2017 (3) TMI 1773 - AT - Income Tax

Deduction admissible u/s 80IB - assessee has not submitted audit report in Form No.10CCB along with return filed originally u/s 139 - HELD THAT - No doubt sub-section (7) of section 80IA requires the assessee to submit audit report along with return for claiming deduction under section 80IB. But in various authoritative pronouncements it has been held that it is a directory requirement and not a mandatory one. If the assessee has submitted such report during the course of assessment proceedings and the AO has benefit of such report while evaluating claim of the assessee about admissibility of such deduction then such claim would not be rejected merely on the ground that audit report was not filed while filing return. The Hon ble jurisdictional High Court in the case of Gujarat Oil Allied Industries 1992 (9) TMI 67 - GUJARAT HIGH COURT has considered this aspect while dealing with admissibility of deduction under section80IA. The Hon ble Court was considering identical situation provided in section 80J(6A) and held that submission of audit report in support of claim admissible under section 80IB is a directory condition and if it is complied with even during the course of assessment proceedings then deduction could not be disallowed to the assessee. CIT(A) has passed its decision relying rightly on the decision of Hon ble jurisdictional High Court. No reason to interfere in the order of the CIT(A). Accordingly appeal of the Revenue is dismissed.

Summary

Issues involved:
1. Appeal against the order of the ld.CIT(A)-1, Surat dated 17.7.2013 regarding deduction under section 80IB of the Income Tax Act, 1961.
2. Reopening of assessment due to non-submission of audit report in Form No.10CCB along with the original return filed under section 139 of the Act.
3. Acceptance of claim by ld.CIT(A) based on various decisions, including the Hon’ble jurisdictional High Court’s decision in CIT Vs. Gujarat Oil & Allied Industries.

Analysis:
1. The Revenue appealed before the Tribunal against the order of the ld.CIT(A)-1, Surat dated 17.7.2013 concerning the deduction under section 80IB of the Income Tax Act, 1961. The Revenue's grievance was that the ld.CIT(A) granted the deduction despite the assessee not submitting the audit report in Form No.10CCB along with the original return filed under section 139 of the Act.

2. The assessee filed its return electronically on 31.12.2006, which was later revised under section 139(5) on 18.3.2008. The ld.AO granted the deduction under section 80IB in the assessment order under section 143(3). However, the AO reopened the assessment as the audit report in Form No.10CCB was not submitted along with the original return. The assessee submitted the audit report during the reassessment proceedings, explaining that it was not filed earlier due to the AO not requesting it during the original proceedings.

3. The ld.CIT(A) accepted the assessee's claim, citing various decisions, including the Hon’ble jurisdictional High Court’s decision in CIT Vs. Gujarat Oil & Allied Industries. The Tribunal, after careful consideration, noted that while section 80IA requires the submission of an audit report along with the return for claiming deduction under section 80IB, it has been interpreted as a directory requirement, not a mandatory one. The Tribunal referred to the Hon’ble jurisdictional High Court’s decision, which held that the submission of the audit report during the assessment proceedings suffices for the claim of deduction under section 80IB.

4. The Tribunal upheld the ld.CIT(A)'s decision, stating that if the AO had the benefit of the audit report during the assessment proceedings and considered it for evaluating the claim of deduction, the claim cannot be rejected solely on the ground of non-submission with the original return. Therefore, the Tribunal dismissed the Revenue's appeal, affirming the decision of the ld.CIT(A). Consequently, both the Revenue's appeal and the assessee's Cross Objection were dismissed.

Conclusion:
The Tribunal upheld the ld.CIT(A)'s decision to allow the deduction under section 80IB, emphasizing that the submission of the audit report during the assessment proceedings was sufficient, as per the interpretation of the law and relevant judicial precedents.