Income Tax Appellate Tribunal - Kolkata
Tide Water Oil Co. (India) Ltd., Kolkata vs Department Of Income Tax
आयकर अपीलीय अधीकरण, Ûयायपीठ - "C", कोलकाता,
IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH- C , KOLKATA
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Before Shri B.R.Mittal, Judicial Member & Sri C.D. Rao, Accountant Member
आयकर अपील संÉया / ITA Nos. 850 to 852 (Kol) of 2010
िनधॉरण वषॅ/Assessment Years 2004-05 to 2006-07
Dy.Commissioner of Income-tax -वनाम- Tide Water Oil Co.(India) Ltd.,
Circle-4, Kolkata. -Versus- Kolkata. (PAN-AABCT1122C)
(अपीलाथȸ/APPELLANT) (ू×यथȸ/RESPONDENT)
अपीलाथȸ कȧ ओर से/ For the Appellant: ौी/Sri S.S. Gautam
ू×यथȸ कȧ ओर से/For the Respondent: ौी/Sri A.K. Tulsyan
आदे श/ORDER
बी. आर.
बी.
(बी िमƣल),् Ûयायीक सदःय (B.R.Mittal), Judicial Member :
These three appeals are filed by the department against three separate orders of ld. C.I.T.(A) all dated 28/8/2009 for assessment years 2004-05 to 2006-07. Since the facts and the grounds in all the three appeals are identical, we heard these appeals together and dispose of the same by this common order. For the sake of brevity, we take up the grounds for assessment year 2004-05, which read as under:
"1. That Ld. CIT(A) has erred in law as well as on facts, in allowing deduction u/s 80IB without considering that the Return o Income was filed on 29.10.2004 and the statutory Audit Report in Form No. 10CCB was filed on 26.12.2006 i.e. more than two years after filing of Return.
2. That Ld. CIT(A) has erred in law as well as on facts, in allowing deduction u/s 80IB without considering that such claim, made in the Return, was not based on the statutory Audit Report in Form No. 10CCB."
2. In all the three appeals, the basic issue involved is the denial to the assessee the deduction u/s. 80-IB of the Act on the ground that the assessee failed to submit audit report as required in Form-10CCB under Rule 10BBB along with the return filed for all the three assessment years under consideration.
13. There is no dispute to the fact that the assessee filed the requisite audit report in Form-10CCB at the time of assessment proceedings for all the three assessment years under consideration.
4. The ld. C.I.T.(A) considering the fact that the assessee filed the audit report in Form-10CCB before finalizing the assessment and also considering the decisions of Hon'ble Madhya Pradesh High Court in the case of CIT vs. Panama Chemicals Works [292 ITR 147], Hon'ble Gujarat High Court in the case of CIT vs. Gujarat Oil & Allied Industries [201 ITR 325], Hon'ble Bombay High Court in the case of CIT vs. Shivanand Electronics [209 ITR 63] and order of I.T.A.T., 'A' Bench, Kolkata in the case of ACIT vs. Himgiri Casting Pvt. Ltd. [ITA No.338 & 339/Kol/2008, order dated 5/6/2009] has held that the filing of audit report with the return is not mandatory, but is directory in nature. The ld. C.I.T.(A) has also stated that the initial claim of the assessee for deduction u/s. 80-IB of the Act was for assessment year 1998-99. The Tribunal in ITA Nos. 1791 to 1793 (Kol)/2007, while deciding the appeals for assessment years 1998-99 to 2000-01, has allowed the claim of the assessee u/s. 80-IB of the Act. The ld. C.I.T.(A) by following the earlier order of the Tribunal has allowed the deduction to the assessee u/s. 80-IB of the Act. Hence the department is in appeals for all the three assessment years under consideration.
5. The ld. Departmental Representative supported the orders of the Assessing Officer. The ld. A/R of the assessee submitted that the filing of audit report in Form- 10CCB along with the return is not mandatory. He relying on the following decisions submitted that even when the audit report is filed in requisite form before finalization of assessment proceedings, it is compliance of the provisions of sec. 80-IB of the Act in regard to the submission of audit report :-
1) CIT Vs Ramco International (2009) 221 CTR (P&H) 491
2) Murali Export House & Ors. Vs CIT (1999) 238 ITR 257 (Cal)
3) CIT Vs Berger Paints (India) Ltd. (2002) 254 ITR 503 (Cal)
4) CIT Vs Panama Chemicals Works (2007) 292 ITR 147 (MP)
5) CIT Vs Shivanand Electronics (1994) 209 ITR 63 (Bom).
6) CIT Vs Gujarat Oil & Allied Industries (1993) 201 ITR 325 (Guj.)
7) CIT Vs Panama Chemicals Works (2000) 245 ITR 684 (MP)
8) N.A.N. Woolen Mills Vs ACIT (1956) 56 lTD (Del) 268.
9) DCIT Vs B. V. Aswathaiah & Bros. (2001) 72 TTJ (Bang.) 714 2 The ld. A/R further submitted that in respect of assessment year 2006-07, the assessee filed the return in electronic form and, therefore, the audit report could not be filed along with the said return and was required to be filed only at the time of assessment proceedings. The assessee undisputedly filed the audit report at the time of assessment proceedings for all the three assessment years under consideration. The ld. A/R further submitted that the ld. C.I.T.(A) has also allowed deduction to the assessee u/s.
80-IB of the Act by following in the assessee's own case the I.T.A.T's order for assessment years 1998-99 to 2000-01. He submitted that the facts are identical in the assessment years under consideration. Therefore, the orders of the ld. C.I.T.(A) for all the three assessment years under consideration should be confirmed.
6. We have heard the parties and perused the orders of the authorities below and evidence on record. The A.O. denied the assessee the deduction claimed by it u/s. 80- IB of the Act while computing the total business income on the ground that the assessee failed to submit the audit report in Form-10CCB, as required under Rule 18BBB of the Rules along with the returns for all the three assessment years under consideration. It is an admitted position that although the assessee did not file the requisite audit reports along with the returns of respective assessment years under appeal, but the same were duly filed during course of assessment proceedings and the assessments were completed after taking into consideration those audit reports. There is catena of judgments of several High Courts including jurisdictional High Court wherein it has been held that filing of audit report in Form-10CCB with the return is not mandatory but is directory in nature.
6.1. We find that the issue is squarely covered by the decisions of Hon'ble jurisdictional High Court in the cases of CIT vs. Magnum Exports (P) Ltd. [262 I.T.R. 10 (Cal)], Murli Export House & Ors. vs. CIT (supra) and CIT vs. Berger Paints (India) Ltd. (supra). We further observe that the ld. C.I.T.(A) apart from relying on several judicial pronouncements has also allowed the deduction to the assessee u/s.80- IB for the assessment years under consideration on identical facts and situation by following the order of I.T.A.T. in the assessee's own case for assessment years 1998- 3 99 to 2000-01 vide ITA Nos. 1791 to 1793/Kol/2007. On the facts and in the circumstances of the case, therefore, we find that the common issue in these appeals before us is squarely covered by the decisions of Hon'ble jurisdictional High Court referred to above. It is an admitted position that preparation of account is mandatory, but filing of the same is a procedural matter. The ratio of the aforesaid decisions of Hon'ble jurisdictional High Court is that the benefit of deduction u/s. 80-IB of the Act is available where the audit report has been filed before the completion of the assessment, inasmuch as filing of audit report in Form No.10CCB is directory in nature and not mandatory. In this case, the assessee did not enclose the audit report in Form No.10CCB along with the returns of income, but filed the same during assessment proceedings before the A.O., i.e. before the completion of assessments. 6.2. Further, the provisions of Sec. 80-IB of the Act speak about deduction in respect of profits and gains from certain industrial undertakings other than infrastructure development undertakings. The Hon'ble Gauhati High Court in the case of CIT vs. Rajesh Kumar Jalan [286 ITR 274 (Gau)] had an occasion to interpret the beneficial provision in a Taxing Statute. It has been held as under :-
"While construing a beneficial enactment the view that advances the object of the beneficial enactment and serves its purpose must be preferred to that which obstructs the objects and paralyses the purpose of the beneficial enactment."
Further, the Hon'ble Supreme Court, in a similar situation, in the case of Bajaj Tempo Ltd. vs. CIT [196 ITR 188 (SC)] has held as under:-
"A provision in a taxing statute granting incentives for promoting growth and development should be construed liberally; and since a provision for promoting economic growth has to be interpreted liberally the restriction on it too has to be construed so as to advance the objective of the provision and not to frustrate it."
In this view of the matter and respectfully following the aforesaid decisions of Hon'ble Supreme Court, jurisdictional High Court, Gauhati High Court and the Tribunal relied on by the ld. C.I.T.(A), we are of the considered opinion that the requirement of filing the audit report in Form-10CCB along with the return is not mandatory in the strict sense of the term, but is only directory. We, therefore, decline to interfere with the 4 orders of ld. C.I.T.(A) on this issue for all the three assessment years under consideration and reject the grounds of appeal of the Revenue.
7. Further, in respect of grant of deduction u/s. 80-IB of the Act for all the three assessment years under consideration, we observe that the ld. C.I.T.(A) has directed the A.O. to allow deduction u/s. 80-IB of the Act by following earlier order of the Tribunal in the assessee's own case for assessment years 1998-99 to 2000-01 in ITA Nos. 1791 to 1793/Kol/2007. The ld. Departmental Representative has not disputed the above factual position. Therefore, we hold that the ld. C.I.T.(A) has rightly directed the A.O. to allow deduction to the assessee u/s. 80-IB of the Act.
8. In the result, appeals of the department for all the three assessment years are dismissed.
यह आदे श खुले Ûयायालय मɅ सुनाया गया है This order is pronounced in the open Court on 07.01.2011.
Sd/- Sd/-
सी.
सी.डȣ.
(सी डȣ.राव
राव) लेखा सदःय ौी बी
(ौी बी.. आर.
आर. िमƣल)् Ûयायीक सदःय
(C.D.Rao), Accountant Member (B.R.Mittal), Judicial Member
(तारȣख)
तारȣख) Date: 07-01-2011
आदे श कȧ ूितिलǒप अमेǒषतः-
Copy of the order forwarded to:
1. अपीलाथȸ / The Appellant : D.C.I.T., Circle-4, Kolkata.
2 ू×यथȸ / The Respondent : M/s.Tide Water Oil Co. (India) Ltd., 8, Dr. Rajendra Prasad Sarani, Kolkata-700 001.
3. आयकर किमशनर (अपील) : The CIT(A)-IV, Kolkata.
4. आयकर किमशनर/The CIT, Kol-
5 वभािगय ूितनीधी / DR, ITAT, Kolkata Benches, Kolkata 6 Guard file.
स×याǒपत ूित/True Copy, आदे शानुसार/ By order,
(dkp)
उप पंजीकार/Deputy Registrar.
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