One minute delay in return filing – ITAT allows section 80IA(4) deduction

Hi-Tech Water Solution Pvt. Ltd. Vs DCIT (ITAT Surat)

The return of income was filed by assessee on 31-10-2018 (Midnight) at 12.00, however, the server (the computer electronic machine- website of department) accepted it at 12.01 hours on 01-11-2018 (next day). Thus, return of income so filed was late by one minute. Therefore, deduction claimed by assessee under section 80IA(4) of the Act was denied by CPC, Bangalore (Assessing officer), as while processing of the return of income by the CPC, it was considered, as if the return of income was filed beyond due date prescribed under section 139(1) of the Act, and therefore by invoking the provision of section 143(1)(a)(v) of the Act, the deduction claimed by assessee u/s 80IA(4) has been disallowed.

We note that in the assessee’s case, there is a delay in filling the return of income by one minute only. The Co-ordinate Bench of ITAT, Surat, on the similar and identical facts, has condoned the delay in filling the appeal for eleven minutes, vide order of Co-ordinate Bench in the case of M/s. Veekay Rayon, in ITA No.490/SRT/2019 for AY.2015-16, dated 17.05.2022.

We note that delay of one minute in filing of the return was due to technical snags in the website of department, and therefore return could not be uploaded. Therefore, we note that there is only a negligible delay (one minute only) which is due to bonafide reasons as has explained above, therefore, delay in filling return of income is hereby condoned.

FULL TEXT OF THE ORDER OF ITAT SURAT 

Captioned appeal filed by the assessee, pertaining to the Assessment Year (AY) 2018-19, is directed against the order passed by the Learned Commissioner of Income Tax (Appeals), [in short “the ld. CIT(A)”], National Faceless Appeal Centre (in short ‘NFAC’), dated 29.11.2022, which in turn arises out of an assessment order passed by the Assessing Officer, Central Processing Centre (CPC), Bangalore under section 143(1) of the Income Tax Act, 1961 (hereinafter referred to as “the Act”), dated 13.06.2019.

2. Grounds of appeal raised by the assessee are as follows:

“1. The CIT(A)-NFAC-Delhi has erred in confirming the incorrect adjustment made under clause (v) of the section 143(1)(a) of the Act, in disallowing the deduction claimed u/s 80(I)(A) of Rs.1,52,16,470/- (restricted to the amount of Gross Total Income of Rs.1,48,55,222/-).

2. The CIT(A)-NFAC-Delhi has erred in not deleting the repetition of above disallowance by way of incorrect adjustment made under section 143(1)(a)(i) of the Act.

3. The CIT(A)-NFAC-Delhi has erred in confirming the repetition of above disallowance by way of incorrect adjustment made under section 143(1)(a)(ii) of the Act.

4. The appellant craves leave to add, alter or very any of the grounds of appeal.”

3. Brief facts qua the issue are that assessee before us is a Private Limited Company and engaged in the business of developing, operating and maintaining the infrastructure facility. The assessee-company filed its return of income for assessment year (A.Y.) 2018-19 on 31-10-2018 (Midnight) at 00.01 hours of 01-11-2018, declaring total income at Rs. Nil, after claiming deduction under section 80 IA (4) and deemed total income u/s 115 JB of the Act at Rs.1,52,16,470/-. The assessee had claimed deduction u/s 80-IA(4) of the Act to the tune of Rs.1,52,16,470/- on account of infrastructure development. The deduction so claimed u/s 80-IA(4) of the Act, was restricted to the extent of Gross Total Income of Rs.1,48,55,222/ -.

4. The return of income was filed by assessee on 31-10-2018 (Midnight) at 12.00, however, the server (the computer electronic machine- website of department) accepted it at 12.01 hours on 01-11-2018 (next day). Thus, return of income so filed was late by one minute. Therefore, deduction claimed by assessee under section 80 IA (4) of the Act was denied by CPC, Bangalore (Assessing officer), as while processing of the return of income by the CPC, it was considered, as if the return of income was filed beyond due date prescribed under section 139(1) of the Act, and therefore by invoking the provision of section 143(1)(a)(v) of the Act, the deduction claimed by assessee u/s 80 IA(4) has been disallowed.

5. Aggrieved by the order of the Assessing Officer, (CPC Bangalore) the assessee carried the matter in appeal before the ld. CIT(A), who has confirmed the action of the Assessing Officer, [Central Processing Centre (CPC), Bengaluru]. Aggrieved, by the order of the ld. CIT(A), the assessee is in further appeal before us.

6. Learned Counsel for the assessee pleaded that return of income filed by the assessee is late by one minute as the server (the computer electronic machine of the Department- website of department) was not responding properly, hence there was delay in filling the appeal by one minute only. The ld Counsel submitted that such delay is due to the fact that server (website of department) of the Income Tax Department was working slow, therefore delay in filling the return of income may be condoned and the deduction under section 80IA of the Act should be allowed.

7. On the other hand, Learned Departmental Representative (Ld. DR) relied on the order of the authorities below.

8. After giving our thoughtful consideration to the submission of the parties and perusing the judicial decisions relied upon by the Ld. AR, we find that the issue involved in the present appeal is no longer res integra. We note that in the assessee’s case, there is a delay in filling the return of income by one minute only. The Co-ordinate Bench of ITAT, Surat, on the similar and identical facts, has condoned the delay in filling the appeal for eleven minutes, vide order of Co-ordinate Bench in the case of M/s. Veekay Rayon, in ITA No.490/SRT/2019 for AY.2015-16, dated 17.05.2022 wherein it was held as follows:

“6. We have considered the rival submissions of the parties and have gone through the orders of the lower authorities carefully. We find that during the assessment proceedings, it was noticed by the Assessing Officer that the assessee had declared loss of Rs.1,50,40,579/- for the year under appeal. In this case, the due date for filing return of income extended was 31/10/2015 and the assessee filed its return on 01/11/2015 which was beyond the date. The Assessing officer disallowed the carried forward loss of Rs. 1,50,40,579/- by taking a view that where the assessee has some capital loss or business loss from business or profession to be carried forward, the assessee should file its return of income within due date as prescribed under Section 139(1). The ld. CIT(A) has held that assessee’s claim of loss was disallowed for the reasons that the return was not filed within due date prescribed under section 139(1). The ld CIT(A) held that the delay of 11 minutes is bonafide. The ld. CIT(A) also recorded that the digital signatory Manish K Gupta could upload his proprietary return of income of Maatra Overseas within prescribed due date of 31/10/2015 (before 00:00 hrs of 01/11/2015) but the same digital signatory could not upload the return of income of the assessee within the prescribed deadline due to system congestions/session expired message.

7. We find that the Hon’ble Madras High Court in the case of Regen Infrastructure & Services (P) Ltd. Vs CBDT (supra) has held that when the delay in filing of the return was due to technical snags in the website of department, and return could not be uploaded and due to which the carry forward loss could not be denied to the assessee. The Coordinate Bench of Hyderabad Tribunal in the case of ACIT Vs M/s Noel Pharma (supra) has also held that when delay was not because of any lapse on the part of assessee but due to technical reasons in uploading the return electronically and due to delay of few hours in getting connectivity and the date was changed from 30^th September to 01^st October. Thus, considering the totality of facts and circumstances and legal position, we affirm the order of the ld. CIT(A). In the result, the ground of appeal raised by the revenue are dismissed.

8. In the result, the appeal of the Revenue is dismissed.”

9. We note that delay of one minute in filing of the return was due to technical snags in the website of department, and therefore return could not be uploaded. Therefore, we note that there is only a negligible delay (one minute only) which is due to bonafide reasons as has explained above, therefore, delay in filling return of income is hereby condoned.

10. We also direct the Assessing Officer to examine the eligibility of the claim of the assessee and terms and conditions under section 80IA of the Act and after verification of the same, the deduction under section80-IA(4) of the Act, should be allowed in accordance with law. For statistical purposes, appeal filed by the assessee is treated as allowed.

11. In the result, appeal filed by the assessee is allowed for statistical purposes.