The Ahmedabad bench of the Income Tax Appellate Tribunal ( ITAT ) observed that the Income Tax Return filing within due date in mandatory for claiming deduction under Section 80IB (10) of Income Tax Act, 1961.
The assessee was selected by scrutiny and notice under Section 143(2) was issued on 04-03-2008 and served accordingly. The other statutory notices under Section 143(2) and 142(1) were issued on 14-10-2009 and served on the assessee on 15-10-2009. Vide letter dated 26-10-2009, the assessee in compliance to notices issued under Section 142(1) of the Income Tax Act submitted hard copy of return of income for assessment year 2007-08.
The Assessing Officer observed that in view of non-compliance of sub-section 80AC to his fulfillment of conditions led down in section 80IB(10), the submissions of Form No. 10CCB which is abinitio on account of grounds that the assessee has filed the return of income beyond the time allowed u/s. 139(1) of the Act as well as the assessee is not a developer as contemplated under Section 80IB(10) and therefore the deduction under Section 80IB(10) of Rs. 13,68,61,112/-.
Mr. S.N. Soparkar representing the assessee relied upon the decision of CIT (A) in respect of this issue and further submitted that the Assessing Officer has disallowed the said amount under Section 80IB and again disallowed the same amount under Section 69C which will amount to double taxation. Further pointed out that the profit and loss account of the assessee in respect of all three parties and submitted that the opening work in progress and the expenses incurred during the year under consideration constitute cost of the project and the Assessing Officer has completely overlooked the fact that the it is this very amount that has been treated as income while filing return of income.
Mr Ahilendra Pratap Yadaw representing the revenue submitted that Assessing Officer has rightly made disallowance under Section 69C on the basis of details provided under audit report amounting to Rs. 13,80,13,924/-. Further resubmitted that the assessee could not substitute its claim and the same is unexplained income as it had inflated the cost of work in progress without incurring any expenses so as to claim higher deduction under Section 80IB of the Income Tax Act.
The bench observed that the assessee was having a genuine reason for filing the return of income along with the audit report due to the attachment of bank accounts as well as the search operation the mandatory date under Section 80AC prescribed for claiming deduction under Section 80IB has to be applied as the decision of Apex Court in case of Wipro Ltd. ( supra ) has categorically held that for claiming the benefit under Section 10B(8) of the Income Tax Act, the twin conditions of furnishing a declaration before the Assessing Officer and that too before due date of filing original return of income under Section 139(1) are to be satisfied and both are to be complied with.
In the present case, the two member bench of the tribunal comprising Waseem Ahemed ( Accountant member ) and Suchithra Kamble ( Judicial member ) observed that the assessee was claiming deduction under Section 80IB (10) and the Income Tax Statute under Section 80IB (10) is also uses the word “shall” and therefore the condition of filing the return of income within the due date was mandatory in nature. Accordingly, appeal of the assessee was dismissed.
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