DEPUTY COMMISSIONER OF INCOME TAX, JAIPUR vs. M/S BHAGWATI HOTELS & RESORTS LTD., JAIPUR

आयकर अपीलीय अधिकरण] जयपुर न्यायपीठ] जयपुर IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR Jh fot; iky jko] U;kf;d lnL; ,oa Jh foØe flag ;kno] ys[kk lnL; ds le{k BEFORE: SHRI VIJAY PAL RAO, JM AND SHRI VIKRAM SINGH YADAV, AM vk;dj vihy la-@ITA No. 174/JP/2018 fu/kZkj.k o"kZ@Assessment Years : 2014-15 cuke Dy. Commissioner of Income M/s Bhagwati Hotels & Resorts Ltd., Vs. Tax, Circle-4, Jaipur. F-214, Road No. 10, VKI Area, Jaipur. LFkk;h ys[kk la-@thvkbZvkj la-@PAN No. AABCB 9972 G vihykFkhZ@Appellant izR;FkhZ@Respondent

jktLo dh vksj ls@ Revenue by : Smt. Seema Meena (JCIT) fu/kZkfjrh dh vksj ls@ Assessee by : Shri P.C. Parwal (CA)

lquokbZ dh rkjh[k@ Date of Hearing : 04.04.2018. ?kks"k.kk dh rkjh[k@ Date of Pronouncement : 05/04/2018.

vkns'k@ ORDER

PER: VIKRAM SINGH YADAV, AM

The appeal is filed by the Revenue against the order of Ld. CIT(A)-2,

Jaipur dated 29.11.2017 for the A.Y. 2014-15 wherein the Revenue has

challenged the action of the Ld. CIT(A) in deleting the disallowance of

deduction u/s 80IA ignoring the provision of Section 80AC and 80IA(7)

wherein the assessee was mandatory required to file the audit report in Form

No. 10CCB electronically on or before the due date of filing the return of

income.

engaged in the activity of power generation and distribution and its project

2 ITA No. 174/JP/2018. M/s Bhagwati Hotels & Resorts Ltd., Jaipur.

was running at Sodamada, Jaisalmer from the Financial Year 2003-04 and

during the year under consideration, deduction u/s 80-IA(4)(iv) has been

claimed for the first time amounting to Rs. 56,74,556/-. The Assessing Officer

observed that in terms of provision of Section 80IA(7) read with sub rule (2)

of Rule 12 of the Income Tax Rules, the assessee company was required to

furnish the audit report in Form No. 10CCB electronically along with the return

of income and given that the assessee has not complied with the same, the

deduction claim u/s 80IA amounting to Rs. 56,74,556/- was denied to the

assessee company.

Ld. CIT(A) and it was submitted that the only default on the part of the

assessee is that it has not filed the audit report electronically but there is no

dispute as to the fact that the assessee has obtained the audit report before

the due date and filed the audit report manually before the Assessing Officer

during the course of assessment proceedings and it is thus eligible to claim

deduction under section 80IA of the Act. It was further submitted that this

being the first year for claim of deduction u/s 80IA and furnishing the audit

report in Form 10CCB, the amendment relating to filing of the audit report

electronically has missed the attention of the assessee company.

3 ITA No. 174/JP/2018. M/s Bhagwati Hotels & Resorts Ltd., Jaipur.

Khetan Tiles Pvt. Ltd. ITA No. 353 & 505/JP/2017 dated 09.08.2017 wherein it

was held that while filing of the audit report is mandatory, the further

condition that it should be filed with the return of income is directory in nature

and so long as the audit report has been filed during the course of

assessment proceedings, substantial compliance has been made by the

assessee company. Drawing support from the said decision and submissions

filed by the assessee company, the Ld. CIT(A) has allowed the claim of

deduction u/s 80IA of the Act.

made before the Ld. CIT(A) and also relied on the decision of the Co-ordinate

Bench in the case of Khetan Tiles Pvt. Ltd (Supra). Per contra, Ld. D/R relied

on the provision of Section 80IA(7) read with Rule 12(2) and submitted that

the assessee company was mandatory required to file the audit report

electronically before the specified due date of file of the return of income and

since it has failed to comply with the same, the AO has rightly denied the

claim of deduction u/s 80IA of the Act.

record. It is noted that this is the first year of claim of deduction under

Section 80IA by the assessee company and the AO has stated in the

4 ITA No. 174/JP/2018. M/s Bhagwati Hotels & Resorts Ltd., Jaipur.

assessment order that despite the assessee claiming deduction u/s 80IA, copy

of the audit report required under section 80IA(7) was not filed along with the

reply dated 8.9.2015. The AO thereafter refers to the provision of Section

80IA(7) and Rule 12(2), and held that the assessee has not complied with the

relevant provisions of Income Tax and has not filed the audit report in Form

10CCB electronically along with the return of income and no explanation in

this regard has been filed inspite of assessee being asked to clarify during the

course of assessment proceedings. The AO thereafter held that the assessee

has made false deduction u/s 80IA without filing any audit report in Form

10CCB. In light of the said findings of the AO, it is clear that the assessee has

not filed the audit report electronically. However, it is not clear as to whether

the assessee has filed the audit report in Form 10CCB even manually during

the course of assessment proceedings based on what the AO has stated

initially in the assessment order. Though the assessee has stated before the

ld CIT(A) that audit report has been filed manually during the course of

assessment proceedings, there is no finding of the ld CIT(A) in this regard.

Before us, the ld AR has again reiterated the said contentions, however, there

is nothing on record to support the said contentions in terms of filing of the

audit report manually before the AO. Further, we find that the AO has stated

that the assessee has claimed false deduction under section 80IA without

filing the audit report, it seems that in absence of such a report, the AO has

had no occasion to examine the satisfaction of other conditions for claim of

5 ITA No. 174/JP/2018. M/s Bhagwati Hotels & Resorts Ltd., Jaipur.

deduction under section 80IA, being the first year of claim of such deduction.

The ld AR has stated at the Bar that there is no dispute that the assessee is

eligible to claim such deduction and in the subsequent years, the Revenue has

accepted the said claim of the assessee company and has allowed the

deduction so claimed by the assessee company. We therefore deem it

appropriate to remand the matter to the file of the AO. Where the AO

determines that the audit report in Form 10CCB has been filed manually

during the course of assessment proceedings, non-filing of such a report

electronically is only a technical breach and the same on a standalone basis

cannot be a basis for denial of deduction under section 80IA of the Act.

Further, regarding other conditions of eligibility for claim of deduction under

section 80IA, where the AO determines that the assessee has been allowed

the claim of such deduction in the subsequent years after due examination,

the AO shall allow the same for the impunged assessment year. Otherwise,

the AO shall examine the eligibility conditions and fulfillment thereof by the

assessee and determine the claim of deduction as per law. With the above

directions, the matter is set-aside to the file of the AO. The ground of appeal

is thus allowed for statistical purposes.

The appeal of the Revenue is allowed for statistical purposes.

6 ITA No. 174/JP/2018. M/s Bhagwati Hotels & Resorts Ltd., Jaipur.

Order pronounced in the open Court on 05/04/2018.

Sd/- Sd/- (Jh fot; iky jko) (foØe flag ;kno ½ (VIJAY PAL RAO) (VIKRAM SINGH YADAV) U;kf;d lnL; / Judicial Member ys[kk lnL; /Accountant Member

Jaipur Dated:- 05/04/2018. Pooja/ आदेश की प्रतिलिपि अग्रेषित@ब्वचल वf जीम वतकमत वितूंतकमक जवरू

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