Heena Metal P. Ltd, Mumbai vs Assessee

Present for: Assessee by : Shri Apurva R. Shah, A.R. Revenue by : Shri Uday Bhaskar Jakka, D.R.

Date of Hearing : 01.06.2015 Date of Pronouncement : 30.06.2015

ORDER

Per Sanjay Garg, Judicial Member:

The present appeal has been preferred by the assessee against the order dated 02.09.2013 of the Commissioner of Income Tax (Appeals) [hereinafter referred to as the CIT(A)] relevant to assessment year 2003-04. The sole issue raised by the assessee in this appeal is relating to denial of deduction under section 80HHC of the Income Tax Act because of the reason that Form 10CCAC was not filed with the return of income.

2. The brief facts are that the assessee originally claimed deduction under section 10B of the Act which was denied by the Assessing Officer (hereinafter referred to as the AO). The assessee carried the matter up to the level of the Tribunal. The Tribunal restored the matter to the Ld. CIT(A) for fresh 2 ITA No.6077/M/2013 M/s. Heena Metal Pvt. Ltd.

consideration. The Ld. CIT(A) in the set aside proceedings again denied the deduction claimed by the assessee under section 10B of the Act. The assessee again approached the Tribunal by way of appeal. The Tribunal vide order dated 10.02.12 again restored the issue to the file of the AO for denovo adjudication. The AO discussed the issue with the assessee and, after considering the submissions of the assessee, held that the assessee was not entitled to the deduction under section 10B. The assessee, however, put an alternate claim before the AO of deduction under section 80HHC to the extent it had earned profit from export of goods. The assessee also filed the audit report in Form 10CCAC during the assessment proceedings. The AO, however, rejected the claim of the assessee observing that the assessee had not filed the necessary audit report in Form 10CCAC with the return of income.

3. In appeal, the Ld. CIT(A) also held that the benefit of deduction under section 80HHC can be given only when the audit report in Form 10CCAC is submitted along with the return of income. He further observed that since the assessee had made a false claim of deduction under section 10B and had not fulfilled the condition of filing From 10CCAC along with return of income for availing the benefit of section 80HHC, therefore the denial of deduction under section 80HHC by the AO was justified. Aggrieved by the order of the Ld. CIT(A), the assessee has come in appeal before us.

4. At the outset, the Ld. A.R. of the assessee has brought our attention to the order of Hon'ble Rajasthan High Court, Jodhpur in the case of "CIT Udaipur vs. M/s. Godha Chemicals Pvt. Ltd." in DB ITA No.1 of 2008 decided on 10.01.2013 wherein a direct question of law on the issue was framed by the Hon'ble High Court which for the sake of convenience is reproduced as under:

"Heard learned counsel for the appellant and perused the impugned order.

3 ITA No.6077/M/2013 M/s. Heena Metal Pvt. Ltd.

Learned Tribunal has passed the impugned order relying upon one judgment of the Calcutta High Court, and another judgment of Punjab and Haryana High Court, and has held, that though, the Audit Report in Form No.10CCAC was not originally filed along with the return of income but was duly filed during the assessment proceedings, therefore, the assessee is entitled to deduction under Section 80HHC, to the tune of Rs. 37,08,019.97.

It is contended by the learned counsel for the appellant, that there is no decision on this point, either from this Court, or from the Hon'ble Supreme Court. In our view, on the basis of the language of Section 80HCC (4), the requirement is of filing of the report in the prescribed form "along with the return of income".

The question thus is, as to whether the expression "along with the return of income"

can be interpreted to be permitting filing of such report even during assessment proceedings?

Since, the appeal involved above the substantial question of law, requiring the detailed hearing, and decision, by this Court, the appeal is admitted. Issue notice."

5. The Hon'ble High Court, relying upon another decision of the Hon'ble Rajasthan High Court in the case of "CIT vs. Dr. L.M. Sanghvi" (2007) 289 ITR 425 (Raj.) and further of the Hon'ble Punjab & Haryana High Court in the case of "CIT vs. Gupta Fabs" (2005) 274 ITR 620 (P&H), has answered the question as under:

"Accordingly, in view of the above, to the question of law formulated in the present case, our answer is that the expression "alongwith return of income" occurring in Sub-section (4) of Section 80HHC of the Income Tax Act, 1961 is directory in nature insofar it relates to the time for furnishing of the report of an accountant by the assessee in the prescribed form; and even if such a report in the prescribed form is not furnished alongwith the return of income, but is furnished during the course of assessment proceedings, it cannot be removed out of consideration only for the reason of the same having not been filed at the initial stage of filing of the return.

In view of the above answer to the question involved in the matter, the order as passed by the Tribunal does not call for any interference and stands confirmed insofar it is held that the assessee cannot be denied the benefit of deduction under Section 80HHC."

4 ITA No.6077/M/2013 M/s. Heena Metal Pvt. Ltd.

6. The finding of the Hon'ble High Court, which is based on different decisions of other High Court's, squarely covers the issue under consideration in favour of the assessee.

7. In view of the above, the order of the Ld. CIT(A) is set aside and it is directed that the assessee cannot be denied deduction under section 80HHC on the ground that the required Form 10CCAC was not filed along with the return of income but the during the assessment proceedings. The AO, therefore, is directed to consider the claim of the assessee under section 80HHC subject to eligibility fulfillment of other conditions.

8. In the result, the appeal of the assessee is hereby allowed.

Order pronounced in the open court on 30.06.2015.

Sd/- Sd/- (G.S. Pannu) (Sanjay Garg) ACCOUNTANT MEMBER JUDICIAL MEMBER

Mumbai, Dated: 30.06.2015. * Kishore, Sr. P.S.

Copy to: The Appellant The Respondent The CIT, Concerned, Mumbai The CIT (A) Concerned, Mumbai The DR Concerned Bench //True Copy// [

By Order

Dy/Asstt. Registrar, ITAT, Mumbai.