1987 (9) TMI 84 - AT - Income Tax

Summary

Issues:
1. Whether the assessee complied with the statutory provisions of section 12A (b) of the IT Act?
2. Whether the assessee is entitled to the benefit of section 11 of the IT Act despite non-compliance with section 12A (b)?

Detailed Analysis:
Issue 1:
The Revenue appealed against the direction of the AAC regarding compliance with section 12A (b) of the IT Act. The assessee filed a nil income return without the audited copies of accounts and Form No. 10B. The assessee explained that the audit was done after the original return filing date. The AAC held the assessee entitled to the benefit of section 11 based on case law. The Revenue contended that the revised return was invalid and the audit report was not in existence during the original return filing.

Issue 2:
The Revenue argued that non-compliance with the procedure was an irregularity, not an illegality. The assessee's counsel relied on various case laws to support compliance with statutory requirements. The ITO observed that the documents were filed during the assessment proceedings. The ITAT held that the audit report being produced before the ITO during proceedings fulfilled the requirements. Referring to previous cases, the ITAT concluded that the assessee was entitled to the benefits of section 11 based on the deeming feature of section 139(4A) and the timing of filing the audit report.

Conclusion:
The ITAT rejected the Revenue's ground and upheld the assessee's entitlement to the benefits of section 11. The decision was based on the reasoning of previous ITAT benches and the deeming provision of section 139(4A). The ITAT emphasized that compliance with the statutory requirements during the assessment proceedings cured any infirmity, allowing the assessee to claim the exemption under section 11.