TaxTMI 
TaxTMI 
2013 (3) TMI 223
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....along with the return of income but was duly filed during the assessment proceedings, therefore, the assessee is entitled to deduction under Section 80HHC, to the tune of Rs.37,08,019.97. It is contended by the learned counsel for the appellant, that there is no decision on this point, either from this Court, or from the Hon'ble Supreme Court. In our view, on the basis of the language of Section 80HCC (4), the requirement is of filing of the report in the prescribed form "along with the return of income". The question thus is, as to whether the expression "along with the return of income" can be interpreted to be permitting filing of such report even during assessment proceedings? Since, the appeal involved above the substantial question of law, requiring the detailed hearing, and decision, by this Court, the appeal is admitted. Issue notice." The relevant background aspects of the matter could be noticed in the following: In its return for the assessment year 2003-04, the respondent-assessee claimed deduction under Section 80HHC of the Act to the tune of Rs.39,86,538/-. However, a copy of the audit report in Form o.10CCAC was not filed alongwith the return. During the course....
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.... appeal, the Tribunal, however, held that on principles, the assessee could not be denied the benefit of deduction under Section 80HHC because the audit report in Form No.10CCAC had indeed been filed during the course of assessment proceedings. The Tribunal further proceeded to observe that the assessee in its return claimed the deduction at (about) Rs.39.86 lakhs whereas this amount, as per the audit report, was (about) Rs.37.08 lakhs; and that there was no question of granting any deduction for an amount in excess of what had been calculated by the Chartered Accountant in Form No.10CCAC. Hence, the Tribunal proceeded to grant the benefit to the assessee to the tune of the amount stated in the audit report i.e., a sum of Rs.37,08,019.97. The Tribunal, inter alia, observed and held as under:- "4. We have heard both the sides and perused the relevant material on record. The undisputed fact is that the audit report in Form No.10CCAC, which was not originally filed alongwith the return of income was duly filed during the assessment proceedings. A consistent view has been taken by the Hon'ble High Courts and the Tribunal that where the audit report in Form No.10CCAC is filed during th....
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....f an accountant in the prescribed form alongwith the return of income could be interpreted to mean that filing of report even during assessment proceedings is permissible. In our view, the decision of this Court in Dr.L.M.Singhvi's case (supra) on pari material provisions as contained in Section 32AB of the Act read with the decision of Hon'ble Punjab and Haryana High Court in Gupta Fab's case (supra) on the provisions contained in Section 80HHC, clinches the issue. In Dr.L.M.Singhvi's case, a Division Bench of this Court was concerned with the question as to whether filing of the audit report under Section 32AB(5) during the assessment proceedings and not alongwith return of income would satisfy the requirements of aforesaid Section. The Division Bench, inter alia, examined the provisions of Section 32AB of the Act as also the provisions of Section 80HHC, with which we are concerned in the present case; and, after finding these provisions pari materia, held the requirement of furnishing of report alongwith return to be that of procedural requirement with reference to several of the cited cases including the one of the Full Bench of the Hon'ble Punjab and Haryana High Court in CIT....
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....t report along with the return has been held to be directory and not mandatory." The Hon'ble Division Bench ultimately held, inter alia, as under:- ".....Further the audit forms substantive foundation for claiming allowance and such foundation must exist at the time of filing reference viz., the accounts must have been audited before claiming deduction in a return, and in the absence of which, such deduction cannot be claimed. Compliance of the aforesaid requirement is mandatory before deduction is claimed. So far as such compliance along with return is concerned, it is directory and this procedural compliance can be made as such during the course of assessment proceedings....." It may also be noticed that in Gupta Fab's case (supra), the Hon'ble Punjab and Haryana High Court was precisely concerned with the question as to whether the AO was justified in allowing deduction under Section 80 HHC of the Act when the condition of filing of audit report alongwith the return of income was not satisfied. The Division Bench of Punjab and Haryana High Court referred to the decision in Punjab Financial Corporation's case (supra) wherein, as noticed, the Full Bench of that High Court had h....
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....hall not be admissible unless the accounts of the business or profession of the assessee for the previous year relevant to the assessment year for which the deduction is claimed have been audited by an accountant as defined in the Explanation below subsection (2) of section 288 and the assessee furnishes, along with his return of income, the report of such audit in the prescribed form duly signed and verified by such accountant: (4). The deduction under subsection (1) shall not be admissible unless the assessee furnishes in the prescribed form, along with the return of income, the report of an accountant, as defined in the Explanation below sub-section (2) of section 288, certifying that the deduction has been correctly claimed in accordance with the provisions of this section: On the material aspects pertaining to the questions involved in this appeal, obvious it is that the two provisions aforesaid are pari materia. Thus, the interpretation as made by a co-ordinate Bench of this Court in respect of Section 32AB(5) would apply to the requirement of sub-section (4) of Section 80HHC too. In view of the above and following the principles enunciated in the two decis....