LAXMI RICE MILLS Vs. INCOME TAX OFFICER
INCOME TAX APPELLATE TRIBUNAL
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D.S.Meenakshi Sundaram, -
(1.) THIS is an appeal against the order of the Commissioner passed under Section 263 of the Income-tax Act, 1961 ('the Act'), holding that the relief allowed by the ITO to the assessee under Section 80J of the Act was erroneous and prejudicial to the interests of revenue and, therefore, setting aside the assessment for the assessment year 1977-78 and directing the ITO to recompute the income as per law.
(2.) The appellant is a partnership firm carrying on business in running a rice mill at Gadarpur, in the interior of Nainital district. In its assessment for 1977-78, for the previous year ended on 1-10-1976, the appellant had claimed deduction under Section 80J. While completing the assessment, the ITO had allowed a deduction of Rs. 23,034 under Section 80J in the following words :
CLAIM OF SECTION 80J
Full facts have been given in A.Y. 76-77. The assessee has filed the audited report from C.A., Shri R.C. Tandon, Bareilly. The opening balance of partners are as under :
This assessment order was passed by the ITO on 7-12-1979.
The Commissioner, Lucknow, considered this order to be erroneous and prejudicial to the interests of revenue on the ground that the audited accounts and report were not filed along with the return by the assessee as required by Section 80J(6A). He, therefore, called upon the assessee to show cause against his proposed action under Section 263. The assessee submitted its objections in writing and contended that the ITO had rightly allowed the deduction under Section 80J as the assessee had filed audited accounts along with the prescribed report before the assessment was completed. The learned counsel relied on the decision of the Madhya Pradesh High Court in the case of Kamalchand v. ITO  128 ITR 290.
(3.) THE Commissioner rejected the above objections of the appellant as untenable. He held that the provisions contained in Section 80J(6A) were quite lucid and were absolute and that in order to avail the privilege of statutory deduction under Section 80J, there was a statutory obligation on the part of the assessee to get his accounts audited by a chartered accountant and to furnish the report of such audit in the prescribed form duly signed and verified by such accountant along with the return of income. He held that the assessee had erred on this score, since the audited accounts and report were not submitted by the assessee along with its return of income. He distinguished the decision of the Madhya Pradesh High Court in Kamalchand (supra) as inapplicable to the facts of the present case. He, therefore, held that the relief allowed under Section 80J by the ITO was erroneous and prejudicial to the interests of the revenue and, therefore, set aside the assessment for the assessment year 1977-78 with the direction to the ITO to recompute the income as per law. Aggrieved by this order of the Commissioner, the appellant has preferred the present appeal to the Tribunal.;
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