2021 (3) TMI 72 - AT - Income Tax

Deduction u/s. 80IC denied - non filing of audited accounts in Form 10CCB along with the return of income - HELD THAT - Referring to material on record and the decision of case of CIT vs. G.M. Knitting Industries Pvt. Ltd. 2015 (11) TMI 397 - SC ORDER find that the assessee has filed Form 10CCB and the books of account during the course of assessment proceedings. AO ought to have considered the same before disallowing the claim of deduction u/s. 80IC of the Act. The order of the CIT(A) is ex-parte, and the assessee's appeal was not considered on merits. In view of the same, deem it fit and proper to remand the issue to the file of the AO for verification and reconsideration of the issue. Assessee's appeal is treated as allowed for statistical purposes.

Summary

Issues:
Assessee's appeal against order of CIT(A) disallowing deduction u/s. 80IC for A.Y. 2015-16.

Analysis:
1. The assessee, an individual running two business units, filed her return of income for A.Y. 2015-16 admitting an income of ?4,85,450. She claimed deduction u/s. 80IC for Vishnu Polymers in Uttarakhand. The AO disallowed the deduction as the audit report in Form 10CCB was not submitted along with the return, and P & L A/c and balance sheet were not provided for the eligible undertaking.

2. The assessee's appeal before CIT(A) was dismissed for non-appearance. The grounds of appeal raised before the Tribunal challenged the addition made by the AO and alleged violation of principles of natural justice by CIT(A). The assessee contended that Form 10CCB was filed during assessment proceedings, and the separate P & L A/c and Balance Sheet were submitted. The assessee cited the decision of CIT vs. G.M. Knitting Industries Pvt. Ltd. to support the contention that details can be filed during the assessment proceedings.

3. The learned Counsel for the assessee argued that the assessee had filed Form 10CCB and the books of account during assessment proceedings, fulfilling the conditions u/s. 80IC. On the other hand, the DR supported the authorities' orders, emphasizing the requirement of filing audited accounts in Form 10CCB along with the return of income and maintaining separate books of account for the eligible unit.

4. The Tribunal found that the assessee had indeed filed Form 10CCB and the books of account during assessment proceedings. Considering the decision in CIT vs. G.M. Knitting Industries Pvt. Ltd., the Tribunal held that the AO should have considered the filed documents before disallowing the deduction u/s. 80IC. The ex-parte order of the CIT(A) was deemed inappropriate, leading to the remand of the issue to the AO for verification and reconsideration.

5. Consequently, the assessee's appeal was treated as allowed for statistical purposes. The judgment was pronounced in the Open Court on 22nd February 2021.