Madras High Court
Commissioner Of Income Tax-I vs M/S.Aks Alloys(P) Ltd on 14 December, 2011
Bench: P.Jyothimani, P.P.S.Janarthana Raja
IN THE HIGH COURT OF JUDICATURE AT MADRAS Dated : 14.12.2011 Coram The Honourable Mr.Justice P.JYOTHIMANI and The Honourable Mr.Justice P.P.S.JANARTHANA RAJA Tax Case Appeal No.495 of 2011 Commissioner of Income Tax-I, Chennai. .. Appellant vs. M/s.AKS Alloys(P) Ltd., 47/240-A Kilpauk Garden Road, Kilpauk,Chennai-600 010 .. Respondent The above tax case appeal is preferred under Section 260-A of the Income Tax Act, 1961, against the order dated 19.5.2011 passed by the Income Tax Appellate Tribunal 'D' Bench, Chennai,in I.T.A.No.298/Mds/2009. For Appellant : Mr.T.Ravikumar JUDGMENT
(Judgment of the Court was made by P.JYOTHIMANI.J.) The Revenue has preferred this tax case appeal as against the order dated 19.5.2011 passed by the Income Tax Appellate Tribunal 'D' Bench, Chennai, in I.T.A.No.298/Mds/2009, suggesting the following substantial questions of law:
"1.Whether on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was right in holding that the assessee was entitled to claim deduction u/s.80IB in respect of the unit at Pondicherrys even though the assessee had not complied with the mandatory provision for filing the Audit Report in Form 10CCB in support of the claim as stipulated in Section 80IB(13) r/w.Sec.80IA(7) of the Act, by observing that it was enough if the Audit Report was filed before the assessment was completed?
2. Whether on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was right in deleting the addition of Rs.1,20,00,000/- made u/s.68 by the Assessing Officer being unexplained share application money credited in the assessee's books of account even though the assessing officer had established by thorough investigation that the companies existed only on paper and the identity and creditworthiness of the companies who allegedly had paid the share application money and the genuineness of the transaction had not been proved?"
2.The assessee company is engaged in the business of manufacture of steel ingots. In respect of the assessment year 2005-06, assessment order dated 26.12.2007 was passed under Sec.143(3) of the Act, in which, the assessing officer has disallowed the claim of the assesee made under Section 80IB of the Act and has also made addition of Rs.1,20,00,000/- as unexplained credit, under Section 68 of the Act, on the ground that for the purpose of claiming deduction, the assessee did not file necessary certificate in Form 10CCB of the Act along with the return of income, which was filed on 18.7.2005 declaring the income as Rs.1,02,11,036/-.
3. As against the disallowance of the claim, the assessee filed an appeal before the Commissioner of Income Tax (Appeals). The appellate authority has allowed the appeal, thereby granting the claim of the assessee made under Section 80IB of the Act. It was against the said order, the Revenue has preferred appeal before the Appellate Tribunal, which came to be dismissed under the impugned order.
4. Being aggrieved by the said order, the present appeal has been filed on the above substantial questions of law.
5. In so far as it relates to the substantial question of law (1) is concerned, namely, whether the filing of audit 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 THE COMMISSIONER OF INCOME TAX AND ANOTHER vs. ACE MULTITAXES SYSTEMS (P) LTD. (2009) 317 ITR 207(Karnataka), wherein it was held that when a relief is sought for under Section 80IB 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 COMMISSIONER OF INCOME TAX v. CONTIMETERS ELECTRICALS (P) LTD -(2009) 317 ITR 249(Delhi), wherein the Delhi High Court, by following the judgements of the Madras High Court in COMMISSIONER OF INCOME TAX V. ARUNACHALAM (A.N.)-(1994) 208 ITR 481 and in CIT v. JAYANT PATEL (2001) 248 ITR 199 (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 Commissioner of Income Tax v. Sivanand Electronics-(1994)209 ITR 63(Bom), apart from Gujarat High Court in zenith Processing Mills v. CIT-(1996) 219 ITR 721 and Panjab and Haryana High Court in CIT V. Mahalaxmi Rice Factory (2007) 294 ITR 631.
7. The Culcutta High Court in the case in THE COMMISSIONER OF INCOME TAX V. BERGER PAINTS (INDIA) LTD (NO.2) has also concurred with the said view which was followed by the Tribunal in this case.
8. Mr.T.Ravikumar, the learned counsel for the appellant is not able to produce any other judgement contrary to the above said views consistently taken.
9. In the light of the above, by virtue of hierarchy of judgements which are against the Revenue, the substantial question of law (1) would not arise at all for consideration.
10. In so far as the substantial question of law (2) is concerned, it relates to the deletion of addition of Rs.1,20,00,000/- made under Section 68 of the Act by the assessing officer as unexplained share application money, and the issue has been covered by the judgement of the Madras High Court in the case in THE COMMISSIONER OF INCOME TAX V. GOBI TEXTILES LIMITED (2007) 294 ITR 663 (MAD) holding against the Revenue.
11. In such view of the matter, the substantial question of law (2) also does not merit consideration.
12. In fact, to arrive at such conclusion, the Madras High Court has relied on the judgement of the Delhi High Court in COMMISSIONER OF INCOME TAX v. STELLAR INVESTMENT LTD.(1991) 192 ITR 287, which judgement has been confirmed by the Honourable Apex Court and the same was reported in (2001) 251 ITR 263.
13. In the light of the above, no question of law much less substantial question of law would arise for consideration. Accordingly, the tax case appeal stands dismissed. Connected miscellaneous petition is closed. However, there is no order as to costs.
msk To
1.The Assistant Registrar,Income Tax Appellate Tribunal, Madras Bench "D".
2.The Secretary, Central Board of Direct Taxes, New Delhi.
3.The Commissioner of Income Tax (Appeals) V, 121, Mahatma Gandhi Road, Chennai 600 034