M/s. Mahavir Construction, Nadiad V. The Dy.CIT.,Cent.Circle-2, Baroda

ITSSA 59/AHD/2012

• Counselvise Citation: [2016] 122 COUNSELVISE.COM (IT) 2295 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 7 month(s) 23 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 26-09-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 23-09-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 03-02-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: R I PATEL
• Assessee Lawyers: P M MEHTA
• Keywords: Initiation of penalty proceedings
• Section: 142(1); 234B; 80IB; 32; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD A BENCH (BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER & SHRI S. S. GODARA, JUDICIAL MEMBER) IT(SS)A. NO: 59/AHD/2012 (ASSESSMENT YEAR: 2009-10) M/S. MAHAVIR CONSTRUCTION 107, CITY POINT, NR. PARAS CINEMA NADIAD-387001 V/S DCIT, CENTRAL CIRCLE-2, BARODA (APPELLANT) (RESPONDENT) PAN: AANFM0076D APPELLANT BY : SHRI P. M. MEHTA, AR RESPONDENT BY : SHRI R. I. PATEL, CIT/D.R. ( )/ ORDER DATE OF HEARING : 23 -09-20 16 DATE OF PRONOUNCEMENT : 26 -09-2016 PER N.K. BILLAIYA, ACCOUNTANT MEMBER: 1. THIS APPEAL BY THE ASSESSEE IS PREFERRED AGAINST TH E ORDER OF LD. CIT(A)-IV, AHMEDABAD DATED 25.11.2011 PERTAINING TO A.Y. 2009-10. 2. THE SUBSTANTIVE GRIEVANCE OF THE ASSESSEE READS AS UNDER:- IT(SS)A NO. 59/AHD/2012 . A.Y. 2009-10 2 1. IN LAW AND IN THE FACTS AND CIRCUMSTANCES OF THE AP PELLANTS CASE, THE LD. CIT(A) HAS GROSSLY ERRED IN UPHOLDING DISALLOWANCE OF DEDU CTION U/S. 80-IB(10) EVEN THOUGH, AS HE HAD HIMSELF CATEGORICALLY HELD IN THE IMPUGNED ORDER, THE APPELLANT FULFILLED AL THE CONDITIONS STIPULATED IN THAT PROV ISION U/S. 80-IB. HENCE, REJECTION OF APPELLANTS CLAIM FOR DEDUCTION U/S. 80IB COULD N OT BE SUSTAINED ON THE GROUND THAT ITS RETURN HAD NOT BEEN FURNISHED ON OR BEFORE THE DUE DATE SPECIFIED IN SUB- SECTION(10 OF SECTION 139 AS REQUIRED BY SECTION 80 AC. 2. IN LAW AND IN THE FACTS AND CIRCUMSTANCES OF THE AP PELLANTS CASE, THE LD. CIT(A) HAS GROSSLY ERRED IN DISMISSING GROUND NO. 7 OF THE APPELLANTS APPEAL CHALLENGING LEVY OF INTEREST U/S. 234A, 234B AND 23 4C ON THE GROUND THAT IT WAS MANDATORY AND CONSEQUENTIAL IN NATURE. 3. WHILE SCRUTINIZING THE RETURN OF INCOME OF THE ASSE SSEE FOR THE YEAR UNDER CONSIDERATION, THE A.O. FOUND THAT THE ASSESS EE HAS CLAIMED DEDUCTION U/S 80-IB(10) OF THE ACT. THE A.O. FURTHE R NOTICED THAT THE ASSESSEE DID NOT FILE THE RETURN OF INCOME ON OR BE FORE THE DUE DATE OF FILING OF THE RETURN AS PER THE PROVISIONS OF SECTI ON 139(1) OF THE ACT. INVOKING THE PROVISIONS OF SECTION 80AC OF THE ACT, THE A.O. DENIED THE CLAIM OF DEDUCTION U/S 80-IB(10) OF THE ACT. 4. ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A) B UT COULD NOT CONVINCE THE FIRST APPELLATE AUTHORITY SO FAR AS TH E CLAIM OF DEDUCTION IS CONCERNED. WHILE CONFIRMING THE ASSESSMENT ORDER , THE FIRST APPELLATE AUTHORITY CAME TO THE CONCLUSION THAT PRO VISIONS OF SECTION 80AC OF THE ACT WHICH WERE INTRODUCED WITH EFFECT F ROM 01.04.2006 SQUARELY APPLY ON THE FACTS OF THE CASE. THE LD. CI T(A) ALSO DENIED THE CLAIM OF DEDUCTION U/S 80-IB(10) OF THE ACT. IT(SS)A NO. 59/AHD/2012 . A.Y. 2009-10 3 5. AGGRIEVED BY THIS, THE ASSESSEE IS BEFORE US. THE L D. COUNSEL FOR THE ASSESSEE FAIRLY CONCEDED THAT AN IDENTICAL ISSUE WA S DECIDED BY THE CO- ORDINATE BENCH AGAINST THE ASSESSEE IN THE CASE OF ANOLI HOLDING PVT. LTD. IN ITA NO. 1042/AHD/2012 DATED 03/08/2016. THE COPY OF THE ORDER WAS PLACED BEFORE US. THE LD. D.R. STRONGLY R ELIED UPON THE DECISION OF THE TRIBUNAL (SUPRA). 6. WE HAVE CAREFULLY GONE THROUGH THE ORDERS OF THE AU THORITIES BELOW. THE DETAILS OF RETURN OF INCOME FILED BY THE ASSESS EE IS TABULATED AS UNDER:- A.Y. DATE OF FILING OF RETURN OF INCOME AS PER U/S 139(1) OF THE ACT DUE DATE OF FILING OF RETURN OF INCOME DELAY/REMARKS DATE OF NOTICE ISSUED/SERVED U/S. 153C OF THE ACT DATE OF FILING OF R/I IN RESPONSE TO NOTICE U/S 153C OF THE ACT 2007-08 29-10-2007 31-07-2007 03 MONTHS 29-08-2008 03-09-2008 19-03-2010 2008-09 31-03-2010 30-09-2008 18 MONTHS 29-08-2008 03-09-2008 31-03-2010 2009-10 12-10-2010 30-09-2009 THE RETURN IS FILED IN RESPONSE TO NOTICE ISSUED U/S 142(1) OF THE ACT DATED 30-10-2009( 12 MONTHS) -- -- 7. IT CAN BE SEEN FROM THE ABOVE THAT THE ASSESSEE HAS FILED THE RETURN OF INCOME U/S 139(1) AFTER A LONG DELAY WITHOUT ANY JU STIFIABLE CAUSE. IT(SS)A NO. 59/AHD/2012 . A.Y. 2009-10 4 8. THE CO-ORDINATE BENCH IN THE CASE OF M/S. ANOLI HOL DING PVT. LTD. ON IDENTICAL FACTS HAS HELD AS UNDER:- 13. WE HAVE GIVEN A THOUGHTFUL CONSIDERATION TO TH E RIVAL CONTENTIONS; WE HAVE ALSO CAREFULLY PERUSED THE ORDERS OF THE AUTHORITIE S BELOW. THE UNDISPUTED FACT IS THAT THE RETURN OF INCOME FOR THE YEAR UNDER CONSID ERATION WAS NOT FURNISHED ON OR BEFORE THE DUE DATE AS PER THE PROVISIONS OF SECTIO N 139(1) OF THE ACT. IN OUR CONSIDERED OPINION, PROVISIONS OF SECTION 80AC OF T HE ACT SQUARELY APPLY ON THE FACTS OF THE CASE IN HAND, SECTION 80AC READS AS UN DER:- 80AC. WHERE IN COMPUTING THE TOTAL INCOME OF AN ASSESSEE OF THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR COMME NCING ON THE 1 ST DAY OF APRIL, 2006 OR ANY SUBSEQUENT ASSESSMENT YEAR, A NY DEDUCTION IS ADMISSIBLE UNDER SECTION 80IA 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 H IS INCOME FOR SUCH ASSESSMENT YEAR ON OR BEFORE THE DUE DATE SPECIFIED UNDER SUB-SECTION (1) OF SECTION 139]. 14. THE SPECIAL BENCH OF THE TRIBUNAL AT RAJKOT HA D THE OCCASION TO CONSIDER THE FOLLOWING FACTS IN THE CASE OF SAFFIRE GARMENTS (SU PRA):- THE ASSESSEE, A PARTNERSHIP FIRM, FILED ITS RETURN OF INCOME CLAIMING DEDUCTION UNDER SECTION 10A IN RESPECT OF ITS PROFI T DERIVED FROM THE EXPORT OF ARTICLES PRODUCED IN SEZ. THE ASSESSING OFFICER, HOWEVER, NOTED THAT THE ASSE SSEE HAD FILED ITS RETURN ON 31.01.2007 WHEREAS THE EXTENDED DUE DATE FOR FIL ING RETURN OF INCOME FOR THE ASSESSEE, BEING A FIRM, UNDER THE PROVISION S OF SECTION 139(1) WAS 31.12.2006. THE ASSESSING OFFICER, FURTHER NOTED THAT AS PER PR OVISO TO SUB-SECTION (1A) OF SECTION 10A, INTRODUCED WITH EFFECT FROM 1- 4-2006, NO DEDUCTION SHOULD BE ALLOWED TO ASSESSEE WHO DOES NOT FURNISH RETURN OF INCOME ON OR BEFORE THE DUE DATE. IT(SS)A NO. 59/AHD/2012 . A.Y. 2009-10 5 ACCORDINGLY, APPLYING PROVISO TO SECTION 10A(1A), A SSESSING OFFICER DENIED DEDUCTION UNDER SECTION 10A. ON APPEAL BY THE ASSESSEE, THE COMMISSIONER (APPEAL S) UPHELD THE ORDER OF ASSESSING OFFICER. ON FURTHER APPEAL BY THE ASSESSEE. THE TRIBUNAL HEL D PROVISIONS OF THE PROVISO TO SUBSECTION (1A) OF SECTION 10A TO BE MER ELY DIRECTORY AND NOT MANDATORY AND, THEREFORE, ON THAT BASIS HELD THAT E VEN IF RETURN OF INCOME WAS NOT FILED WITHIN THE TIME-LIMIT PRESCRIBED BY S ECTION 139(1), THE ASSESSEE COULD NOT BE DENIED DEDUCTION UNDER SECTIO N 10A. INSTANT SPECIAL BENCH OF THE TRIBUNAL WAS CONSTITUT ED TO CONSIDER THE FOLLOWING QUESTIONS. 15. ON THE AFOREMENTIONED FACTS, THE SPECIAL BENCH HELD AS UNDER:- SCHEME OF THE ACT WITH REGARD TO FILING OF RETURNS IN ORDER TO DECIDE THE ISSUE, I HE WHOLE SCHEME OF THE ACT NEEDS TO BE CONSIDERED. THE ASSESSEE IS REQUIRED TO FILE THE RE TURN OF INCOME WITHIN THE PRESCRIBED TIME AS PER THE PROVISIONS OF SECTION 13 9(1). THIS PROVISION OF SECTION 139(1) IS APPLICABLE TO ALL COMPANIES AND F IRMS IRRESPECTIVE OF THE FACT AS TO WHETHER THEY ARE EARNING TAXABLE INCOME OR NO T FOR THE CURRENT YEAR I.E. FROM 1-4-2006. IN RESPECT OF OTHER PERSONS SUCH AS INDIVIDUAL, HUF, AOP OR BOI AND ARTIFICIAL JURIDICAL PERSON, THE REQUIREMEN T IS THAT IF SUCH A PERSON IS HAVING TAXABLE INCOME BEFORE GIVING EFFECT TO THE P ROVISIONS OF SECTION 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 GIVI NG EFFECT TO THE PROVISIONS OF SECTION 10A. [PARA 11] CONSEQUENCES OF FAILURE TO FILE RETURN WITHIN DUE D ATE IT IS FOUND THAT THE PROVISIONS OF THE PROVISO TO S ECTION 10A(IA) IS NOTHING BUT A CONSEQUENCE OF FAILURE OF THE ASSESSEE LO FILE TH E RETURN OF INCOME WITHIN THE DUE DATE PRESCRIBED UNDER SECTION 139(1). FOR SUCH A FAILURE OF THE ASSESSEE TO FILE HIS RETURN OF INCOME WITHIN THE DUE DATE PR ESCRIBED UNDER SECTION 139( 1), THIS IS NOT THE ONLY CONSEQUENCE. ONE CONSEQUEN CE OF SUCH FAILURE IS IT(SS)A NO. 59/AHD/2012 . A.Y. 2009-10 6 PRESCRIBED IN SECTION 234A ALSO AS PER WHICH, THE A SSESSEE IS LIABLE TO PAY INTEREST ON THE TAX PAYABLE BY HIM AFTER REDUCING A DVANCE TAX AND TDS/TCS IF ANY PAID BY HIM APART FROM SOME OTHER REDUCTIONS. S UCH INTEREST IS PAYABLE FROM THE DATE IMMEDIATELY FOLLOWING THE DUE DATE FO R FILING THE 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 N OT FURNISHED ANY RETURN OF INCOME THEN THE INTEREST IS PAYABLE TILL THE DATE O F COMPLETION OF THE ASSESSMENT UNDER SECTION 144. IT IS HELD THAT ABOV E IS ALSO ONE OF THE CONSEQUENCES OF NOT FILING RETURN OF INCOME BY THE ASSESSEE WITHIN THE DUE DATE. [PARA 11] 16. A SIMILAR ISSUE WAS ALSO CONSIDERED BY THE CO-O RDINATE BENCH OF CHANDIGARH IN THE CASE OF LAKSHMI ENERGY & FOODS LTD. (SUPRA), THE RELEVANT FACTS AND FINDINGS OF THE CO-ORDINATE BENCH READ AS UNDER:- HOWEVER, HON'BLE SUPREME COURT IN CASE OF PREM NA TH KHANNA (SUPRA) HELD - THAT 'DUE DATE' WOULD MEAN DUE DATE AS PROVI DED U/S 139(1). THEREFORE WE ARE OF THE OPINION THAT THE DECISION O F CIT VS. MS JAGRITI AGGARWAL (SUPRA) IS NOT APPLICABLE PARTICULARLY BEC AUSE THERE IS A SPECIFIC PROVISION U/S 80AC WHICH PROHIBITS DEDUCTION UNDER PART 'C' OF CHAPTER VI A UNLESS THE RETURNS ARE FILED WITHIN TIME PRESC RIBED U/S 139(1). W HEN A SPECIFIC PROVISION IS THERE IN THE STATUTE SAME C ANNOT BE INTERPRETED IN A WAY TO MAKE THE PROVISION REDUNDANT. THEREFORE IN O UR OPINION, PRINCIPLE LAID DOWN BY THE HON'BLE HIGH COURT IN CASE OF CIT VS. MS. JAGRITI AGGARWAL (SUPRA) CANNOT BE APPLIED WHILE INTERPRETI NG THE PROVISION OF SEC 80AC. 32 THE LD. COUNSEL FOR THE ASSESSEE HAS ALSO RELIED ON THE DECISION OF ACIT VS. DHIR GLOBAL INDUSTRIAL PVT. LTD (SUPRA) WH EREIN IT WAS OBSERVED THAT THOUGH THE PROVISO TO SEC L0B FOR FILING OF RE TURN U/S 139(1) FOR CLAIMING DEDUCTION BUT THE SAME WAS OF DIRECTORY NA TURE AND NOT MANDATORY. IN OUR OPINION, THIS JUDGMENT OF DIVISIO N BENCHES IS NO MORE VALID AFTER PRONOUNCEMENT OF THE DECISION OF SPECIA L BENCH IN CASE OFF SAFFIRE GARMENTS VS. ITO (SUPRA). SIMILARLY IN ITO VS. S. IT(SS)A NO. 59/AHD/2012 . A.Y. 2009-10 7 VENKTAYA(SUPRA), HYDERABAD BENCH OF THE TRIBUNAL HE LD THAT IF RETURN WAS FILED LATE THEN DESPITE THE PROVISIONS OF SECTION 8 0AC THE DEDUCTION WAS HELD TO BE ALLOWABLE IF SUCH DELAY IS BEYOND THE CO NTROL OF THE ASSESSEE. THIS POSITION ALSO STANDS REVERSED AFTER THE DECISI ON OF SPECIAL BENCH IN CASE OF SAFFIRE GARMENTS VS. 1TO (SUPRA) WHEREIN IT IS CLEARLY HELD THAT THE PROVISIONS OF SECTION 8OAC ARE OF MANDATORY NAT URE. AS FAR AS DECISION OF HON'BLE DELHI HIGH COURT IS CONCERNED, THE SAME IS DISTINGUISHABLE ON FACTS BECAUSE IN THAT CASE THE ASSESSEE DID NOT HAV E POSITIVE GROSS TOTAL INCOME IN THE INITIAL YEAR, THEREFORE COULD NOT CLA IM THE DEDUCTION FOR SUCH INITIAL YEAR. THEREAFTER FOR ASSESSMENT YEAR 2001-0 2 THE ASSESSEE DID NOT CLAIM DEDUCTION DESPITE OF THE POSITIVE PROFITS. TH IS OMISSION WAS NOTICED SOMEWHERE IN 2004 BY WHICH TIME FILING OF REVISED R ETURN HAS ELAPSED AND THE ASSESSEE MOVED A PETITION U/S 264 WHICH WAS HEL D TO BE MAINTAINABLE BECAUSE THE DEDUCTION WAS NOT CLAIMED BECAUSE OF BO NAFIDE MISTAKE. THEREFORE CLEARLY ON THESE FACTS THE APPLICABILITY OF PROVISIONS OF SECTION 8OAC WAS NOT THERE FOR CONSIDERATION BECAUSE THIS P ROVISION WAS INTRODUCED ONLY FROM ASSESSMENT YEAR 2006-07 AND TH EREFORE THIS CASE IS DISTINGUISHABLE. 33 THE LD. D.R. FOR THE REVENUE HA S RIGHTLY POINTED OUT TO THE DECISION OF AMRITSAR BENCH OF THE TRIBUNAL IN C ASE OF BALKISHAN VS. ITO (SUPRA) WHEREIN IT WAS CLEARLY OBSERVED THAT PR OVISIONS OF SECTION 80AC ARE MANDATORY. HEAD NOTE READS AS UNDER: 'SEC 80IB R.W.S. 80AC OF THE INCOME-TAX ACT, 1961 D EDUCTION - PROFITS AND GAINS FROM INDUSTRIAL UNDERTAKING OTHER THAN INFRAS TRUCTURE DEVELOPMENT UNDERTAKINGS -ASSESSMENT YEAR 2006-07 AND 2007-08 - WHERE AN ASSESSEE WANTS TO AVAIL DEDUCTION U/S 80IB, HE HAS TO NECESS ARILY FURNISH HIS RETURN OF INCOME CONTAINING SUCH CLAIM BEFORE DUE DATE SPE CIFIED IN SEC 139(1) - HELD YES' THEREFORE IN VIEW OF THE ABOVE LEGAL POSITION AND D ISCUSSION IT IS CLEAR THAT ONCE THE RETURN IS FILED LATE BEYOND DUE DATE PROVI DED U/S .139(1) IN SECTION 80AC THEN DEDUCTION U/S 8OIB CANNOT BE ALLO WED. IT(SS)A NO. 59/AHD/2012 . A.Y. 2009-10 8 17. IF, WE CONSIDER THE FACTS OF THE CASE IN HAND IN THE LIGHT OF THE DECISIONS MENTIONED HEREINABOVE, WE FIND SIMILARITY IN THE FA CTS. THEREFORE, RESPECTFULLY FOLLOWING THE DECISIONS OF THE SPECIAL BENCH AND TH E CO-ORDINATE BENCH (SUPRA), WE CONFIRM THE FINDINGS OF THE LD. CIT(A). GROUND N O. 1 IS DISMISSED. 9. THE SECOND GRIEVANCE RELATES TO THE LEVY OF INTERES T U/S 234A, 234B & 234C OF THE ACT. 10. THE LEVY OF INTEREST IS MANDATORY, THOUGH CONSEQUEN TIAL IN NATURE. WE, ACCORDINGLY, DIRECT THE A.O. TO CHARGE INTEREST AS PER THE PROVISIONS OF THE LAW. 11. THE ASSESSEE HAS ALSO CHALLENGED THE INITIATION OF PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT. THIS GRIEVANC E OF THE ASSESSEE IS PREMATURE AND IS ACCORDINGLY DISMISSED. 12. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 26 - 09- 201 6. SD/- SD/- (S. S. GODARA) (N. K. BILLAIYA) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: TRUE COPY RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED.