The Pune Bench of Income Tax Appellate Tribunal(ITAT) ruled that the deduction under section 80IA(4) of Income Tax Act,1961 cannot be denied solely due to the delayed filing of Form 10CCB, as the audit report was filed before the return was processed.
Desai Infra Projects Private Limited,appellant-assessee, filed its return on 15.10.2022, reporting a total income of Rs. 6,41,73,900/- after claiming a Rs. 3,42,22,700/- deduction under section 80IA(4)(i). The Centralized Processing Center(CPC) processed the return and issued an intimation under section 143(1), increasing the total income to Rs. 9,83,96,600/- by disallowing the deduction.
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Before the Commissioner of Income Tax(Appeals)[CIT(A)], the assessee argued that due to technical issues with the e-filing portal, it was unable to file Form 10CCB by the extended due date of 07.10.2022 and only submitted it on 31.10.2022. The assessee contended that the tax audit report was filed on time and Unique Document Identification Number(UDIN) was obtained on 07.10.2022.
However, the form could not be assigned to the auditor in time due to portal issues. The assessee relied on previous decisions, claiming the CPC was wrong to reject the deduction claim under section 80IA(4) of the Act.
The CIT(A) dismissed the assessee’s arguments, stating that the delay was due to the assessee’s own actions and not technical issues. Since Form 10CCB was not filed within the prescribed time, the assessee was not eligible for the deduction. The CIT(A) also held that the CPC was correct in making the adjustment under section 143(1)(a)(ii) of the Act.
The assessee appealed to the Tribunal against the CIT(A)’s order.
The two member bench comprising Rama Kanta Panda(Vice President) and Astha Chandra(Judicial Member) reviewed the submissions and the material on record. It noted that the assessee had claimed a deduction of Rs. 3,42,22,760 under section 80IA(4)(i), which was denied by the CPC in the intimation under section 143(1). The CIT(A) had dismissed the appeal, rejecting the assessee’s arguments.
The assessee argued that the CPC lacked the power to deny the deduction and that since the audit report was filed before processing the return, the claim should not have been denied.
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The appellate tribunal agreed, referring to decisions in similar cases, including Natesan Precision Components Pvt. Ltd. and Tarasafe International (P.) Ltd., where it was held that the claim could not be denied if the audit report was filed before the assessment proceedings were completed.
Since the assessee had filed the audit report in Form-10CCB before the processing of the return, the tribunal reversed the CIT(A)’s order and allowed the claim for deduction under section 80IA(4). The appeal was allowed.
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