Delay of just 1 day in filing the return of income beyond the prescribed period and grant of benefit attached with the return filed u/s 139(1)

Short Overview : Where the delay of 1 day in on-line filing of return occurred not due to any negligence of the assessee, rather, the reason for the same was beyond the control of the assessee, therefore matter was remanded back to AO to examine the limited aspect as to whether the assessee, otherwise, was entitled to claim deduction under section 80-IC of the Act and if so found eligible, AO would allow the claim accordingly.

AO disallowed the deduction claimed by assessee under section 80-IB and held that assessee was not entitled to deduction under section 80-IB and further it had not filed the return of income within the stipulated period as provided under section 139(1). Assessee had submitted that so far as the denial of claim of deduction under section 80-IB was concerned, he, otherwise, was entitled to deduction under section 80-IC also. He has further submitted that even in the subsequent assessment years, on identical issue, the matter was restored to AO with a direction to examine as if the assessee was entitled to deduction under section 80-IC. He had, therefore, submitted that mere mentioning of wrong section did not disentitle assessee from claiming deduction.

it is held that Tribunal in the case of Symbiosis Pharmaceuticals (P) Ltd. v. DCIT’ [(2017) 51 CCH 32 (Chd-Trib) : 2017 TaxPub(DT) 4780 (Chd-Trib)] the delay of 01 day in on-line filing of return occurred not due to any negligence of the assessee, rather, the reason for the same was beyond the control of the assessee. Even otherwise, the return was filed within extended period as provided under section 139(4). Thus, matter was remanded back to AO to examine the limited aspect as to whether the assessee, otherwise, was entitled to claim deduction under section 80-IC and if so found eligible, AO would allow the claim accordingly irrespective that there was a delay of 1 day in filing the return of income beyond the prescribed period under the provisions of section 139(1).

Decision: In assessee’s favour (by way of remand).

Followed: Symbiosis Pharmaceuticals (P) Ltd. v. Dy. CIT (2017) 51 CCH 32 (Chd-Trib) : 2017 TaxPub(DT) 4780 (Chd-Trib).

IN THE ITAT, CHANDIGARH

SANJAY GARG, J.M.

Shree Ganesh Concast Group of Industries v. Dy. CIT

ITA No. 829/Chd/2018

6 June, 2019

Assessee by: Ashray Sarna, CA

Revenue by: Manjit Singh, CIT-Departmental Representative

The present appeal has been preferred by the assessee against the order dt. 26-3-2018 of the Commissioner(Appeals), Palampur [hereinafter referred to as ‘Commissioner(Appeals)’].

2. The assessee in this appeal has taken following grounds of appeal:-

1. That the order passed by the Hon’ble Commissioner(Appeals) dt. 26-3-2018 is against the law and facts of the case.

2. That having regard to the facts and circumstances of the case, Hon’ble Commissioner(Appeals) has erred in law and on facts in confirming the action of learned assessing officer in framing the impugned assessment order under section 147/144 and without complying with the mandatory conditions under section 147/148/151 as envisaged under the Income Tax Act, 1961.

3. That having regards to the facts and circumstances of the case, learned Commissioner(Appeals) has erred in law and on facts in confirming the action of learned assessing officer in disallowing the benefit of deduction under section 80IC amounting to Rs. 30,17,900, as earlier wrongly claimed by the assessee under section 80IB of the Act, without giving adequate opportunity of being heard and without observing the principles of natural justice.

4. That in any case and in any view of the matter, action of learned Commissioner(Appeals) in confirming the action of learned assessing officer in making disallowance of deduction under section 80IC of Rs. 30,17,900 without considering the fact that return was filed within extended period of sub-section (4) of section 139, is bad in law and against the facts and circumstances of the case.

5. That the appellant craves the leave to add, modify, amend or delete any of the grounds of appeal at the time of hearing and all the above grounds are without prejudice to each other.

3. A perusal of the above grounds of appeal reveals that the assessee in this appeal has agitated the reopening of the assessment under section 147 of the Income Tax Act, 1961 (in short ‘the Act’) as well as the additions made by the asessing officer and further confirmed by the Commissioner(Appeals) on merits.

4. Ground No.1 is general in nature .

5. The learned counsel for the assessee has not addressed any arguments on the validity of re-assessment under section 147 of the Act. Hence, ground No.2 of the appeal is dismissed as ‘not pressed’.

6. Now coming to the issues on merits raised vide ground No. 3 & 4 of the appeal, the learned counsel for the assessee has submitted that the impugned additions have been made by the assessing officer by disallowing the deduction claimed by the assessee under section 80IB of the Act. The assessing officer held that the assessee is not entitled to deduction under section 80IB of the Act and further the assessee had not filed the return of income within the stipulated period as provided under section 139(1) of the Act.

7. The learned counsel for the assessee has submitted that so far as the denial of claim of deduction under section 80IB of the Act is concerned, the assessee, otherwise, is entitled to deduction under section 80IC of the Act also. He has further submitted that even in the subsequent assessment years, on identical issue, the matter has been restored to the file of the assessing officer with a direction to examine as if the assessee is entitled to deduction us 80IC of the Act and if found so eligible, allow the deduction to the assessee accordingly. He has, therefore, submitted that mere mentioning of wrong section does not disentitle the assessee from claiming deduction, if the assessee is otherwise eligible, as such deduction provisions have been enacted for promotion of certain industries in economic backward area and, hence, are beneficial provisions.

8. So far as the observation of the assessing officer that the return of income has been filed beyond the period of limitation under section 139(1) of the Act, the learned counsel for the assessee has submitted that though there is a delay of only one day in filing the return of income beyond the period stipulated under section 139(1) of the Act, however, the return was filed within the extended period as provided under section 139 (4) of the Act. That vide decision of the Co-ordinate Chandigarh Bench of the Tribunal in the case of Symbiosis Pharmaceuticals (P) Ltd. v. Dy. CIT (2017) 51 CCH 32 (Chd-Trib) : 2017 TaxPub(DT) 4780 (Chd-Trib), it has been held that the claim of the assessee of deduction could not be ousted if the return has been filed within the extended period of sub section (4) of section 139 of the Income Tax Act. The learned counsel, has further submitted that the delay of one day in filing the return beyond the limitation period prescribed under section 139(1) of the Act has occurred due to circumstances beyond the control of the assessee and of his counsel. That the counsel for the assessee tried to upload the return of income on 30-9-2011, which was required to be e-filed, however, due to technical glitches, the counsel for the assessee could not upload the return of income. The learned counsel for the assessee in this respect has relied upon the certain computer generated information which shows that the counsel for the assessee had tried to upload the return on 30-9-2011 and an ‘XML’ file was also created. That the return of income was immediately filed on the next date. The learned counsel, therefore, has submitted that the assessee could not be denied deduction for delay of one day in filing the return of income beyond the limitation period prescribed under section 139(1) of the Act, which was beyond the control of the assessee.

9. The learned Departmental Representative, on the other hand, has relied on the findings of the lower authorities.

10. Considering the rival contentions and also considering the decision of the Coordinate Bench of the Tribunal in the case of Symbiosis Pharmaceuticals (P) Ltd. v. Dy. CIT (supra), I am of the view that the delay of 01 day in on-line filing of the return occurred not due to any negligence of the assessee, rather, the reason for the same was beyond the control of the assessee. Even otherwise, the return has been filed within extended period as provided under section 139(4) of the Act. In view of this, the matter is restored to the file of the assessing officer to examine the limited aspect as to whether the assessee, otherwise, is entitled to claim deduction under section 80IC of the Act and if so found eligible, the assessing officer will allow the claim accordingly irrespective of the fact that there was a delay of 01 day in filing the return of income beyond the prescribed period under the provisions of section 139(1) of the Act.

In the result, the appeal of the assessee is treated as allowed for statistical purposes.

Order dictated and pronounced in the open court immediately on completion of hearing.