1996 (2) TMI 192 - AT - Income Tax

Assessing Officer, Assessment Order, Assessment Proceedings, Delay In Filing, Rectification Proceedings

Issues Involved:
1. Deduction under section 80HHC of the Income Tax Act.
2. Filing of Form No. 10CCAB along with the return of income.
3. Unpaid sales tax and unpaid bonus deductions.
4. Assumption of jurisdiction under section 263 by the Commissioner.
5. Rectification proceedings under section 154.

Issue-wise Detailed Analysis:

1. Deduction under section 80HHC:
The assessee claimed a deduction under section 80HHC for the assessment year 1991-92. The Commissioner found that the Assessing Officer (A.O.) allowed the deduction without obtaining the requisite audit report in Form No. 10CCAB for the entire export turnover. The Commissioner deemed the A.O.'s order erroneous and prejudicial to the interest of revenue, leading to the assumption of jurisdiction under section 263.

2. Filing of Form No. 10CCAB:
The assessee argued that Form No. 10CCAB was filed during the assessment proceedings, not necessarily along with the return of income. The Commissioner, however, noted that the required certificates were not filed for six parties and only two certificates were submitted. The Tribunal referred to the Bombay High Court's decision in Shivanand Electronics, which held that while obtaining the forms is mandatory, filing them along with the return is not. The forms can be submitted during the assessment proceedings but before the completion of the assessment. However, in this case, there was no evidence that the forms were filed during the assessment proceedings.

3. Unpaid Sales Tax and Unpaid Bonus:
The Commissioner found that the A.O. erroneously allowed deductions for unpaid sales tax and unpaid bonus. The Tribunal noted that the unpaid sales tax was paid on 4-6-1991 and the unpaid bonus on 11-1-1994, before filing the return of income. This issue was covered by the Patna High Court in Jamshedpur Motor Accessories Stores and the Calcutta High Court in Sri Jagannath Steel Corpn., which held that such payments made before the due date for filing the return are allowable. Therefore, the rectification under section 263 on this issue was not justified.

4. Assumption of Jurisdiction under Section 263:
The Tribunal examined whether the Commissioner was justified in assuming jurisdiction under section 263. The learned counsel for the assessee argued that the A.O.'s order was in accordance with law and the Commissioner could not assume jurisdiction simply because he believed the order should have been more elaborate. The Tribunal found that the Commissioner was justified in invoking section 263 as the A.O.'s order was erroneous and prejudicial to the revenue due to the failure to file Form No. 10CCAB during the assessment proceedings.

5. Rectification Proceedings under Section 154:
The A.O. issued a notice under section 154 to rectify the apparent mistake but did not proceed with it. The learned counsel argued that rectification proceedings are part of the assessment proceedings, citing various judicial decisions. However, the Tribunal held that rectification proceedings under section 154 are not part of the assessment proceedings for the purpose of obtaining relief under section 80HHC. The assessee failed to file the requisite forms during the assessment proceedings and did not provide any reasons for the delay, thus not entitled to the deduction under section 80HHC.

Conclusion:
The appeal was partly allowed. The Tribunal upheld the Commissioner's decision regarding the erroneous allowance of the deduction under section 80HHC due to the non-filing of Form No. 10CCAB during the assessment proceedings. However, it found that the deductions for unpaid sales tax and unpaid bonus were correctly allowed by the A.O. and did not warrant rectification under section 263.

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