TMI Blog2016 (3) TMI 240X X X X Extracts X X X X X X X X Extracts X X X X ..... rder of CIT(A), for the assessment year 2007-08, in the matter u/s.143(3)(ii) of the I.T. Act, wherein the following three grounds taken of the assessee. (i) On the facts and circumstances of case and in law, the Ld. CIT(A) erred in holding that the assessee is entitled to deduction u/s 80IB (10) of ₹ 1,94,12,489/- inspite of the fact that the claim for deduction was not made in the original return and was only made in the return filed, for A.Y. 2007-08, on 31.08.2009, which is not a valid return in the eye of law and also cannot be treated as revised return‟ u/s. 139(5). (ii) On the facts and circumstances of the case and law, the Ld. CIT(A) erred in allowing the deduction u/s 80IB (10) of ₹ 1,94,12,489/-, as the same is contrary to the provisions of section 80A(5), effective from 01.04.2003, which does not permit allowance of deduction unless the claim for deduction is made in the return of income. (iii) On the facts and circumstances of case and in law, the Ld. CIT(A) erred in allowing the deduction u/s 80IB(10) as the same only means that deduction can be claimed just by filling revised return u/s 139(5) has already elapsed, in the course ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AO is not tenable because of obvious facts of fulfillment of all the conditions by the appellant. There is no bar of furnishing of revised return of income u/s.80A(5) and the decision of Hon‟ble ITAT, High Courts and Supreme Court over such issues support the appellant. Under section 80A(5), there is an insertion of new provision of law with effect from 01.04.2003 providing that where the assessee failed to make claim in his return of income for any deduction u/s.10(A) or section 10(AA) or section 10(B) or section 10(BA) or under any provision of Chapter VIA under the head in C deduction in respect of certain income‟, no deduction shall be allowed to him thereunder, means there is no restriction about the revised return of income but there is a provision of law for claiming such deduction through return of income‟ only. This provision of law does not limit the date of filing of return of income to be either as provided u/s.139(1) or 139(4) or 139(5) of the Income-tax Act. As such, there is no ambiguity regarding interpretation or understanding of this provision of law. The provision of section 80A(5) does not provide that return of income‟ through whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s in the original return and does not obliterate the later, the assessment means on the basis of original return of income ignoring the revised return is liable to be set aside vide CIT vs. Chitranjali (1986) 159 ITR 801 (Cal). Similar view has also been taken in the case of CIT vs. Bansidhar Dalal and Sons (1994) 207 ITR 494 (Cal). It is also relevant to mention that Assessing Officer has important statutory functions to discharge. Such functions encompass power as well as duty to be exercised. Obviously, these powers are coupled with a duty to exercise them within the ambit of law. If order invested a public office with an authority to do an act in specified set of circumstances, it is imperative upon him to exercise the authority in a manner appropriate too the things when an party interested and having right to comply are to be benefited. Such preposition is there in the case of Jayamal Jayantilal Thakur vs. Chief CIT (1998) 230 ITR 142, 151, 152 (Guj.). It is worthwhile to mention that in the case of DCIT vs. Lab India Instruments (P) Ltd., 93 ITD 120 Hon‟ble Pune ITAT has held as under: - Further, Rival submissions of the parties have been considered carefu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... course of assessment proceedings then assessee is entitled to make such claim by moving application under section 154 for rectification since non-granting of deduction/ exemption would amount to mistake apparent from record. The ratio of this judgment is based on the principle that Assessing Officer is duty bound to grant the exemption/ deduction even where assessee failed to claim the same. The relevant observations of their Lordships are extracted below: An obligation is imposed on the Income-tax Officer by section 84 of the Income-tax Act, 1961, to grant relief there under and the relief cannot be refused merely because the assessee has omitted to claim the relief, but the mere existence of such an obligation on the Income-tax Officer is not sufficient. Precise factual material and clear data must be contained in the record sufficient to enable the Income-tax Officer to consider whether the relief should be granted under section 84. In the absence of such material, no fault can be found with the Income-tax Officer for not making an order under section 84 favouring the assessee. Our view is further fortified by the judgment of Hon‟ble Supreme Court in the case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (1983) 36 CTR (Ker) 372: (1984) 150 ITR 105 (Ker). Hence, it was the duty of the AO to ask information before completing the assessment under s. 143(3) of the Act. It may also be mentioned that the tax audit report along with return is not a mandatory condition as per the ratio laid down in the case of CIT cs. Rai Bahadur Bissesswarlal Motilal Malwasie Trust (1992) 195 ITR 825 (Cal) as well as in the case of CIT vs. Sankalp Welfare Society (2008) 303 ITR 64 (P H). The audit report can be furnished before completing the assessment as per the ratio laid down in the case of CIT cs. Dr. L.M. Singhvi (2007) 207 CTR (Raj) 452 : (2007) 289 ITR 425 (Raj.). It may be out of place to mention that furnishing the audit report and the certificate for claiming the exemption under s. 80HHC in form 10CCAC was treated as procedural in nature. The mistake was treated as a technical breach and the AO was duty bound to ask it before denying claim as observed in the following cases CIT vs. Gujarat Oil Allied Industries (1993) 109 CTR (Guj) 272 : (1193) 201 ITR 325 (Guj.) CIT vs. Berger Paints (India) Ltd. (2002) 174 CTR (Cal)269 : (2002) 254 ITR 503 (Cal.) In the instant c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r claim of deduction u/s.80IB(10). He invited to our attention to the various judicial pronouncements placed on record which supports the case of the assessee to the effect that legal claim even if not made in the original return or even in the revised return but made by the assessee before the AO completing the assessment, should be allowed. 7. We have considered rival contentions, carefully gone through the orders of the authorities below and also deliberated on the judicial pronouncements cited at bar. From the record we found that assessee is engaged in development of housing project. However, the original return was filed well within the time u/s.139(1), wherein the assessee has not made any claim of deduction u/s.80IB(10). The assessee filed revised return wherein deduction u/s.80IB(10) was claimed, however, while framing assessment the AO decline claim of deduction in view of the provisions of Section 80A(5) of the Act. As per our considered view, Section 80A(5) only requires filing of return, nowhere it suggests that claim should be made in the original return and not by way of revised return. When the original return of income has been filed well within the due date, th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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