CIT Vs Web Commerce (India) Pvt. Ltd. (Delhi High Court)
Delhi High Court considered Revenue’s appeal involving interpretation of Section 10B(5) of the Income-tax Act, 1961. The Court noted that the provision was virtually identical to Section 80-IA(7), Section 80HHB(3)(ia) and the erstwhile Section 80J(6A). The controversy concerned whether furnishing the prescribed audit report along with the return of income was a mandatory requirement for obtaining the statutory deduction, or whether the requirement could be satisfied by furnishing the report subsequently but before completion of assessment.
Revenue contended that unless the audit report was filed along with the return, the assessee could not obtain the benefit of Section 10A. The High Court, however, observed that it had already interpreted similar statutory provisions and held the requirement regarding the time of furnishing the audit report to be directory rather than mandatory. Thus, failure to furnish the audit report along with the return did not, by itself, result in forfeiture of the deduction where the requisite report was furnished before the assessment was framed.
The High Court specifically relied upon its recent decision in CIT Vs Contimeters Electricals Private Limited, ITA 1366/2008, decided on 02.12.2008. In that case, while considering the identical requirement under Section 80-IA(7), the Court had held that the provision stood complied with so long as the audit report was filed before framing of the assessment. The requirement to furnish the report along with the return was therefore treated as directory and not mandatory.
