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Facts
The assessee claimed a deduction under Section 80JJAA, uploading Form 10DA before the extended due date for filing the return. However, the acceptance/verification of Form 10DA on the portal by the assessee occurred after the due date, leading the CPC to disallow the deduction during processing under Section 143(1) on grounds of belated filing. The CIT(A) upheld this disallowance.
Held
The Tribunal, relying on a coordinate bench decision, held that the filing of Form 10DA is directory and procedural, not mandatory, as it was available on record before the return processing. It distinguished the Supreme Court's decision in Wipro Ltd. (which concerned exemption under Section 10B) from the present case involving a deduction under Chapter VIA (Section 80JJAA). Consequently, the deduction under Section 80JJAA was directed to be allowed.
Key Issues
Whether a deduction under Section 80JJAA can be disallowed if Form 10DA, though uploaded on time, is accepted/verified on the portal after the due date but before the return is processed, and if the requirement for filing Form 10DA is mandatory or directory.
Sections Cited
143(1), 80JJAA, 139(1), Rule 19AB (IT Rules, 1962), 143(1)(a), 10B(8), 10B, 32(1)(ii-a), 80-IB
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Income Tax Appellate Tribunal, PUNE BENCH “A”, PUNE
Before: SHRI R. K. PANDA & SHRI VINAY BHAMORE
ORDER PER VINAY BHAMORE, JM: Both the above captioned appeals filed by the assessee are directed against the separate orders dated 28.02.2025 passed by Ld. Addl./JCIT(A)-1, Surat [‘Ld. CIT(A)’] for the assessment years 2022-23 and 2023-24 respectively. 2. Since identical facts and common issues are involved in both the above captioned appeals of the assessee, therefore, we proceed to dispose of the same by this common order.
2022-23 as the lead case for adjudication.
A.Y. 2022-23 : 4. The appellant has raised the following grounds of appeal :-
1. The Hon'ble CIT(A) has erred both in law and in facts in upholding the disallowance made in the intimation under Section 143(1) of the Income-tax Act, 1961, by the Centralized Processing Centre (CPC) in respect of the deduction of Rs.49,40,441/- claimed under Section 80JJAA. The said disallowance has been sustained despite the fact that Form I0DA, duly certified by a Chartered Accountant, was uploaded on the Income Tax Portal on October 21, 2022, and was accepted by the appellant on January 9. 2023, well before the return was processed on March 16, 2023, under Section 143(1). Hence, as the said Form 10DA was available on record, there was no reason to deny the deduction claimed u/s. 80JJAA.
2. The Hon'ble CIT(A) failed to appreciate that the CPC did not have the jurisdiction to disallow such a claim of deduction u/s 80JJAA in the intimation u/s 143(1) on the ground that there was a delay in accepting the filed Form 10DA and hence, the disallowance made of the deduction u/s 80JJAA is not justified.
3. The Hon'ble CIT(A) erred in not appreciating that the disallowance of deduction u/s 80JJAA on account of delay in accepting Form 10DA by the assessee was not covered by any of the sub clauses (i) to (vi) of clause(a) of section 143(1) and the disallowance made of the deduction claimed u/s 80JJAA was not justified and the same may kindly be deleted.
4. The appellant craves to leave, add/amend or alter any of the above grounds of appeal.”
5. Facts of the case, in brief, are that the assessee company filed its return of income for assessment year 2022-23 on 21.10.2022 i.e. before the extended due date which was 07.11.2022, declaring total income of Rs.41,07,12,720/- after claiming deduction u/s 80JJAA & 1112/PUN/2025 of the IT Act amounting to Rs.49,40,441/-. The assessee company also uploaded the audit report in Form 10DA on 21.10.2022, however the same was accepted/ verified on the portal by the assessee on 09-01-2023. The return was processed on 16.03.2023 by the Assessing Officer, CPC, disallowing the deduction claimed u/s 80JJAA on the ground of belated filing of the audit report in Form No.10DA, which was not submitted before the prescribed due date of 07.11.2022.
By relying on the judgement of Hon’ble Apex Court, passed in the case of PCIT vs. M/s Wipro Ltd, Civil Appeal No.1449 of 2022 order dated 11.07.2022, Ld. CIT(A) dismissed the appeal filed by the assessee by observing as under :- “5.1 I have carefully gone through the grounds of appeal raised by the appellant, submission of the appellant and intimation Order passed by the CPC u/s. 143(1). The sole ground for filing the appeal is that the AO CPC didn’t allow deduction claimed under section 80JJA for delay in filing of Audit Report in Form 10B. In the instant case, though the form was uploaded by the CA on 21/10/2022 i.e. before the extended due date of filing of return of income, the same does not tantamount to filing of form 10DA as per the IT Rules, 1962. The process of filing of Form 10DA includes both uploading by CA and acceptance by the appellant together and if either of the process is not completed within the stipulated time, the same does not equate with filing of Form 10DA within due date. Under the statute, it was mandatory to file the said Form 10DA within the prescribed time, failing which will make the appellant ineligible for claiming deduction u/s 80JJAA of the Act. Since, in the instant case, the process of filing Form 10DA was completed on 09/01/2023 i.e. after the extended due date of filing of return of income u/s 139(1), the claim of deduction u/s 80JJAA of the Act is not admissible. The appellant has accepted the mistake that the said form could not be accepted by the appellant company within extended due date of filing of return of income u/s 139(1) of the Act and it was accepted only after issue of notice u/s. & 1112/PUN/2025 143(i)(a). The oversight was not for the lack of awareness of the procedure of filing of the said Form. Instead, it amounts to complete disregard towards statutory provisions of the Act. If such disregard is allowed, it will make the governing provisions of the statute redundant and ineffective. 5.2 Further, the Hon'ble Apex court in the case of PCIT vs. M/s Wipro Limited (Judgment dated 11.07.2022 in the Civil Appeal No. 1449 OF 2022) has applied strict construction to reverse the findings of the Hon'ble High Court of Karnataka which had earlier allowed carry forward of such losses. The Hon'ble SC held that the requirement of filing a declaration within a timeline is "mandatory" in nature as per the language of the provision. The Supreme Court has stated as under- "In view of the above discussion and for the reasons stated above, we are of the opinion that the High Court has committed a grave error in observing and holding that the requirement of furnishing a declaration under Section 10B (8) of the IT Act is mandatory, but the time limit within which the declaration is to be filed is not mandatory but is directory. The same is erroneous and contrary to the unambiguous language contained in Section 10B(8) of the IT Act, We hold that for claiming the benefit under Section 10B(8) of the IT Act, the twin conditions of furnishing a declaration before the assessing officer and that too before the due date of filing the original return of income under section 139(1) are to be satisfied and both are mandatorily to be complied with. Accordingly, the question of law is answered in favour of the Revenue and against the assessee. The orders passed by the High Court as well as ITAT taking a contrary view are hereby set aside and it is held that the assessee shall not be entitled to the benefit under Section 10B (8) of the IT Act on non- compliance of the twin conditions as provided under Section 10B (8) of the IT Act, as observed hereinabove.” 5.3 In view of the facts of the case, it is clear that the appellant had filed the Form 10DA after due date is violation of Rule 19AB of Income Tax Rules, 1962. Therefore, in application of the above decisions of the apex court and also the mandated provisions of the statute, the AO CPC made no error in disallowing the deduction claimed and in making addition of the same to the total income of the appellant as per the law. As it is evidently clear that there is clear violation of provisions of section POJJAA r.w.r 19AB therefore, the claim of deduction is not admissible in the light of the provision of section 80JJAA. In view of the above, I am of the considered opinion that the AO CPC rightly disallowed the deduction claimed u/s 80JJAA as the Form 10DA was not filed within prescribed time. Accordingly, this ground of appeal
is dismissed."
6. In the result, the appeal is dismissed.”
& 1112/PUN/2025 7. It is the above order against which the assessee company is in appeal before this Tribunal.
The Ld. Authorised Representative, appearing on behalf of the assessee company, submitted that the order passed by the Ld. CIT(A) is unjustified. It was contended that the audit report in Form No.10DA was duly furnished on 09.01.2023 and was available on record prior to the date of processing of the return by the Assessing Officer, CPC, which occurred on 16.03.2023. Therefore, the deduction claimed u/s 80JJAA of the Income-tax Act, 1961 ought to have been allowed, as the audit report was on record at the time of processing and the delay in filing was merely procedural in nature, not affecting the substantive eligibility of the claim. In this regard, Ld. counsel of the assessee relied on decision passed by a coordinate bench of this Tribunal wherein under identical facts and similar circumstances the deduction u/s 80JJAA of the IT Act was directed to be allowed.
Ld. DR appearing from side of the Revenue relied on the orders passed by subordinate authorities and requested to confirm the same.
We have heard Ld. counsels from both the sides and perused the material available on record. In this regard, we find the issue is squarely covered in favour of the assessee by the decision of the & 1112/PUN/2025 coordinate bench of this Tribunal passed in the case of Tarasafe International Private Limited vs. DDIT, CPC, Bengaluru, order dated 03.10.2024 for assessment year 2023-24 wherein under identical facts and similar circumstances even after belated filing of Form 10DA the deduction u/s 80JJAA was allowed to the assessee by observing 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 time 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 3. The issue is squarely covered by the decision of Hon'ble Supreme Court in the case of CIT v. G. M. Knitting Industries (P.) Ltd. [2016]12 SCC 272/[2016] 71 taxmann.com 35/376 ITR 456 (SC), 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.
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 v. Wipro Ltd. [2022] 140 taxmann.com 223/288 Taxman 491/446 ITR 1 (SC) which is also relied on by LD CIT(A), is concerned, it is to 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 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 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. & 1112/PUN/2025 (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 decision of this Tribunal in the case of Tarasafe International Private Limited (supra), we hold that the filing of audit report in Form 10DA is directory/ procedural & not mandatory. We therefore set-aside the order passed by Ld. CIT(A) and direct the AO CPC to issue amended intimation after considering the audit report in Form 10DA filed by the assessee. Thus, the grounds raised
by the assessee are allowed.
12. In the result, the appeal filed by the assessee in A.Y. 2022-23 is allowed.
& 1112/PUN/2025 A.Y. 2023-24 : 13. Since the facts and issues involved in the appeal of the assessee for the assessment year 2022-23 are identical to the facts of the case for assessment year 2023-24, therefore, our decision in