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TMI Blog2012 (2) TMI 401X X X X Extracts X X X X X X X X Extracts X X X X ..... - after granting deduction of Rs.1,19,98,303/-. Subsequently, the learned CIT called for the record of the assessee and noticed that the assessment framed by the AO was erroneous in so far as it was prejudicial to the interests of Revenue. The following show cause notice was issued as to why the order passed by the AO u/s 143(3) not be cancelled:- On perusal of the case records, it is noticed that the assessee was required to file the audit report in form No.10 CCB for claiming deduction u/s 80IB of the Act as per requirement of section 80IA)7) r.w.s. 80IB(13) and Rule 18BBB. However, the audit report has not been filed by the assessee either with the return or during the assessment stage. As the assessee company failed to file the audit report even during the assessment proceedings, it would not be entitled to claim deduction u/s 80IB. The irregular claim of deduction u/s 80IB has resulted in underassessment of Rs.1,19,98,303/- with short levy of tax of Rs.40,48,629/-. 3 During the course of proceedings u/s 263, the following written submissions were filed before the learned CIT:- "(i) At the outset the revision of the order clearly lacks jurisdiction not only from the point ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... time during the course of assessment proceedings as per Annexure - 2. The details which he has asked vide point no. 4 and 5 of his letter dated 12.11.08 relating to deduction claimed u/s 80IB of the Act is reproduced hereunder: "4. You have shown insurance income of Rs.10,00,773/- and scrap sales of Rs.61,1121-and claimed deduction u/s 80IB at 30%. Please show cause why 30% thereon should not be disallowed as the same is found to be included in the profit eligible for deduction u/s 80IB of the Act. 5. Please furnish details of working of profit claimed as eligible for deduction u/s 80IB of the Act. Please state whether separate books of accounts for each unit has been maintained or not and basis on which you have distributed head office expenses on units." The reply to above points were submitted vide our letter dated 19.11.2008. After proper verification and applying his mind, the Id. AO has allowed the claim of deduction of your assessee. We further submit that when we have already obtained such audit report well before filing of return of income, there was no point in not submitting the same during the course of assessment proceedings, if the same has been asked by the Id. A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly upon the decision given by Hon 'ble ITAT, Ahmedabad (the Jurisdictional Authority) in case of Kothari Oil Products Vs. Income Tax Officer (1985) 23 TTJ 546 wherein the Hon'ble ITAT has stated that assessment when made under section 143(3) r.w.s. 144B, same cannot be revised by the Commissioner u/s 263 of the Act where all necessary details directed by Commissioner to be verified were considered by the ITO. WITHOUT PREJUDICE TO ABOVE WE SUBMIT AS UNDER: (v) Even if the audit report is not filed along with the return of income but it is made available to the Assessing Officer before completion of assessment, the benefit under section 80-IA or 80-IB cannot be denied - CIT v. Trehan Enterprises [2000] 108 Taxman 189 (J K), CIT v. Panama Chemical Works [2000] 245ITR 684 (MP), Amber Sales Mfg. Corpn. v. ITO [1984] 19 TTJ (Chd.) 177, Mahalaxmi Rice Factory v. ITO [1983] 5 ITD 238 (Chd.), Gujarat Oil Allied Industries v. ITO [1982] 2 ITD 454 (Ahd.). Applying the same analogy, since we are submitting herewith the report of an audit in the prescribed form vide Annexure - I before your honour, we are, in any way, complying with the requirements of filing of report during revisionary ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es, 2006 w.e.f. 24-07-2006. He further submit ted that paras 5 and 6 of CBDT Circular No.9 of 2006, dated 10-10-2006 provided that the corporate assessee was not required to attach audit report along with the return of income filed in electronic mode. Sections 139 C and 139 D were inserted by the Finance Act, 2007, with retrospective effect from 01-06-2006 which provided that the CBDT has a power to declare that audit report is not required to be filed along with the return of income filed electronically, however, the same was required to be filed before the AO on his demand. He further pointed out that during the course of assessment proceedings, the AO never asked the assessee to furnish the audit report and, therefore, the same was not furnished though the assessee was in possession of the audit report and the same was filed before the learned CIT in reply to his show cause notice vide Annexure-1. The learned counsel of the assessee also submitted that during the assessment proceedings, the AO carried out detailed inquiries in respect of claim made u/s 80IB of the Act by issuing a show cause notice dated 12-11-2008 and after due verification of claim, passed the assessment order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of Hon ble Uttrakhand High Court in the case of CIT vs. Clough Engineering Ltd. [300 ITR 435], wherein it was held that assessment order cannot be treated as erroneous on the ground that the assessee had not filed audit report along with the return of income. Concluding his arguments, the learned counsel of the assessee submitted that the order passed by the learned CIT u/s 263 of the Act be quashed. 7 The learned DR, on the other hand, relied on the order of the learned CIT and submitted that since the claim of the assessee u/s 80IB of the Act was allowed by the AO in the absence of audit report which was required u/s 80IA(7) read with section 80IB(13), the learned CIT was justified in invoking the provisions of section 263 in this case. He, therefore, prayed that the order passed by the learned CIT may kindly be upheld. 8 Heard both the parties and perused the record and we find that there is no dispute about the fact that the assessee filed its return of income in electronic mode without enclosing the audit report as per Sub-rule (3) of Rule 12 of the Income Tax Rules which was inserted by the Income-tax (Seventh Amendment) Rules, 2006, with effect from 24-07-2006 and read ..... X X X X Extracts X X X X X X X X Extracts X X X X
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