Income Tax Act - Deduction under section 10A(1A) not allowed to an assesse who does not furnish a return of his income on or before due date specified under Sec.139(1) - This is Mandatory not merely directory - ITAT SB
AS per Section 10A (1A) of the Income Tax Act, deduction is allowed on export profits, but as per the proviso to this Section, no deduction shall be allowed if the return is not filed within the time limit specified under Section 139(1). In this case, the assessee filed the Return on 31.01.2007 when it was required to file the return latest by 31.12.2006. And the AO promptly disallowed the deduction.
The question before the Special Bench of the ITAT was: "Whether the proviso to Sec.10A(1A) of the Income Tax Act, which says that no deduction under Sec.10A shall be allowed to an assessee who does not furnish a return of his income on or before the due date specified under sec.139(1), is mandatory or merely directory?"
And the Special Bench of the ITAT had no hesitation in holding that the provisions of the proviso to Section 10A(1A) is mandatory and not directory.
We bring you this order today.