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Facts
The Revenue appealed the CIT(A)'s decision to allow a Section 10AA deduction of Rs. 4.82 crores. The deduction was initially disallowed by the AO under Section 143(1) as the assessee failed to file Form 56F within the prescribed time, which the assessee claimed was due to technical errors on the Department's e-filing portal.
Held
The Tribunal upheld the CIT(A)'s order, finding that the belated filing of Form 56F was not due to the assessee's fault but technical glitches. It reiterated that the requirement of filing Form 56F is directory, not mandatory, and directed the AO to verify and allow the Section 10AA claim as the form was submitted before the First Appellate Authority.
Key Issues
Can a deduction under Section 10AA be allowed if the prescribed Form 56F is filed belatedly due to technical errors on the tax department's portal, and is the requirement for filing Form 56F directory or mandatory?
Sections Cited
10AA, 143(1), 139(1), 250
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) Deputy Commissioner of Vs. Meghmani Limited Liability Income Tax, Partnership, Circle-2(1)(1), 11th Floor, JMC House, Eden Co- Ahmedabad op. Hsg. And Office So Opp. Parimal Garden, Ellishbr, Ahmedabad-380006 [PAN No.AARFM8635Q] (Appellant) .. (Respondent) Ms. Urvashi Sodhan, AR Appellant by : Respondent by : Ms. Ketaki Desai, Sr. DR 11.09.2025 Date of Hearing Date of Pronouncement 18.09.2025 O R D E R PER: ANNAPURNA GUPTA - AM: The present appeal has been filed by the Revenue against the order passed by the Ld. Commissioner of Income Tax (Appeals), (hereinafter referred to as “CIT(A)”), ADDL/JCIT (A), Madurai dated 12.06.2025 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.
The grounds of appeal raised read as under:
“1. Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in allowing the deduction claimed u/s. 10AA of Rs. 4,82,14,893/-, which was disallowed in the intimation issued u/s. 143(1) dated 25.03.2024, since the assessee failed to respond within the prescribed time and did not furnish the requisite documentation to substantiate its claim for deduction u/s. 10AA of the Act, thereby failing to meet the procedural requirement stipulated under law? 2. Thea appellant craves leave to amend or alter any ground or add a new ground, which may be necessary.
DCIT vs. Meghmani Limited Liability Partnership Asst.Year –2023-24 - 2 - 3. It is, therefore, prayed that the order of Ld. CIT(A) may be set aside and that of the Assessing Officer be restored.”
The solitary issue in the present appeal relates to denial of claim of deduction under Section 10AA of the Act to the assessee on account of delayed filing of prescribed Form 56F. The assessee had filed its return of income under Section 139(1) of the Act and claimed deduction of its profits under Section 10AA of the Act amounting to Rs. 4,82,14,893/-. In the intimation made under Section 143(1) of the Act, the AO/ CPC disallowed the assessee’s claim of deduction under Section 10AA of the Act on account of Form 56F not being filed.
Before the Ld. CIT(A), the assessee submitted that due to technical error in the portal of the Department, despite several attempts made by the assessee to upload Form 56F, the assessee was unable to upload the same and it was subsequently on 17.09.2024 that the assessee finally uploaded the Form56F. The screen short of the portal showing failed attempts to submit Form No. 56F on 09.04.2024, 26.03.2024 and 25.01.2024 due to server issues were filed. The assessee submitted that, therefore, till the date of intimation made on the assessee under Section 143(1) of the Act on 25.03.2024, the assessee was unable to upload Form 56F. That the assessee attempted to upload the same before the intimation was made on 25.01.2024 but due to server issues it could not be uploaded and even subsequently after the intimation was made, two other attempts made by the assessee to upload the said Form, on 26.03.2024 and 09.04.2024, failed and finally it was only on 17.09.2024 that the assessee was able to successfully upload the Form. This form was uploaded before the hearing began with the Ld. CIT(A) on the 28.10.2024. The Ld. CIT(A) appreciated the fact pointed out by the assessee that in the past also the assessee had been claiming deduction under Section 10AA of the Act and filing Form DCIT vs. Meghmani Limited Liability Partnership Asst.Year –2023-24 - 3 - No. 56F in due time and accordingly, admitted the Form 56F filed by the assessee, directing the AO to verify the said Form and allow the assessee’s claim of deduction under Section 10AA of the Act.
Before us, the Ld. DR was unable to controvert the fact that the assessee attempted on several occasions to upload Form 56F which due to technical error in the systems of the Department itself the assessee was unable to upload and that Form 56F could not uploaded for the aforesaid reason even till the date when the intimation was made under Section 143(1) of the Act. That ultimately the assessee was able to upload the Form 56F before the hearing began before the First Appellate Authority.
In the light of the same, the non-filing of Form No. 56F during the processing of the return of income cannot be attributed to any fault on the part of the assessee and therefore, we hold that the Ld. CIT(A) was right in entertaining the said Form and directing the AO to verify the contents of the same and allow the assessee’s claim of deduction under Section 10AA of the Act after verification. It is settled law that prescription of filing necessary Forms for claiming deduction is only a directory requirement and not mandatory and if the prescribed Forms are submitted during assessment proceedings it would suffice for allowing the assessee’s claim of deduction.This ratio has been laid down by the Hon’b;e apex court in the case of CIT vs G. M Knitting &others C.A. No. 10782 of 2013 dated 24-07-2015.
In the facts of the present case the assessee was deprived from filing the prescribed Form even up to the processing of its return on account of the fault in the system of the Department and therefore, it cannot be said that the assessee failed to deposit the requisite Form during assessment proceedings. Having DCIT vs. Meghmani Limited Liability Partnership Asst.Year –2023-24 - 4 - successfully submitted the Form before the First Appellate Authority, thus, we hold that the Ld. CIT(A) was right in entertaining the same and directing the AO to allow the deduction under Section 10AA of the Act after verification. Even otherwise the fact that the assessee has in the past filed the requisite form in time and claimed deduction u/s 10AA of the Act, which has been allowed to it also, we hold has been rightly appreciated by the Ld.CIT(A) while admitting the form filed belatedly by the assessee.
The grounds raised by the Revenue are therefore, dismissed.
In the result, the appeal filed by the Revenue is dismissed. This Order pronounced in Open Court on 18/09/2025