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Facts
The assessee claimed deduction under Section 80JJAA and TDS credit. The CPC initially disallowed the deduction and did not grant full TDS credit. After rectification, the deduction was allowed, but TDS credit remained an issue. The Addl. CIT(A) confirmed the disallowance.
Held
The Tribunal held that the assessee complied with the requirement for Section 80JJAA deduction as Form 10DA was filed within the extended due date. Regarding TDS credit, the Tribunal found merit in the assessee's submission concerning demerged entities and directed the AO to verify and allow the credit.
Key Issues
Whether the assessee is eligible for deduction under Section 80JJAA when Form 10DA was filed within the extended due date, and whether TDS credit should be allowed for demerged entities.
Sections Cited
80JJAA, 143(1), 154
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Income Tax Appellate Tribunal, ‘A’ BENCH: CHENNAI
Before: SHRI ABY T. VARKEY & SHRI JAGADISH
आदेश / O R D E R
PER JAGADISH, A.M : Aforesaid appeal filed by the assessee for Assessment Year (AY) 2023-24 arises out of the order of Learned Addl /Jt. Commissioner of Income Tax, Appeal, Addl. JCIT(A)-1, Mumbai [hereinafter “Addl. CIT(A)”] dated 16.12.2024 in the matter of intimation issued by the CPC, Bengaluru [CPC] u/s.143(1) of the Income-tax Act, 1961 (hereinafter “the Act”) dated 22.12.2023.
The effective grounds of appeal in this appeal are against the disallowance of deduction claimed u/s. 80JJAA of the Act, and non- grant of full TDS credit as claimed in the return of income, in the order passed under section 154 r.w.s. 143(1) of the Act.
The assessee-company has filed its return of income declaring total income of Rs. 7,89,76,180/-. The CPC vide intimation u/s. 143(1)
of the Act had disallowed the deduction u/s. 80JJAA of the Act of Rs.2,20,62,033/-. The assessee filed rectification petition u/s. 154 of the Act and the CPC allowed deduction u/s. 80JJAA of the Act, but not granted full TDS credit of Rs. 2,35,12,376/- against the claim of Rs.7,34,51,948/-. Aggrieved by the 143(1) adjustments, the assessee filed an appeal before the Ld. Addl. CIT(A), who confirmed the disallowance u/s. 80JJAA of the Act made in the intimation u/s. 143(1) of the Act stating that the assessee has filed Form-10DA on 31.10.2023 which should have been filed one month before filing of the return.
The Ld. Authorized Representative (A.R) has submitted that the return of income along with Form 10DA was filed on 31.10.2023 and the extended due date for filing the return was 30.11.2023. Therefore, Form 10DA was filed one month prior to the due date, and the Ld. Addl. CIT(A) was not justified in confirming the disallowance. It was further submitted that the CPC, in its order passed u/s. 154 of the Act, had itself allowed the deduction u/s. 80JJAA of the Act. The Ld. A.R. also submitted that the CPC failed to grant TDS credit in the name of M/s. KG Information Systems Pvt. Ltd., from which the assessee- company was demerged, and the corresponding income was offered to tax by the assessee.
The Ld. Departmental Representative (DR), has relied on the orders of lower authorities.
We have heard the rival submissions, and perused the materials available on record. The assessee filed its return of income on 31.10.2023 and claimed deduction u/s. 80JJAA of the Act amounting to Rs. 2,20,62,033/- by filing Form 10DA along with the return. The Ld. Addl. CIT(A) denied the deduction stating that Form 10DA was not filed at least one month before the date of filing the return. We find that the extended due date for filing the return by the assessee was 30.11.2023, and Form 10DA was filed on 31.10.2023, which was one month prior to the due date. Therefore, the assessee has complied with the requirement u/s 80JJAA(2)(c) of the Act and is eligible for the deduction u/s. 80JJAA of the Act. Moreover, the CPC has already allowed the claim in the rectification order passed u/s. 154 of the Act.
In view of the above, the AO is directed to delete the disallowance confirmed by the Ld. Addl. CIT(A).
With regard to the TDS claim, the assessee submitted that M/s.
KG Information Systems Pvt. Ltd. has demerged into two companies i.e., KGISL Technologies Pvt. Ltd. and KG Invicta Services Pvt. Ltd., as per the order of the Hon’ble NCLT, Chennai, with effect from 01.10.2021. The business receipts of both companies were invoiced and received in the name of the erstwhile KG Information Systems Pvt. Ltd., and accordingly, TDS was also deducted in its name. However, the said company has not claimed the TDS pertaining to the demerged entities and the corresponding income has been offered to tax in the return of the demerged entities, the Ld. AR therefore prayed that the TDS credit should be allowed in the hands of assessee corresponding to the income. We find merit in the submissions of the Ld. A.R. and direct the A.O to verify the claim and allow the TDS credit in accordance with law.
In the result, the appeal filed by the assessee is partly allowed.
Order pronounced on 30th day of July, 2025 at Chennai.