ITAT empowered to allow deduction u/s 80IB (10) even if requirement u/s 80AC is not complied with, in case of conflict of opinions: HC

Case Law Citation:- CIT vs. M/s Unitech Ltd. (Delhi High Court), Income tax (Appeal) no.239 of 2015, Date of Judgment: 05/10/2015

Brief of the Case

Delhi High Court held In the case of CIT vs. M/s Unitech Ltd. that where there are conflicts of opinions of the various benches of the ITAT on the provision u/s 80AC of requirement of return filing before due date to claim deduction u/s 80IB (10), ITAT rightly allowed the deduction even the assessee filed his return of income after due date.

Facts of the Case

In the present case the Assessee filed its return of income for the on 2nd April 2009 claiming the benefit of deduction under Section 80IB (10). This was allowed by the AO while making assessment under Section 143(3) of the Income Tax on 30th December, 2009. In terms of Section 80AC of the Act the return had to be filed by the Assessee, ‘on or before the due date specified under Section 139(1) which in this case meant on or before 31st October, 2008.

Contention of the Assessee

The ld counsel of the assessee place reliance on the decisions of this Court in CIT v. Integrated Databases (I) Ltd. (2009) 178 Taxman 432 (Del) and CIT v. Contimeters Electricals (P) Ltd. (2009) 178 Taxman422 (Del).

He also placed reliance on the decision dated 26th June 2013 of the Andhra Pradesh High Court in ITTA    No.114 of 2013 (CIT v. Sri S Venkataiah), the decisions dated 29th April 2013 of the ITAT Madras in ITA No.1214/Mds/2012 (ACIT vs. Precot Meridian Ltd.) and 4th February 2013 in ITA No. 1219-1223/Mds/2012 (ACIT v. V.N. Devadoss), the decisions of the ITAT Delhi dated 30th July 2010 in ACIT v. Dhir Global Industrial (P) Ltd. 133 TTJ (Del) 580 and dated 25th January 2012 in ITA No. 3352/Del/2011(Hansa Dalakoti v. ACIT), the decision of the Bangalore ITAT dated 12th April 2103 in M/s Vanshee Builders & Developers P. Ltd. v. CIT 63 SOT 30 and the decision of the Kolkata ITAT dated 19th April 2013 in ITA No. 1586/Kol/2012 (M/s Shelcon Properties (P) Ltd. v. JCIT).

Contention of the Revenue The ld counsel of the revenue placed reliance on the decision dated 27th August 2012 of the Uttarakhand High Court in ITA No. 07/2012 (Umesh Chandra Dalakoti v. Assistant Commissioner of Income Tax) as well as of the Calcutta High Court in CIT v. Shelcon Properties (P) Ltd. [2015] 370 ITR 305 (Cal) both of which have held the provision under Section 80AC of the Act to be mandatory.

Also he has referred to the decisions of the ITAT Special Bench in Saffire Garments v. ITO 20 ITR (Trib) 623, of the ITAT Madras Bench in 1219-1223/MDS/2012 (ACIT v. Shri V.N. Devadoss), of the ITAT Chandigarh Bench in 250-2511CHD/2003 (Lakshmi Energy and Food Ltd. v. ACIT) and the decision dated 30th January 2015 of the ITAT Mumbai Bench in ITA No. 4727/Mum/2012 (Dwarkadas Panchmatiya v. ACIT).

 Held by ITAT

The ITAT while allowing appeal filed by the Assessee noted that there was a cleavage of opinion on the issue as was evident from two lines of decisions of the ITAT itself. Since a possible view in favour of the Assessee could be taken if one line of decisions was applied, the ITAT concluded that there was no justification for CIT to have invoked the jurisdiction Section 263 of the Act.

 Held by High Court

In the case of CIT v. Sri S Venkataiah dated 26th June 2013 of the Andhra Pradesh High Court in ITTA    No.114 of 2013, in which question was dealt with that whether the time limit for filing the return in terms of Section 80AC read with Section 139 (1) of the Act was mandatory. In this case, high court confirms the order of ITAT and held that Assessee appears to have shown “reasonable cause for filing the return of income belatedly” and that it was “beyond the control of the Assessee.”

On the other hand, the decisions of the Uttarakhand High Court in Umesh Chandra Dalakoti ITA No. 07/2012 dated 27^th Aug. 2012 and of the Calcutta High Court in CIT v. Shelcon Properties (P) Ltd. [2015] 370 ITR 305 (Cal) appear to support the case of the Revenue that Section 80 AC is mandatory. There appears to be no authoritative pronouncement of this Court on the interpretation of Section 80AC of the Act and whether the said provision is mandatory or directory.

In the present case, there is no doubt that at the time of passing of order by CIT, there was a conflict of opinions of the various benches of the ITAT on whether 80AC was mandatory. Consequently, the ITAT was not in error in reversing the order of the CIT as far as the question of exercising jurisdiction under Section 263 was concerned.

It is clarified that the question whether the requirement under Section 80AC of the Act is mandatory is left open for consideration in an appropriate case.

 Accordingly, appeal of the revenue dismissed.

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KK Singh
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