“Section 119(3)(b)”
The decision most relied on for Section 119(3)(b) is CIT v. G.M. Knitting Industries (P.) Ltd. (376 ITR 456), cited in 221 judgments on BharatTax.
Leading authorities on Section 119(3)(b)
The requirement to file a certificate or form (e.g., Form 10CCB, 10-IC) along with the return of income for claiming a deduction (e.g., under sections 80-IB, 115BAA) is directory regarding its timing. Such a deduction is allowable if the requisite form is filed before the final order of assessment, as procedural requirements should not override substantive benefits.
An assessment cannot be reopened under Section 147/148 based on a mere change of opinion by the Assessing Officer on material already considered during the original assessment, clarifying the scope of 'escaped assessment'.
The requirement to file an audit report along with the income tax return, as specified in provisions like Section 80J(6A) or 80-IA(7), is directory and not mandatory. Substantial compliance is achieved if the audit report is submitted at any time before the assessment is framed or completed, and benefits should not be denied merely due to a delay in furnishing it.
Exemption provisions under Chapter III, such as Section 10B(8), must be interpreted strictly, and any claim for such exemptions must be made in the return of income. The principles governing Chapter III (incomes not forming part of total income) differ from those for Chapter VIA (deductions in computing total income).
The requirement to file an audit report along with the return of income under section 80-IA(7) and similar provisions is directory, not mandatory. Such a report suffices if filed at any time before the assessment is framed.
An assessment order becomes erroneous and prejudicial to the revenue under Section 263 if the Assessing Officer fails to conduct a proper inquiry or investigation, even if the return appears prima facie correct. The Income-tax Officer has a duty to investigate and cannot remain passive.
The Gujarat High Court held that Form No. 10, for exercising the option under section 11(2) to accumulate income, can be submitted during assessment proceedings, including before the Income Tax Appellate Tribunal, which is a continuation of assessment proceedings. Such submission constitutes sufficient compliance for claiming exemption under section 11.
For claiming deductions under Section 80IB, the audit report in Form 10CCB can be filed any time before the assessment is completed, even if not submitted along with the original return of income.
