2019 (3) TMI 2024 - AT - Income Tax

Deduction u/s 80IB - Denial of claim as assessee has failed to file the audit report in Form No. 10CCB online as required in Rule 12(2) of the Income Tax Rules, 1962 - HELD THAT - Since AO has out rightly declined the assessee s claim of deduction U/s 80IB of the Act merely for non-filing of report electronically, there is no merit in the action of the AO to decline claim of deduction U/s 80IB, unless the assessee had failed to fulfill the conditions stipulated U/s 80IB in respect of housing project. No where the AO has pointed out failure of the assessee to fulfill any of the conditions required to be fulfilled for claim of deduction u/s 80IB accordingly, there is no merit in the action of the AO in declining the claim of deduction U/s 80IB. In the substantial interest of justice, we restore the matter back to the file of the AO with a direction to allow the claim of deduction U/s 80IB of the Act if the conditions specified therein are fulfilled by the assessee like completion certificate etc. Appeal of the assessee is allowed for statistical purposes only.

Summary

Issues:
1. Decline of claim of deduction U/s 80IB of the Income Tax Act.
2. Disallowance of deduction due to failure to file the audit report electronically.
3. Interpretation of the requirement to file the audit report in Form No. 10CCB.

Detailed Analysis:
1. The appeal was filed against the order of the ld.CIT(A)-4, Jaipur for the A.Y. 2013-14 regarding the decline of the claim of deduction U/s 80IB of the Income Tax Act amounting to Rs. 13,65,811. The Assessing Officer disallowed the claim citing non-filing of the audit report in Form No. 10CCB online as required by the Income Tax Rules, 1962. The ITAT considered the facts that the assessee was engaged in real estate business, filed the necessary Form No. 10CCB physically before the Assessing Officer, and argued that the failure to file electronically should not disentitle the assessee from the claim if filed during assessment proceedings. The ITAT found no failure by the assessee to fulfill conditions for the deduction and directed the Assessing Officer to allow the claim if all conditions under U/s 80IB were met.

2. The ITAT referred to a similar case where the Tribunal observed that the filing of the audit report before the completion of assessment is sufficient, even if not filed along with the return of income. Various High Courts and the Supreme Court have consistently held that the audit report can be filed before the assessment is completed, and failure to file along with the return is not fatal to the claim. The ITAT upheld the claim of the assessee based on these judicial precedents and directed the Assessing Officer to allow the deduction under U/s 80IB if all conditions were met, despite the report not being filed electronically.

3. The ITAT emphasized that the failure to file the audit report electronically should not be the sole reason to decline the claim of deduction U/s 80IB, especially when the report was submitted physically during assessment proceedings. The ITAT highlighted that the Assessing Officer did not point out any failure by the assessee to fulfill the conditions required for the deduction. Therefore, the ITAT restored the matter back to the Assessing Officer with a direction to allow the deduction if all conditions specified under U/s 80IB were fulfilled, such as obtaining a completion certificate. The appeal of the assessee was allowed for statistical purposes only, emphasizing the importance of fulfilling statutory conditions for claiming deductions under the Income Tax Act.