2017 (9) TMI 1844 - HC - Income Tax

Court Upholds Deduction Despite Late Audit Report Submission

PRINCIPAL COMMISSIONER OF INCOME TAX-3 Versus LIPI SPECIFIC FAMILY TRUST

The Court dismissed the Tax Appeal, upholding the Tribunal's decision to allow the deduction under section 80IB despite the delayed submission of the ... Deduction u/s 80IB - Assessee had not filed the requisite audit report in support of the claim with the return or even during the course of the assessment - HELD THAT:- When the assessee tried to produce the same before the appellate Commissioner, he refused to take it on record. The Tribunal granted such facility and allowed the claim of deduction against which the Revenue is in appeal. In case of Commissioner of Income-tax v. Gujarat Oil and Allied Industries [1992 (9) TMI 67 - GUJARAT HIGH COURT] the Division Bench of this Court in context of deduction under section 80J of the Act had observed that filing of requisite report during the course of assessment proceedings would be sufficient compliance. Later on, in case of Panasonic Energy India Co. Ltd. v. Assistant Commissioner of Income-tax [2014 (2) TMI 129 - GUJARAT HIGH COURT] the Court recognized that for sufficient reasons, the assessee may also be allowed to file such a report at the appellate stage. of course, in the said case finding that there were insufficient grounds for allowing the assessee to do so, the report was not taken into consideration when it was sought to be filed directly before the High Court for the first time - Tax Appeal is dismissed Issues Involved:Appeal against Income Tax Appellate Tribunal's judgment allowing deduction u/s.80IB - Compliance with filing audit report - Precedents regarding filing reports during assessment and appellate stages.Analysis:Issue 1: Appeal against ITAT's judgment allowing deduction u/s.80IBThe Revenue filed an appeal challenging the Income Tax Appellate Tribunal's decision to allow a deduction under section 80IB. The Tribunal had granted the facility to the assessee to produce the requisite audit report supporting the claim, which the assessee failed to submit during the assessment. The Revenue contested this decision, leading to the present appeal.Issue 2: Compliance with filing audit reportThe crux of the matter revolved around the assessee's failure to file the necessary audit report along with the return or during the assessment process. Despite this lapse, the Tribunal permitted the assessee to present the report at the appellate stage. The Revenue objected to this allowance, prompting a legal dispute over the validity of the deduction claim without timely submission of the audit report.Issue 3: Precedents regarding filing reports during assessment and appellate stagesThe judgment referred to previous legal precedents to shed light on the matter at hand. Citing the case of Commissioner of Income-tax v. Gujarat Oil and Allied Industries and Panasonic Energy India Co. Ltd. v. Assistant Commissioner of Income-tax, the Court highlighted the importance of filing requisite reports during assessment proceedings. The Division Bench's observations in the former case emphasized that filing the report during assessment suffices for compliance, while the latter case acknowledged the possibility of allowing such filings at the appellate stage under certain circumstances.In conclusion, the Court dismissed the Tax Appeal, upholding the Tribunal's decision to allow the deduction under section 80IB despite the delayed submission of the audit report. The judgment underscored the significance of compliance with filing requirements during assessment while recognizing exceptions for filing reports at the appellate stage based on valid reasons.