2018 (2) TMI 1921 - HC - Income Tax

Tribunal Decision Upheld: Assessee Entitled to Deduction

PR. COMMISSONER OF INCOME TAX, SURAT 1 Versus KIRAN INDUSTRIES P. LTD

The High Court upheld the Tribunal's decision, dismissing the Revenue's appeal and affirming the assessee's entitlement to deduction under section 80IB of ... Disallowance u/s 80IB - reassessment proceedings when the assessee could not furnish audit report in prescribed form 10CCB during the course of Original Assessment proceedings - HELD THAT:- This Court has repeatedly taken a view that filing of audited accounts in the prescribed format is a procedural requirement and as long as during the assessment the same has been complied with, the deduction cannot be disallowed. Several other High Courts have taken a similar view. This Court had referring to the judgments in case of Commissioner of Income-tax v. Gujarat Oil and Allied Industries [1992 (9) TMI 67 - GUJARAT HIGH COURT] and in case of Panasonic Energy India Co. Ltd. v. Assistant Commissioner of Income-tax [2014 (2) TMI 129 - GUJARAT HIGH COURT] expressed such a view. Revenue would however rely on some of the observations made in the said judgments in case of Panasonic Energy (supra). It was the case in which without any justification the assessee had tried to submit the documents before the High Court in a Tax Appeal which was not permitted. The facts are therefore distinguishable. Tax Appeal dismissed. Issues:1. Disallowance of deduction under section 80IB of the Income Tax Act due to non-filing of audit report in prescribed form 10CCB during reassessment proceedings.Analysis:The High Court heard an appeal by the Revenue against the Income Tax Appellate Tribunal's judgment, questioning the deletion of disallowance of deduction under section 80IB of the Income Tax Act amounting to Rs. 80,48,975. The issue arose as the assessee failed to furnish the audit report in form 10CCB during the original assessment proceedings, leading to a notice for reassessment. The Assessing Officer withdrew the deduction, stating non-compliance with the law. However, the Commissioner of Income Tax (Appeals) and the Tribunal both ruled in favor of the assessee, emphasizing that the documents were submitted during the reassessment proceedings, and the requirement was procedural.The Court referred to its previous decisions and noted that the filing of audited accounts in the prescribed format is a procedural requirement. As long as the compliance is met during the assessment, the deduction cannot be disallowed. The Court also cited similar views taken by other High Courts. In a previous case, the Court had discussed the importance of complying with procedural requirements during assessment. The Counsel for the Revenue attempted to rely on certain observations from another case but failed to convince the Court, as the facts were distinguishable. Consequently, the Tax Appeal was dismissed, upholding the Tribunal's decision in favor of the assessee.In conclusion, the High Court upheld the Tribunal's decision, emphasizing that the procedural requirement of filing audited accounts in the prescribed format was met during reassessment proceedings, thereby rejecting the Revenue's appeal and dismissing the Tax Appeal.