M/S UNIQUE BUILDERS AND DEVELOPERS (AJIT),JAIPUR vs. DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-2, JAIPUR

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ITA 249/JPR/2018Status: DisposedITAT Jaipur27 March 2019AY 2013-147 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the non-filing of the audit report electronically would not disentitle the assessee to the deduction if the report was filed during the assessment proceedings. The AO's action of disallowing the claim solely on this ground was not justified.

What were the facts?

The assessee, engaged in real estate business, claimed a deduction under Section 80IB. The Assessing Officer disallowed this claim because the audit report in Form 10CCB was not filed electronically as required by Rule 12(2). The CIT(A) upheld this disallowance.

What were the issues?

Whether the failure to file the audit report electronically disentitles the assessee from claiming deduction under Section 80IB, even if filed physically during assessment proceedings.

Which sections of the Income-tax Act were involved?

Section 80IB

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Income Tax Appellate Tribunal, JAIPUR BENCHES (SMC

Before: SHRI RAMESH C SHARMAvk;dj vihy la-@ITA No. 249/JP/2018

For Appellant: Shri Manish Agarwal (CA) jktLo dh vksj ls@
Hearing: 19/03/2019Pronounced: 27/03/2019

आयकर अपीलीय अधिकरण] जयपुर न्यायपीठ] जयपुर IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES (SMC), JAIPUR Jh jes'k lh 'kekZ] ys[kk lnL; ds le{k BEFORE: SHRI RAMESH C SHARMA, ACCOUNTANT MEMBER vk;dj vihy la-@ITA No. 249/JP/2018 fu/kZkj.k o"kZ@Assessment Year : 2013-14 cuke M/s Unique Builders and D.C.I.T., Vs. Developers (Ajit), Central Circle-2, Special Bench-59, 3rd Floor UDB Jaipur. Tower, Opp.- Jaipur Nagar Nigam, Tonk Road, Jaipur- 302015 LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: AABFU 8858 R vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@ Assessee by : Shri Manish Agarwal (CA) jktLo dh vksj ls@ Revenue by : Ms. Anuradha (JCIT) lquokbZ dh rkjh[k@ Date of Hearing : 19/03/2019 mn?kks"k.kk dh rkjh[k@ Date of Pronouncement : 27/03/2019 vkns'k@ ORDER PER: R.C. SHARMA, A.M.

This is an appeal filed by the assessee against the order of ld.CIT(A)-4, Jaipur dated 29/01/2018 for the A.Y. 2013-14 in the matter order passed U/s 143(3) of the Income Tax Act, 1961 (in short the Act).

2.

In this appeal, the assessee is aggrieved for decline of claim of deduction U/s 80IB of the Act amounting to Rs. 13,65,811/-.

ITA 249/JP/2018 2 M/s Unique Builders & Developers (Ajit) Vs. DCIT

3.

Rival contentions have been heard and record perused. The facts in brief are that the assessee company is engaged in real estate business. Return of income for the year under consideration was filed on 30/07/2013 declaring total income at Rs. NIL after claiming deduction U/s 80IB of Rs. 13,65,811/-. In the course of assessment U/s 143(3) of the Act, the Assessing Officer declined assessee’s claim U/s 80IB of the Act by alleging that the assessee has failed to file the audit report in Form No. 10CCB online as required in Rule 12(2) of the Income Tax Rules, 1962. By the impugned order, the ld. CIT(A) confirmed the disallowance and the assessee is in further appeal before the ITAT.

4.

I have considered rival contentions and carefully gone through the orders of authorities below. From the record I found that the assessee is engaged in the business of real estate development. During the year under consideration the assessee firm filed the return of income where the income was computed by following the project completion method and since the project was stated to be completed, the assessee had claimed deduction of Rs. 13,65,811/- u/s 80IB of the Act and necessary Form No. 10CCB duly signed by the Chartered Accountant was filed before the Deputy Commissioner of Income Tax, Central Circle- II, Jaipur on 31.07.2013. Copy of Form No. 10CCB along with ITA 249/JP/2018 3 M/s Unique Builders & Developers (Ajit) Vs. DCIT acknowledgment of deposit of the same was furnished before the Assessing Officer. Though the assessee had not filed the Form No. 10CCB electronically as required by the first proviso to Rule 12(2) of the Income Tax Rules, 1962, however, assessee had filed the report during the course of assessment proceedings. However, the Assessing Officer without appreciating the fact that the assessee had already filed the report in physical form in his office within the stipulated time period, disallowed the deduction claimed by the assessee U/s 80IB of the Act.

5.

In support of his contention that mere not filing the audit report electronically will not disentitle the assessee from its claim, if the same is filed during the course of assessment proceedings, ld. A.R. of the assessee has placed on record the order of the Coordinate Bench in the case of ITO Vs M/s Marathon India Ltd. in order dated 27/06/2018 wherein the Tribunal has observed as under:

“5. We have considered the rival submissions as well as the relevant materials on record. The AO has not disputed the eligibility of the assessee for deduction U/s 80IE of the Act being nature of business and undertaking of the assessee engaged in the manufacturing of goods or articles. Only reasons for disallowance of claim of deduction U/s 80IE of the Act by the AO is not filing of the audit report in form No. 10CCB along with the return of income. It is also not in disputed that the assessee filed the requisite tax audit report in Form No. 10CCB during the course of assessment proceedings and before the assessment order

ITA 249/JP/2018 4 M/s Unique Builders & Developers (Ajit) Vs. DCIT was passed by the AO. The Hon’ble Madras High Court in case of CIT vs. AKS Alloy Pvt. Ltd. 205 Taxman 11 while considering an identical issue of not filing of audit report in Form 10CCB along with return of income but filed the same before the assessment was completed has held in paras 5 to 13 as under:-

“5. In so far as it relates to the substantial question of law (1) is concerned, namely, whether the filing of audit report in Form 10CCB is mandatory, it is well settled by a number of judicial precedents that before the assessment is completed, the declaration could be filed. In fact, the said issue came to be decided by the Karnataka High Court in the case in CIT v. ACE Multitaxes Systems (P.) LTD. [2009] 317 ITR 207(Kar.), wherein it was held that when a relief is sought for under Section 80IB of the Act, there is no obligation on the part of the assessee to file return accompanied by the audit report, thereby, holding that the same is not mandatory. Therefore, it is clear that before the assessment is completed if such report is filed, no fault could be found against the assessee. That was also the view of the Delhi High Court in the case in CIT v. Contimeters Electricals (P.) Ltd. [2009] 317 ITR 249/ 178 Taxman 422(Delhi), wherein the Delhi High Court, by following the judgements of the Madras High Court in CIT v. A.N. Arunachalam [1994] 208 ITR 481/ 75 Taxman 529and in CIT v. Jayant Patel [2001] 248 ITR 199/117 Taxman 707 (Mad.) held that the filing of audit report along with the return was not mandatory but directory and that if the audit report was filed at any time before the framing of the assessment, the requirement of the provisions of the Act should be held to have been met.

6. That is also the consistent view of the other High Courts, including the High Court of Bombay in CIT v. Shivanand Electronics [1994] 209 ITR 63/ 75 Taxman 93(Bom.), apart from Gujarat High Court in Zenith Processing Mills v. CIT [1996] 219 ITR 721(Guj.) and Punjab and Haryana High Court in CIT v. Mahalaxmi Rice Factory [2007] 294 ITR 631/ 163 Taxman 565(Punj. & Har).

7.

The Calcutta High Court in the case in the CIT v. Berger Paints (India) Ltd. [2002] 254 ITR 503/[2003] 126 Taxman 435(Cal.) has ITA 249/JP/2018 5 M/s Unique Builders & Developers (Ajit) Vs. DCIT

also concurred with the said view which was followed by the Tribunal in this case.

8.

Mr. T. Ravikumar, the learned counsel for the appellant is not able to produce any other judgement contrary to the above said views consistently taken.

9.

In the light of the above, by virtue of hierarchy of judgements which are against the Revenue, the substantial question of law (1) would not arise at all for consideration.

10.

In so far as the substantial question of law (2) is concerned, it relates to the deletion of addition of Rs. 1,20,00,000/- made under Section 68 of the Act by the assessing officer as unexplained share application money, and the issue has been covered by the judgement of the Madras High Court in the case in CIT v. Gobi Textiles Ltd. [2007] 294 ITR 663/[2008] 170 Taxman 142(Mad.) holding against the Revenue.

11.

In such view of the matter, the substantial question of law (2) also does not merit consideration.

12.

In fact, to arrive at such conclusion, the Madras High Court has relied on the judgement of the Delhi High Court in CIT v. Stellar Investment Ltd. [1991] 192 ITR 287/ 59 Taxman 568(Delhi), which judgement has been confirmed by the Honourable Apex Court and the same was reported in CIT v. Steller Investment Ltd. [2001] 115 Taxman 99/ 251 ITR 263(SC).

13.

In the light of the above, no question of law much less substantial question of law would arise for consideration. Accordingly, the tax case appeal stands dismissed. Connected miscellaneous petition is closed. However, there is no order as to costs.”

The order of Hon’ble Madras High Court has been affirmed by the Hon’ble Supreme Court in case of CIT vs. G.M. Knitting Industries (P.) Ltd.(supra). Accordingly, in view of the various binding precedent as relied upon by the ld. CIT(A) while allowing the claim of the assessee,

ITA 249/JP/2018 6 M/s Unique Builders & Developers (Ajit) Vs. DCIT we do not find any error or illegality in the impugned order of the ld. CIT(A). Hence, we uphold the impugned order of the ld. CIT(A).”

6.

In view of above judicial pronouncements, there is no reason to out rightly decline the claim of deduction U/s 80IB of the Act only on the plea of the report not filed electronically and when the report was duly submitted before the Assessing Officer during the course of assessment proceedings. Since the Assessing Officer has out rightly declined the assessee’s claim of deduction U/s 80IB of the Act merely for non-filing of report electronically, there is no merit in the action of the Assessing Officer to decline claim of deduction U/s 80IB, unless the assessee had failed to fulfill the conditions stipulated U/s 80IB of the Act in respect of housing project. No where the Assessing Officer has pointed out failure of the assessee to fulfill any of the conditions required to be fulfilled for claim of deduction U/s 80IB of the Act, accordingly, there is no merit in the action of the Assessing Officer in declining the claim of deduction U/s 80IB of the Act. In the substantial interest of justice, we restore the matter back to the file of the Assessing Officer with a direction to allow the claim of deduction U/s 80IB of the Act if the conditions specified therein are fulfilled by the assessee like completion certificate etc.. I direct accordingly.

ITA 249/JP/2018 7 M/s Unique Builders & Developers (Ajit) Vs. DCIT 6. In the result, appeal of the assessee is allowed for statistical purposes only.

Order pronounced in the open court on 27th March, 2019

Sd/- ¼jes'k lh 'kekZ½ (RAMESH C SHARMA) ys[kk lnL;@Accountant Member ys[kk lnL;@ ys[kk lnL;@ ys[kk lnL;@ Tk;iqj@Jaipur fnukad@Dated:- 27th March, 2019 *Ranjan आदेश की प्रतिलिपि अग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू vihykFkhZ@The Appellants- M/s Unique Builders and Developers 1. (Ajit), Jaipur. izR;FkhZ@ The Respondent- The D.C.I.T., Central Circle-2, Jaipur. 2. vk;dj vk;qDr@ CIT 3. vk;dj vk;qDr¼vihy½@The CIT(A) 4. विभागीय प्रतिनिधि] आयकर अपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत 5. xkMZ QkbZy@ Guard File (ITA No. 249/JP/2018) 6. vkns'kkuqlkj@ By order,

सहायक पंजीकार@Aेेज. त्महपेजतंत

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