By TIOL News Service

KOLKATA, JUNE 02, 2018: THE ISSUE BEFORE THE COURT IS - Whether when the statute contains express prohibition on availing Sec 80IB benefits in case of failure to file return u/s 139(1) within the prescribed period, the assessee can still avail the benefits during extended period as per Sec 139(4). AND THE ANSWER IS NO.

Facts of the case:

The assessee is a joint venture company and had some non-residents as its directors and share-holders. As a result, the annual accounts for the joint venture company could not be completed within the stipulated time and an application was made before the relevant Registrar of Companies for extension of the time to complete the finalisation of the accounts and the acceptance thereof at a deferred annual general meeting. Pursuant to the Registrar's orders, the accounts were finalised in November of the relevant year and the annual general meeting was also held. In terms of Section 139(4) of the Act, the returns were filed at a belated stage but upon complying with the requirements of such provision.

During assessment, the AO found that the assessee had claimed benefits conferred u/s 80IB. However, the AO disallowed the benefits on the grounds that the assessee had not filed its returns for the relevant AY within the time stipulated u/s 139(1).

High Court held that,

++ since the embargo is couched in negative words. Had it been a case where the express prohibition as in the words quoted from Sec 80AC were not there, an arguable case could have been made out. However, when the governing provision expressly mandates that no such deductions shall be allowed unless the assessee filed his returns of income "on or before the due dates specified under" Section 139 (1) of the Act, there is no question of referring to the extended period permitted u/s 139(4) to seek the benefit. Indeed, if the embargo were not as strict as is evident from the relevant provision, the entirety of Sec.139 would have been mentioned in the relevant expression in Sec.80AC which would have included within its sweep the extended period under sub-section (4) thereof. But in such provision referring only to sub-section (1) of Sec.139, the reference to the other provisions of Sec.139 must be understood to have been excluded;

++ since the legal issue raised by the assessee is directly covered in the judgment of Shelcon Properties P. Ltd. and the view expressed therein does not require to be revisited notwithstanding the aberration in the case of S. R. Batliboi, the appeal is dismissed at the admission stage. ITAT No.385 of 2016 and GA No.690 of 2018 stand dismissed. GA No. 3162 of 2016 was the application under Sec. 5 of the Limitation Act, 1963, which has been allowed at the beginning.

(See 2018-TIOL-1043-HC-KOL-IT)