TaxTMI 
TaxTMI 
TaxTMI 
2021 (11) TMI 767
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.... erred in arbitrarily conforming the addition of Rs. 1,01,259/-made in the total income by disallowing the claim of depreciation and imposing the tax on the same which is neither correct nor justified therefore same is liable to be deleted. However, prior to arguing the same, the ld. Counsel for the assessee, Shri Mishra, would plead for admission of legal Grounds (Gds. 3 & 4), reading as under, also praying for their adjudication first inasmuch as the acceptance thereof, where so, would render infructuous the adjudication of Grounds 1 and 2: 3. The reopening of case u/s. 147 of the Act, is illegal and unjustified because no additions has been made, for the reasons for recorded by the assessing officer dated 04/05/2010. Hence the consequential assessment is ab-initio void, and deserves to be set aside. 4. That, the assessment of the appellant was reopened on non-existing and irrelevant reasons hence the reopening u/s. 147/148 of the IT Act, 1961 and assessment order dated 06.12.2010 is illegal, without jurisdiction and void. 3. Grounds 3 and 4 being legal were admitted after brief arguments. Qua Gd. 4, adverting to the reasons recorded, reproduced hereunder, it was submitted ....
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....it report along with the return of income - filed on 27.09.2008, and which had admittedly not been done, on one hand, and the procedural requirement per the relevant rule (r. 12) read with the Board Instruction for filling-up the return form in respect of business income, which are thus in harmony. As regards the validity of the reason to believe, the reason recorded, as apparent, has two limbs, each of which has to be given due weight. The second limb of the reason recorded clearly states of non-compliance of the provision of section 80IA(7), so that deduction u/s. 80IB(11A) is not admissible in terms of section 80IB(13), which makes some clauses of section 80IA, including sec. 80IA(7), applicable to a claim for deduction u/s. 80IB. How could the AO infer compliance of s. 80IA(7), or the conduct of audit u/s. 80IB, where the same was not, as required by law, filed along with the return of income and, in fact, even thereafter? 4. I have heard the parties, and perused the material on record. 4.1 It would be relevant to reproduce the relevant provisions of law, as under: 80-IA. Deductions in respect of profits and gains from industrial undertakings or enterprises engaged in infra....
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....'s contention that the reason recorded only speaks of the requirement of audit (u/s. 80IB), which had in fact been undertaken, though the audit report not furnished along with the return of income, but only during the reassessment proceedings, so that the reason does not hold, cannot be accepted. The reason, read holistically, speaks of non-compliance of the statutory provisions of section 80IB(13) read with s. 80IA(7); it noting a failure to comply with the said provisions. When the reason, as recorded, adverts to these provisions, the same have to be necessarily read into the said reason, and which explains the reproduction thereof hereinbefore. The requirement of law is, as apparent, twofold. The first requirement is to get the accounts audited u/s. 80-IB and obtain the audit report, duly verified, in the prescribed form and, two, to furnish the same along with the return of income. Section 80AC proscribes deduction under, among others, section 80-IB, where the return of income is not furnished by the due date of filing the return u/s. 139(1). Implicit therein is the requirement to get the accounts audited u/s. 80-IB by the said date. The relevant rule (r.18BBB) prescribes Form ....
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....stantive law, which would in that case prevail. No doubt, para 1 of the Instruction, clarifying the legal status thereof, states that in case of doubt reference be made to the provisions of the Act and the Income-tax Rules, 1962. Further, para 10(1)(b)(vi) of the Instruction, explaining the scheme of the law, states that deductions u/c. VI-A of the Act (which Chapter contains ss. 80-IA, 80-IB) be claimed from the gross total income by following the procedure prescribed by law. What, however, when the Board, whose rule-making powers are for the purposes of the Act, itself provides for, contrary to the procedure per the express provision of law, annexure-less returns? A procedure, in any case, is one which could be followed, i.e., to the extent possible, or practicably so. A browse of the Act clears any vestige of doubt. The Instruction is wholly in terms of and consistent with the Act. Sections 139C & 139D stand coopted on the statute by Finance Act, 2007, w.r.e.f. 01/6/2006, and provide for the power to the Board for specifying persons or classes of persons not required to furnish documents, statements, receipts, audit reports, etc., required to be furnished along with the return o....