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Facts
The assessee, a startup company, claimed a deduction under section 80-IAC for AY 2024-25. The audit report in Form 10CCB was filed on the same day as the return of income, which was a delay of approximately 30 days from the prescribed due date. The CPC disallowed the deduction under section 143(1) due to this delay.
Held
The Tribunal held that the filing of Form 10CCB is a procedural requirement, and a delay in filing does not defeat the substantive benefit of deduction under section 80-IAC, especially when the eligibility conditions are otherwise met. The Tribunal relied on various judicial precedents where similar procedural delays were not considered fatal.
Key Issues
Whether a delay in filing the audit report in Form 10CCB can lead to the disallowance of a deduction under section 80-IAC, particularly when the return was processed under section 143(1).
Sections Cited
80-IAC, 143(1), 139(1), 11(2)
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Income Tax Appellate Tribunal, “A” BENCH, AHMEDABAD
Before: SHRI SIDDHARTHA NAUTIYAL & SHRI NARENDRA PRASAD SINHA
(Assessment Year: 2024-25) Swarnimtouch Solutions Pvt. Ltd., Vs. Income Tax Officer, A-906, Dev Aurum, Anand Nagar Ward-4(1)(1), Cross Road, Ahmedabad-380015 Ahmedabad [PAN No.AAYCS2087G] (Appellant) .. (Respondent) Appellant by : Shri Hardik Vora, AR Respondent by: Shri C Dharani Nath, Sr. DR 09.03.2026 Date of Hearing Date of Pronouncement 12.03.2026 O R D E R
PER SIDDHARTHA NAUTIYAL - JUDICIAL MEMBER:
This appeal has been filed by the Assessee against the order passed by the Ld. Commissioner of Income Tax (Appeals), (in short “Ld. CIT(A)”), ADDL/JCIT(A)-2, Pune vide order dated 29.10.2025 passed for A.Y. 2024- 25.
The assessee has taken the following grounds of appeal:
“1. On the facts and circumstances of the cased as well as law on the subject, the Ld. CIT(A) has erred in confirming the disallowance of Rs.55,10,800/- under section 80-IAC on the ground of delayed filing of Form 10CCB, without appreciating that the audit report was filed on the same day as the return of income and all substantive conditions were duly fulfilled.
2. On the facts and circumstances of the case as well as law on the subject, the Ld. CIT(A) has grossly in confirming the adjustment under section 143(1), which the limited jurisdiction contemplated under the I said provision by applying it to a disputed arid debatable issue, instead of confining it to prima facie errors apparent from the return of income. Swarnimtouch Solutions Pvt. Ltd. vs. ITO Asst. Year –2024-25 - 2– 3. On the facts and circumstances of the case as well as law on the subject, the Ld. CIT(A) has erred in upholding the disallowance on the ground of non-filling or delayed filing of Form 10CCB, overlooking the fact that such filling is a procedural requirement and not a substantive condition for claiming deduction under section 80- IAC.
4. On the facts and circumstances of the case as well as law on the subject, the Ld. CIT(A) has erred in disregarding the fact that the delay in filling form 10CCB was neither deliberate nor intended to evade compliance, but occurred due to an inadvertent and bona fide oversight on the part of the company's directors.
On the and circumstances of the case as well as law on the subject, the Ld. CIT(A) has erred in treating the filling of form 10CCB as a mere procedural formality, thereby defeating the beneficial provisions intended to encourage eligible startups and promote innovation.
It is therefore prayed that I procedural should not defeat genuine claims, especially when no prejudice is caused to the revenue.
7. It is prayed that order passed by the Ld. CIT(A) may please be quashed.
8. Appellant craves leave to add, alter or delete any ground(s) either before or in the course of hearing of the appeal.”
The brief facts of the case are that the assessee is a private limited company incorporated as a startup under the provisions of the Companies Act, 2013. For the Assessment Year 2024-25, the assessee filed its return of income on 15.11.2024 declaring total income of ₹79,130/- after claiming deduction of ₹55,10,805/- under section 80-IAC of the Income Tax Act, 1961 ("the Act"). The return of income was processed by the Centralized Processing Centre (CPC), Bangalore under section 143(1) of the Act vide intimation dated 02.06.2025. While processing the return, the CPC disallowed the deduction of ₹55,10,805/- claimed under section 80-IAC of the Act on the ground that the audit report in Form No. 10CCB had not been furnished within the time prescribed under the provisions of the Act, namely one month prior to the due date of filing the return of income under section 139(1). Consequently, the total income of the assessee was determined at Swarnimtouch Solutions Pvt. Ltd. vs. ITO Asst. Year –2024-25 - 3– ₹55,89,830/- as against the returned income of ₹79,130/- and the refund claimed by the assessee was correspondingly reduced.
Aggrieved by the intimation issued under section 143(1) of the Act, the assessee preferred an appeal before the Commissioner of Income Tax (Appeals). Before the learned CIT(Appeals), the assessee submitted that the audit report in Form No. 10CCB had been filed electronically on 15.11.2024 along with the return of income and the delay of about 30 days in filing the audit report had occurred due to a bona fide misunderstanding of the procedural compliance requirement, especially because this was the first year in which the assessee had claimed deduction under section 80-IAC of the Act. The assessee also contended that the disallowance of deduction at the stage of processing of return under section 143(1) of the Act involved a debatable issue of law which could not be subject matter of prima facie adjustment.
5. The learned CIT(Appeals), however, did not accept the contentions of the assessee. While adjudicating Ground Nos. 1 and 4 relating to denial of deduction under section 80-IAC, the learned CIT(Appeals) observed that although the assessee had filed the return of income and Form No. 10CCB on 15.11.2024, the statutory requirement was that the audit report in Form No. 10CCB should have been furnished one month prior to the due date of filing the return of income. Since the assessee had failed to comply with the said requirement, the learned CIT(Appeals) held that the action of the CPC in denying the deduction claimed under section 80-IAC was in accordance with law and accordingly dismissed the grounds raised
by the assessee. Accordingly, the appeal of the assessee was dismissed. Swarnimtouch Solutions Pvt. Ltd. vs. ITO Asst. Year –2024-25 - 4–
6. The assessee is in appeal before us against the order passed by CIT(Appeals) dismissing the appeal of the assessee.
We have carefully considered the rival submissions and perused the material available on record. The core issue involved in the present appeal relates to the disallowance of deduction of ₹55,10,805/- claimed by the assessee under section 80-IAC of the Act at the stage of processing of return under section 143(1) of the Act on the ground that the audit report in Form No. 10CCB was filed belatedly.
In the present case, the audit report in Form No. 10CCB was admittedly filed by the assessee along with the return of income on 15.11.2024 before the issuance of intimation under section 143(1) of the Act. The delay in filing the said report was explained to be due to a bona fide misunderstanding regarding procedural compliance requirements.
We find that the issue whether delay in filing prescribed forms can result in denial of substantive benefits has been considered in several judicial pronouncements.
The Kolkata Bench of the Tribunal in Gram Vikas Trust vs. Income- tax Officer (Exemption) [2025] 175 taxmann.com 644 (Kolkata - Trib.) dated 12-06-2025 held that filing of Form No. 10 is a procedural requirement and delay in filing such form cannot lead to denial of exemption under section 11(2) of the Act. The Tribunal further held that such claim could not be disallowed through intimation issued under section 143(1) merely on account of delay in filing the prescribed form. Swarnimtouch Solutions Pvt. Ltd. vs. ITO Asst. Year –2024-25 - 5– 11. Similarly, the Mumbai Bench of the Tribunal in Income-tax Officer (Exemption) vs. Seth Damji Laxmichand Jain Dharma Sthanak [2025] 179 taxmann.com 574 (Mumbai - Trib.) / [2025] 215 ITD 415 (Mumbai - Trib.) dated 17-10-2025 held that where Form No. 10/10B was submitted before completion of assessment proceedings, delay in filing the said form was only a procedural irregularity and could not be treated as a fatal defect for denying exemption.
The Pune Bench of the Tribunal in Bible Fellowship Centre Wagholi vs. Income Tax Officer [2025] 180 taxmann.com 136 (Pune - Trib.) dated 31-10-2025 also held that delay in filing audit report in Form No. 10B is directory in nature and such report can even be furnished at the appellate stage. Therefore, denial of exemption merely on the ground of delay in filing the audit report was held to be unjustified.
Further, the Delhi Bench of the Tribunal in Puran Chand Arora Charitable Trust vs. Income-tax Officer, Exemption [2025] 172 taxmann.com 161 (Delhi - Trib.) / [2025] 211 ITD 678 (Delhi - Trib.) dated 22-01-2025 held that where audit report in Form No. 10B was filed belatedly but before completion of proceedings under section 143(1) of the Act, the lapse was merely procedural and exemption could not be denied.
Further, the Ahmedabad Bench of the Tribunal in Shiksha Foundation vs. Income Tax Officer (Exemption) [2024] 164 taxmann.com 757 (Ahmedabad - Trib.) dated 14-06-2024 held that where the audit report in Form No. 10B was submitted before the issuance of intimation under section 143(1) of the Act, the claim of exemption could not Swarnimtouch Solutions Pvt. Ltd. vs. ITO Asst. Year –2024-25 - 6– be denied merely because the report was not filed along with the return of income.
The ratio laid down in the aforesaid decisions in our considered view establishes the principle that filing of prescribed forms or audit reports is essentially a procedural requirement and delay in filing such documents cannot defeat the substantive entitlement of the assessee when the eligibility conditions are otherwise satisfied.
In the present case also, it is not the case of the Revenue that the assessee is not otherwise eligible for deduction under section 80-IAC of the Act. The disallowance has been made merely on account of delay in filing Form No. 10CCB. Considering the judicial precedents referred to above and the fact that the audit report was filed before the issuance of intimation under section 143(1) of the Act, we are of the considered view that the deduction claimed by the assessee cannot be denied on such technical grounds.