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Income Tax Appellate Tribunal, ‘B’ BENCH: CHENNAI
Before: SHRI ABY T. VARKEY & SHRI S.R.RAGHUNATHA
आदेश / O R D E R
PER ABY T. VARKEY, JM: This is an appeal preferred by the assessee company against the
order of the Learned Commissioner of Income Tax (Appeals)/JCIT,
(hereinafter in short "the Ld.CIT(A)”), Mumbai, dated 08.02.2024 for the
Assessment Year (hereinafter in short "AY”) 2017-18.
The main grievance of the assessee is against action of the First
Appellate Authority not condoning the delay of 442 days in filing of the
appeal and dismissing the same. The brief facts are that the assessee
ITA No.767/Chny/2024 (AY 2017-18) M/s.Copral Energy Pvt. Ltd. :: 2 ::
company was incorporated on 12.04.1994 and was engaged in the
business of manufacturing of insulated conductors, primarily copper and
aluminum. Assessee had filed its return on 20.12.2017 declaring gross
total income of Rs.3,97,57,505/- and total income of Rs.3,28,96,620/- by
claiming deduction of Rs.68,60,886/- u/s.80IA of the Income Tax Act,
1961 (hereinafter in short "the Act”). Assessee’s return of income was
processed by CPC u/s.143(1) of the Act on 01.10.2018, wherein,
assessee’s claim of deduction was rejected on the ground that the Tax
Audit Report (hereinafter in short "TAR")/Form 10CCB had not been filed
along with return of income. According to the assessee, neither it
received any show cause notice from the CPC before the adjustment was
made (revising deduction u/s.80IA of the Act) nor intimation order
u/s.143(1) of the Act dated 01.10.2018. According to the assessee, it
came to its knowledge about the intimation order of CPC (supra) only in
the first week of January, 2020 and immediately thereafter, the assessee
filed the TAR dated 30.10.2017 in Form 10CCB before the Income Tax
authorities. According to the Ld.AR, assessee was enjoying Sec.80IA deduction for the last four years and the relevant year was the 5th year of
claim for deduction u/s.80IA of the Act. Therefore, according to the
Ld.AR, the assessee in no way would benefit from non-filing of Form
10CCB which was inadvertently not uploaded, though assessee had TAR
dated 30.10.2017 at the time of filing of return of income in December,
ITA No.767/Chny/2024 (AY 2017-18) M/s.Copral Energy Pvt. Ltd. :: 3 ::
2017. However, the Ld.CIT(A) has rejected the statutory appeal only
because the assessee didn’t file condonation petition for condoning the
delay of 442 days. According to the Ld.AR, the assessee was in the dark
about the intimation order passed by the CPC dated 01.10.2018. And
again asserted that assessee didn’t get any show cause notice from the
CPC before it denied deduction u/s.80IA of the Act. And immediately,
after knowing about the order passed by the CPC, the assessee without
wasting any time, rectified the inadvertent mistake of non-filing of Form
10CCB/TAR, which was already in their hands as on 30.10.2017 but filed
only on 08.01.2020.Therefore, assessee pleads to condone the delay and
also cited the decision of the Hon’ble Madras High Court in the case of
CIT v. AKS Alloys (P) Ltd., reported in [2012] 18 taxmann.com 25 (Mad),
wherein, the Hon’ble Madras High Court had an occasion to deal with such
claim being made without filing of TAR along with RoI and the question of
law raised by the Revenue was as under:
"1.Whether on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was right in holding that the assessee was entitled to claim deduction u/s.80IB in respect of the unit at Pondicherrys even though the assessee had not complied with the mandatory provision for filing the Audit Report in Form 10CCB in support of the claim as stipulated in Section 80IB(13) r/w.Sec.80IA(7) of the Act, by observing that it was enough if the Audit Report was filed before the assessment was completed?” 3. And the Hon’ble High Court answered the same by upholding the
action of the Tribunal and dismissed the Revenue appeal by holding as
under:
ITA No.767/Chny/2024 (AY 2017-18) M/s.Copral Energy Pvt. Ltd. :: 4 ::
2.The assessee company is engaged in the business of manufacture of steel ingots. In respect of the assessment year 2005-06, assessment order dated 26.12.2007 was passed under Sec.143(3) of the Act, in which, the assessing officer has disallowed the claim of the assesee made under Section 80IB of the Act and has also made addition of Rs.1,20,00,000/- as unexplained credit, under Section 68 of the Act, on the ground that for the purpose of claiming deduction, the assessee did not file necessary certificate in Form 10CCB of the Act along with the return of income, which was filed on 18.7.2005 declaring the income as Rs.1,02,11,036/-.
As against the disallowance of the claim, the assessee filed an appeal before the Commissioner of Income Tax (Appeals). The appellate authority has allowed the appeal, thereby granting the claim of the assessee made under Section 80IB of the Act. It was against the said order, the Revenue has preferred appeal before the Appellate Tribunal, which came to be dismissed under the impugned order.
Being aggrieved by the said order, the present appeal has been filed on the above substantial questions of law.
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 THE COMMISSIONER OF INCOME TAX AND ANOTHER vs. ACE MULTITAXES SYSTEMS (P) LTD. (2009) 317 ITR 207(Karnataka), 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 COMMISSIONER OF INCOME TAX v. CONTIMETERS ELECTRICALS (P) LTD -(2009) 317 ITR 249(Delhi), wherein the Delhi High Court, by following the judgements of the Madras High Court in COMMISSIONER OF INCOME TAX V. ARUNACHALAM (A.N.)-(1994) 208 ITR 481 and in CIT v. JAYANT PATEL (2001) 248 ITR 199 (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.
That is also the consistent view of the other High Courts, including the High Court of Bombay in Commissioner of Income Tax v. Sivanand Electronics- (1994)209 ITR 63(Bom), apart from Gujarat High Court in zenith Processing Mills v. CIT-(1996) 219 ITR 721 and Panjab and Haryana High Court in CIT V. Mahalaxmi Rice Factory (2007) 294 ITR 631.
The Culcutta High Court in the case in THE COMMISSIONER OF INCOME TAX V. BERGER PAINTS (INDIA) LTD (NO.2) has also concurred with the said view which was followed by the Tribunal in this case.
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.
ITA No.767/Chny/2024 (AY 2017-18) M/s.Copral Energy Pvt. Ltd. :: 5 ::
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.
We also note that the Department challenged the order of the
Hon’ble Madras High Court in the case of CIT v. AKS Alloys (P) Ltd.,
(supra) which was decided by the Hon’ble Supreme Court along with the
case of CIT v. GM Knitting Industries (P) Ltd., reported in [2015] 376 ITR
456 (SC) and also the decision of the Hon’ble Madras High Court. The
head notes of the decision are as under:
Section 80-18 of the Income-tax Act, 1961 - Deductions - Profits and gains from industrial undertakings (Condition as to number of workers) - Assessment year 2005-06-Even though necessary certificate in Form 10CCB along with return of income had not been filed but same was filed before final order of assessment was made, assessee was entitled to claim deduction under section 80-IB [In favour of assessee] Even though necessary certificate in Form 10CCB along with return of income had not been filed but same was filed before final order of the assessment was made, the assessee was entitled to claim deduction under section 80-1B
Therefore, in the light of the above discussion, we are inclined to
condone the delay of 442 days, since assessee was not aware of the
intimation order dated 01.10.2018 and since, the assessee had already
got the TAR in its hand on 30.10.2017, which event was well before the
return was filed on 20.12.2017. Therefore, we set-aside the impugned
order of the Ld.CIT(A) and restore the appeal back to the file of the
Ld.CIT(A) with a direction to decide the appeal on merits as claimed by
the assessee after considering the judgment of the Hon’ble Supreme
ITA No.767/Chny/2024 (AY 2017-18) M/s.Copral Energy Pvt. Ltd. :: 6 :: Court in the case of GM Knitting Industries (P) Ltd. (supra) / AKS Alloys (P) Ltd. (supra) in accordance to law, after hearing the assessee.
In the result, appeal filed by the assessee is allowed for statistical purposes.
Order pronounced on the 25th day of June, 2024, in Chennai.
Sd/- Sd/- (एस. आर. रघुनाथा) (एबी टी. वक�) (S.R.RAGHUNATHA) (ABY T. VARKEY) लेखा सद�य/ACCOUNTANT MEMBER �याियक सद�य/JUDICIAL MEMBER
चे�ई/Chennai, �दनांक/Dated: 25th June, 2024. TLN, Sr.PS आदेश क� �ितिलिप अ�ेिषत/Copy to: 1. अपीलाथ�/Appellant 2. ��थ�/Respondent 3. आयकरआयु�/CIT, Chennai / Madurai / Salem / Coimbatore. 4. िवभागीय�ितिनिध/DR 5. गाड�फाईल/GF