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Facts
The assessee, a start-up company, filed a return of income declaring Nil income after claiming a deduction under section 80IAC. This deduction was disallowed by the Assessing Officer because Form 10CCB was not filed within the prescribed time limit, one month prior to the filing of the return of income.
Held
The Tribunal held that the issue is covered by the Supreme Court's decision in CIT vs. G. M. Knitting Industries Pvt. Ltd., where it was held that if the certificate (Form 10CCB) is filed before the final assessment order, the assessee is entitled to the deduction. The Tribunal noted that the amendment regarding pre-filing of returns was procedural.
Key Issues
Whether the late filing of Form 10CCB, a procedural requirement, disentitles the assessee from claiming the deduction under section 80IAC when it was filed before the final assessment order.
Sections Cited
80IAC, 44AB, 143(3), 80JJAA, 10B, 32(1)(ii-a), 80-IB, 80-IA, 80-1B
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “B” BENCH : BANGALORE
Before: SHRI. LAXMI PRASAD SAHU & SHRI. KESHAV DUBEY
Per Laxmi Prasad Sahu, Accountant Member :
This appeal is filed by the assessee against the Order passed by the CIT(A) vide DIN and Order No.ITBA/APL/S/250/2024-25/1074767849(1) dated 20.03.2025.
Briefly stated the facts of the case are that assessee is a private limited company registered as start up company. It filed return of income on 14.03.2022 declaring Nil income after claiming deduction under section 80IAC of the Act of Rs.2,49,72,917/- which was disallowed while processing return of income. Later on, the case was selected for scrutiny under CASS.
Page 2 of 6 3. Assessee filed appeal before the learned CIT(A) and learned CIT(A) also dismissed the appeal of the assessee observing that assessee did not file Form 10CCB within due date as specified in provisions of income tax Act. As per the mandate of section, assessee had to file Form 10CCB one month prior to filing of return of income. However, the assessee filed Form 10CCB on 07.03.2022 and return of income was filed on 14.03.2022. Accordingly, he dismissed appeal of the assessee.
Aggrieved from the above Order, assessee filed appeal before the Tribunal. The learned Counsel reiterated the submissions made before the lower authorities and submitted that the amendment made to comply with the provision for claiming deduction is procedural in nature and he referred to Finance Bill, 2020, which reads as under:
5. Further, he referred to the memorandum of budget speech and referred to the following:
He further submitted that as per the above memorandum, the amendment has been made for enabling pre filing of return in the case of persons who are claiming deduction under Chapter VI A and this is not mandatory / directory provision and it is procedural in nature and he further submitted that assessee filed Form 10CCB before filing of return of income Page 3 of 6 and the due date was 15.03.2022. Therefore, assessee deserve claiming of deduction and he further submitted that in the case of following Assessment Year the case was selected for scrutiny and AO has allowed deduction, passed Order under section 143(3) of the Act dated 22.03.2023 for the Assessment Year 2023-24 and income has been determined at Nil and allowed deduction u/s 80IAC of the Act. He strongly relied on the judgment of Hon’ble Apex Court in the case of CIT Vs. G. M. Knitting Industries (P.) Ltd., reported in [2016] 71 taxmann.com 35 (SC). He also relied on the judgment in the case of Tarasafe International (P.) Ltd., Vs. Dy. Director of Income Tax, CPC, Bengaluru reported in [2024] 168 taxmann.com 514 (Kolkata – Trib.) and submitted that this case is related to Assessment Year 2023-24 after the amendment in the section, it is with regard to deduction under section 80JJAA of the Act and he referred to para 3 of he judgment and submitted that filing of Form 10DA is procedural in nature and further submitted that regarding filing of audit report prior to one month in the case of deduction under section 80IA, 80IAC or 80JJAA, the provisions are similar and he prayed that the judgment of the Co-ordinate Bench of ITAT, Kolkata, may be applied in the case of the assessee.
On the other hand, learned DR relied on the Order of the lower authorities and submitted that there is amendment by the Finance Act, 2020, and applicable w.e.f. 01.04.2021. Assessee is required to file Form 10CCB prior to one month from the date of filing of return of income. However, in this case, assessee did not comply with the mandatory provision as introduced in the relevant section of the Income Tax Act for claiming deduction.
Considering the rival submissions and on perusal of the entire material available on record and Orders of authorities below, we noted that there is no dispute regarding eligibility for deduction on its income as start up company.
Page 4 of 6 Here the dispute is only regarding non-filing of Form 10CCB within the period specified in section i.e, prior to one month for filing of return of income to make claim of deduction under section 80IAC. We have also gone through the memorandum of speech of the Finance Minister noted supra. It has been stated that “to enable pre-filling of returns in case of persons having income from business or profession, it is required that the tax audit report may be furnished by the said assessee at least one month prior to the due date of filing of return of income. ” This speech of Hon’ble Fm is to facilitate to prefiled the return of income and it has been introduced by the Finance Act, 2020 w.e.f. 10.04.2021 and the provision is applicable to the assessee for the limited Assessment Year. We have also noted the judgment of the Co-ordinate Bench of the Tribunal in the case noted supra. In that case, assessee did not file Form 10DA within due date for Assessment Year 2023-24 but the Co-ordinate Bench has allowed as under:
“2. The short issue involved in this appeal is as to whether the late filing of audit report in Form 10DA would disentitle the assessee from claiming deduction u/s. 80JJAA of the Act, when the said Form 10DA was available to the Ld. AO at the time of assessment proceedings. The assessee in this case filed the Form 10DA on 27.10.2023 as against the due date of 30.09.2023 but, the same was available to the AO at the Itime of processing the return of income as the notice u/s. 143(1)(a) of the Act was issued by the CPC to the assessee on 23.11.2023.
The issue is squarely covered by the decision of Hon'ble Supreme Court in the case of CIT, Maharashtra Vs. G. M. Knitting Industries Pvt. Ltd. [2016]12 SCC 272, wherein the Hon'ble Supreme Court has held that, even though it is necessary to file certificate in Form 10CCB along with the return of income, but even if the same has not been filed with the return of income, but the same was filed before the final order of assessment was made, the assessee was entitled to claim deduction u/s. 80-IB of the Act. 4. so far as the reliance of the ld. DR on the another decision of the Hon'ble Supreme Court in the case of Pr. CIT-III, Bangalore &anr. Vs. M/s. Wipro Ltd. reported in [2022] 446 ITR 1 (SC) is concerned, it is to Page 5 of 6 be observed that the said case is relating to the claim of exemption u/s. 10B falling under Chapter III of the I. T. Act. However, the claim of the assessee in the case in hand is u/s. 80JJAA of the Act under Chapter VIA of the Act. The Hon'ble Supreme Court in para 11 of the judgment in the case of M/s. Wipro Ltd. (supra) has clarified the position that the exemption provisions are to be strictly adhered to whereas the decision of the Hon'ble Supreme Court in the case of G. M. Knitting Industries Pvt. Ltd. (supra) is relating to deduction provisions u/s. VA of the Act the relevant para 11 of the order of the Hon'ble Supreme Court in the case of M/s. Wipro Ltd. (supra) is reproduced below: "11. Now so far as the reliance placed upon the decision of this court in the case of G. M. Knitting Industries Pvt. Ltd. (supra), relied upon by the learned counsel appearing on behalf of the assessee is concerned, section 10B(8) is an exemption provision which cannot be compared with claiming an additional depreciation under section 32(1)(ii-a) of the Act. As per the settled position of law, an assessee claiming exemption has to strictly and literally comply with the exemption provisions. Therefore, the said decision shall not be applicable to the facts of the case on hand, while considering the exemption provisions. Even otherwise, Chapter III and Chapter VIA of the Act operate in different realms and principles of Chapter III, which deals with "income which do not form a part of total income", cannot be equated with mechanism provided for deductions in Chapter VIA, which deals with "deductions to be made in computing total income". Therefore, none of the decisions which are relied upon on behalf of the assessee on interpretation of Chapter VIA shall be applicable while considering the claim under section 10B(8) of the I. T. Act." In view of this, the issue is squarely covered in favour of the assessee by the decision of the Hon'ble Supreme Court in the case of G. M. Knitting Industries Pvt. Ltd. (supra) the impugned order of the Ld. CIT(A) is, therefore, set aside and the AO is directed to grant deduction to the assessee u/s. 80JJAA of the Act as claimed. The appeal of the assessee stands allowed.
In the result, the appeal of the assessee stands allowed.”
Respectfully following the above judgment, we allow appeal of the assessee.