Software Developers India P Ltd., CHENNAI V. ITO, Pondicherry

ITA 817/CHNY/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 96676 (ITAT-CHENNAI)
• Duration Of Justice: 2 year(s) 8 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-12-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 28-12-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 29-04-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: A B KOLI
• Assessee Lawyers: S SRIDHAR
• Keywords: Non-deduction of tax; Competent authority; Condonation of delay
• Section: 143(3); 234B; 80G; 10B; 263; 144; 10; 139

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , B B ENCH, CHENNAI . , ' $ , % ' BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER ./ I.T.A.NO.817/MDS/2013 ( / ASSESSMENT YEAR: 2009-10) M/S. SOFTWARE DEVELOPERS INDIA P.LTD., 70A, 1 ST FLOOR, 1 ST CROSS, KAMALAM NAGAR, JAYA NAGAR REDDIARPALAYAM, PONDICHERRY - 605 010. VS THE INCOME TAX OFFICER, WARD-(1), PONDICHERRY. PAN: AAKCS4182N ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : MR. S.SRIDHAR, ADVOCATE /RESPONDENT BY : MR. A.B.KOLI, JCIT /DATE OF HEARING : 28 TH DECEMBER, 2015 /DATE OF PRONOUNCEMENT : 31 ST DECEMBER, 2015 / O R D E R PER CHALLA NAGENDRA PRASAD, JM: THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE OR DER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-XII, CHENN AI DATED 25.02.2013 FOR THE ASSESSMENT YEAR 2009-10. 2. THOUGH THE ASSESSEE HAS RAISED SEVERAL GROUNDS O F APPEAL, THE ISSUES RAISED IN THE GROUNDS ARE ONLY TWO NAMELY I) CHALLENGING THE ORDER OF THE COMMISSIONER OF INC OME TAX (APPEALS) IN SUSTAINING THE DISALLOWANCE MADE UNDER SECTION 40(A)(IA) OF THE ACT FOR NON-DEDUCTION OF TAX ON TH E RENT AND ADVERTISEMENT CHARGES PAID BY THE ASSESSEE AND II) SUSTAINING THE DISALLOWANCE UNDER SECTION 10B OF TH E ACT. 2 ITA NO.817/MDS/2013 3. AT THE TIME OF HEARING, COUNSEL FOR THE ASSESSEE SUBMITS THAT HE IS CONFINING HIS ARGUMENT TO THE IS SUE OF DISALLOWANCE IF AT ALL TO BE MADE SHOULD BE MADE O NLY FOR THE PAYMENTS OUTSTANDING AS ON 31 ST MARCH I.E. END OF THE ACCOUNTING YEAR AND NOT TO THE PAYMENTS ALREADY MA DE DURING THE YEAR. FOR THIS PROPOSITION, HE PLACES RE LIANCE ON THE DECISION OF THE CO-ORDINATE BENCH OF THIS TRIBU NAL IN THE CASE OF N.PALANIVELUVS. ITO (40 ITR (TRIB) 325 [CHE NNAI]). 4. DEPARTMENTAL REPRESENTATIVE VEHEMENTLY SUPPORTS THE ORDERS OF THE LOWER AUTHORITIES AND SUBMITS THAT NO DETAILS HAVE BEEN FURNISHED AS TO WHETHER THE PAYMENTS HAVE BEEN MADE DURING THE YEAR OR PAYMENTS ARE OUTSTANDING BY THE END OF THE ACCOUNTING YEAR AND FOR THIS PURPOSE THE MATTER SHOULD GO BACK TO THE ASSESSING OFFICER FOR VERIFIC ATION. 5. HEARD BOTH THE PARTIES. PERUSED THE ORDERS OF LO WER AUTHORITIES. THIS BENCH IS CONSISTENTLY HOLDING TH AT IN CASE OF DISALLOWANCE UNDER SECTION 40(A)(IA) FOR NON-DEDUC TION OF TAX AT SOURCE THE AMOUNTS OUTSTANDING AS ON 31 ST MARCH OF THE ACCOUNTING YEAR ONLY HAVE TO BE DISALLOWED AND NOT THE AMOUNTS WHICH WERE ALREADY PAID DURING THE YEAR, IN VIEW OF 3 ITA NO.817/MDS/2013 THE DECISION OF SPECIAL BENCH OF THE TRIBUNAL IN T HE CASE OF MERLIYN SHIPPING & TRANSPORTS VS. ACIT (136 ITD 23 ). IN THE CASE OF N. PALANIVELU VS. ITO (SUPRA) AS RELIED ON BY THE COUNSEL, THE CO-ORDINATE BENCH HELD AS UNDER:- 3. WE HAVE HEARD BOTH THE SIDES AND PERUSED THE M ATERIAL ON RECORD. WE FIND THAT THE SPECIAL BENCH OF THE TRIBU NAL IN THE CASE OF MERILYN SHIPPING AND TRANSPORTS VS. ACIT (2012) 136 ITD 23 (VISAKHAPATNAM) AND JUDGMENT OF GUJARAT HIGH COU RT IN THE CASE OF CIT VS. M/S. VECTOR SHIPPING SERVICES (P) L TD IN ITA NO. 122 OF 2013 DATED09.7.2013 HELDTHATSEC 40(A)(IA ) IS NOT APPLICABLE WHEN THERE IS NO OUTSTANDING BALANCE AT THE END OF THE CLOSE OF THE YEAR RELEVANT TO THE ASSESSMENT YEA IN RESPECT OF THESE PAYMENT. HOWEVER, THE ASSESSEE HAS NOT BROUGHT ON RECORD, THE DETAILS OF OUTSTANDING EXPENSES OR SCHE DULE OF SUNDRY CREDITORS SHOWING WHETHER THE IMPUGNED AMOUNT IS OU TSTANDING AT THE END OF THE CLOSE OF THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR EITHER IN THE NAME OF THE PARTY OR OUTSTANDING EXPENSES. HENCE, IN THE INTEREST OF JUSTICE, WE ARE REMITTING THE ISSUE BACK TO THE FILE OF THE ASSESSING OFFICER WITH DIRECTION TO VERIFY THE CLAIM OF THE ASSESSEE AND THE ASSESSEE S HALL PLACE NECESSARY EVIDENCE IN SUPPORT OF HIS CLAIM. 4. FURTHER, WE MAKE IT CLEAR THAT IF THE IMPUGNE D AMOUNT IS NOT OUTSTANDING AT THE END OF THE CLOSE OF THE ASSESSME NT YEAR IN RESPECT OF THE EXPENSES EITHER AS OUTSTANDING EXPENSES OR A S SUNDRY CREDITORS, THIS AMOUNT CANNOT BE DISALLOWED. THIS G ROUND IS REMITTED BACK TO THE ASSESSING OFFICER FOR FRESH CO NSIDERATION. 6. RESPECTFULLY FOLLOWING THE SAID DECISION, WE RES TORE THIS ISSUE FOR LIMITED PURPOSE OF VERIFICATION TO THE AS SESSING OFFICER AS TO WHETHER THE AMOUNTS WERE PAID DURING THE YEAR OR OUTSTANDING AS ON 31 ST MARCH OF THE ACCOUNTING YEAR. THE ASSESSING OFFICER IS DIRECTED TO VERIFY AND DISALLO W ONLY THE OUTSTANDING AMOUNTS AS ON 31 ST MARCH OF THE ACCOUNTING YEAR. 4 ITA NO.817/MDS/2013 7. THE NEXT ISSUE IN THE APPEAL OF THE ASSESSEE IS THAT COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN SUSTA INING THE DISALLOWANCE OF DEDUCTION CLAIMED UNDER SECTION 10B OF THE ACT ON THE GROUND THAT ASSESSEE FILED RETURN OF INCOME BELATEDLY. 8. COUNSEL FOR THE ASSESSEE, AT THE OUTSET, SUBMITS THAT THE ASSESSEE IS CONTEMPLATING TO SEEK PERMISSION FR OM THE BOARD FOR CONDONATION OF DELAY IN FILING THE RETURN OF INCOME AND THEREFORE REQUESTED THAT THE MATTER MAY BE REST ORED TO THE FILE OF THE ASSESSING OFFICER. THIS ARGUMENT OF THE ASSESSEE IS REJECTED. AT THIS STAGE, WE ARE NOT INC LINED TO RESTORE THE ISSUE TO THE FILE OF THE ASSESSING OFFI CER. FURTHERMORE, NOTHING IS PLACED ON RECORD TO SUGGEST THAT ASSESSEE IS APPROACHING THE BOARD SEEKING PERMISSIO N FOR CONDONATION OF DELAY. 9. DEPARTMENTAL REPRESENTATIVE PLACES RELIANCE ON T HE RAJKOT SPECIAL BENCH DECISION IN THE CASE OF M/S. SAFFIRE GARMENTS VS. ITO (140 ITD 6) AND SUBMITS THAT AN I DENTICAL ISSUE HAS BEEN DECIDED BY THE SPECIAL BENCH IN FAV OUR OF THE REVENUE. 5 ITA NO.817/MDS/2013 10. WE HAVE HEARD BOTH THE PARTIES. PERUSED ORDERS OF LOWER AUTHORITIES AND THE DECISIONS RELIED ON. THE ISSUE IN APPEAL IS WHETHER THE ASSESSEE IS ENTITLED FOR DEDU CTION UNDER SECTION 10B EVEN THOUGH THE ASSESSEE FILED RE TURN OF INCOME BELATEDLY AND NOT BEFORE THE DUE DATE SPECIF IED UNDER SECTION 139(1) OF THE ACT. THIS ISSUE HAS BEEN ELAB ORATELY CONSIDERED BY THE SPECIAL BENCH IN THE CASE OF M/S. SAFFIRE GARMENTS (SUPRA), WHEREIN IT IS HELD THAT PROVISO TO SECTION 10A(1A) IS MANDATORY AND NOT MERELY DIRECTORY. THE DECISION RENDERED BY THE SPECIAL BENCH CITED ABOVE THOUGH IN THE CONTEXT OF PROVISO TO SECTION 10A(1A) IS IDENTICAL TO THE PROVISO TO SECTION 10B OF THE ACT AND CONSEQUENTLY APPLIES TO THE FACTS OF THE ASSESSEES CASE. THE SPECIAL BENCH WHILE HOLDING SO HELD AS UNDER:- 2. THE ASSESSEE IS A PARTNERSHIP FIRM. THE ASSESSEE FILED RETURN OF INCOME DECLARING TOTAL INCOME OF RS. 2,72 ,730/- ON 31.01.2007 WHICH WAS PROCESSED U/S 143(1) OF THE IN COME TAX ACT, 1961. THEREAFTER, THE CASE WAS SELECTED FO R SCRUTINY AND NOTICE U/S 143(2) OF THE INCOME TAX ACT, 1961 W AS ISSUED AND SERVED ON 23.01.2008. THE ASSESSEE HAD CLAIMED DEDUCTION U/S 10A OF THE INCOME TAX ACT, 1961. WHEN ASKED TO EXPLAIN THIS CLAIM, THE ASSESSEE SUBMITTED BEFOR E THE A.O. THAT IT DERIVED PROFIT FROM EXPORT OF ARTICLES PROD UCED IN SEZ AND THE SALE PROCEEDS WERE BROUGHT IN INDIA IN CONV ERTIBLE FOREIGN EXCHANGE AND, THEREFORE, DEDUCTION U/S 10A OF THE INCOME TAX ACT, 1961 IS ALLOWABLE TO IT. THEREAFTER , IT IS NOTED BY THE A.O. IN THE ASSESSMENT ORDER THAT THE ASSESS EE HAD 6 ITA NO.817/MDS/2013 FILED ITS RETURN OF INCOME ON 31.01.2007 AND THE EX TENDED DUE DATE FOR FILING RETURN OF INCOME FOR THE ASSESS EE'S, BEING A FIRM, AS PER THE PROVISIONS OF SECTION 139(1) OF TH E ACT WAS 31.12.2006. THE A.O. ALSO OBSERVED THAT THE ASSESSE E FAILED TO FILE ITS RETURN OF INCOME ON OR BEFORE THE DUE D ATE SPECIFIED UNDER SUB-SECTION (1) OF SECTION 139 OF THE INCOME TAX ACT, 1961. HE FURTHER NOTED THAT AS PER THE NEWLY INSERT ED PROVISO APPENDED TO SECTION 10A OF THE INCOME TAX ACT, 1961 , NO DEDUCTION SHOULD BE ALLOWED TO AN ASSESSEE WHO DOES NOT FURNISH RETURN OF INCOME ON OR BEFORE THE DUE DATE SPECIFIED UNDER SUB-SECTION (1) OF SECTION 139 OF THE INCOME TAX ACT, 1961. HE ALSO NOTED THAT THE PROVISO WAS INTRODUCED BY THE FINANCE ACT, 2005 WHICH CAME INTO EFFECT FROM 01.04 .2006. THE A.O. HELD THAT THIS PROVISO IS APPLICABLE TO TH E CASE OF THE ASSESSEE AND HENCE, THE ASSESSEE'S CLAIM FOR DEDUCT ION U/S 10A OF THE INCOME TAX ACT, 1961 IS TO BE DISALLOWED . IN THIS MANNER, THE A.O. DISALLOWED THE CLAIM OF THE ASSESS EE FOR DEDUCTION U/S 10A OF THE INCOME TAX ACT, 1961. BEIN G AGGRIEVED, THE ASSESSEE CARRIED THE MATTER IN APPEA L BEFORE LD. CIT(A) BUT WITHOUT SUCCESS AND HENCE, THE ASSES SEE IS IN FURTHER APPEAL BEFORE THE TRIBUNAL. 3. THE QUESTIONS REFERRED TO THE SPECIAL BENCH ARE ALREADY REPRODUCED ABOVE. THE FIRST QUESTION IS THAT THE PR OVISO TO SECTION 10A(1A) IS MANDATORY OR MERELY DIRECTORY. F URTHER TWO QUESTIONS ARE INTERRELATED TO QUESTION NO.1. 4. IN THE COURSE OF HEARING BEFORE US, BOTH THE SID ES AGREED THAT THERE IS NO DISPUTE ABOUT THE FACTS BECAUSE, A DMITTEDLY, DUE DATE FOR FILING THE RETURN OF INCOME IN THE PRE SENT CASE WAS 31.12.2006 AND THE RETURN OF INCOME WAS FILED B Y THE ASSESSEE ON 31.01.2007. IT WAS SUBMITTED BY THE LD. A.R. BEFORE US THAT THE AUDIT REPORT WAS FILED WITHIN TH E DUE DATE ALLOWED U/S 139(1) OF THE INCOME TAX ACT, 1961. HE PLACED RELIANCE ON THE FOLLOWING JUDICIAL PRONOUNCEMENTS, COPIES OF WHICH ARE GIVEN IN PAPER BOOK III: (A) CIT V. HARDEODASAGARWALLA TRUST [1992] 198 ITR 511 (CAL.) (B) CHURCH'S AUXILIARY FOR SOCIAL ACTION V. DGIT (E XEMPTION) [1993] 2 325 ITR 362 (DELHI) (C) CIT V. GUJARAT OIL & ALLIED INDUSTRIES [1993] 201 ITR 325 (GUJ.) (D) CIT V. SHIVANAND ELECTRONICS [1994] 209 ITR 63/ 75 TAXMAN 93 (BOM.). (E) ITO V. VXL INDIA LTD. [2009] 312 ITR 187 (GUJ.) (F) BAJAJ TEMPO LTD. V. CIT [1992] 196 ITR 188/ 62 TAXMAN 480 (SC). 7 ITA NO.817/MDS/2013 4.1 SYNOPSIS OF CONTENTIONS OF THE ASSESSEE WAS ALS O FILED AND THE SAME WAS ALSO DULY CONSIDERED. 5. AS AGAINST THIS, IT WAS SUBMITTED BY THE LD. D.R . THAT THE FOURTH PROVISO TO SECTION 139(1) IS SPECIFIC WHICH SHALL PREVAIL ON GENERAL PROVISIONS. HE ALSO PLACED RELIANCE ON T HE JUDGEMENT OF HON'BLE APEX COURT RENDERED IN THE CAS E OF PRAKASH NATH KHANNA V. CIT [2004] 266 ITR 1 / 135 TAXMAN 327 . RELIANCE WAS ALSO PLACED ON THE TRIBUNAL DECISION RENDERED IN THE CASE OF BAL KISHANDHAWAN HUF V. ITO [2012] 50 SOT 49 (URO)/ 18 TAXMANN.COM 234 (ASR). HE ALSO SUBMITTED THAT REMEDY LIES WITH THE BOARD AND NOT B EFORE THE APPELLATE AUTHORITIES. HE ALSO SUBMITTED THAT THERE IS DIFFERENCE BETWEEN THE PROVISIONS OF SECTION 139(1) AND SECTION 139(4) AND, THEREFORE, THE PROVISO TO SECTI ON 139(1) SHOULD PREVAIL. 5.1 WRITTEN SUBMISSIONS WERE FILED BY THE LD. D.R. AND THE SAME WERE ALSO DULY CONSIDERED. 6. IN THE REJOINDER, IT WAS SUBMITTED BY THE LD. A. R. THAT THE JUDGEMENT CITED BY THE LD. D.R. ARE NOT APPLICABLE IN THE PRESENT CASE BECAUSE IN THOSE CASES, THE DISPUTE WA S REGARDING SUBSTANTIAL ASPECT AND NOT TO THE PROCEDU RAL ASPECT. HE ALSO PLACED RELIANCE ON THE JUDGEMENT OF HON'BLE BOMBAY HIGH COURT RENDERED IN THE CASE OF SHIVANAND ELECTR ONICS' CASE (SUPRA) AND SUBMITTED THAT THIS JUDGEMENT SUPPORTS THE CASE OF THE ASSESSEE. HE ALSO SUBMITTED THAT RELEVANT EX PLANATORY NOTE ON THE PROVISIONS OF FINANCE ACT 2005 CIRCULAR NO.3/2006 DATED 27.02.2006 IS AVAILABLE ON PAGE 47A OF THE PA PER BOOK III FILED BY THE ASSESSEE AND AS PER THE SAME, THIS PROVISION WAS INSERTED WITH A VIEW TO WIDEN THE TAX BASE AND HENCE, IT IS A PROCEDURAL PROVISION AND NOT SUBSTANTIVE PROVI SION. 7. REGARDING THE RELIANCE PLACED BY THE LD. D.R. ON THE JUDGEMENT OF HON'BLE APEX COURT RENDERED IN THE CAS E OF PRAKASH NATH KHANNA (SUPRA), IT WAS SUBMITTED THAT THIS JUDGEMENT IS NOT APPLICABLE IN THE PRESENT CASE BEC AUSE IN THAT CASE, THE ISSUE INVOLVED WAS WITH REGARD TO OF FENCES AND PROSECUTION U/S 276CC AND, THEREFORE, THE FACTS ARE DIFFERENT IN THE PRESENT CASE. REGARDING THE TRIBUNAL DECISIO N RENDERED IN THE CASE OF BAL KISHANDHAWAN HUF (SUPRA), IT WAS SUBMITTED THAT THIS IS A DIVISION BENCH DECISION AN D, THEREFORE, NOT BINDING ON THE SPECIAL BENCH. 8. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND HAV E GONE THROUGH THE JUDGEMENTS CITED BY BOTH THE SIDES. IN OUR CONSIDERED OPINION, WE HAVE TO DECIDE REGARDING PRO VISO TO SECTION 10A (1A) AND HENCE, IT SHOULD BE REPRODUCED . THE PROVISO TO SECTION 10A(1A) IS REPRODUCED BELOW: '[(1A) NOTWITHSTANDING ANYTHING CONTAINED IN SUB-SE CTION (1), THE DEDUCTION, IN COMPUTING THE TOTAL INCOME OF AN UNDERTAKING, WHICH BEGINS TO MANUFACTURE OR PRODUCE ARTICLES 8 ITA NO.817/MDS/2013 OR THINGS OR COMPUTER SOFTWARE DURING THE PREVIOUS YEAR RELEVANT TO ANY ASSESSMENT YEAR COMMENCING ON OR AF TER THE 1ST DAY OF APRIL, 2003, IN ANY SPECIAL ECONOMIC ZON E, SHALL BE, (I) HUNDRED PER CENT OF PROFITS AND GAINS DERIVED F ROM THE EXPORT OF SUCH ARTICLES OR THINGS OR COMPUTER SOFTW ARE FOR A PERIOD OF FIVE CONSECUTIVE ASSESSMENT YEARS BEGINNI NG WITH THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR I N WHICH THE UNDERTAKING BEGINS TO MANUFACTURE OR PRODUCE SU CH ARTICLES OR THINGS OR COMPUTER SOFTWARE, AS THE CAS E MAY BE, AND THEREAFTER, FIFTY PER CENT OF SUCH PROFITS AND GAINS FOR FURTHER TWO CONSECUTIVE ASSESSMENT YEARS, AND THERE AFTER; (II) FOR THE NEXT THREE CONSECUTIVE ASSESSMENT YEAR S, SO MUCH OF THE AMOUNT NOT EXCEEDING FIFTY PER CENT OF THE P ROFIT AS IS DEBITED TO THE PROFIT AND LOSS ACCOUNT OF THE PREVI OUS YEAR IN RESPECT OF WHICH THE DEDUCTION IS TO BE ALLOWED AND CREDITED TO A RESERVE ACCOUNT (TO BE CALLED THE 'SPECIAL ECO NOMIC ZONE RE-INVESTMENT ALLOWANCE RESERVE ACCOUNT') TO BE CRE ATED AND UTILISED FOR THE PURPOSES OF THE BUSINESS OF TH E ASSESSEE IN THE MANNER LAID DOWN IN SUB-SECTION (1B) : PROVIDED THAT NO DEDUCTION UNDER THIS SECTION SHALL BE ALLOWED TO AN ASSESSEE WHO DOES NOT FURNISH A RETURN OF HIS INCOME ON OR BEFORE THE DUE DATE SPECIFIED UNDER SUB-SECTION (1) OF SECTION 139.' 9. WE ARE ALSO REQUIRED TO CONSIDER SECTION 139(1) AND THE 4TH PROVISO TO SECTION 139(1) OF THE INCOME TAX ACT , 1961 WHICH READ AS UNDER: SECTION 139(1) 'EVERY PERSON (A) BEING A COMPANY OR A FIRM OR (B) BEING A PERSON OTHER THAN A COMPANY OR A FIRM, IF HIS TOTAL INCOME OR THE TOTAL INCOME OF ANY OTHER PERSON IN R ESPECT OF WHICH HE IS ASSESSABLE UNDER THIS ACT DURING THE PR EVIOUS YEAR EXCEEDED THE MAXIMUM AMOUNT WHICH IS NOT CHARGEABLE TO INCOME TAX, SHALL, ON OR BEFORE THE DUE DATE, FURNI SH A RETURN OF HIS INCOME O THE INCOME OF SUCH OTHER PERSON DUR ING THE PREVIOUS YEAR, IN THE PRESCRIBED FORM AND VERIFIED IN THE PRESCRIBED MANNER AND SETTING FORTH SUCH OTHER PART ICULARS AS MAY BE PRESCRIBED.' 4TH PROVISO; PROVIDED ALSO THAT EVERY PERSON, BEING AN INDIVIDUA L OR A HINDU UNDIVIDED FAMILY OR AN ASSOCIATION OF PERSONS OR A BODY OF INDIVIDUALS, WHETHER INCORPORATED OR NOT, OR AN ARTIFICIAL JURIDICAL PERSON, IF HIS TOTAL INCOME OR THE TOTAL INCOME OF ANY OTHER PERSON IN RESPECT OF WHICH HE IS ASSESSABLE U NDER THIS ACT DURING THE PREVIOUS YEAR, WITHOUT GIVING EFFECT TO THE PROVISIONS OF SECTION 10A OR SECTION 10B OR SECTION 10BA OR 9 ITA NO.817/MDS/2013 CHAPTER VI-A EXCEEDED THE MAXIMUM AMOUNT WHICH IS N OT CHARGEABLE TO INCOME-TAX, SHALL, ON OR BEFORE THE D UE DATE, FURNISH A RETURN OF HIS INCOME OR THE INCOME OF SUC H OTHER PERSON DURING THE PREVIOUS YEAR, IN THE PRESCRIBED FORM AND VERIFIED IN THE PRESCRIBED MANNER AND SETTING FORTH SUCH OTHER PARTICULARS AS MAY BE PRESCRIBED.' 10. WHEN, WE GO THROUGH THE PROVISIONS OF SECTION 1 0A(1A) AND ITS PROVISO ALONG WITH THE PROVISIONS OF SECTIO N 139(1) AND ITS 4TH PROVISO, WE FIND THAT THE CASE OF THE R EVENUE IS THIS THAT AS A CONSEQUENCE OF ASSESSEE'S FAILURE TO FILE THE RETURN OF INCOME WITHIN THE TIME PRESCRIBED U/S 139 (1), DEDUCTION IS NOT ALLOWABLE TO THE ASSESSEE U/S 10A OF THE ACT. 11. THE 1ST QUESTION RAISED BEFORE US IS THIS AS TO WHETHER THIS PROVISO TO SECTION 10A(1A) OF THE INCOME TAX A CT, 1961, IS MANDATORY OR MERELY DIRECTORY. IN ORDER TO DECID E THIS ISSUE, WE FEEL THAT WE HAVE TO CONSIDER THE WHOLE S CHEME OF THE ACT. THE ASSESSEE IS REQUIRED TO FILE THE RETUR N OF INCOME WITHIN THE PRESCRIBED TIME AS PER THE PROVISIONS OF SECTION 139(1). THIS PROVISION OF SECTION 139(1) IS APPLICA BLE TO ALL COMPANIES AND FIRMS IRRESPECTIVE OF THE FACT AS TO WHETHER THEY ARE EARNING TAXABLE INCOME OR NOT FOR THE CURR ENT YEAR I.E. FROM 01.04.2006. IN RESPECT OF OTHER PERSONS S UCH AS INDIVIDUAL, HUF, AOP OR BOI AND ARTIFICIAL JUDICIAL (SIC) PERSON, THE REQUIREMENT IS THIS THAT IF SUCH A PERSON IS HA VING TAXABLE INCOME BEFORE GIVING EFFECT TO THE PROVISIONS OF SE CTION 10A, THEN ALSO, HE IS REQUIRED TO FILE RETURN OF INCOME BEFORE THE DUE DATE EVEN IF THIS PERSON IS NOT HAVING TAXABLE INCOME AFTER GIVING EFFECT TO THE PROVISIONS OF SECTION 10 A. WE FIND THAT THE PROVISIONS OF THE PROVISO TO SECTION 10A(1 A) IS NOTHING BUT A CONSEQUENCE OF FAILURE OF THE ASSESSE E TO FILE THE RETURN OF INCOME WITHIN THE DUE DATE PRESCRIBED U/S 139(1) OF THE INCOME TAX ACT, 1961. FOR SUCH A FAIL URE OF THE ASSESSEE TO FILE HIS RETURN OF INCOME WITHIN THE DU E DATE PRESCRIBED U/S 139(1) OF THE INCOME TAX ACT, 1961, THIS IS NOT THE ONLY CONSEQUENCE. ONE CONSEQUENCE OF SUCH FAILU RE IS PRESCRIBED IN SECTION 234A OF THE INCOME TAX ACT, 1 961 ALSO AS PER WHICH, THE ASSESSEE IS LIABLE TO PAY INTERES T ON THE TAX PAYABLE BY HIM AFTER REDUCING ADVANCE TAX AND TDS/T CS IF ANY PAID BY HIM APART FROM SOME OTHER REDUCTIONS. S UCH INTEREST IS PAYABLE FROM THE DATE IMMEDIATELY FOLLO WING THE DUE DATE FOR FILING RETURN OF INCOME AND IS PAYABLE UP TO THE DATE ON WHICH SUCH RETURN OF INCOME WAS FURNISHED B Y THE ASSESSEE AND IF THE ASSESSEE HAS NOT FURNISHED ANY RETURN OF INCOME THEN THE INTEREST IS PAYABLE TILL THE DATE O F COMPLETION OF THE ASSESSMENT U/S 144. IN OUR CONSIDERED OPINIO N, THIS IS ALSO ONE OF THE CONSEQUENCES OF NOT FILING RETURN O F INCOME BY THE ASSESSEE WITHIN THE DUE DATE. ONE MAY RAISE THI S ARGUMENT THAT INTEREST U/S 234A IS PAYABLE ONLY IF THE ASSESSEE HAS NOT PAID HIS ADVANCE TAX AND, THEREFOR E, THIS IS INTEREST FOR THE FAILURE OF THE ASSESSEE TO PAY ADV ANCE TAX AS PER THE REQUIREMENT OF THE ACT AND NOT FOR THE DELA Y IN FILING RETURN OF INCOME. BUT IN OUR CONSIDERED OPINION, TH IS IS NOT SO. 10 ITA NO.817/MDS/2013 FOR THE FAILURE OF THE ASSESSEE TO PAY ADVANCE TAX AS PER THE REQUIREMENT O THE ACT, INTEREST IS CHARGEABLE U/S 2 34B OF THE INCOME TAX ACT, 1961 IF SUCH ADVANCE TAX PAID BY TH E 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 T HE 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 RETURN OF INCOME AND IS PAYABLE UP T O THE DATE ON WHICH THE RETURN OF INCOME IS FURNISHED BY THE A SSESSEE AND IF NO RETURN IS FURNISHED BY THE ASSESSEE AT AL L THEN ONLY, THE INTEREST IS PAYABLE TILL THE DATE OF COMPLETION OF THE ASSESSMENT U/S 144 OF THE ACT. UNDER THIS FACTUAL A ND 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 NOW A SETTLED POSITION OF LAW THAT CHARGING OF INTEREST UNDER VARIOUS SECTION S INCLUDING U/S 234A OF THE INCOME TAX ACT, 1961, IS MANDATORY. WHEN ONE OF THE CONSEQUENCES FOR NOT FILING RETURN OF IN COME WITHIN THE DUE DATE PRESCRIBED U/S 139(1) OF THE INCOME TA X ACT, 1961 IS MANDATORY THEN, OTHER CONSEQUENCE OF THE SA ME FAILURE OF THE ASSESSEE CANNOT BE DIRECTORY AND THE SAME IS ALSO MANDATORY. IN OUR CONSIDERED OPINION AND IN VI EW OF OUR ABOVE DISCUSSION, THE PROVISIONS OF THE PROVISO TO SECTION 10A(1A) IS MANDATORY AND NOT DIRECTORY AND, THEREFO RE, QUESTION (A) REFERRED TO US IS ANSWERED IN NEGATIVE AND IT IS HELD THAT THIS PROVISO TO SECTION 10A(1A) OF THE IN COME TAX ACT, 1961 IS MANDATORY. 12. WE NOW EXAMINE AND DISCUSS OTHER CONSEQUENCES A LSO FOR THE FAILURE OF THE ASSESSEE TO FILE THE RETURN OF I NCOME WITHIN THE DUE DATE AS REQUIRED U/S 139(1) OF THE INCOME T AX ACT, 1961. ONE OF SUCH CONSEQUENCE IS THE PROVISIONS OF SECTION 276CC AS PER WHICH IF THE ASSESSEE FAILS TO FILE TH E RETURN OF INCOME WITHIN THE DUE DATE PRESCRIBED UNDER SUB-SEC TION (1) OF SECTION 139 OF THE ACT THEN HE SHALL BE PUNISHAB LE FOR RIGOROUS IMPRISONMENT ALONG WITH FINE AND THE QUANT UM OF SUCH IMPRISONMENT AND FINE IS DEPENDENT ON THE AMOU NT OF TAX WHICH WOULD HAVE BEEN EVADED IF THE FAILURE HAD NOT BEEN DETECTED. THIS ISSUE WAS EXAMINED BY HON'BLE APEX C OURT IN THE CASE OF PRAKASH NATH KHANNA ( SUPRA) AS CITED B Y THE LEARNED DR AND IT WAS HELD BY THE HON'BLE APEX COUR T 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 I NFRACTION IN NOT FURNISHING RETURN IN DUE TIME AS PRESCRIBED U/S 139(1) OF THE ACT. THIS JUDGEMENT ALSO SUPPORTS THE VIEW TAKE N BY US WHILE ANSWERING QUESTION NO.1 AS PER ABOVE PARAS. W HEN EVEN FOR THE PURPOSE OF PROSECUTION ALSO, IT WAS HE LD BY THE HON'BLE APEX COURT THAT EVEN IF THE RETURN OF INCOM E 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 RETUR N OF INCOME 11 ITA NO.817/MDS/2013 WITHIN TIME ALLOWED U/S 139(4) WILL DILUTE THE PROV ISIONS CONTAINED IN THE PROVISO TO SECTION 10A(1A) OF THE INCOME TAX ACT, 1961. 13. REGARDING VARIOUS SUBMISSIONS OF THE LD. A.R. A ND VARIOUS JUDGEMENTS ON WHICH RELIANCE HAS BEEN PLACED BY THE LD. A.R., WE WOULD LIKE TO OBSERVE THAT THESE SUBMISSIO NS DO NOT HAVE MERIT IN VIEW OF OUR ABOVE DISCUSSION. THE FIR ST SUBMISSION IS THIS THAT THE PROVISION OF SECTION 13 9(4) ARE CONSIDERED AS PROVISO TO SECTION 139(1) AND IF THE ASSESSEE HAS FILED RETURN OF INCOME U/S 139(4), THE SAME SHO ULD BE CONSIDERED AS RETURN FILED U/S 139(1) OF THE INCOME TAX ACT, 1961. ON THIS ASPECT, WE HAVE ALREADY SEEN THE JUDG EMENT OF HON'BLE APEX COURT CITED BY THE LD. D.R. HAVING BEE N RENDERED IN THE CASE OF PRAKASH NATH KHANNA (SUPRA) , WHERE IT WAS HELD BY HON'BLE APEX COURT THAT THE FILING O F RETURN OF INCOME WITHIN THE TIME ALLOWED U/S 139(4) OF THE IN COME TAX ACT, 1961 CANNOT DILUTE THE INFRACTION IN NOT FURNI SHING RETURN IN DUE TIME AS PRESCRIBED U/S 139(1) OF THE INCOME TAX ACT, 1961. IN VIEW OF THIS JUDGEMENT OF HON'BLE APEX COU RT IN THIS REGARD, THE JUDGMENTS CITED BY THE LD. A.R. I.E. CI T V. MS. JAGRITI AGGARWAL [2011] 203 TAXMAN 203/ 15 TAXMANN. COM 146 (PUNJ. &HAR.) AND TRUSTEES OF TULSIDASGOPALJI C HARITABLE &CHALESHWAR TEMPLE TRUST V. CIT [1994] 73 TAXMAN 612 (BOM.) 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 HO N'BLE APEX COURT CITED BY THE LD. D.R. 14. THE 2ND SUBMISSION OF THE LD. A.R. IN THE WRITT EN SUBMISSION IS THIS THAT REQUIREMENT OF FILING OF RE TURN OF INCOME IS PROCEDURAL ASPECT AND, THEREFORE, IT SHOU LD BE CONSIDERED AS DIRECTORY AND NOT MANDATORY. IN SUPPO RT OF THIS CONTENTION ALSO, RELIANCE HAS BEEN PLACED ON VARIOU S DECISIONS SUBMITTED BY THE ASSESSEE IN THE PAPER BOOK II AND III. WE DO NOT FIND ANY MERIT IN THESE SUBMISSIONS OF THE A SSESSEE ALSO BECAUSE WHEN CONSEQUENCES OF NOT FILING THE RE TURN 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 S ECTIONS UNDER CHAPTER VIA, IT CANNOT BE SAID THAT THIS REQU IREMENT 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 RE NDERED BY THE DIVISION BENCH OF THE TRIBUNAL AND HENCE NOT BINDING ON US. REGARDING OTHER JUDGEMENTS OF VARIOUS HIGH C OURTS AND HON'BLE APEX COURT, WE FIND THAT THE SAME ARE N OT IN RESPECT OF FAILURE OF THE ASSESSEE FOR FILING THE R ETURN OF INCOME WITHIN THE DUE DATE PRESCRIBED U/S 139(1) OF THE INCOME TAX ACT, 1961 AND HENCE NOT APPLICABLE. STIL L, WE DISCUSS, EACH OF THOSE JUDGMENTS CITED BEFORE US AS UNDER : 12 ITA NO.817/MDS/2013 - THE FIRST JUDGEMENT SUBMITTED IN PAPER BOOK II IS THE JUDGEMENT OF HON'BLE APEX COURT RENDERED IN THE CAS E OF DIRECTOR OF INSPECTION OF INCOME TAX V. POORAN MALL & SONS [1974] 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, T HIS JUDGEMENT IS NOT RELEVANT IN THE PRESENT CASE. - THE 2ND JUDGEMENT CITED IS THE JUDGEMENT OF HON'B LE MADHYA PRADESH HIGH COURT RENDERED IN THE CASE OF C IT V. PANAMA CHEMICAL WORKS [2000] 113 TAXMAN 717 . IN THAT CASE, THE ISSUE INVOLVED WAS REGARDING FILING OF AU DIT REPORT IN FORM 10CCB. THE SAME WAS REQUIRED TO BE FILED ALONG WITH THE RETURN OF INCOME FILED BY THE ASSESSEE BUT IN T HAT CASE, THE SAME WAS FILED DURING ASSESSMENT PROCEEDINGS. U NDER THESE FACTS, IT WAS HELD THAT THE CLAIM OF THE ASSE SSEE REGARDING DEDUCTION U/S 80-I CANNOT BE REJECTED IF THE REQUIRED REPORT IN FORM 10CCB WAS FILED IN THE COUR SE OF ASSESSMENT PROCEEDINGS. IN THE PRESENT CASE, THE DI SPUTE IS NOT REGARDING FILING OF SOME REPORT ALONG WITH RETU RN OF INCOME BUT THE DISPUTE IS REGARDING FILING OF RETUR N OF INCOME ITSELF WITHIN DUE DATE AND HENCE, THIS JUDGMENT IS ALSO NOT RELEVANT IN THE PRESENT CASE. - THE 3RD JUDGEMENT CITED IS THE JUDGEMENT OF HON'B LE DELHI HIGH COURT RENDERED IN THE CASE OF CIT V. AXIS COMP UTERS (INDIA) (P.) LTD. [2009] 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 REGARDIN G FILING OF RETURN OF INCOME WITHIN THE DUE DATE AND HENCE, THI S JUDGEMENT OF HON'BLE DELHI HIGH COURT IS ALSO NOT A PPLICABLE IN THE PRESENT CASE. - THE NEXT JUDGEMENT CITED IS THE JUDGEMENT OF HON' BLE APEX COURT RENDERED IN THE CASE OF CIT V. NATIONAL TAJ T RADERS [1979] 2 TAXMAN 546 . IN THAT CASE, THE DISPUTE WAS REGARDING PASSING OF ORDER BY CIT U/S 33B OF 1922 ACT CORRESP ONDING TO SECTION 263 OF THE PRESENT ACT AND HENCE, THIS JUDG EMENT IS ALSO NOT RELEVANT IN THE PRESENT CASE. - THE NEXT JUDGEMENT CITED BEFORE US IS THE JUDGEME NT OF HON'BLE DELHI HIGH COURT RENDERED IN THE CASE OF CI T V. WEB COMMERCE (INDIA) (P) LTD. [2009] 178 TAXMAN 310 . THE DISPUTE IN THAT CASE IS ALSO SIMILAR TO THE DISPUTE IN THE EARLIER DECISION OF HON'BLE DELHI HIGH COURT RENDERED IN TH E CASE OF AXIS COMPUTERS (INDIA) (P) LTD. (SUPRA) AND FOR THE SAME REASONS, THIS JUDGEMENT IS ALSO NOT APPLICABLE IN T HE PRESENT CASE. - THE NEXT JUDGEMENT CITED BEFORE US IS THE JUDGMEN T OF HON'BLE APEX COURT RENDERED IN THE CASE OF BAJAJ TE MPO LTD.'S CASE (SUPRA). IN THAT CASE, THE DISPUTE BEFORE THE HON'BLE APEX COURT WAS REGARDING ALLOWABILITY OF DEDUCTION U/S 15C OF 1922 ACT CORRESPONDING TO SECTION 80J OF INCOME TAX ACT, 13 ITA NO.817/MDS/2013 1961 AND THE FACTS WERE THAT THE INDUSTRIAL UNDERTA KING WAS ESTABLISHED IN A BUILDING TAKEN ON LESE, WHICH WAS USED PREVIOUSLY FOR OTHER BUSINESS. UNDER THESE FACTS, I T WAS HELD THAT THE ASSESSEE WAS ENTITLED TO DEDUCTION. SINCE THE FACTS ARE DIFFERENT, THIS JUDGEMENT OF HON'BLE APEX COURT IS ALSO NOT RELEVANT IN THE PRESENT CASE. - THE NEXT JUDGEMENT CITED BEFORE US IS THE JUDGEME NT OF HON'BLE CALCUTTA HIGH COURT RENDERED IN THE CASE OF HARDEODASAGARWALLA TRUST'S CASE (SUPRA). IN THAT CA SE, THE ISSUE IN DISPUTE WAS REGARDING FURNISHING OF AUDIT REPORT ALONG WITH RETURN OF INCOME FOR THE PURPOSE OF CLAIMING E XEMPTION U/S 11 OF THE INCOME TAX ACT, 1961 AND NOT THE DISP UTE WAS NOT REGARDING FILING OF RETURN OF INCOME U/S 139(1) OF THE ACT AND HENCE, THIS JUDGEMENT OF HON'BLE CALCUTTA HIGH COURT IS ALSO NOT APPLICABLE IN THE PRESENT CASE. - THE NEXT JUDGEMENT CITED BEFORE US IS THE JUDGEME NT OF HON'BLE DELHI HIGH COURT RENDERED IN THE CASE OF CH URCH'S AUXILIARY FOR SOCIAL ACTON'S CASE (SUPRA). IN THAT CASE, THE DISPUTE WAS REGARDING DEDUCTION U/S 80G OF THE INCO ME TAX ACT, 1961 AND AS PER THE FACTS OF THAT CASE, THE OB JECTION WAS REGARDING FAILURE OF ASSESSEE IN RENDERING ACCOUNTS TO THE COMPETENT AUTHORITY WITHIN THE PRESCRIBED PERIOD AN D IT WAS HELD THAT SUCH A REQUIREMENT IS DIRECTORY AND NOT M ANDATORY. IN THE PRESENT CASE, THE DISPUTE IS REGARDING FILIN G OF RETURN OF INCOME ITSELF WITHIN THE DUE DATE AND HENCE, THIS J UDGEMENT OF HON'BLE DELHI HIGH COURT IS ALSO NOT RELEVANT IN THE PRESENT CASE. - THE NEXT JUDGEMENT CITED BEFORE US IS THE JUDGMEN T OF HON'BLE GUJARAT HIGH COURT RENDERED IN THE CASE GUJ ARAT OIL AND ALLIED INDUSTRIES' CASE (SUPRA). IN THAT CASE A LSO, THE DISPUTE WAS REGARDING THE REQUIREMENT OF FILING OF AUDIT REPORT AS TO WHETHER THE SAME IS MANDATORY OR DIRECTORY AN D AS DISCUSSED IN ABOVE PARAS, THIS JUDGMENT IS ALSO NOT RELEVANT IN THE PRESENT CASE. - THE NEXT JUDGEMENT CITED BEFORE US IS THE JUDGEME NT OF HON'BLE DELHI HIGH COURT RENDERED IN THE CASE OF CO NTINENTAL CONTRACTION LTD. V. UNION OF INDIA [1990] 185 ITR 230 / 53 TAXMAN 213 . THIS JUDGEMENT IS ALSO NOT APPLICABLE IN THE PRESENT CASE BECAUSE IN THAT CASE, THE ISSUE WAS TH IS AS TO WHEN CBDT HAD APPROVED AGREEMENT FOR SUCH A PROJECT FOR THE PURPOSE OF SECTION 80 O WHILE IN FACT SECTION 8 0HHB WAS FOUND APPLICABLE AND IT WAS HELD THAT ASSESSEE HAS TO BE GIVEN AN OPPORTUNITY FOR COMPLYING WITH THE PROVISIONS OF SUB- SECTION (3) OF SECTION 80HHB. SINCE THE FACTS ARE D IFFERENT, THIS JUDGEMENT IS ALSO NOT RELEVANT IN THE PRESENT CASE. - THE NEXT JUDGEMENT CITED BEFORE US IS THE JUDGEME NT OF HON'BLE BOMBAY HIGH COURT RENDERED IN THE CASE OF S HIVANAND ELECTRONICS' CASE (SUPRA). VERY STRONG RELIANCE WAS PLACED BY THE LEARNED AR ON THIS JUDGMENT BUT WE FIND THAT FO R THE SAME 14 ITA NO.817/MDS/2013 REASONS AS DISCUSSED ABOVE IN RESPECT OF VARIOUS JU DGEMENTS, THIS JUDGEMENT IS ALSO NOT APPLICABLE IN THE PRESEN T CASE BECAUSE IN THAT CASE ALSO, THE ISSUE IN DISPUTE WAS REGARDING REQUIREMENT OF FILING OF AUDIT REPORT ALONG WITH RE TURN OF INCOME FOR DEDUCTION U/S 80J(VIA) AND IT WAS HELD T HAT IT IS NOT MANDATORY IN STRICT SENSE. IN THE PRESENT CASE, THE DISPUTE IS REGARDING FILING OF RETURN OF INCOME WIT HIN DUE DATE PRESCRIBED U/S 139(1) OF THE INCOME TAX ACT, 1961 A ND HENCE, THIS JUDGEMENT IS ALSO NOT RELEVANT IN THE PRESENT CASE. - THE NEXT JUDGMENT IS THE JUDGEMENT OF HON'BLE GUJ ARAT HIGH COURT RENDERED IN THE CASE OF VXL INDIA LTD.'S CASE (SUPRA). IN THAT CASE ALSO, DISPUTE WAS REGARDING FILING OF AUD IT REPORT AND HENCE, THIS JUDGEMENT IS ALSO NOT RELEVANT. - THE NEXT JUDGEMENT CITED BEFORE US IS THE JUDGEME NT OF HON'BLE CALCUTTA HIGH COURT RENDERED IN THE CASE OF PRESIDENCY MEDICAL CENTRE (P) LTD. V. CIT [1977] 108 ITR 838 . THE CONCLUSION AS PER THIS JUDGMENT IS REPRODUCED B ELOW 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 D EEMED TO BE IN ACCORDANCE WITH LAW AND LOSS HAD TO BE DETERMINE D AND CARRIED FORWARD.' IN VIEW OF THIS CONCLUSION IN THIS JUDGMENT THAT LO SS RETURN CAN BE FILED WITHIN TIME SPECIFIED U/139(4), THIS J UDGEMENT IS ALSO NOT APPLICABLE IN THE PRESENT CASE BECAUSE IN THE PRESENT 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, T HIS JUDGEMENT IS ALSO NOT APPLICABLE IN THE PRESENT CAS E. 16. WE HAVE DISCUSSED ALL THE JUDGMENTS WHICH WERE CITED BY THE LD. A.R. IN THE SYNOPSIS AS WELL AS COPIES OF W HICH 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 DISCUSSION, WE HAVE NO HES ITATION IN HOLDING THAT THE PROVISIONS OF PROVISO TO SECTION 1 0A(1A) IS MANDATORY AND NOT MERELY DIRECTORY. 18. NOW, WE EXAMINE THE 2ND QUESTION (B). IN OUR CO NSIDERED OPINION, SINCE WE HAVE ANSWERED THE 1ST QUESTION (A ) AGAINST THE ASSESSEE AND HELD THAT THE PROVISIONS OF THE PR OVISO TO SECTION 10A(1A) IS MANDATORY AND NOT MERELY DIRECTO RY, THE 2ND QUESTION (B) IS NOT REQUIRED TO BE ANSWERED BEC AUSE THE SAME WOULD HAVE BEEN REQUIRED TO BE ANSWERED IF WE WOULD HAVE FOUND THAT THOSE PROVISIONS ARE NOT MANDATORY BUT MERELY DIRECTORY. HENCE, WE DO NOT ANSWER THE 2ND Q UESTION. 19. THE 3RD (C) QUESTION IS ALSO NOT REQUIRED TO BE ANSWERED BY US BECAUSE THE SAME IS TO BE REQUIRED TO BE ANSW ERED ONLY 15 ITA NO.817/MDS/2013 IF OUR REPLY TO 2ND QUESTION WOULD HAVE BEEN IN AFF IRMATIVE. SINCE WE HAVE FOUND THAT THIS QUESTION IS NOT REQUI RED TO BE ANSWERED IN THE FACTS OF THE PRESENT CASE AS PER WH ICH WE HAVE DECIDED THE FIRST QUESTION AGAINST THE ASSESSE E BY HOLDING THAT THE PROVISIONS OF THE PROVISO TO SECTI ON 10A(1A) IS MANDATORY AND NOT MERELY DIRECTORY, THE 3RD QUES TION IS ALSO NOT REQUIRED TO BE ANSWERED BY US. 20. THE ONLY ISSUE RAISED IN THIS APPEAL IS THE ONE WHICH WE HAVE CONSIDERED IN THE QUESTION NO.(A). WE HAVE HEL D THAT THE PROVISIONS OF THE PROVISO TO SECTION 10A(1A) AR E MANDATORY AND NOT DIRECTORY I.E. IN FAVOUR OF THE R EVENUE AND AGAINST THE ASSESSEE. THEREFORE, WE FIND THAT THE O RDER OF LD. CIT(A) IS JUST AND IN ACCORDANCE WITH LAW AND THE G ROUND RAISED BY THE ASSESSEE IS LIABLE TO BE DISMISSED. 11. ADMITTEDLY, IN THIS CASE ASSESSEE FILED RETURN OF INCOME ON 15.10.2010 WHICH IS BEYOND THE DUE DATE FOR FILI NG RETURN OF INCOME I.E. 30.09.2009 UNDER SECTION 139(1) OF T HE ACT FOR THE ASSESSMENT YEAR 2009-10. THUS, RESPECTFULLY FO LLOWING THE SPECIAL BENCH DECISION, WE REJECT THE GROUNDS O F THE ASSESSEE AND SUSTAIN THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) IN REJECTING THE CLAIM FOR DED UCTION UNDER SECTION 10B OF THE ACT. 12. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 31 ST DECEMBER, 2015. SD/- SD/- ( # ) ( & (# ) ( CHANDRA POOJARI ) ( CHALLA NAG ENDRA PRASAD ) * / ACCOUNTANT MEMBER ( * / JUDICIAL MEMBER 16 ITA NO.817/MDS/2013 ( /CHENNAI, , /DATED 31 ST DECEMBER, 2015 SOMU ./ 0/ /COPY TO: 1. APPELLANT 2.RESPONDENT 3. 1 () /CIT(A) 4. 1 /CIT 5. / 5 /DR 6. /GF .