2008 (12) TMI 4

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.... aggrieved by the fact that the Tribunal held that the order passed by the Commissioner of Income Tax under Section 263 of the said Act was without jurisdiction. The Commissioner of Income Tax had issued a notice under Section 263 of the said Act, in which it was stated that the assessee was not entitled to the deduction under Section 80-IA as the assessee did not fulfill the condition laid down in Section 80IA(7). Section 80IA(7) reads as under:- "The deduction under sub-section (1) from profits and gains derived from an undertaking shall not be admissible unless the accounts of the undertaking for the previous year relevant to the assessment year for which the deduction is claimed have been audited by an accountant, as defined in th....

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....ns of section 80-IA(7) with regard to filing of the audit report along with the return were not mandatory and were merely directory. In coming to such conclusion, the Tribunal referred to the decision of the Gujarat High Court in CIT v. Gujarat Oil and Allied Industries, 201 ITR 325 (Guj). In that decision the provisions of Section 80J(6A) were considered. The wording of Section 80J(6A) is similar to that of section 80-IA(7) which is in issue in the present appeal. The Gujarat High Court took the view that the word "shall" which occurs in section 80J(6A) be read as "may" and that the requirement of filing of an audit report along with the return was only to be taken as directory in nature. The Gujarat High Court took the view that in case t....

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....passed by the Commissioner, Income Tax and submitted that the said Commissioner held that the assessee did not fulfill the conditions mentioned in Section 80-IA to claim the deduction and that supplying of meters to electricity board/companies could not be considered as power generation, transmition or specification, renovation and moderanisation to existing distribution lines. Consequently, the learned counsel submitted that the Commissioner Income Tax had rightly held that the assessment was prejudicial to the interest of Revenue and it was also erroneous as the assessee did not fulfill the conditions laid down in section 80-IA. With regard to this contention, as noted in the impugned order, the representative of the assessee had submitte....