Punjab-Haryana High Court
Cit vs Manohar Lai Bhardwaj on 9 July, 2007
Author: Ajay Kumar Mittal
Bench: Ajay Kumar Mittal
ORDER M.M. Kumar, J.
1. At the instance of the revenue, the order dated 31-3-1993 passed by the Income Tax Appellate Tribunal, Amritsar Bench, Amritsar in ITA No. 1281/Asr./1992 in respect of the assessment year 1991-92 has been challenged by way of present reference. On the claim made by the revenue on the application filed under Section 256(1) of the Income Tax Act, 1961 (for brevity 'the Act'), the following question of law has been referred for the opinion of this Court:
Whether on the facts and in the circumstances of the case, the Tribunal has been right in law in holding that the assessee was entitled to benefits of deduction under Section 80HHC of the Income Tax Act, 1961?
2. The facts as revealed by the statement of the case are that the assessee is an individual and exporter for the last so many years. He got his accounts audited on 16-10-1991 and obtained a report under Section 44AB of the Act in the prescribed form from his Chartered Accountant. He filed his return on 17-12-1991. However, the audit report under Section 44AB of the Act could not be attached with the return. On that aspect, the Tribunal has, however, taken the following view:
The assessing officer issued intimation under Section 143(1)(a) on 31 -12-1991. The assessee filed Section 80HHC Tax Audit Report with the assessing officer on 2-1-1992. As stated in para 6 of the Tribunal's order intimation dated 31-12-1991 was served on the assessee on 7-1-1992.
3. The assessing officer issued an intimation dated 31-12-1991 which was served on the assessee on 7-1-1992. The assessee had filed the tax audited report before the assessing officer on 2-1 -1992. Feeling aggrieved with the service of intimation dated 31-12-1991 under Section 143(1)(a) of the Act the assessee filed an application under Section 154 of the Act on 31-1 -1992. The assessing officer vide his order dated 18-2-1992 rejected the application. The assessee filed an appeal before the Commissioner (Appeals) (hereinafter referred to as 'Commissioner (Appeal)') against the order dated 18-2-1992. The Commissioner (Appeals) upheld the order of the assessing officer and dismissed the appeal on 25-9-1992. However, the Tribunal reversed the view taken by the Assessing Officer and Commissioner (Appeals) by holding that the assessee was not a company nor a co-operative society whose accounts were separately required to be audited under the Act. This is a case of individual and tax audit is required under Clause (BB) of Explanation to Section 44AB of the Act which was eventually filed and furnished. According to Clause () if the accounts were audited then the return was required to be accompanied by the copy of P & L Account, balance sheet and auditor's report. The auditor's report under Section 44AB of the Act was not enclosed and the defect was required to be removed by the assessing officer. Therefore, it was held that the benefit of deduction under Section 80HHC of the Act were admissible to the assessee.
4. The question as to whether the assessing officer has the discretion to entertain the audit report later in point of time though the same was not filed with the return for granting the benefit of deduction to the assessee in terms of Section 32AB(1) of the Act has been considered by a Full Bench of this Court in the case of CIT v. Punjab Financial Corporation (2002) 254 ITR 61 wherein it has been held that the provisions of Section 32AB(5) of the Act are not mandatory and the assessing officer has the discretion to entertain the audit report even later. The view taken by the Full Bench in Punjab Financial Corporaiton case (supra) has been followed and applied by a Division Bench of Madras High Court in the case of CIT v. Print Systems & Products .
5. Mr. Sanjay Bansal, learned Counsel for the revenue could not point out any distinguishing feature on the facts of the present case from the law settled by the Full Bench in Punjab Financial Corporation case (supra).Therefore, the question referred for the opinion of this Court has to be answered in favour of the assessee and against the revenue by holding that the Tribunal has rightly held that the assessee is entitled to the benefit of deductions under Section 80HHC of the Act.
6. In view of the above, the question referred for the opinion of this Court is answered in favour of the assessee and against the revenue.
The reference is disposed of accordingly.