYA DEVELOPERS THE ORDER OF THE AO ON THIS ISSUE AND THEREFORE, BE NEFIT OF DEDUCTION WAS DENIED FOR NOT FILING THE RETURN OF INCOME U/S 139( 1). 14. WE HAVE GONE THROUGH THE LEGAL POSITION IN THIS REG ARD. IT IS NOTED THAT PROVISIONS OF SECTION 80AC READS AS FOLLOWS: 80AC . DEDUCTION NOT TO BE ALLOWED UNLESS RETURN FURNISHED - WHERE IN COMPUTING THE TOTAL INCOME OF AN ASSESSEE OF THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR COMME NCING ON THE 1ST DAY OF APRIL, 2006 OR ANY SUBSEQUENT ASSESS MENT YEAR, ANY DEDUCTION IS ADMISSIBLE UNDER SECTION 80-LA 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. A PERUSAL OF THIS SECTION REVEALS THAT MANDATE OF T HIS SECTION IS VERY CLEAR THAT TO AVAIL THE BENEFIT OF DEDUCTION U/S 80IB, TH E ASSESSEE IS REQUIRED TO FILE RETURN WITHIN THE DUE DATE AS PRESCRIBED U/S 1 39(1) OF THE ACT. IT IS NOTED THAT SECTION 139(4) WAS EXISTING WHEN SECTION 80AC WAS BROUGHT ON THE STATUTE AND THUS, THE LEGISLATURE WAS CONSCIOUS OF THIS FACT THAT RETURN COULD BE FILED WITHIN THE EXTENDED TIME AS PRESCRIB ED U/S 139(4), BUT THE LEGISLATURE CHOSE TO GRANT THE BENEFIT OF DEDUCTION ONLY WHEN THE RETURN WAS FILED U/S 139(1). IF THE INTENTION WAS TO GRAN T THE BENEFIT OF DEDUCTION, EVEN IN THOSE CASES WHEN THE RETURN WAS FILED U/S 139(4), THEN THE SAME WOULD HAVE BEEN MENTIONED BY THE LEGISLATU RE IN SECTION 80AC THAT RETURN IS FILED U/S 139(1) OR WITHIN THE TIME EXTENDED BY SECTION 139(4). IT APPEARS THAT THE WHOLE OBJECTIVE OF BRI NGING SECTION 80AC WAS TO ENCOURAGE THE ASSESSEES TO FILE THE RETURN WITHI N TIME AS STIPULATED U/S 139(1) AND TO DISCOURAGE THEM FROM LATE FILING OF R ETURN. SECTION 80AC WAS BROUGHT INTO THE STATUTE BY FINANCE ACT, 2006. EXPLANATORY NOTES TO 8 SIROYA DEVELOPERS THE PROVISIONS RELATING TO DIRECT TAXES WERE AS GIV EN IN CIRCULAR NO.14/2006 DATED 28-12-2006 WHICH READ AS FOLLOWS: 10. BENEFITS OF CERTAIN DEDUCTIONS NOT TO BE ALLOW ED IN CASES WHERE RETURN IS NOT FILED WITHIN THE SPECIFIED TIME LIMIT 10.1 SECTION 139(1) CASTS AN OBLIGATION ON EVERY ASSESSE E TO FURNISH THE RETURN OF INCOME BY THE DUE DATE. WITH A VIEW TO ENFORCE THE COMPLIANCE IN THIS REGARD BY THE ASSESS EES WHO ARE ENTITLED FOR DEDUCTION UNDER SECTION 10B FROM THEIR INCOME, A PROVISO (FOURTH PROVISO) TO SUB-SECTION (1) OF SECT ION 10B HAS BEEN INSERTED SO AS TO PROVIDE THAT NO DEDUCTION UN DER SECTION 10B SHALL BE ALLOWED TO AN ASSESSEE WHO DOES NOT FU RNISH A RETURN OF HIS INCOME ON OR BEFORE THE DUE DATE SPECIFIED IN SUB- SECTION (1) OF SECTION 139. SIMILARLY, WITH A VIEW TO ENFORCE THE COMPLIANCE FOR FURNISHING THE RETURN OF INCOME BY T HE DUE DATE BY THE ASSESSEES WHO ARE ENTITLED FOR DEDUCTIONS UNDER SECTION 80-IA OR SECTION 80-IAB OR SECTION 80-IB OR SECTION 80-IC FROM THEIR INCOME, A NEW SECTION 80AC HAS BEEN INSERTED SO AS TO PROVIDE THAT NO DEDUCTION UNDER SECTION 80-IA OR SECTION 80 -IAB OR SECTION 80-IB OR SECTION 80-IC SHALL BE ALLOWED TO AN ASSESSEE WHO DOES NOT FURNISH A RETURN OF HIS INCOME ON OR B EFORE THE DUE DATE SPECIFIED IN SUB-SECTION (1) OF SECTION 13 9. 10.2 THIS AMENDMENT TAKES EFFECT RETROSPECTIVELY FROM 1 -4-2006 AND APPLIES IN RELATION TO THE ASSESSMENT YEAR 2006 -07 AND SUBSEQUENT YEARS. (EMPHASIS SUPPLIED IN BOLD AND U NDERLINE) PERUSAL OF THE ABOVE SHOWS THAT THE LEGISLATURE HAS CLEARLY INTENDED THAT BENEFIT OF AFORESAID DEDUCTIONS SHOULD NOT BE ALLOW ED IN THE CASES WERE RETURN IS NOT FILED WITHIN THE SPECIFIED TIME LIMIT AS PRESCRIBED IN SECTION 139(1). THE WHOLE IDEA OF BRINGING THIS PIECE OF L EGISLATION ON THE STATUTE WAS TO STREAMLINE AND BRING EFFICIENCY IN THE SYSTE M OF FILING OF RETURNS, ISSUING REFUNDS AND CARRYING OUT ASSESSMENT PROCEED INGS, ETC. IN AN EFFICIENT AND TIME BOUND MANNER. THIS OBLIGATION HAS BEEN CAST UPON THE ASSESSEE BY THE LEGISLATURE FOR A VALID PURPOSE. U NDER THESE CIRCUMSTANCES, IT WOULD NOT BE FAIR, JUSTIFIED AND LEGALLY PERMISSIBLE ON OUR 9 SIROYA DEVELOPERS PART TO ADD OTHER SECTION I.E. SECTION 139(4) AS IS REQUESTED BY THE ASSESSEE, SINCE IT MAY AMOUNT TO DILUTION OF THE OB JECT OF THE SECTION. IT IS FURTHER NOTED BY US THAT THE SPECIAL BENCH OF THE TRIBUNAL HAS TAKEN SIMILAR VIEW IN THE CASE OF SAFFIRE GARMENTS (SUPRA) WHEREIN IT HAS BEEN OPINED THAT FILING OF RETURN WITHIN THE TIME LIMIT PRESCRIBED U/S 139(1) IS MANDATORY TO CLAIM THE BENEFIT OF DEDUCTION U/S 80I B(10). SINCE WE ARE BOUND BY THE DECISION OF THE SPECIAL BENCH, IT WOUL D NOT BE PERMISSIBLE FOR US TO REFER TO THE VIEW TAKEN BY THE CO-ORDINAT E BENCH OF MUMBAI ITAT AS HAS BEEN RELIED UPON BY THE LD. COUNSEL BEFORE U S. 15. IN ADDITION TO THAT IT IS ALSO NOTED BY US THAT ID ENTICAL ISSUE CAME UP BEFORE HONBLE CALCUTTA HIGH COURT IN SIMILAR CIRCU MSTANCES IN THE CASE OF CIT V. SHELCON PROPERTIES P. LTD.370 ITR 305(CAL) WHEREIN THE BENEFIT OF DEDUCTION U/S 80IB(10) WAS DENIED BY THE AO BY APPL YING THE PROVISIONS OF SECTION 80AC ON THE GROUND THAT THE RETURN WAS NOT FILED BY THE ASSESSEE WITHIN THE TIME LIMIT PRESCRIBED U/S 139(1). THE CL AIM WAS ALLOWED BY THE TRIBUNAL ON THE GROUND THAT THERE WAS LACK OF NEGLI GENCE ON THE PART OF ASSESSEE IN FILING THE RETURN LATE AND THERE WAS RE ASONABLE CAUSE FOR DELAY IN FILING OF RETURN . 15.1. THE REVENUE CARRIED THE MATTER BEFORE HONBLE CALC UTTA HIGH COURT AND CONTENDED THAT PROVISIONS OF SECTION 80AC WERE CLEAR AND LAW COULD NOT HAVE BEEN REWRITTEN BY THE TRIBUNAL TO ACCOMMOD ATE THE ASSESSEE, DISREGARDING THE CLEAR PROVISIONS OF SECTION 80AC W HICH MANDATES FILING OF RETURN WITHIN THE TIME LIMIT AS PRESCRIBED U/S 139( 1). AFTER CONSIDERING LEGAL POSITION IN DETAIL, HONBLE HIGH COURT ACCEPT ED THE CONTENTIONS OF THE REVENUE AND HELD THAT FILING OF RETURN U/S 139( 1) WAS MANDATORY FOR 10 SIROYA DEVELOPERS AN ASSESSEE TO BE ELIGIBLE TO CLAIM DEDUCTION U/S 8 0IB(10). OPERATIVE PART OF THE OBSERVATIONS OF THE HONBLE HIGH COURT ARE REPRODUCED HEREUNDER: MR. KHAITAN SUBMITTED THAT THE PROVISION REGARDING FILING OF THE RETURN ON OR BEFORE THE PRESCRIBED DAY IS DIRECTORY IN NATURE. WE ARE UNABLE TO CONCUR WITH HIM. THE BENEFIT IN THE PRESE NT CASE CAN ONLY BE CLAIMED IN CASE OF FULFILLMENT OF THE PRECONDITI ONS LAID DOWN UNDER SECTION 80AC OF THE I.T. ACT. WHEN THE PRECON DITIONS HAVE NOT BEEN FULFILLED, THE BENEFIT CANNOT BE CLAIMED. THER E IS, AS SUCH, NO REASON TO FIND OUT WHETHER THE DIRECTION IS DIRECTO RY OR MANDATORY. IN ANY EVENT, WHEN THE PROVISION IS THAT THE BENEFI T CANNOT BE CLAIMED IF THE RETURN HAS NOT BEEN FILED ON OR BEFO RE THE PRESCRIBED DAY, IN OUR VIEW, IT IS A MANDATORY DIRECTION WHICH PRESCRIBES THE CONSEQUENCE OF OMISSION TO FILE THE RETURN IN TIME. THE COURTS CANNOT REWRITE THE LAW TO DO WHAT IS JUST ACCORDING TO THEM AS RIGHTLY POINTED OUT BY MRS. BHARGAVA. ALL THE JUDGMENTS CITED BY MR. KHAITAN HAVE THUS BE EN DEALT WITH. IT WAS ALSO THE SUBMISSION OF MR. KHAITAN THAT NEITHER OF THESE JUDGMENTS IS ON POINT WHICH HAS ARISEN IN THIS CASE . WE ARE INCLINED TO THINK THAT THE BENEFIT CAN ONLY BE AVAILED BY TH E ASSESSEE IF HE HAS FILED HIS RETURN ON TIME. IF HE HAS NOT FILED H IS RETURN ON TIME, THE BENEFITS CANNOT BE CLAIMED. 15.2. SIMILAR VIEW HAS BEEN TAKEN BY THE HONBLE UTTARAK HAND HIGH COURT IN THE CASE OF UMESH CHANDRA DALAKOTI V. ACIT (DATE D 27 TH AUGUST 2012, IN ITA NO.7/2012) BY HOLDING THAT PROVISIONS OF SECTIO N 80AC ARE MANDATORY. 16. THUS, IN VIEW OF THE AFORESAID LEGAL DISCUSSION A ND FACTS OF THIS CASE, IT IS HELD THAT ASSESSEE HAS FAILED TO FULFIL THE COND ITION OF FILING OF RETURN U/S 139(1) AND, THEREFORE, THE ASSESSEE WAS NOT ELIGIBL E FOR THE BENEFIT OF DEDUCTION U/S 80IB(10) IN VIEW OF CLEAR PROVISIONS OF SECTION 80AC OF THE ACT. THUS, THE ACTION OF THE LOWER AUTHORITIES ON THIS ISSUE IS UPHELD. SINCE WE HAVE REJECTED THE CLAIM OF THE ASSESSEE ON THE P RELIMINARY GROUND, WE ARE NOT GOING INTO THE MERITS OF THE CASE AT THIS S TAGE. AS A RESULT, APPEAL OF THE ASSESSEE IS DISMISSED. 11 SIROYA DEVELOPERS 17. NOW WE SHALL TAKE UP APPEAL FILED BY THE REVENUE FOR A.Y. 2009-10 IN ITA NO.4527/MUM/13 AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS) DATED 25-02-2013 PASSED AGAINS T ASSESSMENT ORDER DATED 19-12-2011 U/S 143(3) DATED 19-12-20111 ON TH E FOLLOWING GROUNDS: '1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE ADDITION MADE ON ACCOUNT OF SECTION 2(22)(E) OF THE ACT IGNORING THAT THE ADVANCES RECEIVED BY THE ASSESSEE WAS FROM A CONCERN, IN WHICH ONE OF THE PARTNER'S OF ASSESSEE WAS HOLDING MAJOR SHARE AND THE ADVANCES SO RECEIVED BY THE ASSESSEE WERE LIABL E TO TAXED AS DEEMED DIVIDEND AS PER PROVISIONS OF SECTION 2(22)(E) OF THE ACT.' 18. THE ONLY GROUND RAISED IN THIS APPEAL IS WITH REGAR D TO THE ADDITION MADE BY THE AO AS DEEMED DIVIDEND U/S 2(22)(E) OF T HE ACT ON ACCOUNT OF ADVANCES RECEIVED BY THE ASSESSEE FROM A CONCERN IN WHICH ONE OF THE PARTNERS OF THE ASSESSEE FIRM WAS HOLDING MAJOR SHA RE HOLDING, WHICH WAS DELETED BY LD.CIT(A). 19. THE BRIEF FACTS ON THIS ISSUE ARE THAT IT WAS NOTED BY THE AO FROM THE BALANCE-SHEET OF THE ASSESSEE THAT ASSESSEE HAD RECEIVED AN AMOUNT AS LOAN FROM M/S SIROYA FM CONSTRUCTION PVT LTD WHE REIN ONE OF THE PARTNERS OF THE ASSESSEE FIRM NAMELY SHRI SHRENIK D SIROYA WAS HOLDING MAJOR SHARE HOLDING AND THE SAID PARTNER WAS HAVING 50% SHARE IN THE ASSESSEE FIRM ALSO. UNDER THESE CIRCUMSTANCES, APP LYING THE PROVISIONS OF SECTION 2(22)(E), THE AO TREATED THIS AMOUNT AS DEE MED DIVIDEND IN THE HANDS OF THE ASSESSEE FIRM. IN THE APPEAL BEFORE T HE LD. CIT(A), IT WAS INTER-ALIA SUBMITTED BY THE ASSESSEE THAT DEEMED DIVIDEND COU LD BE ASSESSED ONLY IN THE HANDS OF THE PERSON, WHO HAS S HAREHOLDER IN THE LENDER COMPANY AND NOT IN THE HANDS OF THE BORROWIN G CONCERN IN WHICH 12 SIROYA DEVELOPERS SUCH SHAREHOLDER WAS MEMBER OR PARTNER HAVING SUBST ANTIAL INTEREST. SINCE THE ASSESSEE FIRM WAS NOT SHAREHOLDER IN THE LENDER COMPANY, VIZ. M/S SIROYA FM CONSTRUCTION PVT LTD, THE IMPUGNED AM OUNT OF LOAN CANNOT BE TAXED IN THE HANDS OF THE ASSESSEE FIRM AS DEEME D DIVIDEND. RELIANCE WAS PLACED BY THE ASSESSEE ON THE JUDGMENT OF HONB LE BOMBAY HIGH COURT IN THE CASE OF CIT VS UNIVERSAL MEDICARE PVT LTD 324 ITR 263 (BOM). LD. CIT(A) CONSIDERED THE SUBMISSIONS OF THE ASSESS EE AND FOUND THAT THE ISSUE WAS COVERED IN FAVOUR OF THE ASSESSEE BY RELY ING UPON THE JUDGMENT OF HONBLE BOMBAY HIGH COURT IN UNIVERSAL MEDICARE PVT LTD (SUPRA) AS WELL AS THE JUDGMENT OF THE SPECIAL BENCH OF THE TR IBUNAL IN BHAUMIK COLOUR PVT LTD 319 ITR 146 (AT)(MUM SB). 20. DURING THE COURSE OF HEARING BEFORE US, BOTH THE PA RTIES JOINTLY AGREED THAT THE ISSUE STANDS COVERED IN FAVOUR OF T HE ASSESSEE IN VIEW OF THE JUDGMENT OF HONBLE BOMBAY HIGH COURT IN UNIVER SAL MEDICARE PVT LTD (SUPRA) AND THERE IS NO DISPUTE ON FACTS. WE HAVE GONE THROUGH THE ORDERS PASSED BY THE LOWER AUTHORITIES AS WELL AS F ACTS OF THIS CASE AND FIND THAT THE JUDGEMENT OF THE HONBLE BOMBAY HIGH COURT IS SQUARELY APPLICABLE TO THIS CASE. THEREFORE, IN VIEW OF THE SAME, WE DO NOT FIND ANY REASON TO INTERFERE IN THE ORDER OF THE LD. CIT(A); THE SAME IS HEREBY UPHELD. 21. AS A RESULT, APPEAL FILED BY THE REVENUE IS DISMISS ED. ORDER PRONOUNCED IN THE COURT ON THIS 30 TH DAY OF NOVEMBER, 2016. SD/- SD/- (MAHAVIR SINGH) (ASHWANI TANEJA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DT : 30 TH NOVEMBER, 2016 PK/- 13 SIROYA DEVELOPERS COPY TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. THE CIT 5. THE LD. DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE , E -BENCH (TRUE COPY) BY ORDER ASSTT.REGISTRAR, ITAT, MUMBAI BENCHES