TaxTMI 
TaxTMI 
2023 (7) TMI 562
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....in law and on facts in confirming action of CPC in disallowing deduction u/s 80IA of the Act while processing return u/s 143(1) of the Act ignoring fact that it is beyond power given to CPC. N.A. being alternative contention to Ground No. 2. 4 Ld. NFAC ought to have considered the submission of the appellant and ought to allow the deduction claimed in the return of income. N.A. being alternative contention to Ground No. 2. 5 Charging of interest u/s 234C is not justified. Total Tax Effect Rs. 7,15,480/- 3. The brief facts of the case are that the assessee has filed his return of income for assessment year 2017-18 and the same was processed by the CPC on 04-02-2019. The assessee filed a rectification application to CPC against the order u/s. 143(1) of the Act and CPC passed order u/s. 154 on 21- 10-2019 and determined demand of Rs. 7,15,480/-. The assessee's case is that the assessee claimed deduction u/s. 80-IA of the Act of Rs. 19,39,565/- in the ITR for A.Y. 2017-18, which was not granted by CPC while passing order u/s. 154 of the Act dated 21-10-2019. The reason for rejection of assessee's claim u/s. 80-IA was that the assessee file....
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....yable on the basis of the return, or proof of the tax, if any, claimed to have been deducted or collected at source or the advance tax or tax on self-assessment, if any, claimed to have been paid or any document or copy of any account or form or report of audit required to be attached with the return of income under any of the provisions of the Act. [Provided that where an assessee is required to furnish a report of audit specified under sub-clause (iv), (v), (vi) or (via) of clause (23C) of section 10, section 10A, [section 10AA], clause (b) of sub-section (1) of section 12A, section 44AB [section 44DA, section 508], section 80-IA, section 80-IB, section 80-IC, section 80-ID, section 80JJAA, section SOLA, section 92E, [section 115JB or section 115VW] [or to give a notice under clause (a) of subsection (2) of section 11] of the Act, he shall furnish the same electronically.]" From above rule, it is clear that appellant was required to furnish a report of audit with return of income within due date for getting the benefit of deductions u/s 80IA of the Act. Section 80IA (7) of the Act clearly establishes the provisions of rule 12(2). The section 80IA(7) reads as und....
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....rm 10CCB after due date in violation of Rule 12(2) of Income Tax Rules, 1962 and section 80IA(7) of the Income Tax Act, 1961, hence, the Assessing Officer rightly disallowed the deductions of 19,39,5657- claimed u/s 80IA and made the addition of the same to the total income of the appellant. Accordingly, I am not inclined to interfere with the decision of the Assessing Officer. The grounds of appeal are hereby dismissed." 5. The assessee is in appeal before us against the addition confirmed by ld. CIT(A) denying the benefit of deduction u/s. 80-IA of the Act. The counsel for the assessee placed reliance on several judicial precedents in support of the contention that filing Form 10CCB is a procedural requirement and not a mandatory requirement. In the instant facts, it has not been disputed that the assessee had filed form 10CCB on 11-10-2018, while the return of income as processed by CPC on 04-02-2019 i.e. after Form 10CCB was filed by the assessee. The counsel for the assessee placed reliance on several judicial precedents of the Jurisdictional Ahmedabad ITAT and also by the Gujarat High Court in support of the contention that even if audit report in Form 10CCB is filed beyon....
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...., it cannot be said that for beneficial exemption liberal rule of construction has been done away with. In other words, for construction of beneficial exemption strict rule of interpretation may not be required to be applied. The Supreme Court in this case observed as under: "This being the case, it is obvious that the beneficial purpose of the exemption contained in Section 3(1)(b) must be given full effect to, the line of authority being applicable to the facts of these cases being the line of authority which deals with beneficial exemptions as opposed to exemptions generally in tax statutes. This being the case, a literal formalistic interpretation of the statute at hand is to be eschewed. We must first ask ourselves what is the object sought to be achieved by the provision, and construe the statute in accord with such object. And on the assumption that any ambiguity arises in such construction, such ambiguity must be in favour of that which is exempted. Consequently, for the reasons given by us, we agree with the conclusions reached by the impugned judgments of the Division Bench and the Full Bench." 6.2 In IPCA Laboratory Ltd. v. Dy. CIT [2004] 12 SCC 7421 th....
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.... due date of filing return of income, which was an essential requirement for not claiming the benefit of section 10B. The Hon'ble High Court decided the issue in favour of the assessee by holding that the requirement of filing the declaration was mandatory but filing it along with the return of income u/s 139(1) was a directory requirement. The matter was brought by the Revenue before the Hon'ble Supreme Court. The assessee, inter alia, relied on the judgment of the Apex Court in G.M. Knitting Industries (P.) Ltd. (supra). Their Lordships held that the requirement of filing the report in support of deduction u/s 10B was not a directory but a mandatory requirement. It further held that both the conditions of - filing the declaration and filing it before the time limit u/s 139(1) - were mandatory and had to be cumulatively satisfied. Rejecting the reliance on G.M. Knitting Industries (P.) Ltd. (supra), the Hon'ble Supreme Court held that that decision was relevant in the context of deduction provisions and not the exemption provisions as given under Chapter III of the Act. 6.3.1. In our view, the aforesaid decision would not apply to assessee's set of facts and w....
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....ith the exemption provisions. However, notably, the Hon'ble Supreme Court in the case of CIT v. Yokogawa India Ltd 391 ITR 274 (Supreme Court), held that section 10A of the Act is a "deduction provision" and not an "exemption provision". Therefore, apparently there seems to be a difference of opinion to whether section 10A/B provisions qualify as "Exemption" or Deduction" provisions. Therefore, since it is well-settled principle of law that deduction provisions, which have been introduced in the Statute to provide incentive to the assessee, should be construed "liberally", in our considered view, once it is not disputed that the instant set of facts, the assessee claimed the benefit of provisions under section 10AA in the return of income (which in our view is a mandatory/directory requirement), the benefit of section 10AA cannot be denied only on the ground that the assessee could not file Form 56F along with the return of income (being a procedural requirement), especially when Form 56F has been filed by the assessee at the assessment stage when such claim was being considered by the Assessing Officer. (iii) Besides the above, in the case of G. M. Knitting Industries....