Filing of Audit Report along with Income Tax Return is not Mandatory

Issue- Whether Income Tax Appellate Tribunal was correct in law, under the facts and circumstances of the case in holding that furnishing of the report in form No. 10CCB as per the requirement of Section 80IB (13) read with Section 80IA (7) is  only directory and not mandatory and allowing the claim of the Assessee on the basis of report furnished in the course of assessment proceedings.

Held by High Court

1. With regard to question no. 2 above in ITA No. 73 of 2010, we are of the view that it is not mandatory. This question is regarding filing of audit report in form 10CCB. If it is not filed alongwith return but filed before assessment, will it amount to non-compliance of Section 80IB (13) read with Section 80IA (7).

2. In CIT Vs. Ace Multitaxes System (P) Ltd. [2009] 317 ITR 207 (Karnataka), it was held that when a relief is sought for under Section 80-IB of Act, 1961, there is no obligation on the part of Assessee to file return accompanied by audit report, thereby, holding that same is not mandatory.

3. Same view was taken by Delhi High Court in CIT Vs. Contimeters Electrical (P) Ltd. [2009] 317 ITR 249; by Madras High Court in CIT Vs. Jayant Patel [2001] 248 ITR 199.

4. Supreme Court in Commissioner of Income Tax Vs. G.M. Knitting Industries (P) Ltd. [2015] 376 ITR 456 dismissed appeal of Revenue and confirmed the view taken by Madras High Court holding that filing of audit report and form 1 0CCB along with return is not mandatory.

5. In view of above, we answer question no. 2 in ITA No. 73 of 2010 in favour of Assessee and against Revenue, holding that it is not mandatory and only directory and Assessee cannot be made to suffer if it filed audit report in form 10CCB in the course of assessment proceedings and not alongwith return.