ITAT Rules Startups Cannot Be Denied Deduction u/s 80‑IAC for Technical Error; Remits Case for Verification [Read Order]

In a recent ruling The Income Tax Appellate Tribunal (ITAT), Delhi Bench, has clarified that the non‑filing of Form 10CCB is a procedural lapse and cannot by itself justify the denial of a deduction under Section 80‑IAC. Also remitted the matter back to the assessing officer with directions to obtain the form during regular assessment and allow the deduction if the claim is genuine.

The appeal was filed by the appellant, Eradicatus Infectus Pvt. Ltd., challenging the disallowance of its ₹3.56 crore deduction under Section 80‑IAC for AY 2023‑24. The Central Processing Centre (CPC), Bengaluru, had rejected the claim under Section 143(1)(a)(ii), citing non‑submission of Form 10CCB.

The appellant argued that Form 10CCB, as currently notified, does not contain any field for certifying deductions under Section 80‑IAC, making compliance legally impossible. It emphasised that its accounts were duly audited, the tax auditor had certified eligibility in the audit report, and the startup recognition certificate from DPIIT remained valid until 2029.

On the other hand, the revenue relied on the detailed findings of the Ld. CIT(A)

The appellate tribunal observed that the assessee, a recognised startup, had duly audited accounts and was otherwise eligible for deduction under Section 80‑IAC. It was also noted that while Section 80‑IA(7) requires filing of Form 10CCB, courts have consistently held that such filing is directory in nature and not mandatory.

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