Ahmedabad ITAT: ITR Filing Must be Done on Time to Claim Tax Benefit U/S 80IB(10)

The Ahmedabad bench of the Income Tax Appellate Tribunal ( ITAT ) witnessed that Income Tax Return filing within the last date is mandatory for claiming deduction u/s 80IB (10) of the Income Tax Act, 1961.

The taxpayer was selected by scrutiny and notice u/s 143(2) was issued dated 04-03-2008 and served consequently. The other legal notices u/s 143(2) and 142(1) were issued dated 14-10-2009 and served on the taxpayer dated 15-10-2009. Vide letter on 26-10-2009, the taxpayer in compliance with notices issued u/s 142(1) of the Income Tax Act submitted a hard copy of the income return for the AY 2007-08.

The Assessing Officer marked that towards non-compliance of sub-section 80AC to his satisfaction of conditions guided in section 80IB(10), the submissions of Form No. 10CCB which is abinitio regarding grounds that the taxpayer has furnished the income return beyond the time permitted under section 139(1) of the Act and the taxpayer is not a developer as contemplated u/s 80IB(10) and hence the deduction u/s 80IB(10) of Rs. 13,68,61,112.

Mr. S.N. Soparkar representing the taxpayer laid on the CIT (A) decision concerning this issue and additionally said that the Assessing Officer has disallowed the expressed amount u/s 80IB and again disallowed the amount u/s 69C which will amount to double taxation.

The profit and loss account of the taxpayer concerning all three parties submitted that the opening work in progress and the expenses made in the year under consideration include the cost of the project and the Assessing Officer has entirely disregarded the fact that it is this very amount that has been deemed as income during return filing.

The revenue representative Mr Ahilendra Pratap Yadaw furnished that the assessing officer has incurred the disallowance u/s 69C on the foundation of the information furnished under the audit report of Rs 13,80,13,924. It again furnished that the taxpayer does not substitute its claims and it is not elaborated income since the same inflates the cost of progress of work without making any expenditure for claiming the higher deduction u/s 80IB of the Income Tax Act.

The bench noted that the taxpayer was securing a genuine cause to file the income return including the audit report as of the attachment of bank accounts and the search operation the compulsory date u/s 80AC stated to claim the deduction u/s 80IB has to be applied since the Apex Court’s decision for the case of Wipro Ltd. ( supra ) has carried that to claim the benefit u/s 10B(8) of the Income Tax Act, the twin prerequisites of providing a declaration before the Assessing Officer and that too before the deadline of filing original income return u/s 139(1) are to be fulfilled and both are to be complied with.

In the case, the two-member bench of the tribunal including Waseem Ahemed ( Accountant member ) and Suchithra Kamble ( Judicial member ) witnessed that the taxpayer was claiming deduction u/s 80IB (10) and the Income Tax rule u/s 80IB (10) is indeed using the word “shall” and hence the income return filing condition within the deadline was mandatory. Therefore, the taxpayer’s petition was dismissed.