M/s Pallavi real estate P.Ltd., Pune v. CIT-II,, Pune

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B PUNE BEFORE SHRI I.C. SUDHIR JUDICIAL MEMBER AND SHRI D. KARUNAKARA RAO ACCOUNTANT MEMBER ITA NO. 510/PN/09 : A.Y. 2004-05 PALLAVI REAL ESTATE SOUTH COURT SOUTH MAIN ROAD 12 KOREGAON PARK PUNE-411 011 PAN AABCP 1292 P .... APPELLANT VS. ASSTT. CIT CIR. 4 PUNE . RESPONDENT APPELLANT BY : SHRI SUNIL PATHAK ITP RESPONDENT BY : SHRI A.S. SINGH CIT DR ORDER PER D. KARUNAKARA RAO AM THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF THE CIT-II PUNE DATED 27-2-2009 PASSED U/S 263 OF THE ACT FOR A .Y. 2004-05. 2. AT THE VERY OUTSET THE LEARNED COUNSEL FOR THE ASS ESSEE MENTIONED THAT THIS IS A CASE WHERE THE CIT ERRONEOUSLY INVOKED THE P ROVISIONS OF SECTION 263 OF THE ACT STATING THAT THERE IS FAILURE TO FILE AUDIT R EPORT IN FORM NO. 10CCB. IN THIS REGARD LD COUNSEL STATED THAT THE CIT WRONGLY ASSUMED THAT THE SAID FORM NO 10CCB WAS NOT FILED. FOR EVIDENCING THAT THE SAID A UDIT REPORT WAS IN FACT FILED ALONG WITH THE RETURN OF INCOME LD COUNSEL READ OUT P ARA 5 OF THE ASSESSMENT ORDER WHICH READS AS FOLLOWS: ASSESSEE HAS CLAIMED 80-IB FOR HOTEL NANDANVAN AN NEXE. THE FIRST YEAR OF CLAIM OF 80-IB WAS A.Y. 1998-99. AS PER AUDIT REPORT 80-IB CLAIMED BY THE ASSESSEE IS RS. 21 21 122/-. SUBSEQUENTLY THE ASSESSEE HAS REVISED THE CLAIM OF 80-IB AT RS. 21 91 677/- AS PE R REVISED RETURN FILED ON 31-01-2005. (EMPHESIS SUPPLIED) 3. FROM THE ABOVE HE POINTED OUT TO THE EXPRESSION AS PER AUDIT REPORT AND MENTIONED THAT UNLESS THE AUDIT REPORT WAS IN TH E RETURN OF INCOME THE AO ITA NO. 510/PN/09 PALLAVI REAL ESTATE A.Y. 2004-05 PAGE 2 OF 3 MUST NOT HAVE PERUSED IT AND MADE USE OF SUCH AN EXP RESSION IN ENGLISH. FURTHER REFERRING TO COPY OF INCOME-TAX RETURN AT PAGE 1 OF THE PAPER BOOK LD COUNSEL MENTIONED THAT ITEM NO. 42 REFERS TO THE AUDI T REPORT AND OTHER COLUMNS EVIDENCES THE ENCLOSURES OF 25 OTHER DOCUMENTS AND T HUS THE RETURN WITH LARGE NUMBER OF DOCUMENTS ANNEXED INCLUDE THE IMPUGNED AU DIT REPORT IN FORM NO 10CCB. THE FACT OF FILING FORM NO. 10CCB WHICH IS PLACED AT PAGE 43 OF THE PAPER BOOK WAS ALSO RELIED UPON BY THE LEARNED COUNSEL TO DEMONSTRATE THE FILING OF THE SAID DOCUMENT ALONG WITH THE RETURN OF INCOME AVAILABLE BEFORE THE A.O. IN THIS REGARD LD COUNSEL MENTIONED THAT ABSENCE OF DOCUMENT IN THE ASSESSMENT RECORD DOES NOT TANTAMOUNT NOT FILING OF T HE SAID AUDIT REPORT BY THE ASSESSEE ALONG WITH THE RETURN OF INCOME. THE ASSESSE E MUST NOT SUFFER FOR THE LAPSES OF THE DEPARTMENT IN MAINTAINING OF THE DOCUM ENTS PROPERLY. FURTHER THE AR MENTIONED THAT THE ASSESSEE HAD BEEN CONSISTENTL Y FILING THE IMPUGNED AUDIT REPORT IN THE PAST AS WELL AS IN THELATTER ASSESSMEN T YEARS AND THE CLAIM OF THE ASSESSEE WAS ALWAYS ALLOWED. ON THE OTHER HAND ON THE ISSUE OF NON-FILING OF AUDIT REPORT IN FORM NO. 10CCB THE LEARNED DR RELIED ON THE ORDERS OF THE REVENUE. 4. WE HAVE HEARD BOTH THE PARTIES ON THE ISSUE OF NON -FILING OF FORM NO. 10CCB AND PERUSED THE RELEVANT PORTION OF THE DOCUMENT S RELIED UPON BY THE LEARNED COUNSEL. FROM THE PLAIN READING OF PARA 5 OF T HE ASSESSMENT ORDER WHICH IS REPRODUCED ABOVE WE FIND THAT THE SAID EXPRESSION WAS USED IN THE CONTEXT OF SECTION 80-IB OF THE ACT AND BY INFERENCE SUCH AN E XPRESSION MUST HAVE BEEN USED ONLY TO THE AUDIT REPORT IN FORM NO. 10CCB WHIC H IS MANDATORY REQUIREMENT FOR MAKING THE CLAIM U/S 80IB OF THE ACT. CONSIDERING THE EXPRESSION USED IN THE SAID PARA WE HAVE COME TO THE CONCLUSION THAT THE ASSESSEE CANNOT BE FOUND FAULTY SO FAR AS FILING OF FORM NO 10CCB ALONG WITH THE RETURN OF INCOME. CONSIDERING THE PAST RECORD OF THE ASS ESSEE IN MATTERS OF CLAIM OF DEDUCTIONS AND NON DENIAL OF THE CLAIMS ON THIS BASIS WE ALSO FIND THAT IT CONSTITUTES A CIRCUMSTANTIAL EVIDENCE TO BELIEVE THA T THE RETURN OF INCOME CONTAINS SUCH AUDIT REPORT AS ONE OF THE MANY ENCLOS URES TO THE RETURN OF INCOME. IN ANY CASE THE ASSESSEE HAS FILED SUCH RE PORT BEFORE THE APPELLATE AUTHORITY WHICH IS ALLOWABLE AS PER THE SETTLED LAW I N THIS REGARD. IN THIS BEHALF OUR DECISION IN THE CASE OF HASTIMAL SANCHETI RESEARC H FOUNDATION (ITA NO. 225/PN/2008 FOR A.Y. 2004-05 ORDER DATED 26-3-2010) W HICH WAS DECIDED IN THE CONTEXT OF FORM NO. 10 FOR THE PURPOSES OF SECTION 11 OF THE ACT. CONSIDERING THE ABOVE FACTUAL AS WELL AS LEGAL POSITION WE ARE OF THE OPINION THAT THE CIT HAS ITA NO. 510/PN/09 PALLAVI REAL ESTATE A.Y. 2004-05 PAGE 3 OF 3 ERRED IN ASSUMING JURISDICTION U/S 263 OF THE ACT. O N THIS TECHNICAL GROUND ITSELF WE QUASH THE ORDER OF THE CIT PASSED U/S 263 OF THE A CT. ACCORDINGLY GROUNDS NO. 1 TO 3 ARE ALLOWED. 5. GROUND NO. 4 IS NOT PRESSED AND THEREFORE THE SAME IS DISMISSED AS NOT PRESSED. 6. IN THE RESULT THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED ON 28 TH FEBRUARY 2011. SD/- SD/- (I.C. SUDHIR) (D.KARUNAKARA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBE R PUNE DATED THE 28 TH FEBRUARY 2011 ANKAM COPY OF THE ORDER IS FORWARDED TO : 1. ITO WARD 3(1) NANDED 2. ASSESSEE 3. CIT II PUNE 4. DR ITAT B BENCH PUNE BY ORDER ASSISTANT REGISTRAR I.T.A.T PUNE