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2024 (6) TMI 651 - AT - Income TaxRevision u/s 263 - Disallowance of deduction u/s. 10AA - Audit Report (Form 56F) was filed at a belated stage instead of filing the same along with the return of income - HELD THAT - It is pertinent to note that the decision quoted in case of PCIT vs. Wipro 2022 (7) TMI 560 - SUPREME COURT though held that since the assessee did not file the Audit Report in Form No.56F, as required under law, the AO was right in disallowing the deduction claimed u/s 10AA of the Act as it is a mandatory condition prescribed under Section 10AA(8) of the Act read with Section 10A(5) of the Act but in the present case the assessee before the PCIT has filed the Audit Report i.e. Form No.56F. Subsequently, AO passed the order u/s 143(3) read with Section 263 and was having access to the Audit report i.e Form No.56F. The fact remains that when the assessee has filed the Form No.56F and the assessee on merit, is entitled for the deduction for which the AO has not commented anything on merit, the provision for filing Form 56F cannot come in the way of the assessee, as Form No.56F was filed before the Revenue Authorities. In fact, the decision of Zenith Processing Mills 1995 (9) TMI 37 - GUJARAT HIGH COURT will be applicable in the present case and the same should be taken into account wherein it is held that the requirement of furnishing Audit Report in prescribed form along with return is directory in nature prior to 01.04.2014 and it became mandatory w.e.f. 01.04.2014 while filing the returns electronically. The present Assessment Year is that of 2012-13 and, therefore, the decision relied by the assessee will be applicable in the present case. Thus, the appeal of the assessee is allowed.
Issues:
1. Disallowance of deduction under Section 10AA 2. Confirmation of interest levy under Section 234 Analysis: Issue 1: Disallowance of deduction under Section 10AA The assessee filed an appeal against the CIT(A)'s order upholding the disallowance of deduction under Section 10AA for the Assessment Year 2012-13. The Assessing Officer disallowed the deduction of Rs. 1,10,30,619 claimed by the assessee. The delay in filing the appeal was condoned due to genuine reasons. The key contention was the non-filing of Audit Report (Form 56F) along with the return of income. The assessee argued that the filing of Form 56F before the PCIT during revisionary proceedings should be considered as sufficient compliance. The AR highlighted important dates and events related to the filing of Form 56F and emphasized that the genuineness of the deduction claim was not in dispute. The AR cited various decisions to support the argument that the requirement of filing the Audit Report is directory in nature. The AR also explained the evolution of e-filing requirements for Audit Reports under Section 10AA. The Tribunal noted that the Audit Report was filed before the Revenue Authorities, and since the assessee was entitled to the deduction on merit, the non-filing of Form 56F with the return should not impede the claim. The Tribunal allowed the appeal based on the merits of the case and relevant legal precedents. Issue 2: Confirmation of interest levy under Section 234 The assessee also challenged the confirmation of interest levy under various sections of Section 234. The Tribunal did not provide a detailed analysis of this issue in the judgment, as the focus was primarily on the disallowance of deduction under Section 10AA. However, it can be inferred that since the appeal on the disallowance of deduction was allowed, the interest levy under Section 234 would also be impacted accordingly. In conclusion, the Appellate Tribunal ITAT Ahmedabad allowed the assessee's appeal regarding the disallowance of deduction under Section 10AA for the Assessment Year 2012-13. The Tribunal emphasized the genuineness of the claim and the filing of the Audit Report before the Revenue Authorities as key factors in granting the deduction. The judgment did not delve deeply into the issue of interest levy under Section 234, as the primary focus was on the disallowance of the deduction.
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