Report of Accountant to be filed along with the return – Condition is directory and not mandatory – The report should however be filed before the order of assessment is made.

Additional depreciation u/s. 32(1)(iia) had been denied to the assessee on the ground that the assessee had failed to furnish form 3AA along with the return of income. The Tribunal allowed additional depreciation as claimed by the assessee. The High Court noted that the Form 3AA was submitted during the course of assessment proceedings and that it was not in dispute that the assessee was entitled to the additional depreciation. The High Court dismissed the appeal of the Revenue in the light of its judgment in CIT vs. Shivanand Electronics (1994) 209 ITR 63 (Bom). On further appeal by the Revenue, the Supreme Court dismissed the appeal concurring with the view of the High Court and holding that even if Form 3AA was not filed along with the return of income but same was filed during the assessment proceedings and before the final order of the assessment was made, that would amount to sufficient compliance.

Note: The above were the facts in G.M. Knitting Industries (P) Ltd.

The facts in AKS Alloys (P) Ltd. were as under:

The Appellant was engaged in the business of manufacture of steel ingots. In respect of the assessment year 2005-06, assessment order dated December 26, 2007, was passed u/s. 143(3) of the Act, in which, the Assessing Officer disallowed the claim of the assessee made u/s. 80-IB of the Act on the ground that for the purpose of claiming deduction, the assessee did not file necessary certificate in Form 10CCB along with the return of income.

The first Appellate authority allowed the appeal, thereby granting the claim of the assessee made u/s. 80-IB of the Act. The Appellate Tribunal, dismissed the appeal of the Revenue. On further appeal the Supreme Court held that the substantial question of law namely, whether the filing of audit report in Form 10CCB is mandatory, was well settled by a number of judicial precedents that before the assessment is completed, the declaration could be filed.

The Supreme Court disposed of both the matters by a common order.