BAN LABS PRIVATE LIMITED V. PRINCIPAL COMMISSIONER OF INCOME TAX 1

SCA/9422/2021

AI Insights

The case involves Ban Labs Private Limited challenging the rejection of their revision application under section 264 of the Income Tax Act, 1961, by the Principal Commissioner of Income Tax. The petitioner had claimed a deduction under section 80IC for the assessment year 2017-18, which was initially allowed but later disallowed due to the late filing of Form 10CCB. The petitioner argued that the form was filed during the assessment proceedings and not with the original or revised returns. The court examined whether the rejection of the revision application was justified, considering the procedural nature of filing Form 10CCB and the timing of its submission relative to the assessment completion.

• Counselvise Citation: [2021] 140 COUNSELVISE.COM (IT) 749643 (HC-GUJARAT)
• Appeal Type: Others
• Pronouncement Date: 20-09-2021
• Assessment Year: misc
• Other Referred Cases: Sarvodaya Charitable Trust vs. Income Tax Officer (Exemption), Zenith Processing Mills vs. Commissioner of Income, CIT vs. Gujarat Oil and Allied Industries, CIT vs. Sitaram Bhagwandas, CIT vs. AKS Alloys (P) Ltd.
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: MAUNA BHATT
• Assessee Lawyers: B S SOPARKAR
• Keywords: Assessment Year 2017-18; Deduction; Form 10CCB; Income Tax; Revision application
• Section: 143(1); 264; 80IC; 80IC; 226

Judgement Text

"C/SCA/9422/2021 ORDER DATED: 20/09/2021 IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/SPECIAL CIVIL APPLICATION NO. 9422 of 2021 ========================================================== BAN LABS PRIVATE LIMITED Versus PRINCIPAL COMMISSIONER` OF INCOME TAX 1 ========================================================== Appearance: MR B S SOPARKAR(6851) for the Petitioner(s) No. 1 MRS MAUNA M BHATT(174) for the Respondent(s) No. 1 ========================================================== CORAM: HONOURABLE MS. JUSTICE SONIA GOKANI and HONOURABLE MR. JUSTICE RAJENDRA M. SAREEN Date : 20/09/2021 ORAL ORDER (PER : HONOURABLE MS. JUSTICE SONIA GOKANI) 1. Present petition is under Article 226 of the Constitution of India seeking to challenge the order dated 24.03.2021 passed by the respondent under section 264 of the Income Tax Act, 1961 (hereinafter referred to as “the I.T. Act” for short), whereby the revision application of the petitioner has been rejected on the ground that he has failed to specify appropriate reason for delay in preferring the application. 2. The facts leading to the present petition are as follows:- 2.1. The petitioner is a private Company which filed its return of income for A.Y. 2017-18 on 30.10.2017 declaring a total income of Rs.3,94,35,040/-. The petitioner also claimed deduction of of Rs.3,34,92,334/- under section 80IC of the I.T. Act of the profit and gains derived from its Page 1 of 27 C/SCA/9422/2021 ORDER DATED: 20/09/2021 notified undertaking situated in the State of Himachal Pradesh. For the first time such exemption was availed on 08.03.2010. 2.2. According to the petitioner, the petitioner filed revised return of income on 18.02.2018 and claimed deduction under section 80IC under Rule 18BBB of the I.T. Act along with audit report through e-filing in support of the claim for deduction under section 80IC. 2.3. It is the case of the petitioner that the said form was neither filed with the original return nor with the revised return. 2.4. A communication was received by the petitioner from Central Processing Centre, Bengaluru (hereinafter referred to as “the CPC” for convenience) under section 143(1)(a) eliciting response from the petitioner on the adjustments proposed to be made in the return of income. This was done on 23.07.2018. Thereafter on 12.09.2018, a duly certified report 10CCB was submitted. 2.5. It is the grievance on the part of the petitioner that without considering the content of the Form 10CCB, CPC communicated an intimation on 18.02.2018 under section 143(1) of the I.T. Act disallowing the petitioner’s claim under section 80IC. 2.6. It is the case of the petitioner that the Assistant Commissioner of Income Tax Circle 3(1) refused to give effect to the form 10CCB filed by the petitioner and asked Page 2 of 27 C/SCA/9422/2021 ORDER DATED: 20/09/2021 for payment of demand vide letter dated 20.08.2019, on the ground that e-form 10CCB was not filed within due date. 2.7. On 27.08.2019, the petitioner responded and raised various issues justifying the claim of the deduction. According to the petitioner, it was not incumbent upon the petitioner to file form 10CCB immediately along with the return of income. However, he has filed it during the course of the assessment. This was rejected by the assessing officer and therefore, on 05.03.2021, the petitioner preferred an application under section 264 before the respondent. Thus, the grievance on the part of the petitioner is that neither the A.O. nor CPC took into consideration the fact that there was no necessity for the assessee to file Form 10CCB along with the return nor was there any delay in filing the said return and therefore, they could not have taken into consideration the same while considering the matter of the assessee on merit. This has aggrieved the petitioner and therefore the petitioner is before this Court seeking for the following prayer :- “9A. Quash and set aside the impugned order passed by the Respondent at Annexure-A and direct the Respondent to allow the application of the petitioner. 9B. Pending admission, hearing and final disposal of this petition, to stay implementation and operation of the demand notice under section 156 of the Act that is annexed with the intimation Page 3 of 27 C/SCA/9422/2021 ORDER DATED: 20/09/2021 under section 143(1) at Annexure-C; 9C. Any other and further relief as may be deemed just and proper may be granted in the interest of justice.” 3. This Court issued notice on 05.07.2020. In response to the same, the Principal Commissioner of Income Tax, Rajkot – respondent No.1 herein has filed Affidavit-in-reply denying each and every averments made in the memo of petition. 3.1. He has contended that the order which is impugned is passed under section 264 of the I.T. Act where all relevant facts have been taken into consideration at the time of deciding the said application. 3.2. Relying on explanation to section 264, it is urged that the order of Principal Commissioner of Income-tax declining any interference be not deemed to be an order prejudicial to the assessee and in limine this petition should be dismissed. 3.3. It is further say of the respondent that the revision application filed under section 264 for revision of the order dated 18.12.23018 issued by the CPC under section 143, ought to have been filed within one year i.e. before 18.12.2019 as per provisions of sub-section (3) of section 264 of the I.T. Act. However, the revision has been filed by the petitioner on 05.03.2020, which was beyond the time permissible under the law and there is no evidence to prove Page 4 of 27 C/SCA/9422/2021 ORDER DATED: 20/09/2021 that he was prevented by sufficient cause in making the application within the permissible time limit. 3.4. It has also placed reliance on the case of Sarvodaya Charitable Trust versus Income Etax Officer (Exemption and Ors. reported in [(2021) 125 taxmann.com75] by the petitioner, on the ground that the facts are entirely different. 3.5. It is also averred that the notice of hearing also has been served upon the petitioner and there is sufficient opportunity given in compliance of the principle of natural justice and hence also, there is no cause of grievance. 6. We have heard extensively Mr.Bandish Soparkar, learned advocate for the petitioner and Ms.Mauna Bhatt, learned Senior Standing Counsel for the Department. In support of their respective stand, they have relied on averments as well as decisions which have been pressed into service, which we shall be discussing hereinafter. 6.1. On the strength of the rival submissions, the question that arise for consideration of this Court is as to, whether the order of revision under section 264 of the I.T. Act is justifiable. 6.2. It is apt to refer section 264 of the I.T. Act. Section 264 Revision of orders: (1) In the case of any order other than an order to which section 263 applies passed by an authority Page 5 of 27 C/SCA/9422/2021 ORDER DATED: 20/09/2021 subordinate to him, the Commissioner may, either of his own motion or on an application by the assessee for revision, call for the record of any proceeding under this Act in which any such order has been passed and may make such inquiry or cause such inquiry to be made and, subject to the provisions of this Act, may pass such order thereon, not being an order prejudicial to the assessee, as he thinks fit. (2) The Commissioner shall not of his own motion revise any order under this section if the order has been made more than one year previously. (3) In the case of an application for revision under this section by the assessee, the application must be made within one year from the date on which the order in question was communicated to him or the date on which he otherwise came to know of it, whichever is earlier: Provided that the Commissioner may, if he is satisfied that the assessee was prevented by sufficient cause from making the application within that period, admit an application made after the expiry of that period. (4) The Commissioner shall not revise any order under this section in the following cases- (a) where an appeal against the order lies to the Deputy Commissioner (Appeals)] or to the Commissioner (Appeals)] or to the Page 6 of 27 C/SCA/9422/2021 ORDER DATED: 20/09/2021 Appellate Tribunal but has not been made and the time within which such appeal may be made has not expired or, in the case of an appeal to the Commissioner (Appeals) or] to the Appellate Tribunal, the assessee has not waived his right of appeal; or (b) where the order is pending on an appeal before the Deputy Commissioner (Appeals)]; or (c) where the order has been made the subject of an appeal to the Commissioner (Appeals) or] to the Appellate Tribunal. (5) Every application by an assessee for revision under this section shall be accompanied by a fee of twenty- five rupees Explanation 1-An order by the Commissioner declining to interfere shall, for the purposes of this section, be deemed not to be an order prejudicial to the assessee. Explanation 2.- For the purposes of this section, the Deputy Commissioner (Appeals)] shall be deemed to be an authority subordinate to the Commissioner. F.- General” Thus, it provides under the heading of the revision of the order that the thrust is on the period of limitation. According to them, the application for revision under this section by the assessee must be made within one year from the date on which the order in question was communicated Page 7 of 27 C/SCA/9422/2021 ORDER DATED: 20/09/2021 to him or the date on which he otherwise came to know of it, whichever is earlier. The proviso to sub-section (3) of section 264 also permits the Chief Commissioner or the Principal Commissioner or Commissioner, as the case may be, to be satisfied on the issue of furnishing sufficieint cause for any delay that may have been caused in preferring the application beyond the period of 12 months. It is thus, the discretion of the concerned officer to admit the application made after the expiry of the stipulated period or is being satisfied with the explanation which prevented the person concerned and thus, sufficiency of the case is the ground which would allow such discretion. 6.3. As could be noticed from the Affidavit-in-reply that emphasis on the part of the respondent is of not only petitioner having preferred application under section 264 beyond the period of 3 years but of having failed to show any sufficient cause for such delay and thus, according to the respondent, this order which is impugned needs to be sustained. 6.4 At one stage while taking a very liberal approach, Ms.Mauna Bhatt, learned Senior Standing Counsel has urged that if at all this Court is inclined for order to be once again gone into by the officer concerned, there will be need for petitioner to satisfy the concerned person with the sufficiency of the cause and then and then only such application for revision could be allowed and otherwise not. 6.5. It is further emphasized by the learned Senior Standing Counsel that merits of the matter cannot be Page 8 of 27 C/SCA/9422/2021 ORDER DATED: 20/09/2021 looked into by this Court even if the order impugned is interfered with. 7. Strong resistance on the part of the petitioner is that there is no delay at all in preferring the revision application and rejection is totally on the ground which is unsustainable and more over, the petitioner cannot be relegated to the concerned officer to decide whether there is delay or not, as that would amount to giving second innings to the officer who has not appreciated the glaring facts which have been presented before him. 8. Gujarat High Court in the case of Zenith Processing Mills versus Commissioner of Income, reported in 219 ITR 721 was considering the question whether the tribunal was justified in holding that the provision of section 80J(6A) was mandatory and not directory as claimed and pointed out by the assessee. The Court held that from perusal of sub-section (6A), two things are necessary. The first requirement is that the statement of accounts for the previous year relevant to the assessment year for which deduction is claimed must have been audited by an accountant and the second requirement is that the assessee must furnish along with his return of income the report of such audit in the prescribed form duly signed and verified by such accountant. The former requirement, according to the Court relates to furnishing substantial foundation for claiming allowance and the later is the requirement of furnishing proof that foundation for claiming such deduction has been laid. Therefore, the former was held to be mandatory whereas the later was Page 9 of 27 C/SCA/9422/2021 ORDER DATED: 20/09/2021 considered directory being in the realm of procedural law. This Court in the aforesaid decision has observed and held thus: “From a perusal of sub-section (6A), it is apparent that compliance with two things is necessary. The first requirement is that the statement of accounts for the previous year relevant to the assessment year for which deduction is claimed must have been audited by an accountant and the second part is that the assessee must furnish along with his return of income the report of such audit in the prescribed form duly signed and verified by such accountant. It can be stated without fear of contradiction that the former is the requirement which furnishes substantial foundation for claiming allowance and the latter is the requirement of furnishing proof that foundation for claiming such deduction has been laid. In our opinion, while compliance with the former before the deduction is claimed is mandatory and so far as manner of submitting proof of such compliance of filing along with the return is concerned, is directory because such requirement falls in the realm of procedure for furnishing evidence in support of the claim and which can be furnished at the time while allowance or disallowance under section 80J is being considered by the concerned authority. Page 10 of 27 C/SCA/9422/2021 ORDER DATED: 20/09/2021 This court in the case of CIT v. Gujarat Oil and Allied Industries [1993] 201 ITR 325, had an occasion to consider the very same provision. The court held the provision of furnishing the auditor's report in the prescribed form along with the return to be directory adopting the view of the Allahabad High Court in Addl. CIT v. Murlidhar Mathura Prasad [1979] 118 ITR 392 and the Patna High Court in the case of CIT v. Sitaram Bhagwandas [1976] 102 ITR 560 in interpreting the phrase \"along with\" appearing in section 184(7). The court opined that merely because the auditor's report has not physically accompanied the return, it cannot be said that it cannot be processed on the merits for deciding the claim of deduction under section 80J(1) of the Act when the Income-tax Officer sits down for framing the assessment on the merits. It is the only stage at which all the requirements of section 80J(1) of the Act read with sub section (6A) thereof are to be ascertained. In our view, the aforesaid reasoning of the Allahabad High Court and the Patna High Court would squarely apply to the facts of the present case. The provision about furnishing of the auditors' report along with the return has to be treated as a procedural provision, directory in nature, and Page 11 of 27 C/SCA/9422/2021 ORDER DATED: 20/09/2021 substantial compliance should suffice. In view of the aforesaid discussion, question No. 2 referred to above is to be answered in the negative by holding that the provision of section 80J(6A) to the extent it requires furnishing of the auditor's report in the prescribed form along with the return is directory in nature and not mandatory.” This Court in the aforesaid decision also considered the decision of Patna High Court in the case of CIT vs. Sitaram Bhagwandas, reported in [1976] 102 ITR 560. 9. At the outset, we need to consider the decision of Madras High Court rendered in the case of Commissioner of Income-tax versus AKS Alloys (P) Ltd. reported in [(2012) 18 taxmann.com 25 (Mad.). That was the case of claim of deduction under section 80IB where the assessee did not file audit report in Form 10CCB along with the return of income but filed the same beyond completion of assessment. The Court was examining substantial question of law as to whether the tribunal was right in holding that the assessee was entitled to claim deduction under section 80IB in respect of the unit at Pondicherry even though the assessee did not comply with the mandatory provisions for filing audit report in Form 10CCB in support of the claim as stipulated in section 80IB(13) r.w.s. 80IA(7) of the Act. The Court, ultimately observed that it was enough if the audit report was submitted before the assessment was completed. The assessee company which was engaged in Page 12 of 27 C/SCA/9422/2021 ORDER DATED: 20/09/2021 the business of manufacture of steel ingots filed return and order of assessmenet under Sec. 143(3) of the I.T. Act was passed where the A.O. disallowed the claim of the assessee made under Section 80IB of the Act and also made addition of huge amount as unexplained credit, under Section 68 of the I.T. Act, on the ground that for the purpose of claiming deduction, the assessee did not file certificate in Form 10CCB of the Act along with the return of income and the same was filed later. The appeal was allowed granting the claim of the assessee made under Section 801B of the Act. The revenue preferred appeal before the Appellate Tribunal, which also came to be dismissed against which revenue approached the High Court of Madras under the impugned order and the Court considered whether filing of the audit report under section 10CCB in support of the claim as stipulated in section 80IB(13) r.w.s.80IA(7) of the I.T. Act, was mandatory. While answering the same, it referred to various decisions and held that before the assessment is completed, declaration could be filed. Paragraph Nos.5, 6 and 7 of the aforesaid decision in the case of AKS Alloys (P) Ltd (supra) read thus: “5. In so far as it relates to the substantial question of law (1) is concerned, namely, whether the filing of report in Form 10CCB is mandatory, it is well settled by a number of judicial precedents that before the assessment is completed, the declaration could be filed. In fact, the said issue came to be decided by the Karnataka High Court in the case in CITV. ACE Multitates Systems (P) LTD [2009] 317 ITR 207 (Kar), wherein it Page 13 of 27 C/SCA/9422/2021 ORDER DATED: 20/09/2021 was held that when a relief is sought for under Section 801B of the Act, there is no obligation on the part of the assessee to file return accompanied by the audit report, thereby. holding that the same is not mandatory. Therefore, it is clear that before the assessment is completed if such report is filed, no fault could be found against the assessee. That was also the view of the Delhi High Court in the case in CIT v. Contimeters Electricals (P.) Ltd. [2009] 217 ITR 249/ 178 Taxman 422 (Delhi), wherein the Delhi High Court, by following the judgements of the Madras High Court in CIT v. A.N. Arunachalam [1994] 208 ITR 481/75 Tasman 529 and in CIT v. Jayant Patel [2001] 248 ITR 199 117 Taxman 707 (Mad.) held that the filing of audit report along with the return was not mandatory but directory and that if the audit report was filed at any time before the framing of the assessment, the requirement of the provisions of the Act should be held to have been met. 6. That is also the consistent view of the other High Courts, including the High Court of Bombay in CIT v. Shivanand Electronics [1994] 209 ITR 63/75 Tasman 93 (Bom.), apart from Gujarat High Court in Zenith Processing Mills v. C7711996] 219 ITR 721 (Guj.) and Punjab and Haryana High Court Page 14 of 27 C/SCA/9422/2021 ORDER DATED: 20/09/2021 in CIT v. Mahalaxmi Rice Factory [20071 294 ITR 531/ 163 Taxman 565 (Punj. & Har). 7. The Calcutta High Court in the case in the CIT v. Berger Paints (India) Ltd. [2002] 254 (TR 503/12003) 126 Taxman 435 (Cal.) has also concurred with the said view which was followed by the Tribunal in this case.” The aforesaid decision had been challenged before the Apex Court in in a group of matters, reported in [(2015) 376 ITR 456 SC] where the Apex Court held that even if Form 3AA was not filed along with return of income but the same was filed during the assessment proceedings and before the final order of the assessment was made, that would amount to sufficient compliance. 10. This Court in the case of Sarvodaya Charitable Trust vs. Income Tax Officer (Exemption), reported in [2021] 125 taxmann.com 75 (Gujarat) was considering the very issue where the assessee had not furnished the audit report in Form 10B and A.O., therefore, denied the exemption to assessee Trust. The said report in form of 10B filed belatedly and the assessee sought to condone such delay, which was rejected on the ground that no grounds were made out. The Court held that when legislature had conferred wide discretionary powers to condone such delay on authorities concerned, the assessee could not be denied such exemption merely on the bar of limitation to submit Form 10B. This Court also relied on various decisions to hold that the approach in the cases of the present type should be equitious, balancing and judicious. Technically, Page 15 of 27 C/SCA/9422/2021 ORDER DATED: 20/09/2021 strictly and liberally speaking, the respondent no.2 might be justified in denying the exemption under Section 12 of the Act by rejecting such condonation application, but an assessee, a public charitable trust past 30 years who substantially satisfies the condition for availing such exemption, should not be denied the same merely on the bar of limitation especially when the legislature has conferred wide discretionary powers to condone such delay on the authorities concerned. It has also referred to the decision rendered in the case of CIT vs. Gujarat Oil and Allied Industries Ltd., reported in [1993] 201 ITR 325 (Gujarat) to hold that furnishing of audit report with the return has to be treated procedural proviso which is directory in nature and if the assessee had not produced audit report along with the return of income, but had produced before completion of assessment, it should be considered as substantial compliance and the benefits of exemption should not be denied merely on the delay in furnishing the same. This Court in the aforesaid decision in the case of CIT Vs. Gujarat Oil and Allied Industries Ltd. (supra) in para 31 and 32 has observed and held thus: “31. Having given our due consideration to all the relevant aspects of the matter, we are of the view that the approach in the cases of the present type should be equitious, balancing and judicious. Technically, strictly and liberally speaking, the respondent no.2 Page 16 of 27 C/SCA/9422/2021 ORDER DATED: 20/09/2021 might be justified in denying the exemption under Section 12 of the Act by rejecting such condonation application, but an assessee, a public charitable trust past 30 years who substantially satisfies the condition for availing such exemption, should not be denied the same merely on the bar of limitation especially when the legislature has conferred wide discretionary powers to condone such delay on the authorities concerned. 32. We may also refer to the decision of this Court in CIT v. Gujarat Oil and Allied Industries Limited, (1993) 201 ITR 325 (Gujarat), wherein it is held that the provision regarding furnishing of audit report with the return has to be treated as a procedural proviso. It is directory in nature and its substantial compliance would suffice. In that case, the assessee had not produced the audit report along with the return of income but produced the same before the completion of the assessment. This Court took the view that the benefit of exemption should not be denied merely on account of delay in furnishing the same and it is permissible for the assessee to produce the audit report at a later stage either beore the Income Tax Officer or before the appellate authority by assigning sufficient Page 17 of 27 C/SCA/9422/2021 ORDER DATED: 20/09/2021 cause. 33. In view of the above, this writ- application succeeds and is hereby allowed. The impugned order passed by the respondent no.2 dated 19th August 2019 (Annexure-A to this writ-application) is hereby quashed and set-aside. The impugned rectification order at page-13 of the paper-book dated 12th February 2020 is also hereby quashed and set-aside. The delay condonation application filed by the writ-applicant before the respondent no.2 is hereby allowed.” 11. In light of the discussion above, on turning to the impugned order passed by the respondent it is noticed that the assessee had filed the original return of income for the year under consideration on 30.10.2017 within stipulated time period and claimed deduction under section u/s.80IC amounting to Rs.3,34,92,234/-. The first deduction was taken by the petitioner on 08.03.2010 for the businesses started in Himachal Pradesh and Uttarachal States. The revised return was filed on 12.02.2018. The ACIT, Circle 3(1) issued notice on 20.08.2019 for communication of proposed adjustment u/s. 143(1)(a) of the I.T. Act mentioning that due date of filing the I.T. return was 07.11.2017 and the Form No.10CCB had to be filed along with the return of income within the due date which is 07.11.2017 whereas the same was filed on 12.09.2018. It also took note of the fact that CPC vide letter dated 23.07.2018 communicated to the assessee about the decision under section 141(1)(a)(ii) for disallowance of Page 18 of 27 C/SCA/9422/2021 ORDER DATED: 20/09/2021 deduction claimed under section 80IC/80IE as Form 10CCB had not been e-filed within the due date. It is his say that on 29.05.2019, the assessee had requested the jurisdictional AO that when the assessee had filed its return of income within stipulated time, though the Form 10CCB was filed on 12.09.2018, the question of disallowance of deduction would not arise. Thus, the assessee’s plea was for revision of order made by the CPC on 23.07.2019 on the ground that the revision application ought to have been filed within one year u/s.264 i.e. before 23.07.2019 and the same was filed on 05.03.2020. It is further its say that an opportunity of being heard was given vide letter dated 05.03.2021 to submit reply, if any, which he did not avail and it was presumed that the petitioner had nothing to offer and on the ground of this for want of any ground which prevented him to file the revision within stipulated time, the revision application came to be rejected, which according to this Court is erroneous. When in light of the various decisions, which have been discussed by this Court, there is no requirement to file Form 10CCB along with the return which had been filed by the assessee with original return on 30.10.2017 and revised return was filed on 12.02.2018 and Form 10CCB was filed on 12.09.2018. 12. It would be apt to refer to section 143 of the I.T. Act: “Assessment. 143. (1) Where a return has been made under section 139, or in response to a notice under sub-section (1) of Page 19 of 27 C/SCA/9422/2021 ORDER DATED: 20/09/2021 section 142, such return shall be processed in the following manner, namely:— (a) the total income or loss shall be computed after making the following adjustments, namely:— (i) any arithmetical error in the return; [***] (ii) an incorrect claim, if such incorrect claim is apparent from any information in the return; [(iii) disallowance of loss claimed, if return of the previous year for which set off of loss is claimed was furnished beyond the due date specified under sub-section (1) of section 139; (iv) disallowance of expenditure indicated in the audit report but not taken into account in computing the total income in the return; (v) disallowance of deduction claimed under any of the provision of Chapter VIA under the heading “C - deduction in respect of income” if the return is furnished beyond the due date specified under sub-section (1) of section 139; or (vi) addition of income appearing in Form 26AS or Form 16A or Form 16 which has not been included in computing the total income in the return: Provided that no such adjustments shall be made unless an intimation is given to the assessee of such adjustments either in writing or in electronic mode: Page 20 of 27 C/SCA/9422/2021 ORDER DATED: 20/09/2021 Provided further that the response received from the assessee, if any, shall be considered before making any adjustment, and in a case where no response is received within thirty days of the issue of such intimation, such adjustments shall be made:] [Provided also that no adjustment shall be made under sub-clause (vi) in relation to a return furnished for the assessment year commencing on or after the 1st day of April, 2018;] (b) the tax [interest and fee], if any, shall be computed on the basis of the total income computed under clause (a); (c) the sum payable by, or the amount of refund due to, the assessee shall be determined after adjustment of the tax [interest and fee], if any, computed under clause (b) by any tax deducted at source, any tax collected at source, any advance tax paid, any relief allowable under section 89 or or any relief allowable under an agreement under section 90 or section 90A or any relief allowable under section 91, any rebate allowable under Part A of Chapter VIII, any tax paid on self-assessment and any amount paid otherwise by way of tax [interest or fee]; Page 21 of 27 C/SCA/9422/2021 ORDER DATED: 20/09/2021 (d) an intimation shall be prepared or generated and sent to the assessee specifying the sum determined to be payable by, or the amount of refund due to, the assessee under clause (c); and (e) the amount of refund due to the assessee in pursuance of the determination under clause (c) shall be granted to the assessee: Provided that an intimation shall also be sent to the assessee in a case where the loss declared in the return by the assessee is adjusted but no tax [interest or fee] is payable by, or no refund is due to, him: Provided further that no intimation under this sub-section shall be sent after the expiry of nine months from the end of the financial year in which the return is made. Explanation.—For the purposes of this sub-section,— (a) \"an incorrect claim apparent from any information in the return\" shall mean a claim, on the basis of an entry, in the return,— (i) of an item, which is inconsistent with another entry of the same or some other item in such return; Page 22 of 27 C/SCA/9422/2021 ORDER DATED: 20/09/2021 (ii) in respect of which the information required to be furnished under this Act to substantiate such entry has not been so furnished; or (iii) in respect of a deduction, where such deduction exceeds specified statutory limit which may have been expressed as monetary amount or percentage or ratio or fraction; (b) the acknowledgement of the return shall be deemed to be the intimation in a case where no sum is payable by, or refundable to, the assessee under clause (c), and where no adjustment has been made under clause (a). (1A) For the purposes of processing of returns under sub-section (1), the Board may make a scheme for centralized processing of returns with a view to expeditiously determining the tax payable by, or the refund due to, the assessee as required under the said sub-section. (1B) Save as otherwise expressly provided, for the purpose of giving effect to the scheme made under sub- section (1A), the Central Government may, by notification in the Official Gazette, direct that any of the Page 23 of 27 C/SCA/9422/2021 ORDER DATED: 20/09/2021 provisions of this Act relating to processing of returns shall not apply or shall apply with such exceptions, modifications and adaptations as may be specified in that notification; so, however, that no direction shall be issued after the 31st day of March, 2012. (1C) Every notification issued under sub-section (1B), along with the scheme made under sub-section (1A), shall, as soon as may be after the notification is issued, be laid before each House of Parliament. [(1D) Notwithstanding anything contained in sub- section (1), the processing of a return shall not be necessary, where a notice has been issued to the assessee under sub-section (2): Provided that the provisions of this sub-section shall not apply to any return furnished for the assessment year commencing on or after the 1st day of April, 2017.] (2) Where a return has been furnished under section 139, or in response to a notice under sub-section (1) of section 142, the Assessing Officer or the prescribed income-tax authority, as the case may be, if, considers it necessary or expedient to ensure that the assessee has not understated the income or has not computed excessive loss or has not under-paid the tax in any manner, shall serve on the assessee a notice requiring Page 24 of 27 C/SCA/9422/2021 ORDER DATED: 20/09/2021 him, on a date to be specified therein, either to attend the office of the Assessing Officer or to produce, or cause to be produced before the Assessing Officer any evidence on which the assessee may rely in support of the return: Provided that no notice under this sub-section shall be served on the assessee after the expiry of three months from the end of the financial year in which the return is furnished.]” 12.1. Proviso (2) of section 143 states that where a return has been furnished under section 139, or in response to a notice under sub-section (1) of section 142, the A.O. or the prescribed income-tax authority, as the case may be, if, considers it necessary or expedient to ensure that the assessee has not understated the income or has not computed excessive loss or has not under-paid the tax in any manner, shall serve upon the assessee a notice requiring him, on a date to be specified therein, either to attend the office of the Assessing Officer or to produce, or cause to be produced before the A.O. any evidence on which the assessee may rely in support of the return. The proviso to this section says that no notice under this sub- section shall be served on the assessee after the expiry of three months from the end of the financial year in which the return is furnished. 13. As could be noticed from the averments and the Page 25 of 27 C/SCA/9422/2021 ORDER DATED: 20/09/2021 various documents which have been brought on record that revision application came to be rejected on 12.02.2018. The CBC communicated the rejection of claim under section 80IC/80IE on the ground that Form 10CCB has not been e-filed within the due date. The communication of the CBC is of 23.07.2018, according to which, the rejection of the application of the petitioner is solely on the ground that the application was filed at a belated stage without any sufficiency of the cause being presented to the officer concerned, there appears to be no delay in preferring the application. The revision of decision of the A.O. dated 20.08.2019 had been sought by the petitioner where the A.O. rejected his claim for non-filing of the Form 10CCB within due date. It is necessary to make a mention that before the assessment was finalized, Form 10CCB was already filed by the petitioner and therefore, it would not be feasible for us to sustain the order on the ground of delay. 13.1. Moreover, as has been discussed hereinabove, the court has been quite emphatic that furnishing of Form 10CCB is a procedural requirement which need not to be done along with the return and here admittedly it has been filed prior to the assessment having been completed by the A.O.. Technicalities should not mar the substantial justice. Balancing the entire issue in wake of the various decisions which have been discussed hereinabove, we are of the opinion that the application filed by the petitioner under section 264(3) and denial on the ground of the same being barred by period of 12 months, deserves indulgence. Page 26 of 27 C/SCA/9422/2021 ORDER DATED: 20/09/2021 14. The Court also cannot be oblivious to the fact that the petitioner is entitled to claim benefit under section 80IC since 08.03.2010, on which the first deduction was taken and it has continued to claim under the very provision and therefore by indulging into the notice of demand u/s.156 along with the intimation under section 143(1), the petition deserves to be allowed to an extent that the impugned order dated 19.03.2021 is quashed. 14.1. Let the case of the petitioner herein be considered on merits by the officer concerned. 14.2. The petitioner will be entitled to seek exemption and the authority concerned is directed to consider such claim of exemption and pass consequential order, which will be subject to provision of section 142 of the I.T. Act. 14.3. Liberty is reserved in favour of the petitioner to make an application afresh. 14.4. The demand notice issued u/s.156 of the I.T. Act shall remain suspended till this claim of the assessee is determined and the powers are exercised under section 264 of the I.T. Act. (SONIA GOKANI, J) (RAJENDRA M. SAREEN,J) R.H. PARMAR. Page 27 of 27 "