Deduction u/s 80IC cannot be denied merely on Ground of Non-Submission of Audit Report alongwith Return: ITAT Delhi [Read Order]

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The Delhi Income Tax Appellate Tribunal (ITAT), on Monday ruled that submission of audit report for claiming deduction u/s 80IC of the Income Tax Act, 1961 is merely a matter of procedure and therefore, deduction cannot be disallowed simply because the audit report was not furnished along with return.

In the instant case, the Assessing Officer denied deduction under Section 80IC of the Income Tax Act to the assessee by finding that during the course of assessment proceedings, assessee has not filed any evidence in support of his claim for deduction and/or the report of chartered accountant in form No. 10 CCB.

Assessee admitted the fact that form No. 10 CCB could not be filed in time. However, it was argued that submission of form 10CCB is only a procedural requirement. They contended that the deduction claimed can be allowed even if the form is submitted before the Tribunal since first and second appeals are continuance of assessment proceedings under the Act.

The delay in filing of the return of income was conned on by the Central board of direct taxes by order dated 29/03/2017 and therefore now the assessee is eligible for deduction under section 80 IC of the income tax act.

The division bench relied on the Calcutta High Court’s decision in CIT Vs. Magnum Exports Private Limited wherein the Court held that filing of audit report is purely a matter of procedure and therefore, deduction cannot be disallowed simply because the audit report was not furnished along with return.

Following the High Court decision, the bench allowed the second appeal and remanded the matter back to the assessing officer with a direction to re-consider the claim.

Read the full text of the Order below.

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