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TMI Blog2021 (11) TMI 767X X X X Extracts X X X X X X X X Extracts X X X X ..... son recorded, is, thus, clearly not valid. Non-eligibility to deduction u/s. 80IB(11A) - Board has per its Circular 09/2006, relied upon by the ld. Sr. DR, clarified that the returns in old forms would not be valid, and that the assessees shall be required to furnish returns in the new forms. This is only in terms of the law; s. 139(1) providing for furnishing the return of income in the prescribed form. No dispute or objection stands raised by the Revenue in the matter, at any stage, accepting the return furnished as valid. This is particularly relevant in view of s. 80-AC. No issue qua the prescribed form, therefore, obtains. In the instant case, the assessee has acted consistent with law furnishing the return within the prescribed time, in the annexure-less mode; obtained the audit report in the prescribed form (Form 10CCB) in time (on 25/8/2008)(PB-1, pgs. 24-29), and furnished the same before the AO at the earliest possible time, i.e., on 23/2/2010, along with the reply in response to the notice u/s. 148(1) dated 20/1/2010. No reason to believe non-conduct of audit u/s. 80-IB and, thus, non-eligibility to deduction thereunder could have been, in view of the foregoing, formed b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... their adjudication first inasmuch as the acceptance thereof, where so, would render infructuous the adjudication of Grounds 1 and 2: 3. The reopening of case u/s. 147 of the Act, is illegal and unjustified because no additions has been made, for the reasons for recorded by the assessing officer dated 04/05/2010. Hence the consequential assessment is ab-initio void, and deserves to be set aside. 4. That, the assessment of the appellant was reopened on non-existing and irrelevant reasons hence the reopening u/s. 147/148 of the IT Act, 1961 and assessment order dated 06.12.2010 is illegal, without jurisdiction and void. 3. Grounds 3 and 4 being legal were admitted after brief arguments. Qua Gd. 4, adverting to the reasons recorded, reproduced hereunder, it was submitted by Shri Mishra, that the only reason for reopening the assessee's assessment for the relevant year was the assessee stating per its' return of income of it being not liable to get its' account audited u/s. 44AB of the Act. This was understood by the Assessing Officer (AO) as a non-conduct of the audit there-under and, inexplicably, audit u/s. 80-IB of the Act and, consequently, non-eligibility to deduction u/s. 8 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of which has to be given due weight. The second limb of the reason recorded clearly states of non-compliance of the provision of section 80IA(7), so that deduction u/s. 80IB(11A) is not admissible in terms of section 80IB(13), which makes some clauses of section 80IA, including sec. 80IA(7), applicable to a claim for deduction u/s. 80IB. How could the AO infer compliance of s. 80IA(7), or the conduct of audit u/s. 80IB, where the same was not, as required by law, filed along with the return of income and, in fact, even thereafter? 4. I have heard the parties, and perused the material on record. 4.1 It would be relevant to reproduce the relevant provisions of law, as under: 80-IA. Deductions in respect of profits and gains from industrial undertakings or enterprises engaged in infrastructure development, etc. (7) The deduction under sub-section (1) from profits and gains derived from an undertaking shall not be admissible unless the accounts of the undertaking for the previous year relevant to the assessment year for which the deduction is claimed have been audited by an accountant, as defined in the Explanation below sub-section (2) of section 288, and the assesse furnishes, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3) read with s. 80IA(7); it noting a failure to comply with the said provisions. When the reason, as recorded, adverts to these provisions, the same have to be necessarily read into the said reason, and which explains the reproduction thereof hereinbefore. The requirement of law is, as apparent, twofold. The first requirement is to get the accounts audited u/s. 80-IB and obtain the audit report, duly verified, in the prescribed form and, two, to furnish the same along with the return of income. Section 80AC proscribes deduction under, among others, section 80-IB, where the return of income is not furnished by the due date of filing the return u/s. 139(1). Implicit therein is the requirement to get the accounts audited u/s. 80-IB by the said date. The relevant rule (r.18BBB) prescribes Form 10CCB (for deduction u/s. 80-IB). The same, i.e., the audit report (in the said or any other form) was admittedly not submitted along with the return of income, furnished electronically on 27.9.2008 (and physically on 10/10/2008), or even by the due date u/s. 139(1) (30.09.2008), or even by 20.01.2010, the date of recording of the reason to believe. Both the conditions of section 80-IA(7) are, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... claimed from the gross total income by following the procedure prescribed by law. What, however, when the Board, whose rule-making powers are for the purposes of the Act, itself provides for, contrary to the procedure per the express provision of law, annexure-less returns? A procedure, in any case, is one which could be followed, i.e., to the extent possible, or practicably so. A browse of the Act clears any vestige of doubt. The Instruction is wholly in terms of and consistent with the Act. Sections 139C & 139D stand coopted on the statute by Finance Act, 2007, w.r.e.f. 01/6/2006, and provide for the power to the Board for specifying persons or classes of persons not required to furnish documents, statements, receipts, audit reports, etc., required to be furnished along with the return of income by or under the other provisions of the Act, but on demand produce the same before the Assessing Officer, i.e., in respect of electronic and paper returns. Section 295(2), which defines the areas or matters qua which the Board may frame rules, also witnessed, simultaneously, insertion of two corresponding clauses, i.e., Cl. (eeba) and Cl. (eebb), one each for paper and electronic returns ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income, so that both are independently required to be furnished by the due date/s prescribed in their respect. The second limb of the reason recorded is, thus, also not valid. 4.3 The assessee, accordingly, succeeds in its' legal challenge per Gd.4, so that there is no valid assumption of jurisdiction u/s. 147 in the instant case. In view thereof, it is not necessary to travel to other Grounds (i.e., Gds. 1 to 3) of appeal, also argued at the bar, which therefore become infructuous. 5. I wish to, however, before parting with this order, express my concern at the state of representation before this Tribunal. Sh. Mishra, while bringing out the relevant Instruction, failed to bring it within the legal framework; rather, conceding, on being asked during hearing, to there being a conflict between the provisions of the Act and the Board Instruction, which have no legal status. That the income stands returned in the new Form (ITR-5) is also not exhibited. Ms. Agarwal, the ld. Sr. DR, also did not help matters when she submitted, incorrectly, and to no rebuttal by the ld. counsel, that the Instruction being referred to by him is a part of the Board Circular 09/2006, applicable to AY 200 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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