2011 (4) TMI 1484 - AT - Income Tax

Summary

Issues Involved:
1. Non-allowance of deduction u/s 80QQB for royalty received from outside India.
2. Procedural requirement of filing Form No. 10CCD along with the return of income.
3. Powers of CIT(A) in admitting additional evidence and granting relief.

Summary:

Issue 1: Non-allowance of deduction u/s 80QQB for royalty received from outside India

The assessee, a reader at the University of Delhi and author of the book "Difficult Daughters," claimed a deduction u/s 80QQB amounting to Rs. 1,63,075 for royalty received from outside India. The deduction was disallowed by the AO and confirmed by the CIT(A) on the grounds that the requisite certificate in Form No. 10CCD was not filed along with the return of income.

Issue 2: Procedural requirement of filing Form No. 10CCD along with the return of income

The assessee argued that the certificate in Form No. 10CCD was received after the filing of the return of income and could not be submitted on time due to the illness of her tax counsel. The CIT(A) admitted the certificate under r. 46A(4) but upheld the disallowance, stating that the statutory requirement u/s 80QQB(3) mandates filing the certificate along with the return. The CIT(A) noted that the assessee could have waited to file the return u/s 139(4) after receiving the certificate.

Issue 3: Powers of CIT(A) in admitting additional evidence and granting relief

The assessee's representative cited various case laws, including CIT v. Trehan Enterprises and CIT v. Hardeodas Agarwalla Trust, arguing that procedural provisions should not be construed as mandatory if defects can be rectified subsequently. The Tribunal agreed, stating that filing the certificate is a procedural provision and should not be mandatory. The CIT(A) has plenary powers similar to the AO and should have granted relief based on the admitted certificate. The Tribunal directed that the deduction u/s 80QQB be allowed, emphasizing that procedural provisions are meant to advance justice.

Conclusion:

The Tribunal allowed the appeal, directing the deduction u/s 80QQB to be granted to the assessee, as the procedural lapse of not filing Form No. 10CCD with the return was rectified during appellate proceedings.