Deduction U/S 80-IB(10) can be allowed even in the case of belated returns:

PCIT vs. H.P. Housing & Urban Development Authority (ITA No.: 35/2019)

Facts:

1.The Assessee filed its return belatedly u/s. 139(4). Thereafter, the Assessee filed revised ITR wherein for the first time the Assessee claimed deduction u/s. 80-IB(10) (which was not claimed in earlier ITR).

2.The AO disallowed the claim for deduction u/s. 80-IB(10) on the ground that since the ITR was not filed within due date specified u/s. 139(1), such claim was not allowable pursuant to section 80AC.

3.The claim for deduction u/s. 80-IB(10) was also examined on merits and AO held that project was not eligible for benefit of section 80-IB.

4.On merits, the CIT(A) held that project was eligible for deduction and stated that part of it can be allowed. However, the CIT(A) concluded that the Assesse cannot revise the ITR u/s. 139(5) which is already filed belatedly u/s. 139(4) and accordingly held that the claim for deduction u/s. 80-IB(10) was not valid.

6.The ITAT held that the claim for deduction u/s. 80-IB(10) cannot be made based on a non-est ITR i.e. revised ITR in which claim was made u/s. 80-IB(10).

Hon Himachal Pradesh HC held as below:

1.The assessee cannot be burdened with taxes which it otherwise is not liable to pay under the law.

2.A duty is cast upon the department to charge legitimate taxes from the tax payers. Revenue cannot punish the tax payers for the bonafide mistakes.

3.If the assessee is otherwise entitled to deduction under Section 80IB(10), but due to ignorance or for some other reason could not claim the same in the return of income, but has raised its claim before the Appellate Authority, then the Appellate Authority should have looked into the same.

4.Accordingly, the claim for deduction u/s. 80-IB(10) is allowed.

 

The copy of the order is as under:

 

Pr_Commissioner_Of_Income_Tax_vs_M_S_H_P_Housing_Urban_on_22_December_2023