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2021 (11) TMI 767 - AT - Income TaxReopening of assessment u/s 147 - assessee stating per its’ return of income of it being not liable to get its’ account audited u/s. 44AB - HELD THAT:- Qua the first limb of the reason recorded, when the assessee states in its’ return of income – a duly verified document, that it is not liable to get its’ accounts audited u/s. 44AB, it only means that, in view of the assessee, the said provision is not applicable thereto for the relevant year. The only inference arising from the said statement by the assessee in its’ return, which is to be regarded as true and, further, only where the AO has reason/s to believe of the assessee being, on the contrary, liable to get its’ account audited u/s. 44AB, is that the assessee has not complied with the provisions of the said section. There is no income implication, even as none emanates from the (part of the) said reason, as recorded, as well. The assessee may at best be liable to penalty u/s. 271B. The first limb of the reason recorded, is, thus, clearly not valid. Non-eligibility to deduction u/s. 80IB(11A) - Board has per its’ Circular 09/2006, relied upon by the ld. Sr. DR, clarified that the returns in old forms would not be valid, and that the assessees shall be required to furnish returns in the new forms. This is only in terms of the law; s. 139(1) providing for furnishing the return of income in the prescribed form. No dispute or objection stands raised by the Revenue in the matter, at any stage, accepting the return furnished as valid. This is particularly relevant in view of s. 80-AC. No issue qua the prescribed form, therefore, obtains. In the instant case, the assessee has acted consistent with law – furnishing the return within the prescribed time, in the annexure-less mode; obtained the audit report in the prescribed form (Form 10CCB) in time (on 25/8/2008)(PB-1, pgs. 24-29), and furnished the same before the AO at the earliest possible time, i.e., on 23/2/2010, along with the reply in response to the notice u/s. 148(1) dated 20/1/2010. No reason to believe non-conduct of audit u/s. 80-IB and, thus, non-eligibility to deduction thereunder could have been, in view of the foregoing, formed by the AO, who cannot but be aware of the extant procedure, or is required to be, particularly when the reason formed is based on the provisions of law. As clarified by the Apex Court in Jaganmohan Rao (V.) [1969 (7) TMI 4 - SUPREME COURT], it is only the true and correct state of law that can form a basis for the reason to believe escapement of income from assessment. AO, where he wanted to clear his doubts in the matter, ought to have inquired with the assessee, as u/s. 133(6). No wonder, the law stands amended since (by Finance Act, 2020, w.e.f. 01/4/2020), delinking the furnishing of the audit report from that of the return of income, so that both are independently required to be furnished by the due date/s prescribed in their respect. The second limb of the reason recorded is, thus, also not valid. The assessee, accordingly, succeeds in its’ legal challenge per Gd.4, so that there is no valid assumption of jurisdiction u/s. 147 in the instant case. - Decided in favour of assessee.
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