2019 (8) TMI 1129 - HC - Income Tax

Benefit of deduction u/s 80IA - assessee raised revised claim before AO - audit reports under Form No. 10CCB filed at the time of assessment - whether ITAT had overlooked Section 80AC read with 80IA (7) ? - HELD THAT - Deduction under sub-Section 1 of 80IA shall not be admissible unless the accounts of the undertaking for the previous year relevant to the assessment year for which the deduction is claimed have been audited by an accountant and the Assessee furnishes on furnishing his return of income the report of such audit in the prescribed form duly signed and verified by such accountant. The admitted position that the Assessee did not furnish such audited report form as originally filed. It has been explained by the Assessee that in view of Rule 12(2) of Income Tax Act 1962 which required returns filed electronically not to be accompanied by any document the audit reports under Form No. 10CCB of Windmill Project I and II were in fact not required to be filed along with return of income of 2009-10. The requirement was subsequently introduced by amending the Rules by the Income Tax (Seventh Amendment) Rules 2013 with effect from 1st April 2013. As a result these audit reports were filed in the course of assessment by letter dated 9th November 2011 and this has not been disputed by the Revenue. Whether the claim can be raised in a revised return it seems to be answered in favour of the Assessee and against the Revenue by the judgment of this Court in CIT v. Jai Parabolic Springs Limited 2008 (4) TMI 3 - DELHI HIGH COURT . In the said decision this Court has recognized that the powers of the ITAT are wide enough to admit a claim for deduction to be made by way of a revised return. - Decided in favour of assessee.

Summary

Issues:
- Appeal against ITAT order for AY 2009-10
- Interpretation of Sections 80AC and 80IA
- Admissibility of revised deduction claim under Section 80IA
- Requirement of audited reports for deduction claim

Analysis:

1. The appeal was filed by the Revenue against an ITAT order for AY 2009-10, questioning the allowance of Section 80IA benefit to the Assessee. The primary issue revolved around whether the ITAT overlooked the mandate of Section 80AC read with Section 80IA (7) in granting the benefit of Section 80IA to the Assessee.

2. The Respondent had established Windmill Projects in Gujarat and claimed deduction under Section 80IA for AY 2009-10, the first year of claim under this section. The deduction is available for ten consecutive years out of fifteen from the year the undertaking starts generating power. The original return filed by the Assessee claimed deductions accordingly.

3. The Assessee sought to enhance the deduction claim based on a Madras High Court decision, arguing against setting off unabsorbed depreciation from previous years. The AO rejected the revised claim, but the CIT (A) later admitted it. Both parties appealed to the ITAT, which upheld the Assessee's claim on merits.

4. The High Court analyzed the provisions of Section 80AC and 80IA, emphasizing the requirement of furnishing audited reports with the return of income. The Assessee initially did not provide these reports with the return but submitted them during assessment, citing a rule that exempted electronic returns from accompanying documents.

5. The Court referred to previous judgments, such as CIT v. Jai Parabolic Springs Limited and CIT Sam Global Securities Ltd, which supported the Assessee's ability to raise claims through revised returns. Consequently, the Court ruled in favor of the Assessee, stating that the ITAT had the authority to admit deduction claims through revised returns. The appeal was thus disposed of in favor of the Assessee.