Section 80IA Deduction not allowable for Belated Income Tax Returns: ITAT [Read Order]

The Income Tax Appellate Tribunal ( ITAT ) bench of Nagpur, referring to the Calcutta High Court decision ruled that deduction under Section 80IA of Income Tax Act, 1961 not allowable for the belatedly filed Income Tax Returns ( ITR ).

The income tax department filed the appeal against the decision of the Commissioner of Income Tax (Appeals) [CIT(A)] who ruled in favour of assessee-respondent, Gondwana Engineers Ltd.

The assessee is an engineering company and deals in designing, constructing, erecting, developing, commissioning and maintaining water treatment plants and projects of various types treating raw water into potable water and other related engineering works for various Municipal Corporation and other Governmental authorities.

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Gondwana Engineers Ltd. initially filed their return of income under Section 139(1) on December 1, 2014, declaring an income of ₹10,23,01,541, with the audit report in Form No. 3CA submitted earlier on November 26, 2014. However, the return did not include a claim for deduction under Section 80IA of the Income Tax Act. Subsequently, the company filed a revised return on September 10, 2015, claiming a deduction of ₹9,05,20,790 under Section 80IA and declaring a net income of ₹1,17,80,750.

The Assessing Officer (AO) disallowed this claim, arguing two main points: first, the original return was filed after the due date of November 30, 2014, making the revised return invalid; and second, the contracts with various municipal and government authorities were classified as works contracts rather than infrastructure facilities under Section 80IA(4) Explanation (c), thus ineligible for deduction under this section.

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The bench, Calcutta High Court's judgment in CIT v/s Shelcon Properties (P) Ltd., stated that Section 80AC does not allow any discretion for delayed filings and that the statutory requirement for timely submission is mandatory. Referring to the same, the tribunal observed that the benefit of deductions under Section 80IA of Income tax is strictly contingent upon timely filing of returns.

Members V. Durga Rao and K.M. Roy observed that the CIT(A) failed to address the fact that the income tax return was filed on 01/12/2014. The CIT(A) based his conclusion on irrelevant materials, which led to a flawed decision. This conclusion was rejected by the tribunal.

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The bench added that the assessee’s representative did not present any High Court or Supreme Court judgments supporting his arguments. Conversely, the Departmental Representative strengthened his case by citing relevant judicial precedents, which are binding and must be followed in accordance with judicial hierarchy.

The CIT(A)'s conclusion, which had supported the claim based on the argument that the original return was valid and could be revised, was overturned by the ITAT, affirming the need for obedience to statutory deadlines for claiming deductions. Consequently, the appeal filed by the Revenue was upheld. Rachit Thakar and Kailash C. Kanojiya appeared for the assessee and department respectively.

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