Benefit provided under section 10AA if Form No. 56F filed before the assessment was completed
The ITAT bench of Delhi has held that the assessee cannot be deprived of the benefit provided under section 10AA where the Form 56F was filed before the assessment was completed. In this context the assessee relied on the judgment of Hon’ble Delhi High Court in CIT Vs. Contimeters Electrical (P) Ltd. (2009) 317 ITR 249 (Del.) and submitted that the said judgment has been relied again by Hon’ble Delhi High Court in CIT Vs. Axis Computers (India) (P) Ltd. (2009) 178 Taxman 143 (Delhi), to hold that as long as compliance is made before the framing of the assessment, the mandate of law shall be considered to be complied and as such the mandate is directory and not mandatory.
It has commonly seen that in such type of case the department has relied on the decision of the Hon’ble Supreme Court in the case of Wipro Limited where it was held that section 10B of the Act is an “exemption provision” and hence, assessee claiming such exemption has to be “strictly” comply with the exemption provisions.
However, it is worth noting that Section 10B has two compliance requirements, one in Section 10B(5) and the other in Section 10B(8), and that decision is related to Section 10B(8), whereas Section 10AA has only one compliance requirement, which is similar to Section 10B(5).
Further it notably that the Hon’ble Supreme Court in the case of CIT v. Yokogawa India Ltd 391 ITR 274 (Supreme Court), held that section 10A of the Act is a “deduction provision” and not an “exemption provision”.
Therefore, apparently there seems to be a difference of opinion to whether section 10A/B provisions qualify as “Exemption” or Deduction” provisions. Therefore, since it is well-settled principle of law that deduction provisions, which have been introduced in the Statute to provide incentive to the assessee, should be construed “liberally”, hence, once it is not disputed that the instant set of facts, the assessee claimed the benefit of provisions under section 10AA in the return of income (which in our view is a mandatory/directory requirement), the benefit of section 10AA cannot be denied only on the ground that the assessee could not file Form 56F along with the return of income (being a procedural requirement), especially when Form 56F has been filed by the assessee at the assessment stage when such claim was being considered by the Assessing Officer.
The case detail is as under:
Din Engineering Services LLP v. PCIT (ITAT Delhi)