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Facts
The assessee filed its original return of income and a revised return claiming deduction under section 80IA. The deduction was denied as the audit report in Form 10CCB was not filed timely. The CIT(A) upheld the disallowance.
Held
The Tribunal held that the filing of the audit report (Form 10CCB) is a procedural requirement and substantial compliance is sufficient. The assessee had filed the report and the revised return within the prescribed time, and the ratio of the Wipro Ltd. case was not applicable here.
Key Issues
Whether the disallowance of deduction under section 80IA is justified solely on the ground of delayed filing of Form 10CCB, when substantial compliance and subsequent acceptance of the revised return have occurred?
Sections Cited
80IA, 119(2b), 11, 10B, 139(1), 139(4), 142(1), 148, 80P, 250
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, ‘A’ BENCH : BANGALORE
Before: SHRI NARENDER KUMAR CHOUDHRY & SHRI WASEEM AHMED
Date of Hearing : 06-08-2025 Date of : 31-10-2025 Pronouncement ORDER PER NARENDER KUMAR CHOUDHRY, JUDICIAL MEMBER
This appeal has been preferred by the assessee against the order dated 26/03/2025 impugned herein passed by the Ld. Addl./JCIT(A)-1, Hyderabad [in short ‘Ld. Commissioner’] u/s 250 of the Income-tax Act 1961 (in short, ‘the Act’) for the assessment year 2017-18.
2. In the instant case, the Ld. Counsel for the assessee has demonstrated the facts which are not refuted by the Ld. DR, that the Assessee had originally filed its original return of income on 31/10/2017 on or before the last date for filing the return of income which was 07/11/2017 for the AY under consideration, as it appears from the order / intimation dated 19/01/2019 u/s. 143(1) of the Act {Page 37 of the paper book}.
The Assessee subsequently by realizing its mistake filed his revised return of income on 24/03/2018 within the due date, which was processed vide intimation/order dated 19/03/2019, whereby the deduction claimed to the tune of Rs. 23,91,313/- was denied.
Thus, the assessee being aggrieved challenged the said disallowance of deduction claimed by the assessee before the Ld. Commissioner, who vide impugned order affirmed the addition/ disallowance mainly by holding “that filing of audit report in form 10CB is mandatory and the Assessee has failed to adhere to the conditions stipulated for claiming deduction u/s. 80IA of the Act”.
The Assessee being aggrieved has preferred instant appeal.
Having heard the parties and perusing the material available on record and considering the rival submissions of the parties, we observe that it is not the case here that the assessee has not claimed the deduction u/s. 80IA of the Act, while filing its original return of income. It is also a fact that the Assessee subsequently revised its return of income, within the time limit as prescribed for that purpose. It is also a fact the at the time of processing of revised return of income, Form 10CCB was made available before the CPC/Assessing Officer, who somehow without taking into
We observe that the Hon’ble Gujarat High Court in the case of Sarvodaya Charitable Trust vs. ITO (Exemption) (2021) 125 taxmann.com 75 (Guj.) has also dealt with an issue qua filing of form 10B belatedly, however, in that case the Assessee approached the appropriate authority u/s 119(2b) of the Act for condonation of delay in filing of form 10B. The Hon’ble Gujarat High Court thus by considering the identical issue, held as under:
“That in the cases of delay in filing form 10B, the approach of the authorities ought to be equitious, balancing and judicious. Further, availing of exemption should not be denied merely on the bar of limitation, especially when the legislature has conferred wide discretionary powers to condone such delay on the authorities concerned. This Court in CIT Vs. Gujarat Oil and Allied Industries Ltd. (1993) 201 ITR 325 (Guj.) has also held that provision regarding furnishing of audit report with the return has to be treated as a procedural proviso. It is directory in nature and its substantial compliance would suffice. Benefit of exemption should not be denied merely on account of delay in furnishing the same and it is permissible for the Assessee to produce the audit report at a later stage either before the Income Tax Officer or before the Appellate Authority by assigning sufficient cause”.
We further observe that the Hon’ble Gujarat High Court in the case of Commissioner of Income Tax (Exemption) Vs. Laxminarayandev Shikshan Seva Kendra (2024) 167 taxmann.com 548 (Guj.) (10.09.2024) has also dealt with the issue “wherein the form 10B was filed during the course of appellate Commissioner (Appeals), who allowed the benefit of section 11 of the Act to the Assessee” and the Tribunal upheld the said decision of the Ld. Commissioner. The Hon’ble Gujarat High Court by taking cognizance of the fact and the decision in the case Sarvodaya Charitable Trust case (supra) approved the decision of the Tribunal in following the judgment of the Social Securities Scheme of GICEA Vs. Commissioner of Income Tax (Exemption), Ahmedabad dated 21.12.2022 in Special Civil Application No.17612 of 2022 wherein, it has been held as under:
“ Though filing of audit report is mandatory in nature and substantial compliance is required to be made, however, furnishing of audit report along with return filed, is to be treated as a procedural requirement”.
We further observe that the Hon'ble Bombay High Court in the case of Mirae Audit Foundation Vs. Pr. Commissioner of Income Tax-6, Mumbai & Ors. has also taken into consideration the judgment of the Hon'ble Gujarat High Court in the case of Sarvodaya Charitable Trust case (supra) and ultimately condoned the delay of 246 days in filing of Form 10B by holding as under:
"That if delay is not condoned, there will be genuine hardship to the petitioner, in as much as the petitioner would be denied the exemption otherwise claimed under the provisions of section 11 of the Act and which is substantial amount".
The Hon'ble Kerala High Court in the case of Chirakkal Service Co-Op. Bank Ltd. vs. CIT [2016] 68 taxman.com 298 (Ker.) has “That the return filed by the Assessee beyond the period stipulated u/sec. 139(1) or 139(4) or 142(1) or 148 can also be accepted and acted upon provided further proceedings in relation to such assessments are pending in the statutory hierarchy of adjudication in terms of the provisions of Income Tax Act. In all such situations, it cannot be treated that a return filed at any stage of such proceedings could be treated as non-est in law and invalid for the purpose of deciding exemption u/sec. 80P of the Act”.
The spirit of the aforesaid judgements is that even if the assessee made any claim during the appellate proceedings or filed the relevant report at later stage prior to the passing of Assessment order or claimed the deduction by filling bleated return within the time prescribed u/sec. 139(1) or 139(4) or 142(1) or 148, then also the benefit of deduction claimed, cannot be denied.
The Hon'ble Gujarat High Court in the aforesaid case also distinguished the judgment of the Hon'ble Apex Court in the case of Pr. CIT Vs. Wipro Ltd. (2022) 446 ITR (1)(SC), which has been relied on by the then Ld. Commissioner, in approving the decision of the CPC, while rejecting the deduction claimed by the Assessee.
We Also observe that the ratio laid down in the case of Wipro Ltd. (supra) by the Hon'ble Supreme Court, which is relied on by the Ld. Commissioner in denying the claim of deduction, is based on Section 10B of the Act by filing original return of income, was later sought to be foregone by filing a revised Return of Income. And therefore in that situation, as per the provisions of Sub-Section (8) of Section 10B the declaration for opting out was supposed to be filed before the due date for filing of the Return of Income. However, in the instant case, as observed above, the Assessee has claimed the deduction u/s. 80IA of the Act, while filing its original return of income and revised return of income within the time limit. And it is also a fact that at the time of processing of revised return of income, Form 10CCB was made available before the CPC/Assessing Officer. Even otherwise the Hon'ble Apex Court in Wipro case(supra) dealt with Chapter III of the Act– which deals with incomes which do not form part of total income but here in the instant case , the Assessee has claimed the deduction under Chapter VI-A of the Act- which deals with deductions to be made in computing total income. Thus, on the aforesaid reasons, the ratio laid down in Wipro case {supra) would not be applicable to the case in hand.
We reiterate that the assessee throughout the filing of original return of income as well as revised return of income, has claimed the deduction u/s. 80IA of the Act and admittedly the revised return was neither side-lined nor rejected but infact the same was duly processed, which resulted into making the addition/disallowance under consideration and litigation before this Court, thus, we are inclined to allow the claim made by the Assessee by filing original and revised return of income. Thus, the Jurisdictional Assessing Officer, is directed to consider the Form 10CCB as validly filed and verify the claim of deduction made by the Assessee on merit and accordingly allow the same.
Order is pronounced on 31-10-2025, as per rule 34(5) of the Income Tax (Appellate Tribunal) Rules, 1963.