DCIT-4(1), INDORE, INDORE vs. ODDIVILLE FOODS AND FROZEN, INDORE

ITA 427/IND/2025Status: DisposedITAT Indore20 March 2026AY 2018-1916 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the assessee is entitled to the deduction under Section 35AD. The Tribunal found that the AO's approach of disallowing the deduction solely on the ground of not furnishing Form 10CCB within the due date of filing the return of income was unsustainable. The Tribunal relied on the Supreme Court's decision in CIT vs. G.M. Knitting Industries and the jurisdictional High Court's decision in CIT vs. Panama Chemical Works, which held that if the prescribed audit report is filed before the completion of assessment, the deduction cannot be denied merely because it was not filed along with the return of income. The Tribunal rejected the revenue's contention that these precedents were not applicable to fresh assessment proceedings initiated under Section 263, stating that once an assessment is set aside, the subsequent proceedings assume the character of a fresh assessment. Since the assessee furnished Form 10CCB before the completion of the fresh assessment, it constituted sufficient compliance. The Tribunal also noted that the claim was disclosed in the return and Form 3CD, and depreciation was foregone, demonstrating the bona fide nature of the claim. Therefore, the grounds raised by the revenue were dismissed, and the order of the CIT(A) granting relief was upheld.

What were the facts?

The assessee, Oddiville Foods and Frozen, engaged in building and operating a cold storage for fruits and vegetables, filed its return for Assessment Year 2018-19 declaring a loss and claiming a deduction of Rs. 8,60,92,248/- under Section 35AD. The Assessing Officer (AO) initially accepted this claim. However, the Principal Commissioner of Income-Tax (PCIT) initiated revision proceedings under Section 263, holding the assessment order erroneous and prejudicial to revenue as the AO had not verified the mandatory filing of Form 10CCB for the Section 35AD deduction. The PCIT set aside the assessment order, directing the AO to re-examine the issue. In the fresh assessment proceedings, the assessee filed Form 10CCB on February 8, 2024, but the AO disallowed the Section 35AD deduction, citing non-filing of the form by the due date of the return. The Commissioner of Income-Tax (Appeals) [CIT(A)] reversed the AO's decision, allowing the deduction. The revenue is now in appeal before the Income Tax Appellate Tribunal (ITAT).

What were the issues?

1. Whether the assessee is entitled to deduction under Section 35AD when the audit report in Form No. 10CCB was not filed along with the return of income but was furnished subsequently during the course of fresh assessment proceedings conducted by the AO pursuant to the revision order passed under Section 263. Assessee's Contentions: - The assessee argued that the case was selected for complete scrutiny and the initial assessment order accepted the deduction. The subsequent revision under Section 263 led to fresh proceedings. - Form 10CCB was obtained but not filed inadvertently. It was filed during the fresh assessment proceedings before the AO completed the assessment. - The Tax Audit Report in Form 3CD already disclosed the claim, and depreciation was foregone on the assets. - The non-filing of Form 10CCB was a bonafide omission in the first year of operations. - Procedural requirements should be construed liberally when substantive conditions are fulfilled. - Relied on CIT vs. G.M. Knitting Industries (Supreme Court) and CIT vs. Panama Chemical Works (jurisdictional High Court) where filing of the report before completion of assessment was held sufficient. Revenue's Contentions: - The revenue contended that the assessee failed to file Form 10CCB before the due date of filing the return of income, making it ineligible for deduction under Section 35AD. - The revenue argued that the judicial precedents cited by the assessee were applicable only to original assessments and not to fresh assessment proceedings initiated under Section 263.

Which sections of the Income-tax Act were involved?

Section 35AD,Section 143(3),Section 263,Section 115JC,Section 80-IA,Section 32

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, INDORE BENCH, INDORE

Before: SHRI B.M. BIYANI & SHRI PARESH M. JOSHI

For Appellant: Shri Harsh Vijayvargiya, AR
For Respondent: Shri Anup Singh, CIT-DR
Hearing: 18.02.2026Pronounced: 20.03.2026

Per B.M. Biyani, A.M.:

Feeling aggrieved by order of first appeal dated 12.03.2025 passed by learned Commissioner of Income-Tax (Appeals)-NFAC, Delhi [“CIT(A)”] which in turn arises out of assessment-order dated 28.03.2024 passed by learned DCIT/ACIT-4(1), Indore [“AO”] u/s 143(3) r.w.s. 263 of Income-tax Act, 1961 [“the Act”] for Assessment-Year [“AY”] 2018-19, the revenue has filed this appeal on following grounds:

“1, That on facts and circumstances of the case and in law, the Id. CIT(A) has erred in deleting the disallowance of deduction u% 35AD of Rs. 8,60,92,253/ without appreciating the findings of AO that as the assessee

(ii)

(iii)

(iv)

Oddiville F

The order continues below.

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