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TMI Blog2024 (5) TMI 1076X X X X Extracts X X X X X X X X Extracts X X X X ..... elevant extracts of the decision of in the case of Association of Indian Panel Board Manufacturer [ 2023 (3) TMI 1374 - GUJARAT HIGH COURT ] in which the Gujarat High Court, while dealing with similar issue held that although the requirement of furnishing report was mandatory, filing thereof is a procedural aspect. Once, it is seen that the audit report, in Form 10B was available with the assessing officer at the time of framing of assessment, even though the same may not have been filed along with the return of income, the assessee is entitled to claim of exemption u/s 11(1) and 11(2) of the Act. We are of the considered view that the claim of the assessee/appellant for deduction u/s 80JJA of the Act cannot be denied for the reason that firstly, the chartered accountant of the assessee had uploaded Form 10DDA before the due date of filing of return of income, and it was only because of procedural lapse/mistake on the part of the appellant/assessee that the aforesaid form could not be accepted before the due date of filing of return of income, secondly, the assessee/appellant had duly accepted the Form 10DDA before the return of income was processed by the CPC on 16.03.2023, thirdl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dvertent mistake by oversight, such uploaded Form 10DA could not be "accepted" by the appellant company on or before 07.10.2022 i.e. due date of filing of return of income. Such Form 10DA was accepted by the assessee company on 06.01.2023 i.e. after the due date of filing of return of income under Section 139(1). The CIT observed that that as per provisions of Section 139(4), the last date for filing the return of income was 31.12.2022 and in this case, the appellant has filed Form 10DA even beyond the period prescribed under Section 139(4) of the Act. Accordingly, CIT rejected the appeal against claim of deduction under Section 80JJA of the Act, with the following observations: "(i) As per Rule 19AB of the Income Tax Rules, 1962, it was mandatory for the appellant to file the accountant's report in Form 10DA along with the return of income u/s 139(1) of the Act, failing which deduction u/s 80JJAA will not be admissible in accordance with the provisions of section 80JJAA of the Act. In the instant case, though the form was uploaded by the CA on 01/10/2022 i.e. before the extended due date of filing of return of income, the same does not tantamount to filing of form 10DA as pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the opinion that the High Court has committed a grave error in observing and holding that the requirement of furnishing a declaration under Section 10B (8) of the IT Act is mandatory, but the time limit within which the declaration is to be filed is not mandatory but is directory. The same is erroneous and contrary to the unambiguous language contained in Section 10B(8) of the IT Act. We hold that for claiming the benefit under Section 10B(8) of the IT Act, the twin conditions of furnishing a declaration before the assessing officer and that too before the due date of filing the original return of income under section 139(1) are to be satisfied and both are mandatorily to be complied with. Accordingly, the question of law is answered in favour of the Revenue and against the assessee. The orders passed by the High Court as well as ITAT taking a contrary view are hereby set aside and it is held that the assessee shall not be entitled to the benefit under Section 10B (8) of the IT Act on non- compliance of the twin conditions as provided under Section 10B (8) of the IT Act, as observed hereinabove." It is evident that the appellant had filed the Form 10DA after due date in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (b) In case of ambiguity in a charging provision, the benefit must necessarily go in favour of subject/assessee but the same is not true for an exemption notification wherein the benefit of ambiguity must be strictly interpreted in favor of the revenue/state From the principle laid down by the Hon'ble Apex Court in the above case, it is amply clear that the provisions of exemption as well as deduction provided in the Statute are to be interpreted strictly and onus always lies with the claimer to substantiate that there is no violation of governing provisions while claiming exemption/deduction as per the law. By following the ratio laid down by the Hon'ble Apex Court in the case of Dilip Kumar, it is clear that the onus was on the appellant to substantiate that the claim of deduction was admissible in accordance with the governing provisions of the Act. However, it is clear that in the instant case, there is clear violation of provisions of section 80JJAA rwr 19AB therefore, the claim of deduction is also not admissible in the light of the provision of section 80JJAA and in view of the decision of Apex Court in the case of Dilip Kumar (Supra). In view of the above, I am ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s report in Form 10DA before the due date of filing of return of income. This position has not been disputed by the Department. Admittedly, the above report was not accepted by the assessee before the due date of filing of return of income. However, the Report in Form 10DA filed by the accountant of the assessee was accepted by the assessee on 06.01.2023, whereas in this case the order under Section 143 (1) of the Act was passed on 16.03.2023, denying the claim of deduction under Section 80JJA of the Act which means that at the time when the order under Section 143(1) of the Act was passed by the CPC, the assessee had accepted the Report filed by the accountant of the assessee in Form 10DA. It would be useful to reproduce the relevant extracts of the decision of Gujarat High Court in the case of Association of Indian Panel Board Manufacturer versus The CIT in Revenue Tax Appeal Number 655 of 2022, in which the Gujarat High Court, while dealing with similar issue held that although the requirement of furnishing report was mandatory, filing thereof is a procedural aspect. Once, it is seen that the audit report, in Form 10B was available with the assessing officer at the time of frami ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der Rule 12 (2) of the Income Tax Rules, 1962 but there is no change with regard to the substantive law about filing of audit report as stated above. 6. The moot aspect thus centres around to the requirement of the availability of the audit report when the assessment was undertaken by the Assessing Officer even though the same may not have been filed along with the return of income. Filing of audit report is held to be substantive requirement but not the mode and stage of filing, which is procedural. Once the audit report in Form 12B is filed to be available with the Assessing Officer, before assessment proceedings take place, the requirement of law is satisfied. In that view, the Income Tax Tribunal was not justified in dismissing the appeal of the assessee. 6.1 The appellant assessee has to be held to be eligible and entitled to exemptions under Section 11(1) and 11(2) of the Act and the alleged ground of non-filing of audit report alongwith return of income which was at the best procedural omission, could never to an impediment in law in claiming the exemption. 6.2 Accordingly the substantial questions of law have to be decided in favor of the appellant. 7. They are acco ..... X X X X Extracts X X X X X X X X Extracts X X X X
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