ASSISTANT COMMISSIONER OF INCOME TAX, CIR-2, AJMER V. SHRI RAMESH KSHETRAPAL, AJMER

ITA 610/JPR/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 1955 (ITAT-JAIPUR)
• Duration Of Justice: 3 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-10-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2014-2015
• Appeal Filed On: 26-07-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R A VERMA
• Assessee Lawyers: HEMANG GARGIEYA S LQUOK
• Section: 143(3)

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH HKKXPUN] YS[KK LNL; ,OA JH DQY HKKJR] U;KF;D LNL; DS LE{K BEFORE: SHRI BHAGCHAND, AM AND SHRI KUL BHARAT, JM VK;DJ VIHY LA-@ ITA NO. 610/JP/2017 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2014-15 ASSTT. COMMISSIONER OF INCOME - TAX, CIRCLE-2, AJMER. CUKE VS. SHRI RAMESH KSHETRAPAL, KUTCHERY ROAD, AJMER. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. ABEPK 2831 J VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT JKTLO DH VKSJ LS@ REVENUE BY : SHRI R.A. VERMA (ADDL.CIT) FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI MAHENDRA GARGIEYA & HEMANG GARGIEYA (ADVOCATES) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 25.10.2017. ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 27/10/2017. VKNS'K@ ORDER PER SHRI KUL BHARAT, JM. THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDERS OF THE LD. CIT(A)- AJMER, DATED 24.05.2017 PERTAINING TO A.Y. 2014-15. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APP EAL:- 1. WHETHER LOOKING TO THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) IS JUSTIFIED IN DELETING THE DISALLOWANCE OF DEDUCTION U/S 80IA(7) AMOUNTING TO RS. 1,03,98,814/- ON ACCOUNT OF NON-FU RNISHING OF AUDIT REPORT INFORM 10CCB ELECTRONICALLY ALONG WITH THE R ETURN OF INCOME. 2. THE APPELLANT CRAVES TO ADD, AMEND, ALTER, DELET E OR MODIFY THE ABOVE GROUNDS OF APPEAL BEFORE OR AT THE TIME OF HEARING. 2. ONLY EFFECTIVE GROUND IS AGAINST DELETING THE DI SALLOWANCE OF DEDUCTION U/S 80IA(7) OF THE INCOME-TAX ACT, 1961 (HEREINAFTER RE FERRED TO AS THE ACT). 2 ITA NO.610/JP/2017. SHRI RAMESH KSHETRAPAL, AJMER. 3. BRIEFLY STATED THE FACTS ARE THAT THE CASE OF TH E ASSESSEE WAS PICKED UP FOR SCRUTINY ASSESSMENT AND THE ASSESSMENT U/S 143(3) O F THE INCOME-TAX ACT, 1961(HEREINAFTER REFERRED TO AS THE ACT) WAS FRAMED VIDE ORDER DATED 30/12/2016. WHILE FRAMING THE ASSESSMENT, THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE WAS ISSUED A NOTICE U/S 142 DATED 06.10.2016 TO SHOW CA USE WHETHER SPECIFIED REPORT OF AUDIT ELECTRONICALLY (FORM 10CCB) ALONG WITH ITR WA S FILED AND ALSO SUBMIT A COPY OF THE SAME. THE ASSESSING OFFICER DECLINED THE CLAIM OF DEDUCTION U/S 80IA ON THE GROUND THAT ASSESSEE FAILED TO FILE REPORT IN FORM 10CCB ALONG WITH ORIGINAL RETURN. AGGRIEVED BY THIS, THE ASSESSEE PREFERRED AN APPEAL BEFORE LD. CIT(A), WHO AFTER CONSIDERING THE SUBMISSIONS, DELETED THE DISALLOWAN CE. AGGRIEVED BY THIS, THE REVENUE IS IN FURTHER APPEAL BEFORE THIS TRIBUNAL. 4. LD. D/R SUPPORTED THE ORDER OF THE ASSESSING OFF ICER. 5. ON THE CONTRARY, LD. COUNSEL FOR THE ASSESSEE RE ITERATED THE SUBMISSIONS AS MADE IN THE WRITTEN SUBMISSIONS AND SUBMITTED THAT THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE. THEREFORE, HE SUPPORTED THE ORDER OF THE LD. CIT(A). 6. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD. THE LD. CIT(A) HAS DECIDED THIS ISSUE BY O BSERVING AS UNDER:- 4.3 I HAVE GONE THROUGH THE ASSESSMENT ORDER, STA TEMENT OF FACTS, GROUNDS OF APPEAL, WRITTEN SUBMISSION, REMAND REPOR T AND REJOINDER CAREFULLY. IT IS SEEN THAT IN THIS CASE, RETURN OF INCOME WAS FILED BY THE APPELLANT U/S 139(1) ON 30.11.2014. NO AUDIT REPORT WAS FILED BY THE APPELLANT ALONG WITH RETURN OF INCOME FILED ON 30.11.2014. HOWEVER, THE APPELLANT E-FILED THE AUDIT REPORT IN FORM 1OCCB ON 16.12.2015, THE COPY OF WHI CH WAS PRODUCED ON 24.10.2016 DURING THE COURSE OF ASSESSMENT PROCEEDI NGS. THE ASSESSMENT U/S 143(3) WAS MADE ON 30.12.2016. THE AUDIT REPORT IS DATED 29.11.2014. THUS, IT IS CLEAR THAT THE ASSESSEE HAD OBTAINED TH E AUDIT REPORT IN FORM 3 ITA NO.610/JP/2017. SHRI RAMESH KSHETRAPAL, AJMER. 1OCCB BEFORE FILING THE RETURN OF INCOME ON 30.11.2 014, THOUGH THE REPORT WAS E-FILED ONLY ON 16.12.2015. TO PROVE THE FACT T HAT AUDIT REPORT AND REPORT IN FORM NO. 1OCCB HAD ALREADY BEEN OBTAINED BY THE APPELLANT BEFORE FILING THE RETURN OF INCOME ON 30.11.2014, THE APPE LLANT HAS FILED AFFIDAVIT OF SHRI PRAMOD KUMAR SHARMA, CA, WHO HAD CARRIED OUT T HE AUDIT AS PRESCRIBED U/S 801A(7). THE AO HAS DISALLOWED THE CLAIM OF THE APPELLANT FOR DEDUCTION OF RS. 1,03,58,814/- MADE U/S 80IA ON THE GROUND TH AT THE APPELLANT HAD NOT FILED AUDIT REPORT IN FORM 1OCCB ALONG WITH THE RET URN OF INCOME FILED BY HIM AS REQUIRED U/S 80IA(7). THE APPELLANT, RELYING ON THE FOLLOWING DECISIONS HAS CONTENDED THAT FURNISHING OF THE AUDIT REPORT IN FO RM 1OCCB FOR CLAIMING DEDUCTION U/S 80IA IS DIRECTORY BECAUSE SUCH REQUIR EMENT FALLS IN THE REALM OF PROCEDURE FOR FURNISHING EVIDENCE IN SUPPORT OF THE CLAIM AND CAN BE FURNISHED WHILE ALLOWABILITY OF THE CLAIM IS BEING CONSIDERED BY THE AUTHORITY CONCERNED: (I) C.I.T. VS DR. L.M.SINGHVI 289 ITR 0425 (RAJASTHAN HIGH COURT) (II) C.I.T. VS. GUJARAT OIL AND ALLIED IND. 201 L T.R. 325 (GUJ). (III) C.IT VS. A.N.ARUNA CHALAM. 208 I.T.R. 481 (MADRAS) (IV) C.I.T. VS. SHIVNAND ELECTRONICS 209 I.T.R. 63. (V) ZENITH PROCESSING MILLS VS. C.I.T. 219 I.T.R. 721 (VI) CIT. VS. MAHALAXMI RICE FACTORS 294 I.T.R. 631. (VII) C.I.T. VS. CONTI METERS TECHNICAL(P) KTD., 317 IT.R 249. (VIII) A. C.I. T CIRCLE 2 VS. HI-LINE PERS PVT. LTD., (NEW DELHI). 4 ITA NO.610/JP/2017. SHRI RAMESH KSHETRAPAL, AJMER. I HAVE GONE THROUGH THE DECISIONS RELIED UPON BY TH E APPELLANT CAREFULLY. THE DELHI HIGH COURT IN THE CASE OF CIT, DELHI VS. CONT IMETERS ELECTRICAL PVT. LTD. (317 ITR 249) DELHI, WHILE DECIDING THE ISSUE OF FU RNISHING OF AUDIT REPORT U/S 801A(7) DURING THE COURSE OF ASSESSMENT PROCEEDINGS HAS OBSERVED AS UNDER: 'THE TRIBUNAL TOOK THE VIEW THAT THE PROVISIONS OF SECTION 80-IA(7) WITH REGARD TO FILING OF THE AUDIT REPORT ALONG WITH THE RETURN WE RE NOT MANDATORY AND WERE MERELY DIRECTORY. IN COMING TO SUCH CONCLUSION, THE TRIBUN AL REFERRED TO THE DECISION OF THE GUJARAT HIGH COURT IN CIT V. GUJARAT OIL & ALLIED I NDUSTRIES, 201 ITR 325 (GUJ). IN THAT DECISION THE PROVISIONS OF SECTION 80J(6A) WERE CON SIDERED THE WORDING OF SECTION 80J(6A) IS SIMILAR TO THAT OF SECTION 80-IA(7) WHIC H 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 I N NATURE. THE GUJARAT HIGH COURT TOOK THE VIEW THAT IN CASE THE AUDIT REPORT IS SUBM ITTED AT ANY TIME BEFORE THE FRAMING OF THE ASSESSMENT, THERE WOULD BE SUBSTANTI AL COMPLIANCE WITH THE PROVISIONS OF SECTION 80J(6A). THE TRIBUNAL ALSO RELIED ON THE DECISION OF THE MAD RAS HIGH COURT IN CIT V. 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 C OURTS TAKING THE SAME VIEW. THE DECISIONS BEING, CIT V. SHIVANAND ELECTRICALS (1994 ) 209 ITR 63 (BOMBAY); ZENITH PROCESSING MILLS V. CIT (1996) 219 ITR 721 (GUJ.); CIT V. JAYANT PATEL (2001) 248 ITR 199 (MAD) AND CIT V. MAHALAXMI RICE FACTORY (2007) 294 ITR 631 (P&H). IN VIEW OF THIS LONG LINE ON DECISIONS OF VARIOUS H IGH COURTS IN CONSIDERING THE PROVISIONS OF SECTION 80J(6A) WHICH ARE SIMILAR TO THE PROVISIONS OF SECTION 80- IA(7), WE FEEL THAT THE TRIBUNAL HAS ARRIVED AT THE CORREC T CONCLUSION THAT THE REQUIREMENT OF FILING THE AUDIT REPORT ALONG WITH THE RETURN IS NOT MANDATORY BUT DIRECTORY AND THAT IF THE AUDIT REPORT IS FILED AT ANY TIME BEFOR E THE FRAMING OF THE ASSESSMENT, THE REQUIREMENT OF SECTION 80-IA(7) WOULD BE MET.' 5 ITA NO.610/JP/2017. SHRI RAMESH KSHETRAPAL, AJMER. THE JURISDICTIONAL HIGH COURT RELYING ON THE DECISI ON OF SUPREME COURT IN THE CASE OF CIT VS. NATIONAL TAJ TRADERS (121 ITR 355) SC, AFTER COMPARING THE PROVISIONS OF SECTION 32AB(5) WITH THE PROVISIONS O F SECTION 80J(6A) HAS HELD 'THAT THE FIRST REQUIREMENT IS THAT THE STATEMENT O F ACCOUNTS FOR THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR FOR WHICH THE DEDUCTION IS CLAIMED HAVE TO BE AUDITED AND THE SECOND IS THAT THE ASSESSEE M UST FURNISH ALONG WITH THE RETURN OF HIS INCOME, THE REPORT OF SUCH AUDIT IN P RESCRIBED FORM AS A PROOF OF ACCOUNTS. THE AUDIT FORMS SUBSTANTIVE FOUNDATION FO R CLAIMING ALLOWANCE AND SUCH FOUNDATION MUST EXIST AT THE TIME OF FILING RE FERENCE VIZ., THE ACCOUNTS MUST HAVE BEEN AUDITED BEFORE CLAIMING DEDUCTION IN A RETURN, AND IN THE ABSENCE OF WHICH SUCH DEDUCTION CANNOT BE CLAIMED. COMPLIANCE OF THE AFORESAID REQUIREMENT IS MANDATORY BEFORE DEDUCTION IS CLAIMED. SO FAR AS SUCH COMPLIANCE ALONG WITH THE RETURN IS CONCERNED, IT IS DIRECTORY AND THIS PROCEDURAL COMPLIANCE CAN BE MADE AS SUCH, DURING T HE COURSE OF ASSESSMENT PROCEEDINGS'. IN THE CASE UNDER CONSIDERATION, IT IS SEEN FROM TH E COPY OF AUDIT REPORT IN FORM NO. 10CCB FILED BY THE APPELLANT THAT THE AUDI T REPORT WAS OBTAINED BY THE APPELLANT ON 29.11.2014 AND RETURN OF INCOME WA S FILED BY THE APPELLANT ON 30.11.2014. THUS, AT THE TIME OF MAKING THE CLAI M FOR DEDUCTION U/S 80IA IN THE RETURN OF INCOME FILED BY THE APPELLANT, THE COMPLIANCE OF THE REQUIREMENT OF OBTAINING THE AUDIT REPORT AT THE TI ME OF CLAIMING DEDUCTION U/S 80IA HAS BEEN MADE BY THE APPELLANT. THEREFORE, FOLLOWING THE DECISION OF JURISDICTIONAL HIGH COURT REFERRED ABOVE AND OTHER DECISIONS RELIED UPON BY THE APPELLANT, IT IS HELD THAT DEDUCTION OF RS. 1,0 3,98,814/- CLAIMED BY THE APPELLANT U/S 80IA COULD NOT HAVE BEEN DISALLOWED B Y THE AO ON THE GROUND THAT THE AUDIT REPORT IN FORM NO. 10CCB WAS NOT FUR NISHED BY THE APPELLANT ALONG WITH THE RETURN OF INCOME FILED BY HIM. ACCOR DINGLY, DISALLOWANCE MADE BY THE AO OF THE CLAIM OF RS. 1,03,98,814/- MADE BY THE ASSESSEE U/S 801A IS HEREBY DELETED. 6 ITA NO.610/JP/2017. SHRI RAMESH KSHETRAPAL, AJMER. IT IS EVIDENT THAT THE LD. CIT(A) HAS RECORDED THAT THE ASSESSEE HAS OBTAINED THE AUDIT REPORT IN FORM 10CCB BEFORE FILING THE RETURN OF INCOME ON 30.11.2014. FURTHER, THE LD. CIT(A) HAS FOLLOWED THE JUDGMENT O F THE HONBLE JURISDICTIONAL HIGH COURT RENDERED IN THE CASE OF CIT VS. DR. L. M. SINGHVI (2007) 289 ITR 0425 (RAJ HC). THEREFORE, WE DO NOT SEE ANY REASON TO INTERFERE INTO THE FINDING OF THE LD. CIT(A), SAME IS HEREBY AFFIRMED. THUS, GROUND R AISED IN THIS APPEAL IS DISMISSED. 7. IN THE RESULT, APPEAL OF THE REVENUE IN ITA NO. 610/JP/2017 IS DISMISSED. ORDER IS PRONOUNCED IN THE OPEN COURT ON FRIDAY, THE 27TH DAY OF OCTOBER 2017. SD/- SD/- ( HKKXPUN ( DQY HKKJR ) ( BHAGCHAND) ( KUL BHARAT ) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER JAIPUR DATED:- 27/10/2017 POOJA/ VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT- ACIT, CIRCLE-2, AJMER. 2. THE RESPONDENT SHRI RAMESH KSHETRAPAL, KUTCHER Y ROAD, AJMER. 3. THE CIT(A). 4. THE CIT, 5. THE DR, ITAT, JAIPUR 6. GUARD FILE (ITA NO. 610/JP/2017) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR