2008 (8) TMI 273 - HC - Income Tax

Claim of Special deduction u/s 80HHC - report of chartered accountant, certifying that the deduction has been correctly claimed - Tribunal was right in holding that the Assessing Officer should not have rejected the legitimate claim of the assessee on mere technical ground, i.e., non-furnishing of the chartered accountant s report along with the return of income if report is submitted at subsequent stage and in any case, before the completion of assessment proceeding, the assessee s claim for deduction under section 80HHC cannot be disallowed

Summary

Issues:
1. Interpretation of section 80HHC of the Income-tax Act regarding deduction claims.
2. Admissibility of deduction claim under section 80HHC without filing the accountant's report along with the return of income.
3. Validity of remanding the case to the Assessing Officer by the Appellate Tribunal.

Analysis:
1. The case involved a dispute over the interpretation of section 80HHC of the Income-tax Act regarding deduction claims. The appellant, the Revenue, questioned the Appellate Tribunal's decision to remand the matter to the Assessing Officer for considering the deduction claim under section 80HHC. The key issue was whether the claim could be made during assessment proceedings even if not included in the original return of income.

2. The Assessing Officer rejected the deduction claim under section 80HHC as the appellant did not submit the accountant's report along with the return of income, as required by sub-section (4) of the said section. The Commissioner of Income-tax (Appeals) upheld this decision, emphasizing the mandatory nature of filing the accountant's report with the return of income for claiming the deduction under section 80HHC. The appellant challenged this before the Tribunal.

3. The Tribunal, considering the decisions of various courts, including the Gujarat High Court and the Calcutta High Court, held that the deduction claim cannot be disallowed solely based on the non-furnishing of the accountant's report with the return of income. The Tribunal directed the Assessing Officer to evaluate the claim on its merits. The High Court, after thorough analysis of the legal provisions and precedents, upheld the Tribunal's decision, emphasizing that the Assessing Officer should not reject a legitimate claim on technical grounds and should consider the claim under section 80HHC on its merits. The court ruled in favor of the assessee, concluding that the Tribunal's decision was appropriate and valid based on established legal principles.

This detailed analysis of the judgment provides a comprehensive understanding of the issues involved and the court's reasoning behind the decision.