PRINCIPAL COMMISSIONER INCOMETAX, SURAT-2 vs. M/S VARDHMAN FASHIONS PVT LTD

TAXAP/787/2018HC GujaratGJHC24035913201809 July 2018Author: HONOURABLE MR. JUSTICE M.R. SHAH,HONOURABLE MR. JUSTICE A.Y. KOGJE4 pages
AI SummaryDismissed

What were the facts?

The Revenue (Principal Commissioner of Income Tax, Surat-2) is appealing against an order of the Income Tax Appellate Tribunal (ITAT) dated January 9, 2018, concerning Assessment Year 2012-2013. The assessee, M/s Vardhman Fashions Pvt Ltd, had declared a total income of Rs. 50,93,730. The Assessing Officer (AO) determined the total income at Rs. 1,20,19,371, disallowing Rs. 68,10,188 under Section 80IA(4)(iv) and Rs. 1,15,451 for certain expenses. The AO's primary reason for the Section 80IA disallowance was the non-furnishing of the audit report in the prescribed Form 10CCB along with the return of income. The assessee appealed to the CIT(Appeals), who deleted the disallowance, noting that Form 10CCB was filed during the assessment proceedings. The ITAT upheld the CIT(Appeals)'s decision, leading to the present appeal by the Revenue.

What did the High Court hold?

The High Court held that the issue was no longer res integra in light of a recent decision by a Division Bench of the same Court in the case of Pr. Commissioner of Income Tax, Surat 1 vs. Kiran Industries P. Ltd. (Tax Appeal No.893/2017). The Court noted that in that decision, it had repeatedly taken the view that filing of audited accounts in the prescribed format is a procedural requirement, and as long as it is complied with during the assessment proceedings, the deduction cannot be disallowed. The Court referred to its own previous judgments in Commissioner of Income-tax v. Gujarat Oil and Allied Industries and Panasonic Energy India Co. Ltd. v. Assistant Commissioner of Income-tax, which expressed a similar view. Therefore, the High Court concluded that no substantial question of law arose in the present appeal as it was covered against the Revenue. The appeal was dismissed.

What were the issues?

1. Whether, on the facts and circumstances, the ITAT was justified in upholding the deletion of the disallowance of Rs. 68,10,188 under Section 80IA of the Income Tax Act, 1961, when the assessee failed to furnish the audit report in the prescribed Form 10CCB? (Question of law) 2. Whether, on the facts and circumstances, the ITAT failed to appreciate that the assessee was statutorily required to electronically file the audit report in Form 10CCB before the due date for filing the return of income, as mandated by the proviso to Rule 12(2) of the Income Tax Rules, 1962? (Question of law) 3. Whether, on the facts and circumstances, the ITAT wrongly relied upon High Court judgments from 1992 and 1995 concerning Section 80J, when the present case pertains to Section 80IA applicable from April 1, 2000? (Question of law) Assessee's Contentions: The judgment does not record specific contentions made by the assessee before the High Court. However, it is implied that the assessee argued that the disallowance was incorrect as Form 10CCB was filed during assessment proceedings. Revenue's Contentions: The Revenue argued that the ITAT was unjustified in deleting the disallowance of Rs. 68,10,188 under Section 80IA as the assessee did not furnish the audit report in the prescribed Form 10CCB. They also contended that the assessee was statutorily required to file Form 10CCB electronically before the due date for filing the return of income, as per Rule 12(2). Furthermore, the Revenue argued that the ITAT wrongly relied on older judgments related to Section 80J.

Which sections of the Income-tax Act were involved?

Section 80IA,Section 80IA(4)(iv),Section 80J

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
C/TAXAP/787/2018 ORDER IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/TAX APPEAL NO. 787 of 2018 =========================================================== PRINCIPAL COMMISSIONER INCOMETAX, SURAT-2 Versus M/S VARDHMAN FASHIONS PVT LTD ================================================================ Appearance: MRS KALPANA K RAVAL(1046) for the PETITIONER(s) No. 1 for the RESPONDENT(s) No. 1 ================================================================ CORAM: HONOURABLE MR.JUSTICE M.R. SHAH and HONOURABLE MR.JUSTICE A.Y. KOGJE Date : 09/07/2018

ORAL ORDER (PER : HONOURABLE MR.JUSTICE M.R. SHAH)

1.

Feeling aggrieved and dissatisfied with the impugned judgment and order dated 09.01.2018 passed by the learned Income Tax Appellate Tribunal (ITAT), Ahmedabad in ITA No.3660/Ahd./2015 for the Assessment Year : 2012-2013, the Revenue has preferred the present Tax Appeal with the following proposed substantial questions of law :- “(A) Whether on the facts and circumstances of the case and in law, Hon’ble ITAT is justified in upholding the decision of ld. CIT(A) deleting the disa

The order continues below.

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