Assessment Under Sec 153A of Income Tax Act Written By CMA Samir Biswal

Assessments completed under section 153A, read with section 143(3) of the

Income-tax Act, 1961. The appeal for the assessment year 2010-11 arises out of the regular assessment completed under section 143(3) of the Act. 4. The assessees herein are engaged in the business of developing and building of housing projects approved by local authorities. The assessees have not filed their returns of income for the impugned assessment years within the due dates prescribed under section 139(1) of the Income-tax Act, 1961. Meanwhile, there was a search action under section 132 conducted on the business premises of the assessees on 6-8-2009 and 17-8-2009. In pursuance of the said search carried out under section 132, the Assessing Officer issued notices under section 153A, requiring the assessees to file their returns of income for the period relevant to six assessment years. The notices under section 153A were issued on 26-7-2011. As the assessment in the case of HUF for the assessment year 2010-11 was a regular assessment completed -4- ITA 1219 to 1223 of 2012 under section 143(3), there was no question of issuing notice under section 153A.

Said assessment year 2010-11, in the case of the HUF. 5. Even though the assessees have not filed the returns of income before the due date prescribed under section 139(1) for the impugned assessment years, they had furnished their returns of income before the issue of notices under section 153A of the Act. In the individual case and in the HUF case returns were filed on 11-11-2010, after the due date prescribed under section 139(1) and after the search conducted, but before the issue of notice under section 153A. The return in the case of HUF for the assessment year 2010-11 was filed on 29-11-2011. Thereafter, the assessees again filed returns for the assessment years 2008-09 and 2009-10 on 23-9-2011, in response to the notices issued under section 153A of the Act. 6. It is in the above background that the story of these appeals begins. In the returns filed by the assessees, they claimed the deduction provided under section 80IB(10) of the Act. Section 80IB(10) provides for deduction in respect of profits and gains in the case of an undertaking developing and building.


DCIT vs. M/s.JMD Limited. the assessee has claimed deduction of interest -12- ITA 1219 to 1223 of 2012 expenditure by way of a note appended to the return of income filed under section 153A. The said expenditure had earlier been disallowed by the Assessing Officer in the regular assessment, which the assessee has not appealed against. In view of the provisions of section 153A(1)(a) that all the provisions would apply to the return of income as if it was a return filed under section 139, the Tribunal directed the Assessing Officer to allow the interest expenditure in the assessment made under section 153A. 18. Relying on the above two decisions of the Tribunal and in the light of the detailed discussion made by him, the Commissioner of Income-tax(Appeals) accepted the alternate contention of the assessees that the returns filed under section 153A should be treated as returns filed under section 139(1) and, therefore, the assessees are entitled for the deduction available under section 80IB(10) of the Act. 19. Thus the Commissioner of Income-tax(Appeals) held that the assessee is entitled for the deduction under section 80IB.


stated in section 153A(1)(a) that a statutory presumption is made that a return filed under section 153A is a return required to be filed under section 139(1). -23- ITA 1219 to 1223 of 2012 33. Where the law has declared that all the provisions of the Income-tax Act will apply to there turns filed by an assessee in response to a notice issued by the Assessing Officer under section 153A as if such return filed by the assessee was a return filed under section 139(1), there cannot be a clash of interpretation between the character of section 139(1) and section 139 adopted in section 153A(1)(a). It is to be seen that the law stated in section 153A starts with a non obstinate clause. It overrides all other provisions stated in the Act in matters of filing of return of income consequent to a search. By declaring through a non obstinate clause when section 153A adopts section 139 for the purpose of completing the assessment under section 153A, there is no scope for drawing a dividing line between section 139 provided in section 153A and section 139(1) simplicity. 34. The liability to file.

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This Article is written by CMA Samir Biswal. He can be reached at cmasamirbiswal@gmail.com

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