High Court Of Gujarat
Director Of Income Tax (Exemption) vs. Divyajyot Foundation
Section 12(3), 80G(5C)(v), IT Rule 18AAAA
Y.R. Meena, C.J. & J.C. Upadhyaya, J.
Tax Appeal Nos. 249, 251 & 266 of 2008
6th May, 2008
Counsel Appeared :
Mrs. Mauna M. Bhatt & Manish R. Bhatt, for the Appellant : None, for the Respondent
JUDGMENT
By the court :
Heard learned counsel for the appellant.
2. The following common substantial question of law is proposed for admission of these three appeals : “Whether the Tribunal is right in law and on facts in confirming the order passed by the CIT(A) in deleting the addition of Rs. 2,12,35,583 while the assessee has not submitted its accounts in Form No. 10AA on or before 30th June, 2004, to the DGIT(E), New Delhi as required under s. 80G(5C) (v) of the IT Act, 1961 r/w r. 18AAAA of the IT Rules, 1962, whereas s. 12(3) of the IT Act, 1961 specifically mentioned about the accounts, which have not been rendered before the prescribed authority in given time ?”
3. The Tribunal has considered the issue raised in the question as under : “6. I have gone through the decision of the Gujarat High Court in the case of CIT vs. Gujarat Oil & Allied Industries (1993) 109 CTR (Guj) 272 : (1993)
201 ITR 325 (Guj), relied upon by the assessee cited above. In that case, the Hon’ble Court took the view that for claiming deduction under s. 80J, an assessee, a newly established industrial undertaking has to furnish audit report along with the return. In that case, such audit report was not filed along with the return but submitted before the AO, before the completion of assessment. The Court had held that filing of audited report is not mandatory and filing the same before the AO during the assessment proceedings is sufficient compliance with the provisions of the Act. The Court has observed that while considering the assessee’s claim care has to be taken to see that the relevant purpose underlying s. 80J is augmented and fortified and not frustrated by the construction put up on the said provisions. 6.1 In the light of the observations of the High Court cited above, it can be fairly interpreted that the purpose of filing of audit report in Form No. 10AA, the DGIT is to ensure that the amount of donation received for providing relief to the earthquake victims is spent for such purpose. Once, it is found that such purpose has been fulfilled and the assessee has filed Form No. 10AA before the AO, before completion of assessment, it should be treated as sufficient compliance with sub-s. (5C) of s. 80G of the Act. Thus, to sum up, the assessee has fulfilled the condition laid down under the provisions of s. 80G(5C) of the Act and hence, there is no case for invoking s. 12(3) of the Act and bringing to tax the entire receipts or any amount, as the entire donation received was spent within the time allowed under the Act. The AO’s interpretation that the entire receipt is taxable, is also without any rationale and logic. I find no infirmity in the order of CIT(A) who has followed the Hon’ble High Court judgment, which has clearly held that filing of audit report is directory and not mandatory in nature. Filing of audit report for s. 80G or in other statutory compliance assumes character. Respectfully following the aforesaid decisions, we allow the claim of the assessee by dismissing the appeal of the Revenue.
The learned Departmental Representative, however, relied on the order of the AO. We have heard the learned representatives of the parties and perused the record. The facts and circumstances being same and respectfully following the above Tribunal’s order, we dismiss the appeal of the Revenue.” The CIT(A) as well as the Tribunal both found that though the assessee has not submitted its accounts in Form No. 10AA before the prescribed authority in given time, but that does not justify the addition and disallowance of the claim of the assessee. Considering the concurrent findings, we see no merit in these three appeals. All the three appeals stand dismissed at the admission stage.
[Citation : 321 ITR 53]
