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Facts
The assessee, a partnership firm, claimed deduction u/s. 80-IB of the Act. The return was processed u/s. 143(1) and the deduction was disallowed because the Audit Report in Form No. 10CCB was not verified. The assessee contended it was due to a technical glitch in the Department's portal.
Held
The Tribunal held that the disallowance was unsustainable as the Audit Report was uploaded prior to the filing of the return, and the non-verification was due to a technical glitch in the Department's portal, not the assessee's negligence. The matter was restored to the AO for fresh consideration.
Key Issues
Whether disallowance of deduction u/s. 80-IB is justified solely on the grounds of non-verification of Audit Report due to a technical glitch in the Department's portal.
Sections Cited
80-IB, 143(1), 80-IA(7)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “F” BENCH, MUMBAI
O R D E R Per Saktijit Dey, VP:
This is an appeal by the assessee against order dated 10.03.2025 of the first appellate authority for the assessment year (A.Y.) 2022-23.
The dispute between the parties is primarily with regard to disallowance of assessee’s claim of deduction u/s. 80-IB of the Act.
Briefly, the facts are, the assessee, a partnership firm, filed its return of income for the assessment year under dispute on 29.09.2022, declaring income of Rs.2,01,98,930/-, after claiming deduction u/s. 80-IB of the Act, for an amount of Rs.1,75,95,624/-. While processing the return of income u/s. 143(1) of the Act on 03.03.2023, the Centralized Processing Centre (CPC for short) disallowed the deduction claimed u/s. 80-IB of the Act and determined the total income at Rs.3,77,94,560/-. Reason being, the assessee has not verified the Audit Report in Form No. 10CCB. authority. However, by the impugned order, the first appellate authority dismissed the appeal on the reasoning that in terms with section 80-IA(7) r.w.s. 80-IB of the Act, no deduction can be allowed unless the assessee files the Audit Report in Form No. 10CCB, along with the return of income. Accordingly, he upheld the disallowance.
Before us, ld. counsel appearing for the assessee submitted that the Auditor had uploaded the Audit Report in Form No. 10CCB on 28.09.2022, one day prior to the actual date on which return of income was filed. He submitted, however, the assessee was unable to verify the Audit Report in Form No. 10CCB due to some technical glitch in the portal of the Department. In this context, he drew our attention to the grievance raised before the Web Manager, placed at pg. nos. 88 to 99 of the paper book. He submitted, the e-filing Web Manager acknowledged the grievance raised by the assessee vide letter dated 04.11.2022, a copy of which is placed at pg. no. 100 of the paper book. Thus, he submitted, the non-furnishing of verified Audit Report in Form No. 10CCB is not due to any deliberate negligence of the assessee, but due to glitch in system of the Department. He submitted, in several other assessment years, assessee’s claim of deduction u/s. 80-IB of the Act has been accepted by the Department. Therefore, he submitted, there being no fault on the part of the assessee with regard to uploading of Audit Report in Form No. 10CCB, deduction u/s. 80-IB should not have been disallowed on that reason.
The learned Departmental Representative ('ld. DR' for short) relied upon the observations of the first appellate authority.
Undisputedly, the first appellate authority has upheld the disallowance of deduction claimed u/s. 80-IB of the Act, simply for the reason that the Audit Report in Form No. 10CCB was not uploaded/filed along with the return of income on 29.09.2022. However, on perusal of the materials on record, we are convinced that the afore-said reasoning of first appellate authority, is unsustainable. The materials placed before us clearly establish the fact that the Auditor did upload the audit report in Form No. 10CCB, one day prior to the date of filing of the return of income. However, due to some technical glitch in the web portal of the Department, the Form was not visible and the assessee could not verify. It is further revealed from the materials on record that the assessee immediately escalated the issue before the Department by raising grievance. Even, there is an acknowledgement by the e-portal Web Manager on the grievance raised by the assessee.
Keeping in view the aforesaid factual position, we are of the opinion that, in case, there is any delay in filing Form No. 10CCB of the Act, it was not due to any deliberate negligence of the assessee, but on account of deficiency/glitch in the web-portal of the Department. Therefore, assessee’s claim of deduction u/s. 80-IB on such technical ground, cannot be disallowed. More so, considering assessee’s submission that in several other assessment years, assessee’s claim of deduction u/s. 80-IB of the Act has been accepted by the Department.
In view of the aforesaid, we set aside the impugned order of the first appellate authority and restore the dispute to the Assessing Officer for considering assessee’s claim of deduction u/s. 80-IB of the Act de novo and may consider granting such deduction, subject to, fulfilment of conditions. While doing so, ld. A.O. should also bear in mind assessment years. Needless to mention, the assessee must be provided reasonable opportunity of being heard, before deciding the issue.
In the result, the appeal is allowed for statistical purpose.
Order pronounced in the open court on 13.06.2025 Sd/- Sd/- (N. K. Billaiya) (Saktijit Dey) Accountant Member Vice President Mumbai; Dated : 13.06.2025 Roshani, Sr. PS Copy of the Order forwarded to : 1. The Appellant 2. The Respondent 3. The CIT(A) 4. CIT - concerned 5. DR, ITAT, Mumbai 6. Guard File BY ORDER,