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TMI Blog2016 (9) TMI 1036X X X X Extracts X X X X X X X X Extracts X X X X ..... support for claiming deduction. Accordingly, the Tribunal erred in allowing deduction under Section 80HHC - Decided against assessee - D.B. Income Tax Appeal No. 62/2000 - - - Dated:- 8-9-2016 - Ajay Rastogi And J. K. Ranka, JJ. For the Appellant : R. B. Mathur, K. D. Mathur For the Respondent : Anant Kasliwal JUDGMENT J. K. Ranka, J. 1. This appeal under Section 260-A of the Income Tax Act, is directed against the order dated 19.6.2000 passed by the Income Tax Appellate Tribunal, Jaipur Bench, Jaipur. It pertains to assessment year 1995-96. 2. The appeal was admitted on the following substantial questions of law :- (i) Whether Tribunal was justified in holding that assessee (respondent) is entitled to claim deduction under Section 80HHC? (ii) Whether the Tribunal was justified in holding that assessee complied with the mandatory requirement of Section 80HHC(4) and hence entitled to claim benefit of the said Section while calculating his income tax liability on his gross turnover? 3. The brief facts noticed for disposal of this appeal are that the respondent assessee derives income from share of profit from firm and export business. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt under Section 44AB, challan of taxes (4) and note on computation of income regarding surrender, and all these documents are certainly available with the return of income. 6. It was also noticed by the CIT(A) that the enclosures which have been scored off are balance-sheet and profit and loss account of KJS Ahluwalia, K.P. Construction, Kamal Transport, photo copies of LIC premium and all these enclosures are not attached with the return of income, though it was claimed that these documents were enclosed along with the return. Analysing the contents of Part-V the CIT(A) further noticed that handwriting and the ink are the same and there is no separate entry for report under Section 44AB which is otherwise available along with the return of income. The CIT(A) also observed that though the assessee claimed deduction under Section 80HHC of the Act for an amount of ₹ 1,07,33,971/- on the other hand the certificate of Anil Nagori and Associates, CA, had worked out allowable deduction under Section 80HHC of the Act at ₹ 6,00,410/- only. The CIT(A) also noticed contradictions in the claim of the assessee and also expressed that even otherwise assessee could not have moved ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h the return of income and in case it was noticed that said audit report was not part of the return of income, the AO was under legal obligation to have issued a notice under Section 139(9) of the Act, to make good the deficiency and in the instant case no such notice was served, therefore, the disallowance of deduction under Section 80HHC is in violation of principles of natural justice. He further contended that the assessee is an exporter and was entitled to deduction under section 80HHC on such exports having been made and the claim of deduction under Section 80HHC was claimed in accordance with the provisions of the Act. 10.1 In the alternative, learned counsel further contended that audit report could have been filed at later stage before the Appellate Authorities and it is held by the judicial pronouncements that it is sufficient compliance of the mandate of law. He also drew attention of this Court to a Circular of the Central Board of Direct Taxes bearing no.689 dated 24.8.1994 read with Circular bearing no.669 dated 25.10.1993 to bring home that even the Board has relaxed the rigour of law by giving administrative relief and such Circulars are binding on the Revenue Au ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xxxx xxxx (3A) xxxx xxxx xxxx xxxx (4) The deduction under sub-section (1) shall not be admissible unless the assessee furnishes in the prescribed form, along with the return of income, the report of an accountant, as defined in the Explanation below sub-section (2) of section 288, certifying that the deduction has been correctly claimed in accordance with the provisions of this section: 13. The provision clearly envisages that an assessee who is engaged in the business of export out of India of any goods or merchandise and the amount is received in convertible foreign exchange in India within the time prescribed, an assessee becomes entitled to a deduction to the extent of profits derived by the assessee from the export of such goods or merchandise. To claim such deduction, sub-clause (4) of Section 80HHC mandates that report of a Chartered Accountant who has audited the accounts, duly signed and verified, is required to be furnished in the prescribed form along with the return of income as defined in the Explanation to sub-section (2) of Section 288 who certifies that deduction has been claimed in accordance with the provisions of law. Therefore, twin conditions a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... do mention that there is a certificate of one Anil Nagori and Associates, CAs, computing allowable deduction under Section 80HHC of ₹ 6,00,410/- only, and is taken note of by the Tribunal. The CIT(A) further observed that there are several cuttings and over-writings and even thereafter he could nowhere find about an enclosure of audit report claiming deduction under Section 80HHC of ₹ 1,07,33,971/-. Indisputably no tangible evidence was enclosed either with the return of income or at the later stage claiming deduction of ₹ 1,07,33,971/-. 14.1 Even the learned counsel for the assessee is unable to place such audit report for our perusal claiming deduction under Section 80HHC. We further enquired from the learned counsel for the assessee as to the dates of the two audit reports, but he was unable to provide such dates to infer prima facie conclusion and the indisputed fact remains that there is an audit report claiming deduction of ₹ 6,00,410/- and there is no audit report claiming deduction of ₹ 1,07,33,971/-. 15. The Tribunal, in our view, has also conveniently ignored the factum of making a mention of any audit report having been placed before it c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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