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TMI Blog2008 (2) TMI 567X X X X Extracts X X X X X X X X Extracts X X X X ..... DGMENT N. P. GUPTA J. - This appeal has been filed by the Revenue against the judgment of the learned Tribunal dated July 29, 2004, affirming the order of the learned Commissioner (Appeals) dated March 15, 1999, whereby the learned Commissioner (Appeals) had set aside the order of the Assessing Officer. The Assessing Officer had dismissed the assessee's application filed under section 154 of the Income-tax Act, 1961 for rectification of the mistake. The appeal was admitted by framing the following substantial question of law: "Whether on the facts and in the circumstances of the case, the learned Tribunal is justified in upholding the order passed by the learned Commissioner of Income-tax (Appeals) by holding that the impugned adjustment made by the Assessing Officer was outside the purview of section 143(1)(a) of the Income-tax Act? 2. Bereft of unnecessary details the facts are that the assessee had filed the return, and thereupon after taking recourse to the procedure provided under section 131, etc., and giving necessary opportunity of hearing to the assessee, the assessment order was made on August 26, 1996. In the return, the assessee had claimed deduction under s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f under section 80J, along with the return were directory, and it was k)und that the time limit was a matter of mere procedure, and should be taken to be directory. Then, the Board's circular dated August 24, 1994, was also considered and it was found that the revised return was filed by the assessee along with the audit report in Form No. 10CCAC, which has been accepted by processing the said revised return, and the claim of the appellant for deduction under section 80HHC has been fully allowed. It was found that filing of the audit report is only a procedural requirement, and that the Assessing Officer was not empowered to make any adjustment under section 143(1)(a) on the ground of the audit report having not been filed with the return. The claim was found to be perfectly in order, and the audit report was submitted along with the application under section 154, which was before the Assessing Officer, while deciding the application. It was also held that there was reasonable cause with the appellant, for not filing the audit report along with the return of income, and that, since the claim of the appellant for deduction under section 80HHC was not found otherwise inadmissible, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were recorded on August 23, 1996, and then assessment was made on August 26, 1996, disallowing the deduction and admittedly the auditor's report is dated September 16,1996. Therefore, this judgment does not help the cause of the assessee at all. 6. Then, the next judgment relied upon by the learned Commissioner, being in Addl. CIT v. Murlidhar Mathura Prasad reported in [1979] 118 ITR 392, is a judgment of the Allahabad High Court wherein the Allahabad High Court was considering the requirement of section 184(7), which requires certain declaration to be furnished along with the return, and it was considered to be a procedural requirement. The declaration required by section 184(7) was about an essential fact, that there has been no change in the constitution of the firm or the share of its partners and it was held that this procedural requirement is directory and that if there is some defect in the declaration form the assessee is to be given an opportunity to rectify it under section 185(2) as it then existed. This again, in our view, has no bearing on the controversy. 7. Then, still the next case relied upon by the learned Commissioner is, in CIT v. Sitaram Bhagwandas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent of obtaining report before this specified date has consciously been substituted by the requirement of furnishing the report by the specified date even on the face of this provision, now it cannot be said that the requirement is only directory. 10. Then, even considering the case from yet another stand point, being, that considering it from the stand point of the provisions of section 143, as it existed at the relevant time, as is apparent from the order of the Assessing Officer that the return was filed on October 31,1995, which did not enclose the audit report required by section 80HHC and, therefore, the Inspector of Income-tax was directed to make enquiries who made enquiries which included recording of statement of the partner of the assessee, which statement was recorded on August 23,1996, and even therefrom it was established that a false verification was made and then the assessment was made under section 143(1)(a) on August 26,1996. It is much there after, that the assessee filed the revised return under section 139(5), along with the audit report, and in Form 10CCAC and that return was processed under section 143(1B) and in that assessment the deduction was allowed. ..... 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