Bal Kishan Dhawan (H... v. Deputy Commissioner ...

Ajay Kumar Mittal, J.

CM No. 32082-CII of 2012

1. Delay in refiling the appeal is condoned. CM stands allowed.

2. This appeal has been preferred by the assessee under Section 260A of the Income Tax Act, 1961 (in short, “the Act”) against the order dated 16.12.2011, Annexure A.4 passed by the Income Tax Appellate Tribunal, Amritsar Bench, Amritsar in ITA No. 236.ASR/2011 for the assessment year 2007-08, claiming following substantial questions of law:-

i) Whether in the facts and circumstances of the case, the time period prescribed under Section 80AC read with section 139 is directory or mandatory?

ii) Whether in the facts and circumstances of the case once the audited accounts have been filed with the department within the prescribed period, still the deduction under section 80IB can be disallowed on mere late filing of the return?

iii) Whether in the facts and circumstances of the case the time period to file the return does get extended by Section 139(1) fourth proviso?

iv) Whether in the facts and circumstances of the case, the provisions of Section 80AC alongwith Section 80IB should have been given a liberal construction and on their substantial compliance the deduction should have been allowed?

v) Whether in the facts and circumstances of the case, the charging of the interest in the facts and circumstances of the present case is sustainable in law?”

3. Briefly, the facts necessary for adjudication of the controversy involved, as narrated in the appeal, may be noticed. The appellant was a Hindu Undivided family (HUF) duly registered with the Income Tax Department. The HUF was proprietor of M/s. BKD Enterprises, Amritsar. After the death of Shri Bal Kishan Dhawan, Kapil Dhawan became the Karta of the HUF. The appellant commenced a new industrial undertaking at Daman. The unit was set up in the assessment year 2004-05, which was eligible for deductions under section 80IB of the Act. The appellant filed return for the financial year 2003-04 i.e Assessment year 2004-05 and claimed deduction under section 80IB of the Act with regard to the new unit at Daman for Rs. 7,65,258/-. The assessment was finalized in scrutiny on 11.12.2006 and the claim of the assessee under section 80IB was accepted. Similarly, the claim under Section 80IB for the assessment year 2005-06 was accepted. With regard to the assessment year 2007-08, the appellant got its accounts of the unit audited and the same were filed with the income tax department on 12.9.2007.According to the appellant, since the information with regard to Income from other sources was not ready, the return could not be filed upto the due date i.e 31.10.2007 There was delay in filing the return and the same was filed on 26.11.2007 Since the claim under section 80IB of the Act had been made in the return and the return was late as provided under section 139 of the Act, show cause notice was issued by the department to the appellant on 27.10.2009 The assessment was finalised vide order dated 15.12.2009 and the claim under section 80IB of the Act was disallowed by holding that the return had not been filed within the stipulated period as provided under section 80AC read with section 139 of the Act. Feeling aggrieved, the appellant filed appeal before the Commissioner of Income tax (Appeals) [CIT(A)]. The CIT (A) dismissed the appeal vide order dated 7.3.2011, Annexure A.3, holding that since the return had been filed late, the deduction had been rightly rejected. Still not satisfied, the appellant filed appeal before the Tribunal. Vide order dated 16.12.2011, Annexure A.4, the Tribunal dismissed the appeal. Hence the instant appeal by the assessee.

4. Learned counsel for the appellant submitted that the claim of the assessee for the assessment year 2007-08 was declined on the ground that the return which was filed under section 139 of the Act was belated as the same was e-filed on 15.11.2007 whereas the due date was 31.10.2007 It was urged that the Central Board of Direct Taxes (CBDT) had issued notification dated 31.10.2007, Annexure A.5, whereby in exercise of powers under Section 119 of the Act, the Board had extended the date for filing of the returns and reports of audit upto 15.11.2007 instead of 31.10.2007 It was urged that in view thereof, in terms of sub sections 6 and 7 of Section 260A of the Act, since these matters go to the root of the case, the same require to be taken up by this Court and the case is required to be remanded to the Tribunal to adjudicate afresh in the light of the aforesaid notification.

5. Learned counsel for the revenue on the other hand besides supporting the order passed by the Tribunal submitted that the said notification was applicable in case of companies and firms and the assessee was not covered by this. However, we are not impressed by the argument.

6. After hearing learned counsel for the parties and in the interest of justice, we are of the view that the matter requires to be adjudicated afresh as the said notification goes to the root of the matter and in view of sub sections 6 and 7 of Section 260A of the Act, the same can be entertained by this Court. Accordingly, while setting aside the order dated 16.12.2011, Annexure A.4 passed by the Tribunal, the matter is remanded to the Tribunal to decide it afresh in accordance with law after affording an opportunity of hearing to the parties. The appeal stands disposed of.