TMI Blog1995 (6) TMI 40X X X X Extracts X X X X X X X X Extracts X X X X ..... fish and other fish products. Return of income was filed on 29th Dec., 1989, declaring total income at Rs. Nil which was subsequently revised on 17th July, 1991, in which total income was again declared at Rs. Nil. It appears from para 6 of the assessment order that the assessee company claimed set off in respect of unabsorbed losses relating to earlier years to the extent of Rs. 4,63,106 and also claimed unabsorbed loss of Rs. 38,514 for being carried forward. However, as a result of order dt. 30th March, 1992, passed under s. 154 for the immediately preceding year for asst. yr. 1988-89, the earlier years losses had already been absorbed in asst. yr. 1988-89, as a result of which the income was assessed at a positive figure of total incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t in the prescribed Form No. 10CCAC along with the return of income. Since the assessee failed to do so, the assessee is not entitled to deduction under s. 80HHC. 3.3 The learned CIT(A) observed that benefit of deduction under s. 80HHC can be granted only on strict fulfilment of the conditions laid down under the Act. Since the assessee has not complied with the aforesaid requirement of s. 80HHC, the AO has rightly refused to grant deduction under s. 80HHC to the assessee. 3.4 The learned counsel for the assessee submitted that the requirement of submitting audit report in the prescribed form under s. 80HHC(4) is merely a procedural requirement and the same could be submitted at any time before the completion of the assessment. He pla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to interpretation of s. 80HHC, but those decisions relate to interpretation of s. 80J or s. 12A being the provisions relating to charitable institutions. The requirement of furnishing those kinds of audit report are different than the one which is required to be furnished along with the return of income for the purposes of s. 80HHC. He vehemently repeated that the audit report in the prescribed form for the purpose of s. 80HHC requires a certification by the auditors that the claim made by the assessee under s. 80HHC is correct and is in conformity with the said provisions. He invited our attention to the judgment of Gauhati High Court to highlight as to how the word "shall" used in the relevant statutory provisions should be interpreted. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he auditors' report alongwith the return has to be treated as a procedural provision, directory in nature, and its substantial compliance should suffice, meaning thereby that such report should be made available by the assessee to the AO latest when the question of framing of assessment is taken up by the ITO and when he applies his mind to the claim of the assessee and if by that time, the assessee has put his house in order and has furnished the report of the auditor for supporting the return, he can be said to have satisfied the requirement of s. 80J(6A) of the Act." 3.7 The Hon'ble Gujarat High Court has taken the aforesaid view after thoroughly examining the principles of law laid down by different Courts in relation to interpretati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase of CIT vs. Hardeodas Agarwalla Trust (1992) 198 ITR 511 (Cal) held that the assessee was not given an opportunity to file the audit report in the prescribed form (s. 12A—Audit report in Form No. 10B) which was available with the assessee before the assessment was completed. In such a case the appeal being a continuation of the original proceedings,the appellate authority had the power to accept the audit report and direct the AO to redo the assessment. In view of the aforesaid judgments, we are of the considered opinion that the requirement of furnishing the audit report in the prescribed form for claiming deduction under s. 80HHC cannot be regarded as a mandatory requirement and the audit report submitted by the assessee along with the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the orders of the learned Departmental authorities that part of the said expenditure included expenditure for staff. We also do not know whether any separate expenditure for staff welfare or for providing tea, coffee to the staff had been claimed and allowed by the ITO. We are, therefore, unable to even grant a part relief out of the aforesaid disallowance. This ground is, therefore, rejected. 5. The next ground relates to disallowance of Rs. 10,000 from the miscellaneous expenses of Rs. 1,15,128 (Rs. 61,660 + Rs. 53,468). 5.1 The learned counsel for the assessee submitted that the books of accounts maintained by the assessee are true and correct and those have duly been audited under s. 44AB. The authorities below have erred in stat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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