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Facts
The assessee claimed a deduction under Section 80LA(3) of the Income Tax Act for profits earned. The claim was denied by the AO in the intimation under Section 143(1) due to the delayed filing of Form 10CCF, which was required for availing the deduction. The assessee filed Form 10CCF 24 days after the due date.
Held
The Tribunal held that the filing of Form 10CCF is a directory requirement, not mandatory. Therefore, the denial of deduction solely on the grounds of delayed filing, especially when the form was filed before the intimation, was incorrect. The Assessing Officer was directed to grant the deduction.
Key Issues
Whether the denial of deduction under Section 80LA of the Act for delayed filing of Form 10CCF is justified, considering it is a directory requirement.
Sections Cited
250, 143(1), 80LA, 80LA(1A), 139(1), 119, 119(2)(b), 143(3), 80LA(3)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “C” BENCH, AHMEDABAD
Before: SHRI SANJAY GARG & SMT. ANNAPURNA GUPTA
(Assessment Year: 2023-24) Volark Leasing IFSC Pvt. Ltd., Vs. Assistant Commissioner of Unit No. 524, Signature Building, Income Tax/Deputy 5th Floor, Block 13B, Zone-1 G, Commissioner of Income Chiloda, Gandhinagar-382355 Tax, Gandhinagar, Gujarat [PAN No.AAICV3373J] (Appellant) .. (Respondent) Appellant by : Shri Pancham Sethi, AR Ms. Ketaki Desai, Sr. DR Respondent by : Date of Hearing 08.09.2025 Date of Pronouncement 29.10.2025 O R D E R PER: ANNAPURNA GUPTA - AM:
The present appeal has been filed by the assessee against the order passed by the Ld. Commissioner of Income Tax (Appeal), (hereinafter referred to as “CIT(A)”), ADDL/JCIT(A), Faridabad dated 26.12.2024 passed under Section 250 of the Income Tax Act, 1961 (hereinafter referred to as the “Act”) and relates to Assessment Year (A.Y.) 2023-24.
Grounds raised by the assessee are as under:
“1. That the Ld. Addl./JCIT (Appeals), Faridabad erred in law and on facts by passing order u/s. 250 confirming the rejection by the Ld. DDIT, CPC, Bengaluru (Ld. AO, CPC) in intimation order passed u/s. 14391) of the claim of deduction/s. 80LA (1A) for Rs. 6,74,86,149/- and whereby Income Tax demand of Rs. 1,98,71,040/- was raised.
2. That the Ld. Addl./JCIT(A) erred in law and on facts by confirming the rejection by the Ld. AO, CPC of the claim of deduction u/ 80LA(1A) of Rs. 6,74,86,149/- on technical grounds being Audit Certificate in Form 10CCF was not filed before the prescribed due date and before the filing of the Income Tax Return.
Volark Leasing IFSC Pvt. Ltd. vs. ACIT/DCIT Asst.Year –2023-24 - 2 - 3. That the order passed u/s 250 by the Ld. Addl./JCIT (A) confirming the order of the Ld. AO, CPC under section 143(1) is bad in law and shall be quashed. 4. That the Ld. AO, CPC erred in charging interest u/s 234B and 234C under the facts & in law in the circumstances of the case. 5. The appellant craves leave to amend, delete or add any grounds of appeal before or during the course of hearing of the appeal.”
3. The solitary issue in the present appeal relates to denial of deduction to profits earned by the assessee under Section 80LA of the Act on account of delay in filing of the prescribed form for availing the deduction i.e. Form 10CCF. The facts of the case noted in the order of the Ld. CIT(A) are that the said form was required to be filed by the 31.10.2023 along with the Return of Income. However, it was filed on the 24.11.2023, by delay of 24 days. The assessees claim of deduction of profits earned in terms of Section 80LA of the Act amounting to Rs. 6,74,86,150/- was denied in the intimation made under Section 143(1) of the Act by the CPC on account of the fact stated above of delay in filing Form 10CCF. The order of the Ld. CIT(A) reveals the assessee to have stated that it is a Private Limited Company registered as an IFSC Company in Gift City, Gandhinagar, and engaged in the business of leasing of Aircraft and Helicopters as approved by the IFSC Authority. That since the assessee was registered as an IFSC Company it was eligible for 100 per cent deduction of the profits of the IFSC unit under Section 80LA of the Act and to claim his deduction, the assessee was required to obtain the Audit Report of a Chartered Accountant in Form 10CCF and file the same before filing of the ITR in terms of Section 80LA of the Act.
4. We have gone through the order of the Ld. CIT(A) and we have heard the Ld. DR also as well as the Ld. Counsel for the assessee and we see no reason to confirm the order of the Ld. CIT(A). A bare perusal of the order of the Ld. CIT(A) reveals that the assessee had cited innumerable decisions both of the ITAT and the Hon’ble High Court and even the Apex Court holding that the requirement of filing requisite form for claiming deduction under the Act was a mere directory requirement and if the said Form was furnished though with the delay, during the assessment proceedings, the assessee ought not to be denied the benefit of deduction. All the case laws are mentioned at Para 2.9 of the order of the Ld. CIT(A) as under:
In support of our contention, we rely on the following rulings: “2,9. Hon'ble Delhi High Court in the case of CIT vs. Contimeters Electricals (P.) i) Ltd. [(2009) 178 TAXMAN 422], taken a sympathetic view regarding the non-fling of Form 10CCB with the income Tax Return and observed at Para 8 of the order that: “8. In view of this long line on decisions of various High Courts in considering the provisions of section 80J(6A) which are similar to the provisions of section 80-IA(7), we feel that the Tribunal has arrived at the correct conclusion that the requirement of filing the audit report along with the return is not mandatory but directory and that if the audit report is filed at any time before the framing of the assessment, the requirement of section 80-IA(7) would be met.” ii) Delhi Tourism & Transportation Development Corporation Ltd. vs. Addl. CIT [2023] 156 taxmann.com 550 (ITAT Delhi)] “33. We have heard both the parties and perused the material available on record. It is seen from the facts of the case, it is clear that although the assessee did not file Form No. 10CCB along with the return of income on or before the due date prescribed u/s 139 (1) of the Act, but the Audit Report in Form No. 10CCB was made available before the A.O. before he completes the assessment u/s 143(3) of the Act, therefore, we are of the view that the A.O. ought to have considered the said Audit Report filed by the assessee and allow the deduction claimed by the Assessee u/s 80IA of the Act. This view of ours is fortified by the judgment of Hon'ble Supreme Court in the case of CIT v. G. M. Knitting Industries Ltd. [2016] 71 taxmann.com 35/[2015] 376 ITR 456 (S.C.), wherein held that even though necessary certificate in Form No. 10CCB along with the return of income had not been filed but the same was made available to the A.O. before passing of final assessment order, the assessee is entitled to claim the deduction u/s 80IA of the Act, in view of the above ratio, we do not find any infirmity in granting 80IA deduction by the CIT(A), accordingly, Ground No. 6 of the Revenue in is dismissed.” iii) CIT vs. GM Knitting Industries Pvt. Ltd. [71 taxmann.com 35 (Hon’ble Supreme Court)] iv) Hon’ble Punjab and Haryana High court in the case of Ramco International vs. CIT [[2009] 180 Taxman 584] v) Hon’ble ITAT Pune in the case of MSEB Employees Co-op. Credit Society Ltd. vs. ITO [[2014] 50 taxmann.com 210], wherein relying on the decision of Hon’ble Punjab and Haryana High Court in the case of Ramco International vs. CIT [[2009] 180 Taxman 584] it has been held at Para 4.1 of the order that: “4.1 In view of above discussion, the CIT(A) was justified in holding that the assessee is entitled for deduction u/s 80P(2)(a)(i) of the Act though the same has not been claimed by the assessee in return of income. It is settled law that correct income of the assessee is to be assessed as per provisions of Income Tax Act, 1961 in spite of higher income incorrectly declared by the assessee in the return of income. This view was fortified by the decision of Hon'ble Bombay High Court in the case of CIT v. Smt. Archana R. Dhanwatey [1981] 136 ITR 355/[1981] 7 Taxman 121, wherein it was held that "under the I.T. Act, 1961, the authorities are obliged to act in accordance with law. Tax has to be collected as per the provision of the Act. If an assessee, under a mistake, misconceptions or on being not properly instructed is over assessed, the concerned authority under the Act is obliged, required to assist such an assessee by ensuring that only legitimate taxes are determined as collectible. If particular levy is not permissible under the Act, the tax cannot be collected. In view of above, the CIT(A) was justified in holding that the assessee is eligible for deduction u/s.80P(2)(a)(i) of the Act and the assessee society is eligible for deduction u/s.80P(2)(a)(i) of the Act on merit as well, as discussed above. This reasoned finding of CIT(A) needs no interference from our side. We uphold the same.” vi) Further, Hon’ble Bombay High Court, in the case of Sanchit Software & Solutions (P.) Ltd. v. CIT [2012] 25 taxmann.com123 has held as under: “5. In any civilized system, the assessee is bound to pay the tax which he liable under the law to the Government. The Government on the other hand is obliged to collect only that amount of tax which is legally payable by an assessee. The entire object of administration of tax is to secure the revenue for the development of the Country and not to charge assessee more tax than that which is due and payable by the assessee. It is in aforesaid circumstances that as far back as in 11/04/1955 the Central Board of Direct Tax had issued a circular directing Assessing Officer not to take advantage of assessee's ignorance and/or mistake. The relevant portion of the above Circular is as under: "3. Officers of the Department must not take advantage of ignorance of an assessee as to his rights. It is one of their duties to assist a taxpayer in every reasonable way, particularly in the of claiming and securing reliefs and in this regard the officers should take the initiative in guiding a taxpayer where proceedings or other particulars before them indicate that some refund or relief is due to him. This attitude would, in the long run, benefit them indicate that some refund or relief is due to him. This attitude would, in the long run, benefit the Department for it would inspire confidence in him that he may be sure of getting a square deal from the Department. Although, therefore, the responsibility for claiming refunds and reliefs rests with assessees on whom it is imposed by law, officers should:- (a) draw their attention to any refunds or reliefs to which they appear to be clearly entitled but which they have omitted to claim for some reason or other; (b) freely advise them when approached by them so to their rights and liabilities and as to the procedure to be adopted for claiming refunds and reliefs." Therefore the above Circular should always be borne in mind by the officers of the respondent-revenue while administering the said Act.” vii) Similar has been taken by Hon’ble Mumbai ITAT in the case of Chicago Pneumatic India Ltd. vs. DCIT [(2007) 15 SOT 252]. viii) Bajaj Tempo Ltd. vs. CIT [(1992) (Supreme Court) 62 Taxman 480/ (1992) 196 ITR 188] Hon’ble Apex Court, on numerous occasions had laid the proposition that “the Assessing Authorities are bound to compute the correct income only and collect legitimate tax, hence, merely for a procedural lapse or technicalities, in our opinion, the assessee should not be compelled to pay more tax than what is due from him.” ix) En-Vision Enviro Engineers (P.) Ltd. vs. ITO [2023] 155 taxmann.com488 (Gujarat High Court)] x) Sanjay Kukreja vs. ACIT [I.T.A. No. 652/Del/2023 (Delhi ITAT) xi) CIT Vs. AKS Alloys Pvt. Ltd. [18 taxmann.com 25 (Madras High Court)] wherein it is held that: "According to the Commissioner of Income Tax since no audit report, duly verified and signed in the prescribed Form no. 10CC8 under Rule 18888 had been furnished along with the return, the condition for claiming deduction had not been satisfied and therefore the action of the Assessing Officer in allowing rebate u/s 80-1A was erroneous and prejudicial to the interest of the Revenue. After issuance of the notice the Commissioner of Income Tax passed the order dated 29.03.2007 whereby he held that he was fully satisfied that the assessment which had been completed by the Assessing Officer was prejudicial to the interest of the Revenue and that it was erroneous in as much as the assessee had not satisfied the conditions laid down u/s 80-1A and consequently the deduction under that section for the sum of Rs. 14,27,351/- had been wrongly allowed. The CIT(A), therefore, cancelled the assessment which had Volark Leasing IFSC Pvt. Ltd. vs. ACIT/DCIT Asst.Year –2023-24 - 6 - been earlier framed and directed the AO to complete the assessment as per law, in terms of the directions given in the said order Being aggrieved by the said order, the assessee preferred an appeal before the Tribunal which was allowed by the Tribunal by virtue of the impugned order. The Tribunal took the”
That despite so pointing out the judicial position vis-à-vis allowability of claim of deduction on account of delayed filing of requisite form. Ld. CIT(A), though acknowledged the judicial decision as above, but still went on to confirm the disallowance stating that by virtue of Section 119 of the Act, the CIT(A) had no authority to grant condonation of delay in filing of Form 10CCF. His findings in this regard are contained at Para 4 to 4.6 of his order as under:
“4.0 Determination & Decision:- Keeping in view, the aforesaid factual and legal position, the appeal filed by the appellant is being decided on the basis of documents available on record. The statement of facts, grounds of appeal, order appealed against and written submissions have been thoroughly examined. The central issue for adjudication among all the grounds of appeal raised pertains to the sole issue of denying the benefit of Section 80LA(3) of the Act. Therefore, all grounds of appeal no. 01 to 04 are being clubbed and adjudicated together. 4.1 It is noted that while processing the return of Income, the AO denied the deduction claimed u/s 80LA(3) of the Act. The reason for adjustment u/s 143(1)(a) was as follows;-
4.2 The appellant submitted that it had filed its ITR on 31/12/2023 and Form- 10CCF on 24/11/2023. In this context, it's important to note that the appellant had claimed deduction u/s 80LA(3) of the Act amounting to Rs. 6,74,86,149/- while filing the return of income. However, to avail the benefit of deduction u/s 80LA(3), Form- 10CCF was required to be filed alongwith the return of Income as per Rule 19AE and Section 80LA(3) of the Act. The appellant had filed Form-10CCF on 24/11/2023, which is before filing of return on 31/12/2023. However, it may be appreciated that both the Income Tax Return as well as Form-10CCF were filed beyond the extended due date of filing ITR for A.Y. 2023-24, i.e. 31/10/2023. 4.3 In view of the above, I find no error in the AO’s decision to disallow the appellant's claim for deduction under Section 80LA(3) of the Act, when processing the return under Section 143(1) of the Act. 4.4 Further, Section 119 empowers the Board to issue orders and guidelines regarding the condonation of delay in compliance with any provision of the Act. Section 119(2) reads as follows: Section 119(2) (a) … (b) the Board may, if it considers it desirable or expedient so to do for avoiding genuine hardship in any case or class of cases, by general or special order, authorise any income-tax authority, not being a Joint Commissioner (Appeals) or a Commissioner (Appeals) to admit an application or claim for any exemption, deduction, refund or any other relief under this Act after the expiry of the period specified by or under this Act for making such application or claim and deal with the same on merits in accordance with law.” 4.5 It is evident from the CBDT Circulars and Section 119(2)(b) that the Assessing Officer (AO), Joint Commissioner of Income Tax (Appeals) [JCIT(A)], and Commissioner of Income Tax (Appeals) [CIT(A)] do not have the authority under Section 119(2)(b) of the Act to grant condonation for the delay in filing Form 10CCF. 4.6 The appellant has the option to approach the jurisdictional Commissioner of Income Tax, Chief Commissioner of Income Tax, or Principal Chief Commissioner of Income Tax for the condonation of the delay in filing Form 10CCF and to claim the benefits of Sections 80LA(3) of the Act.”
The Ld. CIT(A)s reason for upholding the intimation made under Section143(1) of the Act denying the grant of deduction under Section 80LA of the Act to the assessee, is not because he found the judicial decisions cited by the assessee in its favour to be distinguishable in any way from the facts of the present case nor because he was aware of any decision of the higher authority holding to the contrary. His denial of deduction to the assessee is solely on account of Section 119 of the Act not empowering the first appellate authority to condone the delay in filing of the Form.
In the light of the above, since it is not denied by the Ld. CIT(A) and in fact, there is an implicit admission by the Ld. CIT(A) that the assesses case stands covered in favour of the assessee by virtue of innumerable decision of Courts holding that the filing of Form for the purposes of claiming deduction under the Income Tax Act to be a directory requirement only and not mandatory, we have no hesitation in reversing the order of the Ld. CIT(A).
Before us, the Ld. DR was unable to pointing out any decision of any Higher Judicial Authority holding to the contrary.
In light of the same, we hold that the denial of deduction to the assessee under Section 80LA of the Act merely on account of delayed filing of the prescribed Form 10CCA which otherwise was filed before the intimation was made on the assessee by CPC under Section 143(1) of the Act was not as per law. The order of the Ld. CIT(A) in this regard upholding the denial of deduction to the assessee by the CPC is therefore, held to be incorrect. The Assessing Officer is directed to grant the assessee deduction under Section 80LA of the Act as claimed by it.
In the result, the appeal of the assessee is allowed.
This Order pronounced in Open Court on 29/10/2025