DCIT-CIRCLE 1(1), PUNE, SWARGATE PUNE vs. ANSEC HUMAN RESOURCE SERVICES LIMITED , PUNE

Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) erred in allowing the appeal of the assessee on the issue of deduction under section 80JJAA of the Act without considering the fact that the assessee was failed to submit a complete form No. 10DA in prescribed Proforma.

Whether on the facts and the circumstances of the case and in law, the Ld. CIT(A) erred in allowing the deduction under section 80JJAA of the Act, without considering the fact that the assessee had sufficient time to revise its incomplete report in form No 10DA.

The appellant craves to add, amend, alter or delete any of the above ground of appeal during the course of appellate proceedings before the Hon'ble Tribunal.”

Briefly stated the facts are that the assessee is a company engaged in the operations comprising of physical guarding, QRT services, electronic security, specialized IT guarding services, intelligence and investigation services, security survey and audit, VIP security etc. For AY 2018-19, the assessee e- filed its return of income on 30.10.2018 declaring total income at Rs.8,07,14,950/- after claiming deduction u/s 80JJAA of the Income Tax Act, 1961 (the “Act”) of Rs.2,07,12,896/-. The case of the assessee was selected for limited scrutiny through CASS for verification of “deduction from total income under chapter VI-A”. During the assessment proceedings, on verification of Form No. 10DA uploaded by the assessee on 16.08.2018 on the e-filing portal for the claim of deduction u/s 80JJAA of the Act, the Ld. Assessing Officer (“AO”) found that particulars in the column No. 5 was not filled up completely by the assessee. Accordingly, notice u/s 142(1) of the Act dated 10.12.2020 was issued and served upon the assessee requesting the assessee to file details/information with complete supporting documentary evidence in respect of the claim of deduction u/s 80JJAA of the Act for the reason that the audit report in Form No. 10DA r.w. Rule 19AB of the Income Tax Rules, 1962 (the “Rules”) dated 16.08.2018 is not complete. In response thereto, the assessee vide letter dated 24.12.2020 submitted that “the company has filed form 10DA alongwith audit report on 30.10.2018. Due to internal technical error in income tax website form 10DA is not uploaded property even form is filled properly. For your reference attaching form 100A preview version which is downloaded from income tax website only at the time of filling of form 100A Therefore, requesting you to please accept our filed form 100A and any details required from our end we will share it immediately”. The submission of the assessee was considered but not found acceptable by the Ld. AO for the following reasons : (i) since Form No. 10DA (i.e. from Column No. 5(c) to 5(e) and column (a) in case of new business) was not filed by the assessee while uploading the same on the e-filing portal and (ii) as per the e-filing portal, the assessee has uploaded Form No.10DA read with Rule 19AB of the Rules on 16.08.2018 as claimed by the assessee. However, the extended due date for filing income tax return and Audit Report was 30.10.2018 and hence there was more than sufficient time available with the assessee to revise its incomplete report in Form No. 10DA even if there was an internal technical error in the income tax website on uploading. The Ld. AO, therefore, disallowed the deduction claimed u/s 80JJAA of the Act amounting to Rs.2,07,12,896/- for want of requisite report in Form No. 10DA vide his order dated 05.03.2021 passed u/s 143(3) r.w.s. 143(3A) and 143(3B) of the Act.

Aggrieved, the assessee filed an appeal before the Ld. CIT(A)/NFAC. Before the Ld. CIT(A)/NFAC, the assessee contended that the Ld. AO has disallowed the assessee’s claim of deduction for non-display of certain column of Form No. 10DA on Income Tax server. The Ld. AO while passing the order u/s 143(3) of the Act overlooked the facts and documents which confirmed the eligibility of assessee’s claim of deduction. The Ld. AO has overlooked the preview version of Form No. 10DA during the course of assessment proceedings which was filed by the assessee during the course of assessment proceedings vide submission dated 25.12.2012. Disallowance has been made on the basis of technical error on the Income Tax server, overlooking the draft Form No. 10DA and especially not on the basis of verification of facts and eligibility of the assessee to claim deduction u/s 80JJAA of the Act. After considering the above submissions, the Ld. CIT(A)/NFAC allowed the appeal of the assessee by observing as under : “4. Observation and Decision:

Portal Migration Issue:

Non-Applicability of Disallowance:

08.2018 with acknowledgment number 118672441160818 So, the contention of the appellant was genuine. Hence, me of the appeal is allowed.”

Dissatisfied, the assessee is in appeal before the Tribunal and all the grounds of appeal relate thereto.

The Ld. DR supported the order of the Ld. AO. He submitted that since the Ld. AO has not verified all the facts pertaining to the assessee’s eligibility to claim deduction u/s 80JJAA of the Act due to non-display of Form No. 10DA on account of transition of the Income Tax website to the new portal and only draft Form No. 10DA was available with the Ld. AO, the impugned issue may be set aside to the file of the Ld. AO to verify the assessee’s claim of deduction u/s 80JJAA of the Act in light of the complete Form No. 10DA and allow the assessee’s claim of deduction as a result of such verification thereof in accordance with law.

The Ld. AR, on the other hand, supported the order of Ld. CIT(A)/NFAC and reiterated the submission made before the Ld. CIT(A)/NFAC. The Ld. AR, however fairly conceded with the request of the Ld. DR for setting aside the issue for limited purpose of verification of the assessee’s claim of deduction u/s 80JJAA of the Act and allow the said claim of the assessee as a result of such verification thereof in accordance with law after giving an opportunity of hearing to the assessee.

We have heard the Ld. Representatives of the parties and perused the material available on record as well as the paper book filed by the Ld. AR on behalf of the assessee. The facts of the case are not in dispute. The fact on record reveals that Form No. 10DA r.w. Rule 19AB was duly filed by the assessee on 16.08.2018 (pages 10 to 12 of the paper book refers) for claiming deduction u/s 80JJAA of the Act. At the time of assessment the draft Form No. 10DA was submitted as the filed form was not visible due to the migration of the Income Tax website to the new portal. Once, the migration was completed Form No. 10DA became visible along with the acknowledgement in new Income Tax portal. It is the submission of the Ld. Counsel for the assessee that it was on account of the transition period that Form No. 10DA was temporarily invisible which might have led to the confusion in the mind of the Ld. AO and resulted in consequent disallowance. The complete Form 10DA is now visible on the portal. The assessee has thus fully complied with the relevant provisions of section 80JJAA of the Act and no errors or omission exist

In the result, the appeal of the Revenue is allowed for statistical purpose.

अपील र्थी / The Appellant. 2. प्रत्यर्थी / The Respondent. 3. The Pr. CIT concerned. 4. दिभ गीय प्रदिदनदि, आयकर अपीलीय अदिकरण, “ए” बेंच, पुणे / DR, ITAT, “A” Bench, Pune. 5. ग र्ड फ़ इल / Guard File. //सत्य दपि प्रदि//// आिेश नुस र / BY ORDER,