Appeal Upheld: Relief Granted Under Section 80IA for Separate Manufacturing Unit

The appeal challenged the disallowance of deduction u/s 80IA by the Assessing Officer. The CIT(A) granted relief to the assessee based on ITAT's decision in a prior year, emphasizing the independence of Unit-II manufacturing micro nutrient fertilizers. The Tribunal upheld the CIT(A)'s decision, noting the separate nature of Unit-II and the timely filing of the audit report in Form No. 10CCB. The appeal was dismissed, affirming the relief granted to the assessee under section 80IA.

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Issues: Disallowance of deduction u/s 80IA

Analysis:
The appeal filed by the assessee challenged the disallowance of the claim of deduction u/s 80IA amounting to Rs. 16,71,579 by the Assessing Officer. The learned CIT(A) granted relief to the assessee based on the decision of the ITAT in the assessee's own case for the assessment year 2003-04, where the ITAT found the assessee eligible for claiming deduction u/s 80IA for Unit-2 manufacturing micro nutrient fertilizers. The relevant portion of the ITAT's order highlighted the independence of Unit-II from Unit-I, both manufacturing different products and controlled by different laws. The ITAT emphasized that the requirement of filing the audit report in Form No. 10CCB along with the return of income is not mandatory but directory, and if filed during assessment proceedings, the conditions of section 80IA(7) are considered fulfilled.

The facts revealed that the assessee, engaged in formulating pesticides and insecticides since 1973-74, set up a new unit in 1997-98 for manufacturing micronutrient fertilizers and claimed deduction u/s 80IA since then. The Assessing Officer disallowed the deduction on the grounds of non-furnishing of the audit report in Form No. 10CCB. However, the learned CIT(A) found that the audit report was filed before framing the assessment, meeting the requirements of section 80IA(7). The Tribunal noted that Unit-II was separate and independent from the existing unit, with separate audited accounts. The Tribunal emphasized that the requirement of filing the audit report along with the return is directory, not mandatory, and can be fulfilled by filing it before the assessment is framed.

The Tribunal upheld the order of the learned CIT(A) based on the precedent set by the ITAT in the previous year, where relief was granted under similar circumstances. Given the consistent facts and legal principles applied, the Tribunal dismissed the appeal of the revenue and sustained the relief granted to the assessee under section 80IA of the Act. The appeal was pronounced dismissed on 21st September 2015.

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