Unicorn Industries Pvt.Ltd., Hyderabad V. DCIT, Hyderabad

ITA 531/HYD/2009

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 66347 (ITAT-HYDERABAD)
• Duration Of Justice: 3 year(s) 5 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-09-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 19-04-2011
• Assessment Year: 2004-2005
• Appeal Filed On: 22-04-2009
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: V SRINIVAS
• Assessee Lawyers: AJAY GANDHI
• Keywords: Assessment record; Revised return
• Section: 143(3); 80IB; 263; 10; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B', HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL M EMBER ITA NO.531/HYD/2009 : ASSESSMENT YEAR 2004-05 M/S . UNICORN INDUSTRIES P. LTD., SECUNDERABAD. ( PAN - AAACA 3501 D) V/S. DY. COMMISSIONER OF INCOME - TAX CIRCLE 3(3), HYDERABAD. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI AJAY GANDHI RESPONDENT BY : SHRI V.SRINIVAS DATE OF HEARING 22.8.2012 DATE OF PRONOUNCEMENT 28. 9.2012 O R D E R PER SAKTIJIT DEY, JUDICIAL MEMBER: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF THE COMMISSIONER OF INCOME-TAX III, HYDERABAD DATED 13.2.2009 PASSED UNDER S.263 OF THE INCOME-TAX ACT, 1961 FOR THE ASS ESSMENT YEAR 2004- 05. 2. ASSESSEE HAS RAISED SIX GROUNDS IN THIS APPEAL. GROUND NO.1 AND 6 ARE GENERAL IN NATURE AND NEED NO SEPARATE AD JUDICATION. LEARNED AUTHORISED REPRESENTATIVE FOR THE ASSESSEE, AT THE OUTSET, SUBMITTED THAT HE DOES NOT WANT TO PRESS GROUNDS NO.2, 3 AND 4. H ENCE, GROUNDS NO.2, 3 AND 4 ARE DISMISSED AS NOT PRESSED. THUS, GROUND NO.5 ALONE IS LEFT FOR BEING DECIDED BY US. THE SAID GROUND READS AS UNDE R- THE COMMISSIONER HAS ERRED IN DIRECTING THE ASSESSI NG OFFICER TO DISALLOW THE DEDUCTION U/S. 80IB OF THE INCOM E TAX ACT. ITA NO.531/HYD/09 M/S. UNICORN INDUSTRIES P. LTD., SECUNDERABAD. 2 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE I S ENGAGED IN THE BUSINESS OF MANUFACTURE OF FOOD AND DAIRY PRODUCTS, MACHINERY AND ALLIED EQUIPMENT. THE ASSESSEE FILED ITS RETURN OF INCOME ALONGWITH AUDIT REPORT IN FORM NO.3CD, DECLARING TOTAL INCOME OF RS.79,11, 008. IN THE RETURN OF INCOME, THE ASSESSEE CLAIMED DEDUCTION OF AN AMOUNT OF RS.27,44,403 UNDER S.80IB OF THE ACT. IN THE COURSE OF ASSESSME NT PROCEEDINGS UNDER S.143(3) OF THE ACT, THE ASSESSING OFFICER, AFTER VERIFICATION OF THE BOOKS OF ACCOUNT AND OTHER DOCUMENTS, COMPLETED THE ASSES SMENT ALLOWING DEDUCTION CLAIMED BY THE ASSESSEE UNDER S.80IB OF T HE ACT. THE CIT(A) INVOKING HIS JURISDICTION UNDER S.263 OF THE ACT, C ALLED FOR THE ASSESSMENT RECORDS RELATING TO THE ASSESSEE PERTAINING TO THE ASSESSMENT YEAR UNDER DISPUTE. WHILE EXAMINING THE ASSESSMENT RECORDS, T HE COMMISSIONER OF INCOME-TAX NOTICED THAT THE ASSESSEE HAS CLAIMED DE DUCTION UNDER S.80IB, WITHOUT FURNISHING THE AUDIT REPORT IN FORM NO.10CCB OF THE ACT, CERTIFIED BY AN ACCOUNTANT, ALONGWITH THE RETURN OF INCOME. HENCE, THE CLAIM OF DEDUCTION UNDER S.80IB SHOULD HAVE BEEN DI SALLOWED AS PER S.80IB(13) READ WITH S.80IA(7) OF THE ACT. THE AS SESSING OFFICER HAVING ALLOWED DEDUCTION UNDER S.80IB WITHOUT TAKING NOTE OF THE FACTS, THE COMMISSIONER OF INCOME-TAX CONSIDERING THE ASSESSME NT PASSED UNDER S.1433(3) OF THE TO BE ERRONEOUS AND PREJUDICIAL T O THE INTERESTS OF THE REVENUE. HE THEREFORE, ISSUED NOTICE UNDER S.263 OF THE ACT, ASKING HIM TO SHOW CAUSE AS TO WHY THE DEDUCTION ALLOWED UNDER S.80IB CANNOT BE DISALLOWED BY REVISING THE ASSESSMENT ORDER PASSED UNDER S.143(3) OF THE ACT. IN THE COURSE OF HEARING BEFORE THE COMMI SSIONER OF INCOME- TAX, THE LEARNED AUTHORISED REPRESENTATIVE FOR THE ASSESSEE HAS ACCEPTED THE FACT THAT THE AUDIT REPORT UNDER S.10CCB WAS NE ITHER FILED WITH THE RETURN NOR IN THE COURSE OF ASSESSMENT UNDER S.143 (3) OF THE ACT. IT WAS HOWEVER, CONTENDED THAT THE ASSESSEE HAS COMPLIED W ITH THE PROVISIONS OF THE ACT, BY FILING AUDIT REPORT UNDER FORM 10CCB BEFORE THE COMMISSIONER OF INCOME-TAX ON 13.2.2009. THEREFORE , DEDUCTION UNDER S.80IB SHOULD BE ALLOWED. THE COMMISSIONER OF INCO ME-TAX HELD THAT ITA NO.531/HYD/09 M/S. UNICORN INDUSTRIES P. LTD., SECUNDERABAD. 3 S,.80IB(13) READ WITH S.80IA(7) MAKES THE FILING OF THE AUDIT REPORT ALONGWITH RETURN OF INCOME MANDATORY FOR CLAIMING D EDUCTION UNDER S.80IA. THE COMMISSIONER OF INCOME-TAX RELYING UP ON THE DECISION OF THE HONBLE PUNJAB AND HARYANA HIGH COURT IN CIT V/ S. JAIDEEP INDUSTRIES (180 ITR 81) AND HONBLE BOMBAY HIGH COURT IN CIT V /S. SHIVANAND ELECTRONICS(201 ITR 63) AND HONBLE ANDHRA PRADESH HIGH COURT IN CIT V/S. HEMSONS INDUSTRIES (251 ITR 690) HELD THAT SIN CE THE ASSESSEE HAD NOT FILED THE AUDIT REPORT IN FORM 10CCB ALONGWITH THE RETURN OF INCOME OR BEFORE THE FINALISATION OF THE ASSESSMENT PROCE EDINGS, NO DEDUCTION UNDER S.80IB IS ALLOWABLE TO THE ASSESSEE. HE THER EFORE, DIRECTED THE ASSESSING OFFICER TO DISALLOW THE DEDUCTION UNDER S .80IB OF THE ACT. 4. THE LEARNED AUTHORISED REPRESENTATIVE FOR THE A SSESSEE SUBMITTED BEFORE US THAT THE ASSESSEE HAS CLAIMED D EDUCTION UNDER S.80IB IN THE RETURN OF INCOME FILED FOR THE RELEVA NT ASSESSMENT YEAR. THE ASSESSING OFFICER ALSO AFTER VERIFYING ALL THE DETAILS ALLOWED THE DEDUCTION CLAIMED UNDER S.80IB. THE LEARNED AUTHOR ISED REPRESENTATIVE FOR THE ASSESSEE RELIED ON THE FULL BENCH DECISION OF THE PUNJAB AND HARYANA HIGH COURT IN THE CASE OF CIT V/S. PUNJAB F INANCIAL CORPORATION(254 ITR 6) AND SUBMITTED THAT PROVISION S OF S.80IA(7) REQUIRING TO FURNISH THE AUDIT REPORT ALOGNWITH THE RETURN OF INCOME IS DIRECTORY AND NOT MANDATORY. NON-FILING OF THE AUD IT REPORT ALONGWITH THE RETURN IS A CURABLE DEFECT. THE LEARNED AUTHOR ISED REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT SINCE THE ASSESSING OFF ICER COMPLETED THE ASSESSMENT ALLOWING THE DEDUCTION CLAIMED UNDER S.8 0IB OF THE ACT, WITHOUT RAISING THE ISSUE OF NON-FILING OF THE AUDI T REPORT IN FORM 10CCB, THERE WAS NO OCCASION ON THE PART OF THE ASSESSEE T O FURNISH THE REPORT IN FORM 10CCB BEFORE THE FINALISATION OF THE ASSESSMEN T. THE LEARNED AUTHORISED REPRESENTATIVE FOR THE ASSESSEE SUBMITTE D THAT WHEN THE ASSESSEE WAS MADE AWARE OF THE DEFECT, HE IMMEDIATE LY SUBMITTED THE REPORT IN FORM 10CCB BEFORE THE COMMISSIONER OF INC OME-TAX. HE ITA NO.531/HYD/09 M/S. UNICORN INDUSTRIES P. LTD., SECUNDERABAD. 4 FURTHER SUBMITT5EED THAT THE ASSESSEE HAVING RECTIF IED THE DEFECT BY FILING THE FORM 10CCB, THE COMMISSIONER OF INCOME-TAX WAS NOT JUSTIFIED IN DIRECTING THE ASSESSING OFFICER TO DISALLOW THE CLA IM OF DEDUCTION UNDER S.80IB OF THE ACT. IN SUPPORT OF HIS CONTENTION, T HE LEARNED AUTHORISED REPRESENTATIVE FOR THE ASSESSEE RELIED ON THE FOLLO WING DECISIONS OF THE INCOME-TAX APPELLATE TRIBUNAL- (A) ITO V/S. VIJAYADURGA OFFSET PRINTERS (1988) 30 TTJ (HYD)173 (B) MEENA S.BANERJEE V/S. ITO (2007)14 SOT 569(MUM) (C) ZEST AROMAS P. LTD. V/S. CIT(135 ITD 123)-AHD. HE ALSO RELIED ON THE DECISION OF THE DECISION OF T HE HONBLE GUJARAT HIGH COURT IN THE CASE OF ZENITH PROCESSING MILLS V/S. C IT(219 ITR 721). 5. THE LEARNED DEPARTMENTAL REPRESENTATIVE ON THE OTHER HAND SUBMITTED THAT EVEN THOUGH THE PROVISION UNDER S.80 IA(7) CAN BE HELD TO BE DIRECTORY, BUT SINCE THE ASSESSEE HAS NOT FILED THE AUDIT REPORT IN FORM 10CCB EITHER WITH THE RETURN OF INCOME OR BEFORE TH E FINALISATION OF THE ASSESSMENT PROCEEDINGS, NO DEDUCTION UNDER S.80IB CAN BE ALLOWED TO THE ASSESSEE. FOR SUCH PROPOSITION, THE LEARNED DE PARTMENTAL REPRESENTATIVE RELIED ON THE DECISION OF THE PUNJAB AND HARYANA HIGH COURT IN THE CASE OF MAHALAXMI RICE FACTORY(294 ITR 631). LEARNED DEPARTMENTAL REPRESENTATIVE RELYING ON THE DECISION OF THE HONBLE ORISSA HIGH COURT IN ORISSA RURAL HOUSING DEVELOPMENT CORP ORATION V/S. ACIT (343 ITR 316), SUBMITTED THAT WHEN THE STATUTE PROV IDES FOR A THING TO BE DONE IN A PARTICULAR MANNER, THEN IT HAS TO BE DONE IN THAT MANNER AND IN NO OTHER MANNER. THE LEARNED DEPARTMENTAL REPRESE NTATIVE SUBMITTED THAT THE CLAIM OF THE ASSESSEE IS NOT IN ACCORDANCE WITH THE STATUTORY PROVISION, DEDUCTION UNDER S.80IB CANNOT BE ALLOWED TO THE ASSESSEE. ITA NO.531/HYD/09 M/S. UNICORN INDUSTRIES P. LTD., SECUNDERABAD. 5 6. WE HEARD THE RIVAL SUBMISSION AND PERUSED THE M ATERIAL ON RECORD. WE HAVE ALSO GONE THROUGH THE DECISIONS CIT ED AT THE BAR. AT THE OUTSET, WE HOLD THAT IN THE GIVEN SITUATION, THE CO MMISSIONER OF INCOME- TAX WAS CORRECT IN INVOKING JURISDICTION UNDER S.26 3 OF THE ACT. HOWEVER, LEGALITY OF THE DIRECTION OF THE COMMISSIONER OF IN COME-TAX TO DISALLOW THE DEDUCTION CLAIMED BY THE ASSESSEE UNDER S.80IB HAS TO BE CONSIDERED ON THE BASIS OF THE SUBMISSIONS MADE BY THE PARTIES AN D IN THE LIGHT OF THE RATIOS LAID DOWN IN THE JUDICIAL PRONOUNCEMENTS. S .80IB(13) LAYS DOWN THAT WHILE CONSIDERING DEDUCTION UNDER S.80IB, PROV ISIONS OF SUB-SECTION (5), (7) TO (12) OF S.80IA SHALL APPLY. AT THIS ST AGE, IT IS WORTHWHILE TO TAKE NOTE OF THE PROVISIONS OF SUB-SECTION (7) OF S .80IA WHICH READS AS UNDER- THE DEDUCTION UNDER SUB-SECTION (1) FROM PROFITS A ND GAINS DERIVED FROM AN UNDERTAKING SHALL NOT BE ADMISSIBLE UNLESS THE ACCOUNTS OF THE UNDERTAKING FOR THE PREVIOUS YEAR R ELEVANT TO THE ASSESSMENT YEAR FOR WHICH THE DEDUCTION IS CLAIM ED HAVE BEEN AUDITED BY AN ACCOUNTANT, AS DEFINED IN THE EXPLANA TION BELOW SUB-SECTION(2) OF SECTIONS 288 AND THE ALSO FURNISH ES ALONG WITH HIS RETURN OF INCOME THE REPORT OF SUCH AUDIT IN TH E PRESCRIBED FORM DULY SIGNED AND VERIFIED BY SUCH ACCOUNTANT. A PLAIN READING OF THE ABOVE PROVISION MAKES IT CLE AR THAT IT CONSISTS OF TWO PARTS FIRSTLY. THE ASSESSEE HAS TO GET ITS ACC OUNTS AUDITED BY AN ACCOUNTANT; AND SECONDLY, AN AUDIT REPORT IN THE PR ESCRIBED FORM DULY SIGNED AND VERIFIED BY THE ACCOUNTANT HAS TO BE FIL ED ALONGWITH THE RETURN OF INCOME. THE FORM PRESCRIBED FOR FURNISHING THE AUDIT REPORT AS PER RULE 18BBB IS FORM 10CCB. SO FAR AS THE FIRST PART IS C ONCERNED, UNDISPUTEDLY THE ASSESSEE IN THE CASE BEFORE US, HAS GOT ITS ACC OUNTS AUDITED BEFORE FILING THE RETURN OF INCOME FOR THE ASSESSMENT YEAR UNDER CONSIDERATION. THIS FACT IS EVIDENT FROM THE OBSERVATION MADE BY T HE ASSESSING OFFICER IN THE ASSESSMENT ORDER THAT THE RETURN OF INCOME WAS FILED ALONGWITH FORM 3CD. SO FAR AS THE SECOND PART IS CONCERNED, THE A SSESSEE FILED THE FORM 10CCB ONLY DURING THE REVISION PROCEEDINGS, AFTER B EING MADE AWARE OF ITA NO.531/HYD/09 M/S. UNICORN INDUSTRIES P. LTD., SECUNDERABAD. 6 THE DEFECT BY THE COMMISSIONER OF INCOME-TAX, IN TH E NOTICE ISSUED UNDER S.263 OF THE ACT. 7. IT IS A FACT ON RECORD THAT IN THE RETURN OF I NCOME, THE ASSESSEE HAS CLAIMED DEDUCTION UNDER S.80IB OF THE ACT. THE ASSESSING OFFICER AFTER VERIFYING THE CLAIM OF THE ASSESSEE T HOROUGHLY ALLOWED THE DEDUCTION CLAIMED BY THE ASSESSEE UNDER S.80IB, WHI LE COMPLETING THE ASSESSMENT UNDER S.143(3) OF THE ACT. IT IS WELL SETTLED POSITION OF LAW THAT STATUTORY PROVISIONS AKIN TO S.80IA(7) WHICH R EQUIRE FURNISHING OF AUDIT REPORT ALONGWITH THE RETURN ARE DIRECTORY AND NOT MANDATORY. IF THE AUDIT REPORT HAS NOT BEEN FURNISHED ALONGWITH THE R ETURN, IT CAN BE SUBMITTED BEFORE THE FINALISATION OF THE ASSESSMENT PROCEEDINGS. THE NON-FURNISHING OF AUDIT REPORT ALONGWITH THE RETURN WILL RENDER THE RETURN DEFECTIVE. HOWEVER, THE DEFECT IS CURABLE. THE AS SESSING OFFICER HAS TO GIVE AN OPPORTUNITY TO THE ASSESSEE IN TERMS OF S.1 39(9) OF THE ACT TO RECTIFY THE DEFECT. IN THE FACTS OF THE CASE BEFOR E US, THE ASSESSING OFFICER IN THE COURSE OF ASSESSMENT PROCEEDINGS OR BEFORE THE COMPLETION OF THE ASSESSMENT PROCEEDINGS, NEVER RAISED THE IS SUE OF NON-FURNISHING OF THE AUDIT REPORT IN FORM 10CCB. RATHER, THE ASS ESSING OFFICER ALLOWED THE DEDUCTION UNDER S.80IB AFTER FINDING THAT THE A SSESSEE IS ELIGIBLE FOR SUCH DEDUCTION. HAS THE ASSESSING OFFICER IN THE C OURSE OF ASSESSMENT PROCEEDINGS POINTED OUT THE DEFECT OF NON-SUBMISSIO N OF AUDIT REPORT IN FORM 10CCB, THE ASSESSEE CERTAINLY COULD HAVE FURNI SHED THE SAME BEFORE THE ASSESSING OFFICER FINALIZED THE ASSESSMENT. TH IS IS VERY MUCH CLEAR FROM THE FACT THAT WHEN THE COMMISSIONER OF INCOME- TAX RAISED THE ISSUE UNDER S.263 THE ASSESSING OFFICER IMMEDIATELY FURNI SHED THE AUDIT REPORT IN FORM 10CCB BEFORE THE COMMISSIONER OF INCOME-TAX IN THE COURSE OF REVISION PROCEEDINGS. 8. IT IS EVIDENT FROM THE REVISION ORDER THAT HE COMMISSIONER OF INCOME-TAX DOES NOT DISPUTE THE FACT THAT THE ASSES SEES ACCOUNTS ARE ITA NO.531/HYD/09 M/S. UNICORN INDUSTRIES P. LTD., SECUNDERABAD. 7 AUDITED BEFORE FILING THE RETURN OF INCOME AND THE ASSESSEE IS ELIGIBLE OTHERWISE FOR THE DEDUCTION UNDER S.80IB OF THE ACT . THE COMMISSIONER OF INCOME-TAX HAS DIRECTED THE ASSESSING OFFICER TO DI SALLOW THE DEDUCTION UNDER S.80IB BY HOLDING THAT THE PROVISIONS OF S.80 IA(7) IS MANDATORY AND SINCE THE ASSESSEE HAS FAILED TO FURNISH THE AU DIT REPORT IN FORM 10CCB BEFORE THE FINALISATION OF ASSESSMENT PROCEE DINGS,, IT IS NOT ENTITLED FOR DEDUCTION UNDER S.80IA. IN OUR VIEW, SUCH A DIRECTION BY THE COMMISSIONER OF INCOME-TAX IS NOT JUSTIFIED CONSIDE RING THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE. ON CONSIDERING THE LAW LAID DOWN BY THE FULL BENCH OF THE HONBLE PUNJAB AND HARYANA HI GH COURT IN THE CASE OF PUNJAB FINANCIAL CORPORATION (254 ITR 6), WHICH HAS BEEN FOLLOWED BY THE VERY SAME HIGH COURT IN ITS SUBSEQUENT DECISION IN THE CASE OF CIT V/S. MAHALAXMI RICE FACTORY (SUPRA) WE HOLD THAT PR OVISIONS OF S.80IA(7) IS DIRECTORY AND THE DEFECT ON ACCOUNT OF NON-FURNI SHING OF AUDIT REPORT IS A CURABLE ONE. SINCE THE ASSESSING OFFICER IN THE COURSE OF ASSESSMENT PROCEEDINGS NEVER POINTED OUT THE DEFECT AND ON THE OTHER HAND, COMPLETED THE ASSESSMENT ACCEPTING THE CLAIM FOR DE DUCTION, THERE WAS NO OCCASION FOR THE ASSESSEE TO FURNISH THE SAME BE FORE COMPLETION OF THE ASSESSMENT . 9. THE DECISION OF THE HONBLE ORISSA HIGH COURT IN THE CASE OF ORISSA RURAL HOUSING CORPORATION V/S. ACIT (SUPRA) RELIED UPON BY THE LEARNED DEPARTMENTAL REPRESENTATIVE IS FACTUALLY DI STINGUISHABLE. IN THAT CASE, THE ASSESSEE HAS NEVER MADE ANY CLAIM IN THE RETURN OF INCOME. THEREFORE, THE HONBLE HIGH COURT HELD THAT SINCE T HE ASSESSEE HAS NOT MADE ANY CLAIM IN THE RETURN, NOR FILED A REVISED RETURN, THE FRESH CLAIM MADE BEFORE THE ASSESSING OFFICER BY FILING A REVIS ED STATEMENT OF INCOME CANNOT BE ENTERTAINED. HOWEVER, IN THE FACTS OF TH E CASE BEFORE US, THE ASSESSEE HAS MADE A VALID CLAIM IN THE RETURN OF IN COME, WHICH HAS BEEN DULY CONSIDERED AND ALLOWED BY THE ASSESSING OFFICE R. ITA NO.531/HYD/09 M/S. UNICORN INDUSTRIES P. LTD., SECUNDERABAD. 8 10. IN THE AFORESAID FACTUAL MATRIX, THE ISSUE TO BE CONSIDERED IS WHETHER SUBMISSION OF AUDIT REPORT IN FORM 10CCB BE FORE THE COMMISSIONER OF INCOME-TAX CAN BE TREATED AS SUFFIC IENT COMPLIANCE WITH THE PROVISIONS CONTAINED IN S.80IA(7) AND CAN BE TA KEN NOTE FOR THE PURPOSE OF ALLOWING DEDUCTION CLAIMED BY THE ASSESS EE UNDER S.80IB OF THE ACT. IN THIS RESPECT, WE FIND THAT IN THE CASE OF IT\O V/S. VIJAYADURGA OFFSET PRINTERS (30 TTJ 173)(HYD), THE COORDINATE B ENCH OF THIS TRIBUNAL, UPHELD THE ORDER OF CIT(A) IN TAKING COGNIZANCE OF THE AUDIT REPORT SUBMITTED BEFORE HIM DURING THE APPELLATE PROCEEDIN GS. THE HONBLE GUJARAT HIGH COURT IN THE CASE OF ZENITH PROCESSING MILLS V/S. CIT(219 ITR 721) HELD THAT FURNISHING OF AUDIT REPORT BEFORE TH E COMMISSIONER OF INCOME-TAX DURING THE PROCEEDINGS UNDER S.263 OF TH E ACT WILL AMOUNT TO SUFFICIENT COMPLIANCE WITH THE STATUTORY PROVISIONS . IT IS WORTHWHILE TO NOTE THE RELEVANT OBSERVATIONS OF THE HONBLE GUJAR AT HIGH COURT WHICH ARE EXTRACTED HEREUNDER- 2. DURING THE COURSE OF ASSESSMENT THE ASSESSEE HAS FURNISHED ACCOUNTS STAMPED WITH AUDITOR'S SEAL AS N OTICED ABOVE WHICH WERE TREATED BY THE ASSESSEE AS WELL AS THE A O TO BE SUFFICIENT COMPLIANCE OF GIVING PROOF OF THE FACT T HAT ACCOUNTS HAVE, IN FACT, BEEN AUDITED AND ON THAT BASIS THE A SSESSMENT WAS FRAMED. IT WAS ONLY DURING THE COURSE OF PROCEEDING S BEFORE THE CIT UNDER S. 263 THAT QUESTION WAS CONSIDERED WHETH ER DOCUMENT FURNISHED BY THE ASSESSEE AMOUNTS TO SUFFICIENT COM PLIANCE OF FURNISHING SUCH PROOF OR NOT AND THAT HAVING BEEN N EGATIVED THE OCCASION AROSE TO FURNISH THE PROOF WHICH ACCORDING TO THE CIT WAS WANTING IN DECLARATION THAT THE ACCOUNTS HAVE BEEN DULY AUDITED WHICH IS REQUIRED BY SUB-S. (6A) OF S. 80J AND IF T HE ASSESSEE REQUIRES PRODUCTION OF EVIDENCE BEFORE THE ALLOWANC E MADE BY THE ITO UNDER S. 80J WAS WITHDRAWN, IN OUR OPINION THAT WOULD HAVE BEEN SUFFICIENT COMPLIANCE WITH THE REQUIREMENT AND THE ASSESSEE OUGHT NOT TO HAVE BEEN VISITED WITH THE DISALLOWANC E OR WITHDRAWAL OF THE ALLOWANCE ALREADY MADE WITHOUT AF FORDING OPPORTUNITY TO DO SO. IT MAY BE NOTED THAT IN A GIV EN CASE ASSESSEE'S RETURN HAVING A CLAIM OF DEDUCTION UNDER S. 80J MAY BE ACCEPTED BY THE ITO WITHOUT HOLDING AN INQUIRY, THO UGH IT MAY NOT HAVE BEEN ACCOMPANIED WITH PROOF OF ACCOUNTS BEING AUDITED IN THE MANNER PRESCRIBED. THE QUESTION OF FURNISHING P ROOF OF SUCH AUDITED ACCOUNTS IN THE PRESCRIBED FORM AT LATER ST AGE ARISES ONLY WHEN THE MATTER IS BEING ACTIVELY CONSIDERED FOR DI SALLOWANCE BY THE CONCERNED AUTHORITY. IF THE ASSESSEE DOES NOT O FFER TO FURNISH PROOF EVEN AT THE STAGE WHEN IT IS POINTED OUT TO H IM THAT REQUIREMENTS OF LAW ARE NOT FULFILLED TO SUSTAIN TH E CLAIM MADE BY ITA NO.531/HYD/09 M/S. UNICORN INDUSTRIES P. LTD., SECUNDERABAD. 9 HIM AND HE FAILS TO FULFIL THE REQUIREMENTS OF LAW AT THAT STAGE, IT CAN BE SAID THAT THE ASSESSEE HAD FAILED TO RECTIFY THE DEFECT AT EARLIER OPPORTUNITY OFFERED TO HIM. IT IS INHERENT PART OF S. 143(3) THAT WHERE THE AO IS NOT INCLINED TO ACCEPT THE RETURN SUBMITTED BY THE ASSESSEE AND IF HE WANTS TO MODIFY THE ASSESSMENT FROM THE RETURN A SHOW CAUSE NOTICE IS REQUIRED TO BE GIVEN TO THE ASSESSEE. GIVING OF THI S OPPORTUNITY WILL INCLUDE OPPORTUNITY TO RECTIFY PROCEDURAL DEFE CT, IF ANY, WHICH ARE DIRECTORY IN NATURE. IF WE EXAMINE THE MATTER F ROM THAT POINT OF VIEW WE ARE SATISFIED THAT IN THE PRESENT CASE, THE CLAIM MADE BY THE ASSESSEE WAS, THOUGH NOT ADMISSIBLE FOR WANT OF AUDITOR'S REPORT ON RECORD YET THE SAME WAS ALLOWED UNDER A M ISTAKE BY THE AO LEAVING NO OPPORTUNITY TO THE ASSESSEE TO COMPLE TE THE REQUIREMENTS. THE CONDITION OF NON-FULFILMENT OF RE QUIREMENT UNDER SUB-S. (6A) WAS MADE KNOWN TO THE ASSESSEE DU RING THE PROCEEDINGS UNDER S. 263 ALTHOUGH THE ASSESSEE ASKE D FOR AN OPPORTUNITY TO PRODUCE THE AUDITOR'S REPORT TO FULF IL THE REQUIREMENT UNDER S. 80J(6A) THE CIT OUGHT TO HAVE AFFORDED AN OPPORTUNITY TO THE ASSESSEE TO FURNISH THAT PROOF A ND THEN EXAMINED THE ADMISSIBILITY OF THE CLAIM IN THE LIGH T OF THE PROOF FURNISHED. THE AMEDABAD BENCH OF THE TRIBUNAL IN THE CASE OF Z EST AROMAS P. LTD. V/S. CIT (135 ITD 123), WHERE IDENTICAL FACTS ARE I NVOLVED, FOLLOWING THE RATIO LAID DOWN BY THE GUJARAT HIGH COURT IN THE CA SE OF ZENITH PROCESSING MILLS LTD. (SUPRA) DIRECTED THE ASSESSING OFFICER T O EXAMINE THE CLAIM OF DEDUCTION UNDER S.80IB BY TAKING INTO COGNIZANCE TH E AUDIT REPORT SUBMITTED BEFORE COMMISSIONER OF INCOME-TAX DURING PROCEEDINGS UNDER S.263 OF THE ACT. 11. CONSIDERING THE FACTS OF PRESENT CASE IN THE LIGHT OF THE JUDICIAL PRONOUNCEMENTS DISCUSSED ABOVE, WE ARE OF THE VIEW THAT THE COMMISSIONER OF INCOME-TAX WAS NOT JUSTIFIED IN DIR ECTING THE ASSESSING OFFICER TO DISALLOW THE CLAIM UNDER S.80IB WITHOUT CONSIDERING THE AUDIT REPORT SUBMITTED BY THE ASSESSEE. WE THEREFORE, MOD IFY THE ORDER OF THE COMMISSIONER OF INCOME-TAX BY DIRECTING THE ASSESSI NG OFFICER TO EXAMINE THE ISSUE OF DEDUCTION CLAIMED BY THE ASSES SEE UNDER S.80IB OF THE ACT IN ACCORDANCE WITH LAW AFTER CONSIDERING TH E AUDIT REPORT IN FORM 10CCB FILED BY THE ASSESSEE. THE ASSESSING OFFICER SHALL FINALISE THE ITA NO.531/HYD/09 M/S. UNICORN INDUSTRIES P. LTD., SECUNDERABAD. 10 PROCEEDINGS AFTER PROVIDING REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE. 11. IN THE RESULT, THIS APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 28.9.2012 SD/- SD/- ( CHANDRA POOJARI ) (SAKTIJIT DEY) ACCOUNTANT MEMBER. JUDICIAL MEMBER. DT/- 28 SEPTEMBER, 2012 COPY FORWARDED TO: 1. M/S. UNICORN INDUSTRIES P. LTD., C/O, M/S. GANDHI & GANDHI CHARTERED ACCOUNTANTS, 10 02, PAIGAH PLAZA, BASHEERBAGH, HYDERABAD 500 063. 2. DY. COMMISSIONER OF INCOME-TAX CIRCLE 3(3), HYDERAB AD 3. COMMISSIONER OF INCOME-TAX III, HYDERABAD 4. DEPAR TMENTAL REPRESENTATIVE, I TAT , HYDERABAD B.V.S.