TaxTMI 
TaxTMI 
2018 (4) TMI 992
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....16 passed by the Ld. AO u/s 147 of the Act, is without jurisdiction, wrong and bad in law and liable to be quashed and the provisions of Sec. 147 are not applicable in this case. 3. That on facts and circumstances of the case and in law, Ld. CIT(A) has grossly erred in upholding the reassessment order disallowing the exemption u/s 10A and 10AA of the Act for Rs. 4,57,16,415/- and ^ 52,66,799/- totaling to? 5,09,83,214/-, which were earlier allowed in the assessment order u/s 143(3) of the Act after detailed examination and scrutiny of submissions/ documents alleging that Form 56F was not filed in the proceedings u/s 143(3) of the Act. 4. That on facts and circumstances of the case and in law, the Ld. CIT(A) has failed to appreciate that the deduction u/s 10A and 10AA of the Act was allowed by the Ld. AO in the original assessment order u/s 143(3) of the Act after scrutiny by the Ld. AO of the submissions/ documents including Form 56F filed during the course of the assessment proceedings. 5. That on facts and circumstances of the case and in law, the reopening u/s 147 / 148 of the assessment order u/s 143(3) of the Act is without any new material, and/or i....
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....Rs. 1,44,01,237/-) was wrongly allowed vide order u/s. 143(3) dated 22.12.2011. Since exemption u/s. 10A & 10AA is allowable only on filing report u/s 56F, hence, an amount of Rs. 3,65,81,977/- has escaped assessment." 2.1 The Assessing Officer observed that for claiming exemption u/s. 10A/10AA, it is mandatory to file audit report in form No. 56F alongwith return of income or during the course of assessment proceedings, but the assessee failed to furnish the same upto the assessment proceedings. In the reassessment proceedings, the assessee submitted form No. 56F for the assessment year 2009-10 vide letter dated 16.11.2015, which was not taken cognizance of. The assessee was asked to furnish the evidence to show that Form No. 56 was filed in the original assessment proceedings, but he failed to submit any such evidence. The assessee, however, produced an affidavit deposing as under : 2. That during the course of assessment proceedings before A.O. in Noida, several documents were produced for verification /submission. 3. That Form 56F, being report u/s 10-A of the Income Tax Act, 1961 was also submitted to the Assessing officer during the course of said hearing....
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....rt also. Thus, there was no infirmity whatsoever in the grant of exemption of section 10A. 3. Without prejudice to above, filing of audit report viz. Form 56F in the instant case, along with return is held to be directory condition and not mandatory condition in view of following judicial decisions and therefore also, disallowance of deduction u/s 10A by holding such requirement as mandatory by Ld. AO is unjustified: * CIT vs. Axis Computers (India) (P) Ltd., 178 Taxman 0143, High Court of Delhi. * CIT vs. Centimeters EIcctricals, 317 1TR 0249, High Court of Delhi. * CIT vs. Punjab Financial Corporation, 254 ITR 0006, High Court of Punjab and Haryana (Full Bench). * Pr. CIT vs. Surya Merchants Ltd., 387 ITR 0105, High Court of Allahabad. 4. Even Hon'ble Courts have gone to the extent of holding in the following judicial decisions that Form 56F even not filed with the return but filed before Ld. CIT(A) or further appellate authorities, would meet the requirements of law. In the instant case, even the admitted case of Ld. AO in the impugned reassessment order is that it was filed in reassessment proceeding. That being so, wher....
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.... barred by limitation in terms of first proviso to section 147 and in view of the following judicial decisions: * Harvana Acrylic Manufacturing Co. vs. CIT., 308 ITR 0038, High Court of Delhi. * Wcl Intcrtradc Pvt. Ltd. vs. ITO, 308 ITR 0022, High Court of Delhi. * JSRS Udyog Ltd. & Anr. vs. ITO, 313 ITR 0321, High Court of Delhi. * Vishwanath Prasad Ashok Kumar Sarraf vs. CIT, 327 ITR 0190, High Court of Allahabad. 7. There is no fresh tangible material as is evident from the 'reason' recorded and original assessment was made u/s 143(3), assumption of jurisdiction is bad in law in view of following judicial decisions: * PR. CIT vs. Tuppcrwarc India (P) Ltd., 236 Taxman 0494, High Court of Delhi. * CIT vs. Orient Craft Ltd., 354 ITR 0536, High Court of Delhi. * Mohan Gupta (HUF) vs. CIT & Anr., 365 ITR 0115, High Court of Delhi. * CIT vs. K. L. Arora, ITA No. 118/2014, dated 21-04-2014, High Court of Delhi. * CIT vs. Shri AtuI Kumar Swami, ITA No. 112/2014, dated 18-03-2014, High Court of Delhi. * Madhukar Khosla vs. ACIT, 367 ITR 0165, High Court of Delhi. * HV Trans....
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....ng notice under s. 148 on the basis of audit objection mechanically without any application of mind, such a notice was invalid suffering from change of opinion and no substantial question of law arises.-CIT vs. Indian Sussar & General Industry Export Import Corpn. Lid. 8 DTK 112(DeI) -Notice-Opinion of Revenue audit party with regard to non-availability of deduction under sections 80-IA and 80HHC-Change of opinion-Notice not valid- Income-tax Act, 1961, ss. 147, 148-Carlton Overseas (P) Ltd. v. ITO 3181TR295(Delhi) Notice expiry of four years vis-a-vis audit report -Assessee having made complete disclosure of relevant particulars before the AO in the assessment proceeding under s. 143(3), reassessment proceedings under s. 147 could not be initiated beyond the period of four years merely on the basis of the internal audit report.- CIT vs. SimMiaoli Sugar Mills Ltd. 55 DTK 233 (Del.) * Sun Pharmaceutical Industries Ltd. vs. DCIT, 381 ITR 0387, High Court of Delhi. 10.There is no 'satisfaction' of the Pr. CIT u/s 151 as evident from the "form for recording reasons" placed before Hon'ble Bench on 06.11.2017, which mentions the word "Appro....
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..... The vital question to be adjudicated in this appeal, inter alia, is whether the ld. Authorities below were justified in not considering the audit report furnished by the assessee in Form No. 56F during the course of re-assessment order on the premise that the said report was not filed alongwith the return or upto the original assessment order. The requisite audit report in form No. 56F was admittedly filed by the assessee in reassessment proceedings, though the assessee has claimed that the said report was also filed in original assessment proceedings, as deposed in the affidavit. The ld. Authorities below appear to have not taken cognizance of the audit report in Form No. 56F, furnished by the assessee in the reassessment proceedings in support of its claim, stating that the assessee failed to furnish any evidence to substantiate that any such audit report was filed in the original assessment proceedings. It is also an undisputed fact that the claim made by assessee stood accepted in original assessment order. We have gone through various decisions relied on behalf of the parties and we find that this issue is squarely covered in favour of the assessee by the decision of coordin....
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....and in case, the audit report is submitted at any time before framing of the assessment, there will be substantial compliance with the provisions of sec. 8oJ(6A) of the Act. An identical view has also been taken by the Hon'ble Madras High Court in the case of CIT vs. A.N. Arunachalam, 208 ITR 481 (Mad.). There are other decisions of other Courts taking the same view as under: - (ii) CIT vs. Shivanand Electricals (1994) 209 ITR 63 (Bom.). (ii) Zenith Processing Mills v. CIT (1996) 219 ITR 721 (Guj.), (iii) CIT Vs. Jayant Patel (2001) 248 ITR 199 (Mad.). (iv) CIT Vs Mahalaxmi Rice Factory (2007) 294 ITR 631 (P&H). Referring to the aforesaid decisions, the Hon'ble Jurisdictional Delhi High Court in the case of CIT vs. Contimeters Electricals Pvt. Ltd. (2009) 317 ITR 249 (Delhi) has also taken a view that requirement of filing the audit report along with return is not mandatory but directory, and that if the audit report is filed at any time before framing of the assessment, the requirement of sec. 8o-IA(7) would be met. 8. In the present case, the audit report in Form No.10CCB was filed by the assessee during the reassessment proceedings completed un....