While quashing a re-assessment order section 148 of the Income Tax Act, 1961 a division bench of the Delhi High Court held that mere failure to enclose working sheet of deduction along with certificate of CA in form 56F under Section 10AA of the Income Tax Act cannot be a reason to re-open assessment.
Petitioner-Company, HCL Technologies Ltd, is engaged in the business of development and export of computer software and rendering ITES services. While filing returns for the assessment year under consideration, it claimed deduction under Section 10A of the Act along with a certificate issued by a Chartered Accountant in Form 56F. Subsequently, it revised the return and claimed deduction under Section 80HHE of the Income Tax Act. The claims were accepted by the Assessing Officer.
The assessment was re-opened by the Assessee for the reason that along with the certificate in Form 56F, which was the certificate of the CA, the working sheet of deduction was not enclosed.
Quashing the order, a bench of Justice S. Muralidhar and Justice Prathibha M Singh said that enclosing the working sheet of deduction was not a requirement of law. “What Form 56F has to be accompanied with is specified under the Income Tax Rules itself. The mere fact that the working sheet may not have been enclosed does not amount to a failure by the Assessee to make a full and true disclosure of all material facts. Consequently, the Court is satisfied that the second reason for re-opening is also unsustainable in law.”
Read the full text of the Order below.
