Statutory audit report under Section 10A(5) is directory, filing before assessment framing preserves tax benefit under Sections 80IA/80HHB

HC held that the statutory requirement to file an audit report under Section 10A(5) (identical to Sections 80IA(7) and 80HHB(3)(ia)) is directory, not mandatory; filing the audit report before framing of assessment suffices to secure the tax benefit. The court rejected the revenue's contention that the report must accompany the return, found no substantial question of law, and dismissed the appeal.

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Issues: Whether the requirement in Section 10B(5) of the Income-tax Act, 1961 for filing an audit report is mandatory so as to deny deduction if the audit report is not filed with the return, or whether the requirement is directory and satisfied if the audit report is filed before framing of assessment.

Analysis: The provision in question is materially identical to provisions in Sections 80IA(7), 80HHB(3)(ia) and the erstwhile Section 80J(6A). Prior authoritative interpretation of these identical provisions establishes that the statutory obligation to furnish an audit report does not operate as a condition precedent that must be fulfilled at the time of filing the return; instead, compliance with the requirement before the completion of assessment suffices. Applying that established legal framework to the present provision, the filing of the audit report prior to the framing of assessment meets the statutory requirement and remedies any initial omission at the time of return filing.

Conclusion: The requirement under Section 10B(5) is directory and is satisfied if the audit report is filed before framing of assessment; accordingly, the appeal is dismissed and no substantial question of law arises against the tribunal's conclusion.

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