AO rejects Deduction u/s 10AA due to Delaying filing Form 56F: ITAT rules Forms are Directory, cannot take away Rights [Read Order]
The requirement of filing Form 56F, though necessary for verification, is directory in nature and not mandatory in the strict sense, said the tribunal
The Income Tax Appellate Tribunal ( ITAT ) Ahmedabad bench has dismissed the Revenue’s appeal against the allowance of deduction under Section 10AA of the Income-tax Act, 1961 which was rejected due to delay in filing Form 56F.
The Assessing Officer (AO), while processing the assessee’s return under Section 143(1), disallowed the claim of deduction of ₹4.82 crore under Section 10AA on the sole ground that the assessee failed to file the prescribed Form 56F within the stipulated timeline.
Your Ultimate Guide to India’s Latest Income Tax Laws - Click here
The assessee, Meghmani Limited Liability Partnership explained before the Commissioner of Income Tax (Appeals) [CIT(A)] that it had made several genuine attempts to upload Form 56F on the Department’s portal but faced persistent technical glitches. Screenshots showing failed uploads on 25.01.2024, 26.03.2024, and 09.04.2024 were furnished.
Eventually, the assessee successfully uploaded the form on 17.09.2024, prior to the appellate hearing. The CIT(A), noting that the assessee had consistently filed the form in earlier years and that the delay was due to technical errors beyond its control, directed the AO to verify the form and allow the deduction.
On appeal, the Revenue argued that the statutory form was not filed within the prescribed time, and therefore the deduction under Section 10AA was rightly disallowed. The Tribunal, however, upheld the CIT(A)’s decision.
The Bench observed that the requirement of filing Form 56F, though necessary for verification, is directory in nature and not mandatory in the strict sense. It was noted that in the present case, the delay was not attributable to the assessee, but to systemic faults in the Department’s portal, as evidenced by multiple failed attempts.
Therefore, the assessee could not be penalised for a lapse outside its control. Once the form was filed before the appellate proceedings commenced, the claim was validly substantiated.
Accordingly, the Tribunal dismissed the Revenue’s appeal and confirmed that substantive rights under Section 10AA cannot be taken away for mere procedural lapses, particularly when caused by departmental technical issues.
Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
