TMI Blog2022 (10) TMI 942X X X X Extracts X X X X X X X X Extracts X X X X ..... tent of taking up the fresh issue and deciding the same against the assessee is set aside and the matter is remanded to the record of the CIT(A) for deciding the same after giving an opportunity of hearing to the assessee on this issue. It is clarified that the issue with respect to the late filing of the return of income is remanded to the record of the ld. CIT(A) and the remand proceedings before the ld. CIT(A) are confined only on the said issue. Appeal of the assessee is partly allowed. - ITA No.699/LKW/2017 - - - Dated:- 21-10-2022 - Shri. Vijay Pal Rao, Judicial Member For the Appellant : Shri Abhinav Mehrotra, Advocate For the Respondent : Shri Amit Nigam, D.R. ORDER This appeal by the assessee is directed against the order dated 21.8.2017 of the ld. CIT(A)-I, Kanpur for the Assessment Year 2014-15. 2. The assessee has raised the following grounds: 1. That the Ld. Commissioner of Income Tax (Appeals-1) has erred in law as well as on facts in not appreciating the real facts of the case while confirming disallowance of exemption u/s. 80IB amounting to Rs.44,68,160/-. 2. That the Ld. Commissioner of Income Tax (Appeals-1) has further erred in law ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee is whether in the facts and circumstances of the case, the ld. CIT(A) is justified in upholding the disallowance of deduction under section 80IB of the Income Tax Act, 1961 made by the Assessing Officer for want of filing the audit report in Form No.10CCB electronically/online. The assessee firm has filed its return of income on 24.3.2015 for the year under consideration and declared Nil income after claiming deduction under section 80IB of the Act. The case of the assessee was selected for scrutiny under CASS. Accordingly, the assessing officer issued notice under section 143(2) on 31.8.2015. During the scrutiny assessment. The Assessing Officer noted that the assessee partnership firm is engaged in construction of houses in the name and style of M/s Shiva Neeti Developers. The total sale of the assessee for the year under consideration was Rs.58.80 lakhs. The net profit was of Rs.44,68,162/-. The Assessing Officer found that the assessee has not submitted online audit report in the prescribed Form No.10CCB for the year under consideration. The assessee had furnished the audit report in Form No.10CCB manually. For want of submitting the audit report electronically, the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relied upon the decision of the Hon ble Ahmedabad Bench of the Tribunal, dated 4.6.2010 in the case of ITO vs. Horizon Microtech Pvt. Ltd. in ITA No.1619/AHD/2007 and C.O No.143/AHD/2007. The learned Counsel for the assessee has submitted that the disallowance made by the Assessing Officer for want of filing of the audit report in Form No.10CCB electronically is unjustified and unwarranted when the assessee filed the audit report manually during the course of assessment proceedings. He has also referred to the order of the ld. CIT(A)-I, Kanpur, dated 29.6.2018 for Assessment Year 2015 16 in the assessee s own case and submitted that an identical issue has been decided by the ld. CIT(A) for the subsequent year in favour of the assessee and the claim of the assessee was allowed. 5. As regards the fresh issue taken up by the ld. CIT(A), the ld. Counsel for the assessee has submitted that the ld. CIT(A) has not issued a show cause notice before deciding the issue against the assessee, which amounts to enhancement of the assessment. The ld. Counsel for the assessee further has submitted that the order of the ld. CIT(A), so far as fresh issue relating to filing of return of income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Officer are not in dispute, as the assessee has filed the audit report in Form No.10CCB during the course of assessment proceedings manually and it was not filed electronically. The Assessing Officer has further mentioned that from 1.4.2014, audit reports should only be submitted electronically, which means that the submission of audit report in Form No.10CCB is made mandatory only from the year under consideration and hence this is the first year for mandatory submission of the audit report in Form No.10CCB electronically. The assessee has explained the reasons for not filing the audit report electronically due to technical reasons and glitches and therefore, the explanation of the assessee clearly reveals a bona-fide reason for not filing the audit report in Form No.10CCB electronically. Even otherwise, this is the first year for mandatory filing the audit report in Form No.10CCB electronically and, therefore, the reasons explained by the assessee could not be rejected as such. 9. The Hon'ble jurisdictional High Court in the case of CIT vs. M/s Fortune Foundation Engineers Consultants Private Limited, 81 taxmann.com 189 (Alld) considered the issue of denial of claim of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , came to be inserted w.e.f. 1.4.2005, which is prospective. 10. The Hon ble High Court has held that this is not mandatory, but only directory to submit the audit report in Form No.10CCB electronically in accordance with the provisions of section 80IB(13) read with section 80IA(7) of the I.T. Act along with the return of income, but if the audit report in Form No.10CCB is filed during the course of assessment proceedings, the assessee cannot be made to suffer. 11. Further, the ld. CIT(A)-I, Kanpur for the assessment year 2015 16 in the assessee s own case has decided the identical issue in favour of the assessee, as under: I have gone through the above submissions of the appellant and the order of the AO. From the order it emanates that except for uploading of the audit report along with the return of income, all other aspects of section 80IB were duly met by the appellant on which the AO has objected. Further this is not the first year and in earlier years as well the appellant has got the deduction u/s 80IB. In fact the appellant is an old assessee and has been claiming deduction u/s 80IB since 2010-11. The deduction u/s 80IB has been allowed u/s 143(3) by the AO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provides that: deduction u/s SO IB shall be allowed to assessee only if the assessee furnishes a return of his, income on or before the due date specified under sub-section 139(1); It is seen that the return for A.Y. 2014-2015 was filed on 24.03.2015 with a delay of 114 days and the audit u/s 10CCB was allegedly completed on 14.08.2014 and filed before the AO on 16.09.2016 with a delay of more than 2 years i.e. 790 days. The AO has missed on the fact that the return was not filed u/s 139(1) but filed belatedly u/s 139(4) as due date was 30th November, 2014. Therefore fresh issue arises if the assesse is entitled to claim u/s 80IB if return id not filed u/s 139(1). There are thus two defaults: - 1. Delay in filing of return u/s 139(1) 2. No uploading of from 10CCB under with AO as well as ROC or filing it when the return was filed u/s 139(4) Another issue that arises for consideration is whether the Assessing Officer was justified in disallowing the assessee's claim for deduction under S. 80IB on the ground that the audit report in Form 10CCB was not filed even along with the return of income filed u/s 139(4) . -that s. 139(1) of the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts have not been furnished to the Department. 14. When the ld. CIT(A) has not issued a show cause notice before considering and deciding the issue of late filing of the return of income by the assessee and consequently denying the claim of deduction under section 80IB of the act, then it would certainly violates the principles of natural justice. The ld. Counsel for the assessee has submitted that the ld. CIT(A) has violated the provisions of section 251(2) of the I.T. Act before passing the impugned order, as there is enhancement of the assessment by the ld. CIT(A) without issuing show cause notice. However, the outcome of the denial of deduction under section 80IB of the Act, on the ground of late filing of the return of income, would not be more than the disallowance of deduction made by the Assessing Officer and consequently it is not the case of enhancement of the assessment, but the disallowance of deduction as made by the Assessing Officer has been further strengthened by the ld. CIT(A) by taking the issue of late filing of the return of income. In any case, since the ld. CIT(A) has not issued any show cause notice to the assessee before taking up this issue and passed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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