TMI Blog1984 (1) TMI 347X X X X Extracts X X X X X X X X Extracts X X X X ..... o registered firms, on trust for certain objects, which were patently non-charitable and for certain objects, which were stated to be charitable. This deed was further modified by a further deed dt. 27th June, 1946. For the assessment year under consideration, it was claimed before the ITO that the income derived from certain sources was exempt under s. 11 of the IT Act. The balance of the income was admittedly to be taxable. Since the declared income of the assessee without giving effect to the provisions of s. 11, exceed ₹ 25,000 the accounts of the trust were required to be audited under s. 12A(b) of the IT Act and the trustees were expected to have furnished along with the return of income for the relevant assessment year a report ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... completion of the audit. It was further submitted that these facts and circumstances were beyond the control of the assessee. 3. In due course, the IAC considered the draft assessment order submitted by the ITO and after hearing the assessee's representatives issued instructions to the ITO under s. 144B(4) of the IT Act, wherein he observed that although the audited accounts were filed during the proceedings under s. 144B before him, he considered them to be invalid since according to him the requirement of the law was that the audited accounts should have been filed with the return of income. Subject to these remarks, he approved the draft assessment order submitted by the ITO. The ITO accordingly completed the assessment under s. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exemption under s. 11 could not be denied to the assessee on this ground only. It was explained on behalf of the assessee that the additional ground was being filed out of the abundant caution. Actually the point is stated to have been covered by the ground about the non-availability of exemption under s. 11 of the IT Act. In support of this additional ground our attention is invited to a large number of Tribunal decisions wherein it has been held that where the law required that the return claiming certain reliefs should be accompanied by a audit report, it was enough if the audit report was submitted before the ITO finally concluded the assessment. For example, the decision in ITA No. 1427 (Jp) 1980 decided by the Cuttack Bench of the Tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 35 CTR (Trib) 67 (Mad). The Tribunal Ahmedabad Bench 'C' in the case of Gujarat Oil Allied Industry vs. ITO in Tribunal No. 898 (Ahd) 80 decided on 29th Sept., 1081 (since reported in (1982) 14 TTJ (Ahd) 552) has taken the same view. Finally out attention is invited to the Patna High Court decision in the case of Purusottamlal Kishorilal vs. CIT 1978 CTR 204 (Pat) : (1978) 115 ITR 377 (Pat) where the ld. judges had occasion to deal with the provisions of s. 184(7) of the IT Act to the effect that for claiming the benefits of registration under s. 185 of the IT Act, the firm, which was previously granted registration, should file a declaration in Form No. 12 along with the return of income. The ld. judges held that all that the l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssion of the additional evidence in an appeal before the Tribunal was depending upon the Tribunal having required it for purpose of pronouncing its judgment for the purpose of curing some inherent lacuna, which it had itself discovered. 6. We have carefully considered the facts and circumstances of the case and the arguments either side. We shall first deal with the objection on behalf of the Revenue to the admission of the additional ground. The ld. Departmental Representative has objected to the admission of the ground firstly on the plea that the was submitted too late and secondly that it did not arise out of the order of the CIT (A). We are unable to agree with either of these objections. The ground was taken before the CIT (A), but ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 12A(b)what was required was that the auditor's report should ordinarily be filed along with the return of income, in any case, not after the ITO makes his final assessment dealing with the assessee's claim under s. 11 of the IT Act. 8. Or a perusal of the orders of the authorities below, we find that, though the assessee had filed the auditor's report before he made the final assessment under s. 143(3), the ITO did not have the advantage of the audit report before he submitted the case to the IAC under s. 144B. The IAC has not availed of the opportunity to scrutinise the audit reports. In the circumstances, in the instant case, we are inclined to hold that the audit report has not received the attention due to it. Therefore ..... X X X X Extracts X X X X X X X X Extracts X X X X
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