Commissioner Of Income Taxmadurai v. M/S.ramco Cements Limited[Formerly Known As M/S. Madras Cements Limitedrajamandiramrajapalayam – 626 117Pan: Aabcm8375L

IN THE HIGH COURT OF JUDICATURE AT MADRASDATED : 04.04.2022 CORAM : THE HONOURABLE MR.JUSTICE R.MAHADEVANAND THE HONOURABLE MR.JUSTICE J.SATHYA NARAYANA PRASAD T.C.A. NO.966 OF 2013 Commissioner of Income TaxMadurai ...Appellant Versus M/s.Ramco Cements Limited[Formerly known as M/s. Madras Cements LimitedRajamandiramRajapalayam – 626 117PAN: AABCM8375L ...Respondent(cause title amended vide order of this courtdated 10.07.2014 made in MP.No.1 of 2014in TCA.No.966 of 2013) Tax Case Appeal filed under Section 260A of the Income TaxAct, 1961 against the order dated 11.06.2013 passed by theIncome Tax Appellate Tribunal, Chennai 'A' Bench, in I.T.A. No.2265/Mds/2012 against the order of the Commissioner of IncomeTax (Appeals)-II, Madurai dated 03.09.2012 PA.No.AABCM8375L, ITANos.327/2011-12 & 410/2011-12 and against the order of theAdditional Commissioner of Income Tax, Virudhunagar Range dated29.12.2011, PAN. , Ward Circle 1, Virudhunagar. Status-Company for the Assessment Year 2009-10. For Appellant:Mr. M.SwaminathanSenior Standing Counseland Mrs. V. PushpaJunior Standing Counsel For Respondent: Mr.P.J.Rishikesh JUDGMENT (Judgment of the Court was delivered by R. MAHADEVAN, J.) This appeal is filed at the instance of theappellant/Revenue against the order dated 11.06.2013 passed bythe Income Tax Appellate Tribunal, 'A' Bench, Chennai, in I.T.A.No. 2265/Mds/2012 relating to the assessment year 2009-2010. https://hcservices.ecourts.gov.in/hcservices/ 2. The respondent / assessee is engaged in the business ofmanufacture and sale of cements. They filed its return of incomefor the assessment year 2009-2010 admitting a total income ofRs.1,58,55,60,958/- on 28.09.2009. After processing the sameunder Section 143 (1) of the Income Tax Act (in short, “theAct”), notice under Section 143 (2) was issued by the appellant.Upon receipt of the same, the representative of the respondent /assessee appeared for enquiry and produced the requiredparticulars called for by the appellant. Thereafter, theassessing officer passed the assessment order dated 29.12.2011under section 143 of the Act, inter alia disallowing the claimundersection80IA.Aggrievedbythesame,therespondent/assessee preferred an appeal, which was allowed bythe CIT(A) by order dated 03.09.2012, on the ground that the theprovisions of section 80-IA(7) requiring filing of audit reportalong with return are not mandatory, but directory and if theaudit report is filed at any time before framing of assessment,then requirement of section 801A(7) would be met. Challengingthe same, the appellant / Revenue filed an appeal before theITAT, which, by order dated 11.06.2013, dismissed the same.Therefore, this tax case appeal by the appellant / Revenue. 3. The learned senior standing counsel appearing for theappellant submitted that during the course of hearing, theAssessing Officer required the respondent / assessee to producethe copy of audit report of Chartered Accountant as requiredunder Section 801A evidencing the purchase of windmill, incomederived thereon and expenditure incurred. However, therespondent /assessee did not file the same. Therefore, theAssessing Officer rightly disallowed the claim of the assesseeunder Section 80IA for want of report of the CharteredAccountant. However, the CIT(A) erred in holding that filing ofaudit report along with the return of income is not mandatory,but directory; and the audit report can be filed at any timebefore the framing of assessment and if it is filed, then it canbe construed that the requirements under Section 80IA(7) wouldbe met and accordingly, allowed the appeal filed by therespondent / assessee, which was also affirmed by the Tribunal.The learned counsel further submitted that section 80IA(7)specifically requires the assessee to produce the report ofaudit in the prescribed form along with the return of income andhence, it cannot be dispensed with. Thus, according to thelearned senior standing counsel submitted that the order of theTribunal is contrary to the mandatory requirement as indicatedin Section 80IA(7) of the Act, which is liable to be set aside. 4. On the other hand, the learned counsel for therespondent / assessee would contend that for claiming deductionunder section 80IA, it is not mandatory for the assessee to produce the audit report along with the return of income and itcan be furnished at any time before the framing of assessment.In this context, the learned counsel placed reliance on thedecision of the Karnataka High Court in Sutures India (P) Ltd.v. Commissioner of Income Tax, Bangalore [2021 (125) Taxmann.com226 (Karnataka)] wherein it was held that “the assessee isentitled to deduction under Section 80IA of the Act even if theaudit report is filed at the appellate stage”. Therefore, thelearned counsel submitted that the order of the Tribunal doesnot warrant any interference by this court. 5. We have heard the learned counsel for both sides andperused the materials placed on record. 6. This Court, by order dated 02.04.2014 admitted theappeal on the basis of the following substantial question of lawfor consideration: “Whether on the facts and in the circumstancesof the case, the Tribunal is correct in law inholding that provisions of Section 80IA(7) is notmandatory and only directory when Section 80IA(7)clearly stipulates that the report should be filedalong with the return of income?" 7.For better appreciation, the provisions of section 80IA (7) is extracted below: “The deduction under sub-section (1) fromprofits and gains derived from an undertaking shallnot be admissible unless the accounts of theundertaking for the previous year relevant to theassessment year for which the deduction is claimedhave been audited by an accountant, as defined in theexplanation below sub-section(2) of Section 288,[before the specified date referred to in section44AB and the assessee furnishes by that date]* thereport of such audit in the prescribed form dulysigned and verified by such accountant.” * substituted for “and the assessee furnishes, alongwith his return of income” by the Finance Act, 2020with effect from 1-4-2020. 8.Thus, it is crystal clear from the aforesaid provisionsthat the assessee should furnish the audit report along with hisreturn of income, only pursuant to the amendment by the FinanceAct, 2020 with effect from 01.04.2020. Prior to that, therequirement of filing the audit report along with the return ofincome is not mandatory, but directory and the audit report canbe filed at any time before framing of assessment, so as to meetout the requirement of section 80IA(7). It is also settled law * substituted for “and the assessee furnishes, alongwith his return of income” by the Finance Act, 2020with effect from 1-4-2020. 8.Thus, it is crystal clear from the aforesaid provisionsthat the assessee should furnish the audit report along with hisreturn of income, only pursuant to the amendment by the FinanceAct, 2020 with effect from 01.04.2020. Prior to that, therequirement of filing the audit report along with the return ofincome is not mandatory, but directory and the audit report canbe filed at any time before framing of assessment, so as to meetout the requirement of section 80IA(7). It is also settled law that the taxing statute should be read prospectively and notretrospectively. Applying the said legal proposition to thefacts of the present case, wherein it is an admitted fact thatthe respondent / assessee furnished the audit report during thecourse of assessment relating to the assessment year 2009-10 andthey very well complied with the requirement of section 80IA(7)for claiming deduction under section 80IA. Therefore, the CIT(A)allowed the claim of the respondent / assessee, which was alsorightly affirmed by the ITAT and the same do not call for anyinterference at the hands of this Court. 9.At this juncture, it is apposite to refer to thedecision of the Karnataka High Court in Sutures India (P) Ltd.,v. Commissioner of Income Tax, Bangalore, referred to above bythe learned counsel for the respondent / assessee, wherein itwas categorically held as under:“...8. In the backdrop of aforesaid wellsettled legal position, we may advert to thefacts of the case. The Assessee had filed FormNo.10CCB of the Act along with writtensubmissions before the Commissioner of Income-tax(Appeals), which was acknowledged by him in theorder dated 11-3-2008. A bench of this court inCIT v. Ace Multitaxes Systems (P.) Ltd [2009] 317ITR 207 (Kar.) has taken a view that assessee isentitled to deduction under Section 80IA of theAct even if the audit report is filed at theappellate stage. Similar view has been taken byMadras High Court in CIT v. A.N.Arunachalam[(1994) 75 Taxman 529 / 208 ITR 481 (Mad)]. Thus,the view taken by the assessing officer withregard to eligibility of the assessee to claimdeduction under Section 80IA of the Act was oneof the possible views. We are fortified in ouraforesaid conclusion in view of the order passedby the Commissioner of Income-tax under Section263 of the Act. The relevant extract of whichreads as under: “The order u/s.143(3) dated 14-06-2005 is,therefore, modified to the extent that deductionclaimed u/s.80IA is withdrawn and for the purposeof computing deduction u/s.80HHC, deductionallowable u/s.80IA has to be reduced from thebusiness profits. Since deductions u/s 80IA isbeing denied, there will be no change in thecomputation of deduction u/s.80HHC for the timebeing. However, in case it is held by theappellate authority that the assessee is entitledto deduction u/s.80IA, the deduction u/s.80HHC will have to be recomputed keeping in mind theprovisions of Section 80IA(9).” 10. In such view of the matter, the substantial question oflaw is decided in favour of the respondent / assessee andagainst the Revenue. Accordingly, the Tax case Appeal fails andit is dismissed. No costs. Sd/- Assistant Registrar(CS-III) // True Copy // dhk/rsh Sub Assistant Registrar To 1.The Commissioner of Income Tax Madurai Madurai . 2.The Income Tax Appellate Tribunal, Chennai 'A' Bench. Chennai 'A' Bench. 3.The Commissioner of Income Tax (Appeal)-II Madurai. Madurai. 4.The Additional Commissioner of Income Tax, Virudhunagar Range, Virudhunagar. Virudhunagar Range, Virudhunagar. +1cc to Mr.M.Swaminathan, Advocate Sr.No.22618 +1cc to Mr.P.J.Rishikesh, Advocate Sr.No.22892 TCA No.966 of 2013 AD(CO)RVM(10/06/2022)