TMI Blog1999 (9) TMI 113X X X X Extracts X X X X X X X X Extracts X X X X ..... the case was processed under section 143(1)(a) of the Act on 2nd November, 1992. While processing this case adjustment to the extent of Rs. 1,55,73,426 was made observing, "No audit report in support of deduction under section 80HHC for claiming deduction at Rs, 1,55,73,426 is furnished along with the return as required under section 80HHC(4). Hence, no such deduction is admissible and as such the same is disallowed and added back." Thereafter an application under section 154 of the Act was moved by the assessee pointing out that audit report in Form No. 10CCAC was furnished along with the return. Due to inadvertent mistake unsigned copy was attached with the return which was filed on 30th October, 1992. Thereafter copy of the said report ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income is treated as a valid report, not allowing deduction under section 80HHC of the Act while processing the case under section 143(1)(a) of the Act tantamounts mistake apparent from the records which require rectification. The Assessing Officer rejected the rectification application which, in my view, was not justified. As regards reference to my decision in some other case, it is observed that facts of that case were different. With these observations, the application under section 154 of the Act is held to be maintainable and the Assessing Officer is directed to amend the intimation under section 143(1)(a) of the Act treating the report filed along with the return as a valid report and also after taking into a/c the report submitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the representative of the parties, we hereby reproduce the relevant portion of clause 3 of the C.B.D.T.'s Circular No. 581 dated 28-9-1990 relied upon by the D.R.:-- "3. Similarly, filing of evidence in support of an exemption/deduction at the time of furnishing the return of income has been prescribed as a necessary condition in certain other sections of the Income-tax Act, such as sections 32AB(5), 32AB(2), 54(2), 54B(2), 54D(2), 54F(4), 54G(2), 80HH(5), 80HHA(4), 35D(4), 35E(6), 80HHB(3), 80HHC(4), 80HHD(6), 80-1(7), etc. In such cases, also where the exemption/deduction claimed is disallowed as prima facie inadmissible for want of evidence in support thereof under section 143(1)(a), it cannot be subsequently allowed by a rectificati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clear that subsequent furnishing of a signed report along with rectification application under section 154 filed by the assessee he cannot be allowed deduction subsequently even if he has furnished a signed report as a token of evidence in respect of his claim of deduction. 10. Whereas, on the other hand, the assessee has relied upon the Circular No. 689 dated 24-8-1994 sub-clause (6) along with example for ready reference is reproduced below:- "(b) any claim in respect of which there is an omission of information which is required, under the specific provisions of the Act or the Rules, to be furnished along with the return to substantiate such claim. Example: If the audit report specified under section 80HHC(4), which is required t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... long with the return, the A.O.'s can entertain applications under section 154 for rectification of the intimation under section 143(1)(a) or orders under section 143(3), as the case may be, and decide the same on merits. 3. Circular No. 581, dated 28th September, 1990, stands modified to the above extent." 13. Now, on reading of these Circulars simultaneously, we find that Circular No. 581 dated 28-8-1990 clearly lays down that in case the assessee claims deduction/exemption in a particular provision of law (as specified in detail in that circular) but does not file any evidence in support thereof then the Assessing Officer can prima facie disallow the same as inadmissible under section 143(1)(a) of the Income-tax Act, 1961 and the same ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 24-8-1994 wherein even deduction/exemption claimed under section 80HHC(4), 12A(b), etc., and the like could be rectified by the Assessing Officer under section 154 of the Income-lax Act, 1961. In case the assessee later on furnishes evidence in support thereof if he did not furnish the same, which was required to be furnished by him along with the return of income. Hence, we are of the opinion that when Circular No. 581 is only considered in isolation then the Assessing Officer was justified in refusing rectification under section 154 of the Income-tax Act, 1961 because an unsigned audit report filed along with the return of the assessee for claiming exemption was not audit report in the eyes of law and so the Assessing Officer was fully w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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