Facts of the Case:

The Assessee, M/s Unitech Ltd., filed its income tax return for the assessment year (AY) 2008-09 on 2nd April 2009, claiming a deduction under Section 80IB(10). However, the Assessing Officer allowed the claim as per Section 143(3) on 30th December 2009. The case arose when the Commissioner of Income Tax (CIT) invoked jurisdiction under Section 263, withdrawing the deduction under Section 80IB(10), based on the belief that the Assessee did not file the return on or before the prescribed due date under Section 139(1) of the Income Tax Act, as per Section 80AC.

Issues Involved:

  • Whether the requirement under Section 80AC for filing the return within the due date specified under Section 139(1) is mandatory for claiming deductions under Section 80IB(10).
  • Whether CIT could invoke Section 263 jurisdiction when there was a conflict of opinions within ITAT regarding the interpretation of Section 80AC.

Petitioner’s Arguments:

The Revenue, represented by Mr. Rohit Madan, contended that the filing of the return on or before the prescribed due date is mandatory for claiming the deduction under Section 80IB(10), as clarified by decisions from the Uttarakhand and Calcutta High Courts, as well as several ITAT decisions.

Respondent’s Arguments:

On the other hand, M/s Unitech Ltd., represented by Mr. Salil Aggarwal and Mr. Ravi Pratap Mall, argued that there was a valid conflict of opinion within the ITAT itself. They cited several judgments that supported their position, including the Delhi High Court's decisions in CIT v. Integrated Databases (I) Ltd. and CIT v. Contimeters Electricals (P) Ltd.. These decisions implied that there could be room for a flexible interpretation of the time limit for filing returns.

Court’s Order/Findings:

The Delhi High Court dismissed the appeal by the Revenue, emphasizing that there was no authoritative pronouncement by the Court on whether Section 80AC was mandatory or directory. The Court found that at the time when the CIT passed the order under Section 263, there was a conflict of opinions among ITAT benches on the matter. Hence, the ITAT's reversal of the CIT's order was upheld. The Court also clarified that the issue of whether Section 80AC is mandatory was left open for consideration in an appropriate case.

Important Clarification:

The Court clarified that while Section 80AC's interpretation (whether mandatory or directory) was not settled, the ITAT's ruling to reverse the CIT's order under Section 263 was justified, as no substantial question of law arose on the issue.

Section(s) Involved:

  • Section 80AC: Deals with the requirement for filing a return to claim deductions under certain sections of the Income Tax Act.
  • Section 263: Allows the Commissioner of Income Tax to revise an order if found to be erroneous.
  • Section 80IB(10): Provides deductions for housing projects, related to the case's original claim.

Link to download the order: https://delhihighcourt.nic.in/app/case_number_pdf/2015:DHC:8364-DB/VIB05102015ITA2392015.pdf

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