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TMI Blog1995 (10) TMI 77X X X X Extracts X X X X X X X X Extracts X X X X ..... the auditors in Form No. 10CCB along with the return of income. In this case original assessment had been completed on31st January, 1986 at an income of Rs. 5,09,786. This assessment was modified under section 154 to Rs. 4,42,000 vide order dated7-3-1986. On the basis of the internal audit objection, Assessing Officer initiated proceedings against the assessee on the ground that deduction under section 80-I amounting to Rs. 61,379 had been wrongly allowed to the assessee. Besides a trading loss amounting to Rs. 51,581 was also considered to have wrongly been allowed to the assessee. In pursuance to the initiation of proceedings under section 147(b) a notice under section 148 had been served upon the assessee on13-5-1988. The assessee filed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 147(b) and the additions made by the Assessing Officer. The CIT (A) has upheld the reopening of the assessment under section 147(b). It was held that correct state of law on the point which has not been considered during the original assessment, constitutes information as it conveys knowledge and awareness of law and brings into notice the effect and consequences of correct state of law leading to the belief that income has escaped assessment. 3. On merits, the CIT (A) held that though maintenance of separate accounts in respect of the new unit was not-necessary yet filing of audit report in Form No.10CCB is mandatory. In this connection, he relied upon the decision of the Punjab and Haryana High Court in the case of CIT v. Jaideep Indu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10CCB was not filed along with the return of income. The Assessing Officer allowed the claim of the assessee on the basis of the material on record. When proceedings under section 147 were initiated the assessee filed return of income. The certificate of the auditors in Form No. 10CCB dated3rd July, 1985had also been filed along with the return filed in response to the notice under section 148. There is no evidence on record with us in this regard. However, a statement has been made by the learned counsel for the assessee at the Bar and the same has not been controverted before us. We, therefore, proceed on the basis of that. The assessee had filed the certificates of the auditor in Form No. 10CCB along with the return filed in response to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the other and that it will be erroneous to attach equal importance to the non-observance of all conditions irrespective of the purpose they were intended to serve ". On the basis of the principle laid down by their Lordships of the Supreme Court in the afore-mentioned case, the Tribunal in the case of Mrs. Sudha Sharma v. ITO [1993] 44 ITD 351 while interpreting the provisions of section 80HHC held that the filing of the certificate along with the return of income belongs to the area of procedure. Provisions of sections 80-I and 80HHC in the matter of filing of the certificate along with the return of income are para material with each other. When we go into the spirit of legislation behind section 80-I(7) it is quite clear that the requi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... another opinion. To put it bluntly, the Assessing Officer has considered the certificate of the auditors in Form No. 3CB/ 3CD, which is similar to Form No. 10CCB, as sufficient compliance for the purposes of allowance of deduction under section 80-I. The opinion of the auditor is to the contrary. This does not constitute information within the meaning of section 147(b). We derive support in this regard from the decision of the Supreme Court in the case of Indian and Eastern Newspapers Society v. CIT [1979] 119 ITR 996. 5. The decision of the Allababad High Court in the case of Gulati Pharmaceuticals(P.) Ltd. v. Prakash Chandra, ITO [1991] 187 ITR 582, in our view, does not support the plea of the revenue. In that case it was held by thei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Prescribed certificate of the auditors in Form No. 10CCB has also been filed along with the return filed in response to notice under section 148. So in reassessment proceedings when all the conditions for grant of deduction under section 80-I are satisfied how can the Assessing Officer deny the benefit of deduction to the assessee. The assessee is entitled to deduction as all the conditions for grant of the same are satisfied. Therefore, assuming that the Assessing Officer had wrongly allowed deduction under section 80-I in the original assessment, the claim of the assessee being in order in reassessment proceedings, the Assessing Officer was bound to allow the same. The decision of thePunjaband Haryana High Court in the case of Jaideep I ..... X X X X Extracts X X X X X X X X Extracts X X X X
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