AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2012 (2) TMI 401
X X X X Extracts X X X X
X X X X Extracts X X X X
....ase records, it is noticed that the assessee was required to file the audit report in form No.10 CCB for claiming deduction u/s 80IB of the Act as per requirement of section 80IA)7) r.w.s. 80IB(13) and Rule 18BBB. However, the audit report has not been filed by the assessee either with the return or during the assessment stage. As the assessee company failed to file the audit report even during the assessment proceedings, it would not be entitled to claim deduction u/s 80IB. The irregular claim of deduction u/s 80IB has resulted in underassessment of Rs.1,19,98,303/- with short levy of tax of Rs.40,48,629/-." 3 During the course of proceedings u/s 263, the following written submissions were filed before the learned CIT:- "(i) At the outset the revision of the order clearly lacks jurisdiction not only from the point of view of law but also from the point of view of facts available on records. So far as from the point of law is concerned, we submit that sub rule (3) of Rule 12 of the Income Tax Rules, 1962, as inserted by the Income-tax (Seventh Amendment) Rules, 2006 w.e.f. 24.07.2006 reads as under. "[(3) The return of income or the return of fringe benefits to be furnished in F....
X X X X Extracts X X X X
X X X X Extracts X X X X
....0% thereon should not be disallowed as the same is found to be included in the profit eligible for deduction u/s 80IB of the Act. 5. Please furnish details of working of profit claimed as eligible for deduction u/s 80IB of the Act. Please state whether separate books of accounts for each unit has been maintained or not and basis on which you have distributed head office expenses on units." The reply to above points were submitted vide our letter dated 19.11.2008. After proper verification and applying his mind, the Id. AO has allowed the claim of deduction of your assessee. We further submit that when we have already obtained such audit report well before filing of return of income, there was no point in not submitting the same during the course of assessment proceedings, if the same has been asked by the Id. AO. We further submit that since the Id. AO has allowed the claim of deduction after applying his mind and forming his view, why assesses should be penalized. We further submit that the requirement for filing audit report as envisaged under section 80IA (7) r.w.s. 80IB (13) of the Act is with the return of income. There is no requirement under the provisions of the Act to fi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....fied were considered by the ITO. WITHOUT PREJUDICE TO ABOVE WE SUBMIT AS UNDER: (v) Even if the audit report is not filed along with the return of income but it is made available to the Assessing Officer before completion of assessment, the benefit under section 80-IA or 80-IB cannot be denied - CIT v. Trehan Enterprises [2000] 108 Taxman 189 (J&K), CIT v. Panama Chemical Works [2000] 245ITR 684 (MP), Amber Sales Mfg. Corpn. v. ITO [1984] 19 TTJ (Chd.) 177, Mahalaxmi Rice Factory v. ITO [1983] 5 ITD 238 (Chd.), Gujarat Oil & Allied Industries v. ITO [1982] 2 ITD 454 (Ahd.). Applying the same analogy, since we are submitting herewith the report of an audit in the prescribed form vide Annexure - I before your honour, we are, in any way, complying with the requirements of filing of report during revisionary proceedings. We, therefore, request your honour to kindly consider the same and not to disallow our claim of deduction u/s 80IB of the Act. In view of the above submissions, we request your honour not to set aside the/ assessment order passed by the Id. AO in this regard for which we shall remain ever grateful to your honour. If your honour intends to take any contrary view in t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....T has a power to declare that audit report is not required to be filed along with the return of income filed electronically, however, the same was required to be filed before the AO on his demand. He further pointed out that during the course of assessment proceedings, the AO never asked the assessee to furnish the audit report and, therefore, the same was not furnished though the assessee was in possession of the audit report and the same was filed before the learned CIT in reply to his show cause notice vide Annexure-1. The learned counsel of the assessee also submitted that during the assessment proceedings, the AO carried out detailed inquiries in respect of claim made u/s 80IB of the Act by issuing a show cause notice dated 12-11-2008 and after due verification of claim, passed the assessment order after reducing the scrap sales from the eligible profits for deduction u/s 80IB of the Act, which shows that the AO applied his mind while passing the assessment order partly allowing the claim made by the assessee u/s 80IB of the Act. Placing reliance on the decisions of the Hon'ble Delhi High Court in the cases of (i) CIT vs. Sunbeam Auto Ltd. [332 ITR 167; (ii) CIT vs. Vikas Poly....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he Act be quashed. 7 The learned DR, on the other hand, relied on the order of the learned CIT and submitted that since the claim of the assessee u/s 80IB of the Act was allowed by the AO in the absence of audit report which was required u/s 80IA(7) read with section 80IB(13), the learned CIT was justified in invoking the provisions of section 263 in this case. He, therefore, prayed that the order passed by the learned CIT may kindly be upheld. 8 Heard both the parties and perused the record and we find that there is no dispute about the fact that the assessee filed its return of income in electronic mode without enclosing the audit report as per Sub-rule (3) of Rule 12 of the Income Tax Rules which was inserted by the Income-tax (Seventh Amendment) Rules, 2006, with effect from 24-07-2006 and reads as under:- "(3) The return of income or the return of fringe benefits to be furnished in Form No.1 or Form No.2 of Form No.3B shall not be accompanied by a statement showing the computation of tax payable on the basis of the return, or proof of the tax, if any, claimed to have been paid or any document or copy of any account or Form or report of audit required to be attached with the....