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Income Tax Appellate Tribunal, “C” BENCH, CHENNAI
Before: HON’BLE SHRI MAHAVIR SINGH & HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM
आयकर अपील सं./ (िनधाDरण वषD / Assessment Year: 2015-16) M/s. Anabond Ltd. CIT(Appeals), बनाम/ Type-II, 36 Dr. VSI Estate, National Faceless Appeal Centre Vs. Thiruvanmiyur, Chennai – 600 041. Delhi. �थायी लेखा सं./जीआइ आर सं./PAN/GIR No. AACCA-4158-Q (अपीलाथ�/Appellant) : (��थ� / Respondent) अपीलाथ� की ओरसे/ Appellant by : Shri Pawan Bohra (CA) a/w Shri B. Ramakrishna (CA) – Ld. ARs ��थ� की ओरसे/Respondent by : Shri G. Johnson (Addl. CIT) –Ld. DR सुनवाई की तारीख/ : 21-12-2021 Date of Hearing घोषणा की तारीख / : 14-02-2022 Date of Pronouncement आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. Aforesaid appeal by assessee for Assessment Year (AY) 2015-16 arises out of the order of learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [CIT(A)] dated 28-09- 2021 in the matter of intimation dated 27-11-2017 issued by Centralized Processing Center, Bangalore. The grounds raised by the assessee read as under: -
1. The order of the Learned Commissioner of Income Tax (Appeals) is contrary to the law, facts and circumstances of the case.
2. For that the Learned Commissioner of Income Tax (Appeals) erred in confirming the disallowances made by DCIT, CPC u/s 80-IC amounting to Rs.15,00,96,315/- (Tax effect-Rs. 5,10,17,740/-).
For that the Learned Commissioner of Income Tax (Appeals) erred in not considering the fact that the Appellant had claimed the deduction u/s 80-IC of the Act while filing its Original Return of Income u/s 139(1) of the Act and subsequently filed a Revised Return u/s 139(4) of the Act claiming the said deduction along with the Audit Report in Form-10CCB of the Act. 4. For that the Learned Commissioner of Income Tax (Appeals) ought to have considered the fact that the filing of audit report along with return is only directory and not mandatory in nature; thus deduction claimed u/s 80-lC of the Act could not be disallowed only on the ground that the appellant had not filed audit report along with its Original Return filed u/s 139(1) of the Act. 5. Assuming but not admitting the Learned Commissioner of Income Tax (Appeals) erred in not considering the fact that while passing the Order u/s 143(1) of the Act, the CPC having disallowed the claim of deduction u/s 80lC of the Act of Rs.15,00,96,315/-, ought to have provided the MAT credit amounting to Rs.6,98,71,988/- while computing the tax payable under normal provisions of Income-tax Act, 1961.
As evident, the assessee is aggrieved by denial of deduction u/s 80-IC of the Act due to non-filing of Audit Report in Form No.10CCB along with original return of income. The said form has subsequently been filed by the assessee.
The Ld. AR advanced arguments to support the case of the assessee and relied on various judicial pronouncements, the copies of which have been placed on record. Reliance has been placed, more particularly, on the decision of Hon’ble High Court of Madras in the case of CIT V/s Malind Laboratories P. Ltd. (TCA No. 878 of 2014 dated 18.11.2014). The Ld. DR, on the other hand, submitted that the assessee did not file mandatory Form No.10CCB in support of claim as mandated by the statutory provisions. Having considered rival submissions and after going through intimation / orders of lower authorities, our adjudication to the subject matter of appeal would be as under.
3 - 3. The assessee filed its return of income for this AY on 26.09.2015 which is within due date (31.10.2015) as prescribed u/s 139(1). In the return of income, the assessee claimed deduction u/s 80-IC for Rs.1500.96 Lacs. However, in support of deduction, the assessee did not upload mandatory Form No.10CCB. Therefore, the deduction so claimed was denied in the intimation issued u/s 143(1) on 14.03.2017. Subsequently, the assessee filed revised return of income u/s 139(4) on 29.03.2017 along with Form No.10CCB and claimed deduction u/s 80-IC in the same manner.
The return was processed by CPC, Bangalore and an intimation was issued to the assessee u/s 143(1) on 27-11-2017 wherein the deduction was again denied. Though the assessee sought rectification u/s 154, the same did not bear any fruit and a demand was raised against the assessee.
Aggrieved, the assessee preferred further appeal before Ld. CIT(A) and submitted that the deduction was claimed in original as well as revised return of income. This deduction was being claimed since AY 2006-07 which was allowed to the assessee. The attention was also drawn to the fact that similar deduction was allowed by Ld. AO u/s 154 for AY 2011-12 relying upon the cited decision of Hon’ble High Court of Madras in CIT V/s Malind Laboratories P. Ltd. (TCA No. 878 of 2014 dated 18.11.2014).
However, Ld. CIT(A) noted that filing of Form No.10CCB was sine- qua-non for claiming the deduction and the same was to be filed along with original return of income as per the mandate of Sec.80-IA(7). The provisions of this section provide that the deduction shall not be admissible unless the accounts were audited and the assessee 4 - furnishes, along with his return of income, the report of such audit in the prescribed form. Therefore, the Audit Report as required u/s 80-IC in Form No.10CCB was to be furnished along with the return of income. Since the same was not filed along with original return of income, deduction was rightly denied. Aggrieved, the assessee is in further appeal before us.
Upon careful consideration of factual matrix as enumerated in the preceding paragraphs, the undisputed position that emerges is that the assessee has made claim u/s 80-IC in the original return of income filed on 26-09-2015 as well as in the subsequent return of income filed on 29- 03-2017. The only reason to deny the deduction is the fact that the assessee did not upload Form No.10CCB along with original return of income filed on 26-09-2015. However, the assessee has filed another return of income u/s 139(4) on 29-03-2017 wherein the requirement of filing of Form No.10CCB has been fulfilled by the assessee. The Ld. CIT(A) rejected the claim of the assessee on the ground that the Audit Report as required u/s 80-IC in Form No.10CCB was to be furnished along with the return of income. Since the same was not filed along with original return of income, deduction was rightly denied. However, we are of the considered opinion that the requirement of Section 80-IA were that the accounts should have been audited and the assessee furnishes the Audit Report in the prescribed form, along with the return of income. In the present case, the assessee has filed the Form No.10CCB along with return of income filed on 29-03-2017 and the same has been processed by CPC, Bangalore. In such a case, the statutory requirement could be said to have been fulfilled by the assessee.
5 - 8. The facts in the case law of CIT V/s Malind Laboratories P. Ltd. (supra) are that the assessee was denied deduction u/s 80-IC since the same was not claimed in the return of income but the same was claimed by way of rectification. The learned first appellate authority allowed the claim of the assessee. The Tribunal confirmed the appellate order on the ground that the assessee was eligible to claim deduction u/s 80-IC and the ratio of decision of Hon’ble Supreme Court in the case of Ram Lal V/s Reva Coal Field Ltd. (AIR 1962 SC 361) was applicable wherein it was held that the state authorities should not raise technical pleas if the citizens have a lawful right. The state authorities could not adopt the attitude which private litigants might adopt. The revenue’s further appeal was dismissed by Hon’ble Court wherein it was concurred that when the assessee had given a reasonable explanation and supported it with a plea of bona-fide error, the same should be accepted and any decisions rendered otherwise will have the effect of denying the correct tax liability. Since the assessee was eligible for deduction, the order of the Tribunal was to be confirmed and the appeal was to be dismissed.
The Hon’ble High Court of Madras, in CIT V/s AKS Alloys (P.) Ltd. (18 Taxmann.com 25; 14-12-2011), held that the Audit Report in Form No.10CCB could have been filed before the assessment was completed. For the same, Hon’ble Court noted the decision of Hon’ble Karnataka High Court 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 6 - assessee. Similar was the view of Hon’ble Delhi High Court in the case in CIT v. Contimeters Electricals (P.) Ltd. [2009] 317 ITR 249 (Delhi), wherein the Delhi High Court, by following the judgments of the Madras High Court in CIT v. A.N. Arunachalam [1994] 208 ITR 481 and in CIT v. Jayant Patel [2001] 248 ITR 199 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. Similar was the view of High Court of Bombay in CIT v. Shivanand Electronics [1994] 209 ITR 63 as well as various other decisions.
In the present case, we find that Form No.10CCB has already been uploaded by the assessee along with subsequent return of income and the assessee has been granted similar deduction in earlier years. Therefore, the statutory requirements have duly been fulfilled by the assessee and we would hold that the assessee was eligible to claim the deduction u/s 80-IC. We direct CPC, Bangalore to grant this deduction to the assessee.
The appeal stand allowed in terms of our above order. Order pronounced on 14th February, 2022.