1 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD A BENCH, HYDERABAD BEFORE SHRI G.C. GUPTA, VICE PRESIDENT AND SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER ITA NO.1469/H/2010 ASSESSMENT YEAR 2004-05 SMT. G. KAMALA, HYDERABAD (PAN ACGPG 3671 H) VS THE ACIT, CIRCLE 6(1), HYDERABAD APPELLANT RESPONDENT APPELLANT BY : SHRI S. RAMA RAO, ADVOCATE RESPONDENT BY : SMT. NIVEDITA BISWAS, DR ORDER PER CHANDRA POOJARI, ACCOUNTANT MEMBER: THIS APPEAL PREFERRED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER PASSED BY THE CIT(A) IV, HYDERABAD DATED 14. 10.2010 AND PERTAINS TO THE ASSESSMENT YEAR 2004-05. 2. THE FIRST GROUND IN THIS APPEAL IS THAT THE C IT(A) ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN I NITIATING THE PROCEEDINGS U/S 147 OF THE ACT. 3. THE FIRST GROUND OF APPEAL REGARDING REOPENING OF ASSESSMENT DOES NOT SURVIVE AS THIS GROUND HAS NOT EMANATED FR OM THE ORDER OF THE CIT(A). AS SUCH, THE ASSESSEE IS DISENTITLED TO RA ISE THIS GROUND BEFORE US. ACCORDINGLY, THIS GROUND IS DISMISSED. 4. THE SECOND GROUND RAISED BY THE ASSESSEE IN T HIS APPEAL IS THAT THE CIT(A) ERRED IN CONFIRMING THE ACTION OF THE AS SESSING OFFICER IN REJECTING THE CLAIM OF THE ASSESSEE MADE U/S 80HHC MERELY ON THE GROUND THAT THE ASSESSEE DID NOT FILE THE AUDIT REPORT ALONG WITH T HE RETURN OF INCOME. THE ITA NO.1469/H/2010 SMT. G. KAMALA, HYDERABAD CIT(A) OUGHT TO HAVE CONSIDERED THE FACT THAT THE S AID AUDIT REPORT WAS SUBMITTED BEFORE THE ASSESSING OFFICER DURING THE C OURSE OF ASSESSMENT PROCEEDINGS AND THEREFORE, THE ASSESSEE COMPLIED WI TH THE REQUIREMENT OF FILING THE AUDIT REPORT. 5. BRIEF FACTS OF THE ISSUE RELATING TO THE SECO ND GROUND RAISED BY THE ASSESSEE IS THAT AS PER THE ASSESSMENT ORDER, T HE ASSESSEE HAD FILED HER RETURN OF INCOME FOR THE ASSESSMENT YEAR 2004-05 ON 25.10.2004. THE SAME WAS PROCESSED U/S 143(1) ON 29.8.2009. LATER, IT W AS NOTICED BY THE ASSESSING OFFICER THAT THE ASSESSEE HAD FAILED TO F URNISH THE CERTIFICATE IN FORM NO.10CCAB IN ORDER TO AVAIL THE DEDUCTION U/S 80HHC U/S 80HHC(4). ACCORDINGLY, A NOTICE U/S 147 WAS ISSUED AND THE RE ASSESSMENT WAS COMPLETED AT A TOTAL INCOME OF RS.6,29,032/-, DENYI NG THE CLAIM OF DEDUCTION U/S 80HHC. WHILE COMPLETING THE ASSESSME NT, IT WAS OBSERVED BY THE ASSESSING OFFICER THAT THE ASSESSEE HAD FAIL ED TO ENCLOSE THE CERTIFICATE FROM ACCOUNTANT IN FORM 10CCAC ALONG WI TH THE ORIGINAL RETURN. SHE TOOK NOTE OF THE FACT THAT IN THE LIST OF DOCUM ENTS ATTACHED, THE REPORT OF ACCOUNTANT IN THE SAID FORM HAD NOT BEEN LISTED, ME ANING THEREBY THAT THE SAID REPORT HAD NOT BEEN FILED AT ALL ALONG WITH TH E RETURN OF INCOME. EVEN THOUGH, THE ASSESSEE FILED THE REPORT IN FORM NO.10 CCAC DURING THE ASSESSMENT PROCEEDINGS, HE OPINED THAT SINCE THE SA ME WAS NOT FILED ALONG WITH THE RETURN OF INCOME, THE DEDUCTION CLAIMED U/ S 80HHC OF THE ACT WAS NOT ALLOWABLE. ON APPEAL, THE CIT(A) CONFIRMED THE ORDER OF THE ASSESSING OFFICER. AGAINST THIS, ASSESSEE IS IN APPEAL BEFOR E US. 6. WE HAVE HEARD BOTH THE PARTIES ON THIS ISSUE. FROM THE FACTS OF THE CASE, IT IS CLEAR THAT THE ASSESSEE HAS FAILED TO ENCLOSE THE AUDIT REPORT FROM THE ACCOUNTANT IN FORM 10CCA ALONG WITH THE OR IGINAL RETURN OF INCOME. HOWEVER, THE SAME WAS FILED DURING THE REA SSESSMENT PROCEEDINGS. IN OUR OPINION, NON FILING OF AUDIT REPORT IN THE R EQUIRED FORM 10CCA COULD NOT DISENTITLE THE ASSESSEE THE BENEFIT TO CLAIM DE DUCTION U/S 80HHC AND ON THE OTHER HAND, IF THE ASSESSEE FILES THE AUDIT REP ORT BEFORE THE REASSESSMENT ORDER PASSED, IT WILL BE ENTITLED TO DEDUCTION U/S 80HHC. ADMITTEDLY, THE ITA NO.1469/H/2010 SMT. G. KAMALA, HYDERABAD ASSESSEE HAS FILED THE AUDIT REPORT BEFORE THE CONC LUSION OF THE REASSESSMENT PROCEEDINGS. HENCE, IN OUR OPINION, THE CLAIM OF T HE ASSESSEE HAS TO BE RE- EXAMINED BY THE ASSESSING OFFICER. FOR THIS PROPOS ITION, WE PLACE RELIANCE ON THE JUDGEMENT OF THE JURISDICTIONAL HIGH COURT I N THE CASE OF CIT VS. HEMSONS INDUSTRIES (251 ITR 693 ) (AP HC), AND ALS O THE JUDGEMENT OF THE GUJARAT HIGH COURT IN THE CASE OF ITO VS. VXL INDIA LIMITED (312 ITR 187) (GUJ. HC) WHEREIN HELD THAT : SECTION 80 HHC OF THE IT ACT, 1961, REQUIRES THAT T HE REPORT OF A CHARTERED ACCOUNTANT IN THE PRESCRIBED FORM SHOULD BE ATTACHED ALONG WITH THE RETURN OF INCOME, CERTIFYING THAT THE DEDU CTION HAS BEEN CORRECTLY CLAIMED IN ACCORDANCE WITH THE PROVISIONS OF THIS SECTION, BUT IT DOES NOT MEAN THAT IF SUCH REPORT IS NOT ATTACHE D ALONG WITH THE RETURN OF INCOME AND IT IS PRODUCED BEFORE THE ASSE SSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE IS NOT ENTITLED THE DEDUCTION U/S 80HHC OF THE ACT. TO OBTAIN THE REPO RT OF THE COMPANIES ACT, 1956 (1 OF 1956) IS A CONDITION PREC EDENT AND IT IS MANDATORY IN NATURE. HOWEVER, NON FURNISHING OF SU CH REPORT AT THE TIME OF FILING THE RETURN OF INCOME BUT AT A SUBSEQ UENT STAGE AND IN ANY CASE, BEFORE THE ASSESSMENT PROCEEDINGS IS COMPLETE D WOULD NOT RESULT IN THE DENIAL OF THE BENEFIT. THE ASSESSEE IN SUCH A CASE WOULD BE ENTITLED TO THE SPECIAL DEDUCTION U/S 80 HHC. 7. IN VIEW OF THE ABOVE DISCUSSION, WE SET ASIDE THE ISSUE TO THE FILE OF ASSESSING OFFICER TO RE-EXAMINE THE CLAIM OF THE ASSESSEE U/S 80HHC. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS P ARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT O N: 21.4. 2011 SD/- SD/- G.C. GUPTA CHANDRA POOJARI VICE PRESIDENT ACC OUNTANT MEMBER DATED THE 21 ST APRIL, 2011 ITA NO.1469/H/2010 SMT. G. KAMALA, HYDERABAD COPY FORWARDED TO: 1. SHRI S. RAMA RAO, ADVOCATE, FLAT NO.102, SHRIYAS RESIDENCY, ROAD NO.9, HIMAYATNAGAR, HYDERABAD 2. C/O SMT. G. KAMALA, HYDERABAD 3. THE ACIT, CIRCLE 6(1), HYDERABAD 4. THE CIT(A) IV, HYDERABAD 5. THE CIT, HYDERABAD 6. THE DR, ITAT, HYDERABAD NP