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TMI Blog1987 (4) TMI 127X X X X Extracts X X X X X X X X Extracts X X X X ..... CTR (Cal) 433 : (1977) 107 ITR 909 (Cal) and Andhra Pradesh High Court decision in CIT vs. Warner Hindustan Ltd., (1978) CTR (APP) 228 : (1979) 117 ITR 68 (APP). For assessment year 1981-82 the relief claimed was Rs. 2,62,530. However, in view of the amendment and insertion of sub-s. (1A) to s. 80J by Finance (No. 2) Act, 1980, the correct relief was worked out by the ITO at Rs. 77,497. Having worked the correct relief he denied the relief on the ground that the assessee did not file the auditor's report in Form No. 10D as prescribed under r. 18C of the IT Rules r/w s. 80J (6A) of the IT Act. It is not as if the audit reports were not prepared. Inter alia, audit reports for asst. yr. 1982-83 also were prepared and signed on 31st Dec, 1984. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itors was that it should point out that the books of accounts were maintained in the proper manner and that the accounts gave a true and fair view of the affairs of the industrial undertaking for the relevant accounting year, and there was no necessity for the audit report to be prepared at any particular point of time. Therefore, he held ultimately that the assessee is entitled to s. 80J relief as computed correctly by the ITO. Aggrieved against the impugned order of the ld., CIT(A) the present second appeal is filed by the Revenue and thus the matter stands for our consideration. 4. It is argued by the ld., Departmental Representative that there is an inbuilt time limit prescribed in s. 80J(6A) to file the audit report. The filing of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1st April, 1973 and nothing prevented to treat the revised return under s. 139(1). In fact, this decision is more helpful to the assessee than to the department's contention. 6. In Dilsukhrai Ranglal vs. CIT (1976) 102 ITR 640 (Ori) the Orissa High Court considered whether a firm is entitled to continuation of registration under s. 184(7) if a mere declaration that there is no change in the constitution of the firm was filed without the said declaration being accompanied by a return. The Orissa High Court held that in such a case and under those circumstances the earlier registration will continue to have effect for the subsequent year. Halima Fancy Stores vs. CIT (1976) CTR (Mad) 295 : (1976) 104 ITR 190 (Mad) is also a case where cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , namely: (e) where the accounts of the assessee have been audited, the return is accompanied by copies of the audited profit and loss account, balance sheet and the auditor's report and where an audit of cost accounts of the assessee has been conducted under s. 233B of the Companies Act, 1956 (1 of 1956), also the report under that section: therefore, the non-accompanying of the audit report along with return is an instance which should be considered as defective return. As already stated s. 139(9) was inserted w.e.f. 1st Sept., 1980 whereas the Madras High Court decision in 1976 CTR (Mad) 295 : (1976) 104 ITR 190 (Mad) was rendered on 8th July, 1975 whereas the Orissa High Court decision in (1976) 102 ITR 640 (Ori) was rendered on 16th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... port should accompany the return is directory and cannot totally deprive the assessee of relief if it is otherwise admissible. The AAC's order that the mistake was not capable of rectification cannot be accepted and since the audit report was in order, the assessee would be entitled to deduction. Another direct decision is also cited both before the lower authority and before us and that is Chandigarh Bench decision in Mahalaxmi Rice Factory vs. ITO (1984) 18 TTJ (Chd) 553 : (1983) 5 ITD 238 (Chd). The facts of that case are quite identical with facts on hand. There also the assessee firm's claim for deduction under s. 80J was refused by the ITO on the ground that no audit report was accompanying the return of income as required under s. 80 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the principle that the appeal is a continuation of the original proceedings and the appellate authority has the same powers to make inquiries as Assessing Officer himself had while making the assessment". Having regard to all the arguments advanced before us we are inclined to accept the arguments advanced on behalf of the assessee and ultimately we are inclined to confirm the ld. CIT(A)'s order. We confirm his finding that the provision to file the audit report along with the return under s. 80J (6a) is only directory and not mandatory. Even otherwise the ITO from the facts and circumstances of this case should have given an opportunity to the assessee to rectify the defect. The ITO admittedly did not give any such opportunity to the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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