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Income Tax Appellate Tribunal, PUNE BENCH “A”, PUNE
Before: SHRI INTURI RAMA RAO & SHRI VINAY BHAMORE
PER INTURI RAMA RAO, AM:
These are the two appeals filed by the assessee directed against the separate orders of Addl/JCIT(A)-4, Chennai dated 22.12.2023 for the assessment years 2020-21 & 2021-22.
Since the identical facts and common issues are involved in the above appeals of the appellant, we proceed to dispose of the same by this common order. For the sake of convenience and clarity, the facts relevant to the appeal of the appellant in ITA No.358/PUN/2024 are stated herein.
ITA No.358 & 359/PUN/2024
Brief facts of the case are that the appellant is a company incorporated under the Companies Act, 2013. It is engaged in the business of handling, storage and transportation of Food grains. The Return of Income for the A.Y. 2020-21 was filed on 06.11.2020 disclosing total income of Rs.3,79,41,320/- after claiming deduction of Rs.1,09,84,213/- us.80IB(11A) of the Income-tax Act, 1961 (hereinafter also called ‘the Act’). The Tax Audit Report was also filed within the due date prescribed, however, Form 10CCB was not uploaded within the due date prescribed for submission of Audit Report u/s.44AB of the Act. The said return of income was processed u/s.143(1) by the CPC vide intimation dated 28.12.2021 disallowing the claim of deduction u/s.80IB(11A) of the Act.
Being aggrieved by the said intimation, an appeal was filed before the CIT(A) contending that filing of the prescribed Report in Form 10CCB before the due date of filing is only directory, placing reliance on the following decisions :
a. CIT Vs. G.M. Knitting Industries (P) Ltd.(2015) 376 ITR 456 (SC)
b. CIT Vs. Fortuna Foundation Engineers & Consultants (P) Ltd (2017) 81 taxmann.com 189 (All-HC) c. Marudhamalai Sri Dhandapani Spinning Mills Vs. DCIT – ITA No.11/Chny/2023, dt. 06.04.2023 d. Satish Cold Storage Vs. DCIT (2022) 97 ITR 601 (Lucknow-Trib)
Therefore, the claim for deduction us.80IB(11A) of the Act cannot be denied merely on the ground that prescribed Report was not uploaded on or before the due date for furnishing of Audit Report. However, the ld.CIT(A) rejected the said contention by holding that the mandatory conditions for availing deduction us.80IB(11A) of the Act furnishing the
ITA No.358 & 359/PUN/2024
prescribed Report in Form No.10CCB on or before the due date for filing of Audit Report was not complied with.
Being aggrieved, the appellant is in appeal before us in the present appeal.
The ld.AR submits that filing of prescribed Report in Form No.10CCB within the due date prescribed is only a mere directory and not mandatory placing reliance on the following decisions :
i. CIT Vs. G.M. Knitting Industries (P) Ltd.(2015) 376 ITR 456 (SC) ii. CIT Vs. Shivanand Electronics (1994) 209 ITR 63 (Bom.) iii. CIT Vs. Gujarat Oil & Allied Industries (1993) 201 ITR 325 (Guj.) iv. CIT Vs. Magnum Export (P) Ltd. (2003) 262 ITR 10 (Guj.) v. Mercedes Benz India Pvt. Ltd. Vs. DCIT – ITA No.1781/Pun/2013, order dt. 28.06.2016. vi. Sanjay Kukreja Vs. ACIT – ITA No.65/Del/2023, order dated 30.01.2024.
On the other hand, the ld.Sr. DR placing reliance on the orders of the lower authorities submits that no interference by this Tribunal is called for.
We heard the rival submissions and perused the material on record. The solitary issue in the present appeal is whether or not the CPC was justified in making adjustment under sub-clause (a) of sub- section (1) of section 143 of the Act by disallowing the deduction us.80IB(11A) in the absence of prescribed Report in Form No.10CCB as on the date of processing of the return of income.
The power of adjustment under sub-clause (a) of sub-section (1) of section 143 is summary in nature empowering to make adjustments
ITA No.358 & 359/PUN/2024
which are apparent from the return of income under clause (a) of sub- section (1) of section 143. This sub-clause specifies the kinds of adjustments which are required to be made for computing the total income or loss. Under sub-clause (ii) of clause (a) of sub-section (1) of section 143, the adjustment of an incorrect claim, if it is apparent from any information in the return of income can be made. Explanation appended to sub-clause (ii) of clause (a) to section 143(1) explains the meaning of ‘incorrect claim’ apparent from any information in the return of income to mean that information which is required to be furnished in the Act to substantiate an entry which had not been furnished. The provisions of section 80IB(13) mandates that for the purpose of availing deduction u/s.80IB(11A), the conditions stipulated u/s.80IA(7) has to be complied with. The provisions of section 80IA(7) provides the deduction in respect of profits and gains derived from the undertaking shall not be admissible unless the accounts of undertaking have been furnished for the previous year relevant to the assessment year had not been audited and the Audit Report in the prescribed form is furnished before the due date of filing of the Audit Report u/s.44AB of the Act. For better appreciation of the spirit of the provisions, the relevant provisions are extracted below :
“80IB(13) : The provisions contained in sub-section (5) and sub- sections (7) to (12) of section 80-IA shall, so far as may be, apply to the eligible business under this section. “80IA (7) : The deduction under sub-section (1) from profits and gains derived from an undertaking shall not be admissible unless the accounts of the undertaking for the previous year relevant to the assessment year for which the deduction is claimed have been audited by an accountant, as defined in the Explanation below sub-section (2) of section 288, before the specified date referred to in section 44AB and the assessee furnishes by that date the report of such audit in the prescribed form 85 duly signed and verified by such accountant.
ITA No.358 & 359/PUN/2024
From the mere reading of the above provisions, it is very clear that in order to claim the deduction u/s.80IB(11A) furnishing of prescribed Audit Report is a condition precedent for availing such deduction. Further, as held by the Hon’ble Supreme Court in the case of Zuari Estate Development Co. Ltd. Vs. Dy. Commissioner of Income Tax 373 ITR 661, the intimation u/s.143(1) is not to be considered as an assessment. The provisions of section 143(1) have to be considered on stand-alone basis. Therefore, in terms of sub-clause (ii) of clause (a) of Explanation appended to section 143(1), in the absence of prescribed Audit Report in Form No10CCB, adjustment on account of the disallowance of the claim for deduction 80IB(11A) can be made to the total income, which was not there as on the date of processing the return of income by the CPC. The assessee company could upload the Audit Report u/s.10CCB only on 07.10.2022, i.e., subsequent to processing of return u/s.143(1). Hence, the CPC was justified in making adjustment to the total income in terms of sub-clause (ii) of clause (a) of Explanation appended to section 143(1) of the Act.
The ratios laid down in the cases relied upon by the ld. Authorised Representative for the assessee have no application to the facts of the case, inasmuch as those decisions were rendered in the context of assessments made u/s.143(3) of the Act; whereas in the present case, we are concerned with the scope of adjustment made u/s.143(1)(a) of the Act. As discussed above, the adjustments made u/s.143(1)(a) by the CPC is not to be considered as an assessment. Therefore, we do not find any merit in the appeal by the assessee company.
In the result, the appeal filed by the assessee is dismissed.
ITA No.358 & 359/PUN/2024
The facts and issues stated in ITA No.358/PUN/2024 are identical even in appeal bearing ITA No. 359/PUN/2024. Therefore, the finding given in ITA No.358/PUN/2024 equally holds good for the appeal ITA No. 359/PUN/2024 for the AY.2021-22.
To sum up, both the appeals filed by the assessee are dismissed.
Order pronounced on this 12th day of July, 2024.
Sd/- Sd/- (VINAY BHAMORE) (INTURI RAMA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER पुणे / Pune; �दनांक / Dated : 12th July, 2024 Satish
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अपीलाथ� / The Appellant. 1. ��यथ� / The Respondent. 2. 3. The Pr.CIT concerned 4. िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण, “A” ब�च, पुणे / DR, ITAT, “A” Bench, Pune. गाड� फ़ाइल / Guard File. 5. आदेशानुसार / BY ORDER,
// True Copy // Senior Private Secretary आयकर अपीलीय अिधकरण, पुणे / ITAT, Pune