Ita/304/2012 Of Bal Ksihan Dhawan v. Deputy Commissioner Of Income Tax, Circle V, Amritsar

IN THE HIGH COURT OF PUNJAB AND HARYANA ATCHANDIGARH ITA No.304 of 2012 (O&M)Date of decision: 10.03.2014 Bal Kishan Dhawan (HUF) Prop.B.K.D.Enterprises, 867/3, CircularRoad, Amritsar through Kapil Dhawan Karta. .....- Appe Vs, Deputy Commissioner of Income Tax, Circle V, Amritsar ....mesponden CORAM: HON’BLE MR. JUSTICK AJAY KUMAR MITTALHON BLE MR. JUSTICK GURMEET SINGH SANDHAWALIA Present:Mr. Avneesh Jhingan, Advocate for the appellant. Mr. Denesh Goyal, Advocate for the revenue. Ajay Kumar Mittal,J, CM No.32082?CIl of 2012 inDelay in refiling the appeal is condoned. CM stands allowed, D This appeal has been preferred by the assessee under Section260A of the Income Tax Act, 1961 (in short, “‘the Act’) against the ordedated 16.12.2011, Annexure A.4 passed by the Income Tax AppellateTribunal, Amritsar Bench, Amritsar in ITA No.236/ASR/2011 for theassessment year 2007-08, claiming following substantial questions of law:- 1) Whether in the facts and circumstances of the case, the timeperiod prescribed under Section 80AC read with section 139 is directory or mandatory? 11) Whether in the facts and circumstances of the case once thaudited accounts have been filed with the department withinthe prescribed period, still the deduction under section 80IBcan be disallowed on mere late filing of the return?audited accounts have been filed with the department withinthe prescribed period, still the deduction under section 80IBcan be disallowed on mere late filing of the return? 111)Whether in the facts and circumstances of the case the timeperiod to file the return does get extended by Section 139(1)fourth proviso?period to file the return does get extended by Section 139(1)fourth proviso? iv) Whether in the facts and circumstances of the case, theprovisions of Section 80AC alongwith Section 8OIB shouldhave been given a liberal construction and on their substantialcompliance the deduction should have been allowed? v) Whether in the facts and circumstances of the case, thecharging of the interest in the facts and circumstances of thepresent case 1s sustainable in law?”charging of the interest in the facts and circumstances of thepresent case 1s 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 aHindu Undivided tamily (HUF) duly registered with the Income TaxDepartment. The HUF was proprietor of M/s BKD Enterprises, Amritsar,After the death of Shri Bal Kishan Dhawan, Kapil Dhawan became theKarta of the HUF. The appellant commenced a new industrial undertaking at Daman. The unit was set up in the assessment year 2004-05, which waseligible for deductions under section 80IB of the Act. The appellant filedreturn for the financial year 2003-04 1.e. Assessment year 2004-05 andclaimed deduction under section 80IB of the Act with regard to the new unit at Daman for|<a7,65,258/-. The assessment was finalized in scrutiny on11.12.2006 and the claim of the assessee under section 8OIB was accepted. Similarly, the claim under Section 80IB for the assessment year 2005-06was accepted. With regard to the assessment year 2007-08, the appellant got ITA No.304 of 2012 (O&M) Daman. The unit was set up in the assessment year 2004-05, which waseligible for deductions under section 80IB of the Act. The appellant filedreturn for the financial year 2003-04 1.e. Assessment year 2004-05 andclaimed deduction under section 80IB of the Act with regard to the new unit at Daman for|<a7,65,258/-. The assessment was finalized in scrutiny on11.12.2006 and the claim of the assessee under section 8OIB was accepted. Similarly, the claim under Section 80IB for the assessment year 2005-06was accepted. With regard to the assessment year 2007-08, the appellant got ITA No.304 of 2012 (O&M) 1ts accounts of the unit audited and the same were filed with the income taxdepartment on 12.9.2007.According to the appellant, since the informationwith regard to Income from other sources was not ready, the return couldnot be filed upto the due date 1.e. 31.10.2007. There was delay in filing thereturn and the same was filed on 26.11.2007. Since the claim under sectionSOIB of the Act had been made in the return and the return was late asprovided under section 139 of the Act, show cause notice was issued by thedepartment to the appellant on 27.10.2009. The assessment was finalisedvide order dated 15.12.2009 and the claim under section S8OIB of the Acwas disallowed by holding that the return had not been filed within thestipulated period as provided under section 80AC read with section 139 ofthe Act. Feeling aggrieved, the appellant filed appeal before theCommissioner of Income tax (Appeals) [CIT(A)]. The CIT (A) dismissedthe appeal vide order dated 7.3.2011, Annexure A.3, holding that since thereturn had been filed late, the deduction had been rightly rejected. Still notsatishied, the appellant filed appeal before the Tribunal. Vide order dated16.12.2011, Annexure A.4, the Tribunal dismissed the appeal. Hence theinstant appeal by the assessee. 4 Learned counsel for the appellant submitted that the claim ofthe assessee for the assessment year 2007-08 was declined on the groundthat the return which was filed under section 139 of the Act was belated asthe 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 issuednotification dated 31.10.2007, Annexure A.5, whereby in exercise of powersunder Section 119 of the Act, the Board had extended the date for filing of ITA No.304 of 2012 (O&M) A the returns and reports of audit upto 15.11.2007 instead of 31.10.2007. Itwas urged that in view thereof, in terms of sub sections 6 and 7 of Section260A of the Act, since these matters go to the root of the case, the samerequire to be taken up by this Court and the case 1s required to be remandedto the Tribunal to adjudicate afresh 1n the light of the aforesaid notification.4 Learned counsel for the revenue on the other hand besidessupporting the order passed by the Tribunal submitted that the saidnotification was applicable in case of companies and firms and the assesseewas not covered by this. However, we are not impressed by the argument, 6.After hearing learned counsel for the parties and 1n the interestof justice, we are of the view that the matter requires to be adjudicatedafresh as the said notification goes to the root of the matter and in view ofsub sections 6 and 7 of Section 260A of the Act, the same can be entertainedby this Court. Accordingly, while setting aside the order dated 16.12.2011,Annexure A.4 passed by the Tribunal, the matter 1s remanded to the Tribunalto decide it afresh 1n accordance with law after affording an opportunity ofhearing to the parties. The appeal stands disposed of. (Ajay Kumar Mittal)Judge March 10, 2014 @5%: (Gurmeet Singh Sandhawalia)Judge