TMI Blog1987 (9) TMI 85X X X X Extracts X X X X X X X X Extracts X X X X ..... a, CA appeared from time to time. Case was discussed. On perusal of the return it was noticed that the assessee did not file with the return the audited copies of accounts and an audit report in form No. 10-B prescribed under r. 17B of the IT Rules, 1962. Since the non-filing of the said document with the return amounted to the violation of the provisions of. 12A(b) the counsel of the assessee was required to explain as to why the benefit ss. 11 12 should not be disallowed to the assessee on account of the said statutory lapse. In response to this the counsel of the assessee explained that the books of the assessee were audited only on30th June 1984and hence the audited accounts and audit report in form 10B could not be filed with the ret ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the return should be accompanied by the audited copies of statements of accounts and an audit report in form No. 10B. In other words, only requirement of law under this section is that on the date of filing of the return the assessee must have the audited books of accounts. If the assessee had the audited copies of the books of accounts on the date of filing of the return and if per chance he forgets to file the audited copies of statements of accounts and form No. 10B alongwith its return of income, the law can permit him to file the said documents during the course of assessment proceedings also. The law contained in s, 12A(b) appears to be of procedural nature but the penalty prescribed for tits infringement speaks volumes about th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sentative. The learned Departmental Representative also relied upon the ratio of the decision of the Delhi High Court in O.P. Malhotra vs. CIT (1981) 129 ITR 379 (Del) at pages 383 to 385 and further contended that original return of income, filed by the assessee being not under s. 139(1) of the Act, the assessee had no right to revise the return under s. 139(5). Sec. 139 (4A) of the Act is also pressed into service on behalf of the Revenue, alongwith ratio of the decision of the Hon'ble Supreme Court as stands reported in (1950) 18 ITR 274 (SC) (sic). The learned departmental representative further contended that audit report was not in existence when the assessee filed the original return of income, hence the assessee is not entitled to a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tim reasoning of the learned ITO. He has observed that, "..... at best these documents can be regarded to have been filed during the course of assessment, proceedings." He also held that, "The contained in s. 12A(b) appears to be of procedural nature but the penalty prescribed for its infringement speaks volumes about the intention of the legislature in laying down these provisions." 7. Being that, what is the second (sic) of the Revenue at the assessment stage, when any non compliance of procedure will result in an irregularity and certainly not an illegality. Non compliance and non-furnishing of statutory audit report in statutory form No. 10B alongwith the return of income filed, can at best be said to be a procedural irregularity, whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t must be attached to the return and it would be sufficient compliance if the audit report is filed before the completion of assessment. In the instant case, the assessment proceedings were commenced only after the second return was filed and therefore, right at the initiation of proceedings the report was in the hand of the ITO and therefore, the ITO was not right in denying the exemption under s. 11 to the assessee." 10. Following the above reasoning, we also hold accordingly. The assessee is held to be entitled to the benefits of s. 11, but not on the reasoning of learned AAC as found out in the impugned order, but for the above reasoning i.e. of the two Benches of the Tribunal referred to above. 11. Revenue's ground stands rejected ..... X X X X Extracts X X X X X X X X Extracts X X X X
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