TaxTMI 
TaxTMI 
2006 (7) TMI 108
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....f Section 147 of the Act. Hence, notice under section 148 of the Act was issued and assessment was completed under section 147 of the Act, which resulted in profit. Since the assessee had not filed Form 10CCAC, which ought to have been filed along with the return, to claim deduction under Section 80HHC, as he claimed only loss in his original return, the assessee claimed deduction under section 80HHC based on the audit report by filing Form 10CCAC. But, the assessing officer, by order dated 30.3.99, did not allow the assessee to file a report for its claim of deduction under section 80HHC. 5. Aggrieved by the said order of the assessing officer dated 30.3.99, the assessee preferred an appeal before the Commissioner of Income-tax (Appeals). Before the Commissioner, the assessee sought permission to claim deduction under section 80HH based on the audit report by filing Form 10CCAC, which sought to have been filed along with the return. As the assessee did not file the audit report along with the return, the Commissioner o....
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....ailed to file Form 10CCAC along with the return as pre scribed by the statute ?" 8. Mrs. Pushya Sitaraman, learned senior standing counsel appearing for the Revenue, fairly concedes that the Revenue has no grievance as to the remittance of the matter to the assessing officer with regard to the deletion of notional interest on borrowed funds diverted to sister concerns. However, strong objections have been taken by the learned senior standing counsel as to the remittance of the matter with regard to the claim of deduction by the assessee under section 80HHC to re-examine the same after taking into consideration the audit report in Form 10CCAC filed by the assessee. 9. In the order of the Tribunal, it is observed that the assessee did not file Form 10CCAC for grant of deduction under Section 80HHC along with its original return, as per which the assessee had shown only a loss. But the assessee stating that the Assessing Officer re-computed the income, which resulted in profit, requested th....
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....bsp; the expiry of one year from the end of the relevant assessment year or before the completion of the assessment, whichever is earlier." (9) Where the Assessing Officer considers that the return of income furnished by the assessee is defective, he may intimate the defect to the assessee and give him an opportunity to rectify the defect within a period of fifteen days from the date of such intimation or within such further period which, on an application made in this behalf, the Assessing Officer may, in his discretion, allow; and if the defect is not rectified within the said period of fifteen days or, as the case may be, the further period so allowed, then, notwithstanding anything contained in any other provision of this Act, the return shall be treated as an invalid return and the provisions of this Act shall apply as if the assessee had failed to furnish the return. 12. On going through the above provisions under the Act, we find tha....
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....original return or alternatively, as per sub-section (9), if the assessing officer considers the return of income furnished by the assessee as defective, he may intimate the defect to the assessee and give an opportunity to rectify the defect within a period of fifteen days from the date of such intimation or within such further period which , on an application made in this behalf. 16. In the instant case, it is clear from the records that it is the assessing officer, who refused to accept the original return filed by the assessee, in which the assessee had shown a loss and after issuing notice under section 148 of the Act, completed the assessment under section 147 of the Act, which resulted in profit. Therefore, at that point of time, the assessing officer ought to have informed the assessee that the non-furnishing of the audit report in Form 10CCAC to claim deduction under section 80HC is a defect. 17. Then, a question arises for our consideration whether non-filing of the audit report in Form 10CCAC i....
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....sp; claim of the assessee under section 80HHC on the ground that the special audit certificate was not filed along with the return. 19. That apart, this Court, in an unreported decision in T.C.(A).No.905 of 2005 dated 26.10.2005 (between the Commissioner of Income-tax vs. Pandian Hotels Ltd. [2006] 281 ITR 446 (Mad)) held that the filing of audit report along with the return is not a mandatory condition for the purpose of claiming deduction under section 80HHD of the Act. 20. Therefore, it is clear that the spirit behind sub-sections (5) and (9) of section 139 read with section 80HHC of the Act is that the assessee should be given a fair and reasonable opportunity to claim the benefit as available under the statute an y denial on technical ground is not justified. Merely because the assessee seeks to claim deduction under section 80HHC based on the audit report in Form 10CCAC after setting aside of the original assessment order and at the stage of remittance of the matter, particularly, under&....