Case Law Details
In the present case, we note that Tribunal has proceeded on the premise that the claim for deduction under Section 80IA of the Act was duly supported by the Chartered Accountant’s Certificate and prescribed forms signed by the Chartered Accountant. For claiming deduction under Section 80IA of the Act, filing of certificate and forms signed by the Chartered Accountant is mandatory and a requirement of law. All returns, where deduction under Section 80IA is claimed, must have such certificates and forms. Mere filing of the said forms/certificate cannot absolve and protect an assessee who furnishes in-accurate particulars. If the explanation and the reasoning of the Tribunal is accepted, then in all cases where a form/certificate is furnished by the Chartered Accountant but a wrong claim of deduction is made, no penalty under Section 271(1)(c) can be imposed. Merely because the assessee complies with the statutory procedural requirement of filing the prescribed form and certificate of the Chartered Accountant, cannot absolve the assessee of its liability if the act or attempt in claiming the deduction was not bonafide.
HIGH COURT OF DELHI AT NEW DELHI
ITA 480/2012, ITA 481/2012
Date of Decision: 29th July, 2013
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Add-on (of much significance):
Going by one’s independent reading and underestandng,the Explanation (immediately below sub-section (13)), first inserted by the FA 2007 but later amended by the FA 2009,albeit both wref 1-4-2000, a given case will squarely come within the mischief thereof, provided aseessee’s claim for tax exemption is in respect of its business “which is in the nature of a works contract awarded by any person….”. Now, the facts and circumstances as narrated in the subject judgment and understood by one, seem to be quite different.
Open to correction. if such an undertstanding is incorrect or misconceived.
Further,as has been observed, –
“14. We also notice that the Tribunal has not dealt with the second reasoning given by the Assessing Officer to make the said addition; that the assessees had not carried out the work but had sub-contracted the same to a third party/parties…..”
It is not known whether the AO’s referred second reasining, but said to have been not gone into by the ITAT,is one well-founded,and duly supported, after calling for and having gone through, in every detail,all the relevant documentation that ought to have been available in the form of related contract agreements, etc., entered into between the concerned parties, governmental approvals,if any,so on.For , after all, whether or not any given arrangement(s) is one covered strictly by the concept of “works contract”, within the meaning of the enactment (the Explanation), is a question of fact to be decided on the strength of such documentation, etc.
May be, this is an aspect, being vital, may come up or be taken up in the possible further proceedings befor the apex court.
REACTION (from a purely academic point of view):
Without having had the benefit of knowing the complete factual matrix, even on a second reading one is not quite clear on the purport or import of a few of the observations; which, in a manner of speaking, are prima facie mutually conflicting. Particularly, the opening observation, which reads: – “It is not the case of the respondent assessee that there were conflicting decisions of High Court or there was a recent decision of the Supreme Court which had escaped attention or was not understood or an appeal or review etc. was pending before the Supreme Court.”
Paragraph 13, if read in the light/context of preceding ones, is seemingly on a glaringly different wavelength.
As understood,the reasoning for the adverse conclusion reached (as spelt out in paragraph 13) is likely to leave anyone with an impression that for proving the ‘bonafide’/discharging the onus, the claim must be one based or founded on, or supported by, any of the situations so said. Howver, it is hoped, coming from a HC, that certainly was not so intended.
Subject to any further judicial elucidation or enlightenment,it might be worthwhile for law experts to throw some helpful light on the merits of/logic behind the view the HC has taken, especially on such a matter which , in the court’s own words, is – ” one of most vexed and complicated legislation”. And that,- “it has been subjected to numerous amendments from time to time. It requires highest degree of interpretative skills and divergent views on interpretation of…”, etc., etc.
In the returns the Assessee obtained help from the professional and to get benefit of deductions there are provisions in the Act to obtained certificate from the Auditors and when the auditor granted certificate then there is no question of allowability of any claim not to treat it bonafide. There are complexity in the laws of deductions where there are opinions and on the basis of which the assessee claimed it and in the proceedings the AO is free to assessee accordingly aplying the law and facts material on record. And the assessee should not be penalize for doing wrong as prudent business man.
The Penalty proceedings is totally a harassment of the assessee and misuse of discretionary power by the assessing authority in most of the cases. The department never benefited