JUDGMENT
1. These two appeals are preferred by the Revenue against two separate orders passed by the Tribunal holding that, the assessee is entitled to deduction under Section 10-A of the Income Tax Act (for short hereinafter referred to as 'the Act'), though the report of an accountant as defined in the Explanation to sub-section (2) of Section 288 of the Act was not filed along with the return of income, as it was filed subsequently.
2. The assessee is a Company engaged in Software development. While filing the return of income, the assessee claimed deduction under Section 10-A of the Act. As the said return was not accompanied by Form No.56-F, the relief under Section 10-A of the Act was denied to the assessee. However, the assessee produced the Form No.56F at the appellate stage. The first Appellate Authority having accepted the said Form No.56-F, after giving opportunity to the assessee, granted the benefit under Section 10-A of the Act. Aggrieved by the said order, Revenue preferred an appeal before the Tribunal. The Tribunal was of the view that there is no illegality committed by the first Appellate Authority in extending the benefit and therefore, denied to entertain the appeal. Aggrieved by the said order, the present appeals are filed.
3. These appeals are admitted to consider the following substantial questions of law:
In I.T.A. No. 587/2007
"Whether the Commissioner of Appeals was justified in allowing the appeal on the ground that the Assessing Officer has not looked into Form No. 56(g), when such form was actually not produced by the assessee before the Assessing Officer?"
In I.T.A. No. 232/2008
"Whether the Tribunal was correct in holding that the certificate required u/s.10A(5) of the Act having not been filed along with the return will not disentitle the assessee to claim relief u/s.10A of the Act as the assessee had filed Form No. 56F before the Assessing Officer in assessment proceedings?"
4. This Court in the case of CIT v. Ace Multitaxes Systems (P.) Ltd. [2009] 317 ITR 207 (Kar.) held that, sub-section (7) of Section 80-IA of the Act does not cast any obligation on the assessee that the return must be accompanied by the audit report. It appears to be proper reasoning as to why in all cases it cannot be accompanied by audit report. For meeting the practical difficulties of the assessee, it is not necessary that in all cases, it must be accompanied by the audit report. In fact, the provision on which reliance is placed by the Assessing Authority to deny the benefit is similar under Section 10A(5) also. Therefore, the Appellate-Authorities after referring to three judgments of different High Courts, who have also taken the same view while dealing with the case under Section 10-A itself, has granted the benefit. The proceedings before the first Appellate Authority is continuation of the assessing process and admittedly, this audit report is produced at that stage. Even though it was not produced before the Assessing Authority, the lower Appellate Authority was duty bound to take note of the said audit report and grant benefit, if the assessee is entitled to. That is precisely what the lower Appellate Authority has done.
5. In that view of the matter, the order of the Tribunal, declining to interfere with the order of the Appellate Authority is valid. In view of the same, the substantial questions of law raised in these appeals are answered in favour of the assessee and against the Revenue.
6. Hence, both the appeals are dismissed.
POOJA