TaxTMI 
TaxTMI 
TaxTMI 
2024 (10) TMI 531
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....(a)(ii) of the Act. 2. The learned Commissioner (Appeals), erred in confirming action of the CPC Bangalore in making adjustment to the returned income of the Appellant by way of an intimation u/s 143(1) and in denying the benefit of Sec. 80-IA(4) of the Act of Rs. 48,06,281/- to the Appellant by failing to appreciate that this was not a prima facie adjustment permissible u/s 143(1)(a) of the Act." 3. The sole grievance of the assessee is against the denial of deduction claimed under section 80-IA(4)(iv) of the Act. 4. The brief facts of the case pertaining to this issue, as emanating from the record, are: The assessee is engaged in the business of development of the Gandhidham township on leasehold land and generation of power. For the year under consideration, the assessee filed its return of income on 04/11/2022 declaring a total income of Rs. 2,11,32,540, after claiming a deduction of Rs. 48,06,281 under section 80-IA(4)(iv) of the Act. The return filed by the assessee was processed vide intimation dated 16/03/2023 issued under section 143(1) of the Act by the Centralised Processing Centre, Bengaluru, ("CPC"), inter-alia, disallowing the deduction claimed under section 80-IA....
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.... regarding the fact that the due date for filing the audit report in Form no. 10CCB was 07/10/2022, however, the same was filed by the assessee on 17/10/2022. Since the audit report in Form no. 10CCB could not filed by the assessee before the specified date, the lower authorities denied the deduction claimed by the assessee under section 80-IA(4)(iv) of the Act. 8. As per the assessee, the audit report in Form no. 3CA-3CD was obtained by the assessee on 24/08/2022 and the same was uploaded by the Chartered Accountant on 19/09/2022. As per the assessee, the audit report also mentioned that the assessee is entitled to claim deduction under section 80-IA of the Act. It is the plea of the assessee that even though the financials that are required to be filed electronically in Form no. 10CCB for claiming deduction under section 80-IA(4)(iv) of the Act were audited on 24/08/2022, Form no. 10CCB could not be filed before 07/10/2022, i.e. the due date for filing the audit report in Form no. 3CA-3CD and Form no. 10CCB. In the affidavit of the Partner of the Chartered Accountant firm, forming part of the paper book on pages 113-115, it is claimed that the Qualified Chartered Accountant file....
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....he provisions of section 44AB and section 80-IA(7) of the Act were amended vide Finance Act, 2020, w.e.f. 01/04/2020. Prior to the aforesaid amendment in section 80-IA(7) of the Act, the assessee was required to furnish the audit report in Form no. 10CCB along with the return of income. Further, prior to the amendment by Finance Act, 2020 w.e.f. 01/04/2020, the specified date in section 44AB of the Act meant the due date for furnishing the return of income under sub-section (1) of section 139 of the Act. Thus, if the law prior to the amendment by the Finance Act, 2020 is applied to the current factual position, the assessee is entitled to claim a deduction under section 80-IA of the Act since the audit report in Form no. 10CCB was filed on 17/10/2022, i.e. prior to the due date for furnishing the return of income under sub-section (1) of section 139 of the Act. Therefore, now the issue arises whether the aforementioned amendment by the Finance Act, 2020 lays down any mandatory requirement for claiming deduction under section 80-IA of the Act or whether the same is just directory in nature. In order to answer the aforesaid issue, it is relevant to note the rationale behind the afore....
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....ngly, apply in relation to the assessment year 2020-21 and subsequent assessment years." (Emphasis Supplied) 12. Therefore, from the aforenoted relevant portion of the Memorandum explaining the provisions of the Finance Bill, 2020, it is evident that the amendment brought in section 44AB and section 80-IA of the Act was merely to enable pre-filing of returns in case of persons having income from business or profession. Accordingly, the tax audit report was required to be furnished at least one month prior to the due date of filing the return of income as per the amended provisions. Therefore, having considered the rationale behind the aforesaid amendment by the Finance Act, 2020, we are of the considered view that the aforesaid timeline to file the tax audit report is merely directory in nature and cannot be considered to be a mandatory requirement to claim the deduction. 13. We find that the Hon'ble Karnataka High Court in Sutures India Private Limited v/s CIT, reported in [2021] 431 ITR 332 (Karn.) held that the taxpayer could file the audit report in Form no. 10CCB even at the appellate stage so as to be eligible for deduction under section 80-IA of the Act. 14. We further f....
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....e audit report along with the return were not mandatory and were merely directory. In coming to such conclusion, the Tribunal referred to the decisions of the Gujarat High Court in CIT vs. Gujarat Oil & 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 the audit report is submitted at any time before the framing of the assessment, there would be substantial compliance with the provisions of Section 80J(6A). The Tribunal also relied on the decision of the Madras High Court in CIT vs. A.N. Arunachalam, 208 ITR 481 (Mad.), which, again, while considering the provisions of Section 80J(6A), took the same view as that of the Gujarat High Court. We notice that there are other decisions of other Courts taking the same view. The dec....
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....in CIT v. Shivanand Electronics [1994] 209 ITR 63 / 75 Taxman 93 (Bom.), apart from Gujarat High Court in Zenith Processing Mills v. CIT [1996] 219 ITR 721 (Guj.) and Punjab and Haryana High Court in CIT v. Maholaxmi Rice Factory [2007] 294 ITR 631/ 1.63 Taxman 565 (Punj. & Har). 7. The Calcutta High Court in the case in the CIT v. Berger Paints (India) Ltd. [2002] 254 ITR 503/r20031 126 Taxman 435 (Cal.) has also concurred with the said view which was followed by the Tribunal in this case. 8. Mr. T. Ravikumar, the learned counsel for the appellant is not able to produce any other judgement contrary to the above said views consistently taken. 9. In the light of the above, by virtue of hierarchy of judgements which are against the Revenue, the substantial question of law (1) would not arise at all for consideration." 7. Similar view has been taken by the Hon'ble Allahabad High Court in the case of PCIT vs. Surya Merchands Ltd. 387 ITR 105 and the Hon'ble High Court of Uttrakhand in the case of CIT Vs. Sanjay Kumar Bansal 35 taxmann.com 514, and Hon'ble Karnataka High Court in the case of CIT vs. ACE Multi Taxes Systems Pvt. Ltd. 317 ITR 207. The ratios of the abo....