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Facts
The assessee, an LLP engaged in sports industry, was recognized as a startup and claimed deduction under Section 80IAC. They failed to file Form 10CCB along with the original return but filed it later, along with a revised return and audit report, before the processing of the return.
Held
The Tribunal held that the delay in filing Form 10CCB was a procedural lapse and not a substantive condition for claiming the deduction. The eligibility criteria for the startup were not disputed.
Key Issues
Whether delay in filing Form 10CCB is a fatal procedural lapse preventing deduction under Section 80IAC, or a procedural requirement that can be condoned if filed before processing.
Sections Cited
143(1), 80IAC, 250, 139(1), 80IA, 80IB, 80J, 10AA
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, JAIPUR BENCH “A”, JAIPUR
Before: Dr. S. SEETHALAKSHMI & SHRI GAGAN GOYALShri Poornima Entertainments LLP,
This appeal by assessee is directed against the order of Addl./JCIT (A)-06, Kolkata dated 25.03.2025 passed u/s. 250 of the Income Tax Act, 1961 (in short ‘the Act’). The assessee has raised the following grounds of appeal: - Shri Poornima Entertainments LLP
1. In the facts and circumstances of the case and in law, Ld. Addl./JCIT(A)-6, Kolkata has erred in confirming the adjustment made in the intimation issued under Section 143(1) of the Income Tax Act, 1961 ("ITA"), which is outside the purview of Section 143(1). The action of the Ld. Addl. /JCIT (A)-6, Kolkata is illegal, unjustified, arbitrary and against the facts of the case. Relief may please be granted by deleting the entire addition of Rs. 3,80,71,814/- made to the returned income of the assessee firm.
2. In the facts and circumstances of the case and in law, Ld. AddI./JCIT(A)-6, Kolkata has erred in confirming the rejection of the claim made by the assessee firm under Section 80-IAC of ITA of Rs. 3,80,26,814/- for the year under consideration. The action of the Ld. Addl. /JCIT (A)-6, Kolkata is illegal, unjustified, arbitrary and against the facts of the case. Relief may please be granted by allowing such claim, under Section 80-IAC, as originally made by the assessee firm in its return of income.
3. The assessee firm craves its rights to add, amend or alter any of the grounds on or before the hearing.
2. The brief background is that the Assessee Appellant M/s. Shri Poornima Entertainments LLP is engaged in Sports Industry, Sports Promotion and Networking Sector. Assessee Appellant was recognized as a “Start-up” by the Department of Promotion of Industry and Internal Trade, Ministry of Commerce and Industry, bearing Registration No. DIPP73097, vide certificate dated 08.01.2021. Subsequently, Assessee Appellant filed an application, with DPIIT, for being considered as an “Eligible Startup” for the purpose of claiming benefit under section 80IAC of the Act. The said certificate was granted to the Assessee Appellant on 31.03.2022.
3. Assessee Appellant, for the year under consideration, filed its Return of Income under section 139(1) of the Act, on 31.10.2023, at a total income of Rs. Nil, claiming deduction under section 80IAC of the Act of Rs. 3,80,26,814/-. However, Form No. 10CCB could not be filed within the due date as per section Shri Poornima Entertainments LLP 80IA (7) of the Act for claiming such deduction. On receipt of intimation on 11.12.2023 for proposed adjustments u/s. 143(1)(a) of the Act, Form No. 10CCB was filed by the Assessee Appellant on 25.12.2023 for claiming deduction of Rs. 3,80,26,814/-. Thereafter, Assessee Appellant filed revised Audit Report [Form 3CA-3CD] on 26.12.2023 for reporting its claim of deduction u/s. 80IAC of the Act. Return of Income was revised under section 139(5) of the Act on 27.12.2023 wherein claim under section 80IAC of the Act was duly supported by Form No. 10CCB. Assessee Appellant filed its response against the proposed adjustments under section 143(1) (a) of the Act on 09.01.2024 stating the aforementioned facts and requesting for allowing the claim of the Assessee Appellant. However, Return of Income filed by the Assessee Appellant was processed under section 143(1) of the Act on 25.03.2024, rejecting the claim made under section 80IAC of the Act of Rs.3,80,26,814/-, thereby, creating demand against the Assessee Appellant.
4. Ld. AR of the Assessee Appellant submitted that intimation for proposed adjustment was received on 11.12.2023. Due date for response was 10.01.2024. After receiving the intimation for proposed adjustment the Assessee Appellant filed Form No. 10CCB on 25.12.2023. It also filed Revised Tax Audit Report for reporting its claim of deduction on 26.12.2023. The revised Return of Income giving effect of filing Form No. 10CCB and Revised Tax Audit Report was filed on 27.12.2023. The revision of Return was well within the time prescribed under section 139(5). The reply to the proposed adjustment was also filed on 09.01.2024.
Shri Poornima Entertainments LLP 5. On the basis of above factual matrix ld. AR submitted that when the Return of Income was processed under section 143(1) of the Act on 25.03.2024, Form No. 10CCB was available with the AO/ CPC. Return of Income as well as Tax Audit Report was also revised. Thus, ld. AR emphasized that there is no justification to deny the deduction under section 80IAC of the Act amounting to Rs. 3, 80, 26,814/-, just because Form No. 10CCB could not be filed along with the original Return of Income.
Ld. AR further submitted that it is undisputed that the Assessee Appellant is eligible for claim of deduction under section 80IAC of the Act. It is not the case of Lower Authorities that any of the substantive conditions for claim of 80IAC of the Act deduction is not complied with by the Assessee Appellant. It was submitted before the Lower Authorities that filing of Form No. 10CCB, within the prescribed time, was only a procedural requirement and not a substantive condition. It was also submitted that the lapse of not filing the Form No. 10CCB, within the prescribed time, could not be fatal leading to complete denial of deduction under section 80IAC of the Act.
Ld. AR further submitted that the above proposition of law was supported by various judicial pronouncements including the decision of the Hon’ble Supreme Court as well as the Jurisdictional High Court. It was submitted before the Lower Authorities that the issue is no more res integra because similar requirements existed in sections such as 80IA, 80IB and 80J of the Act etc. The said sections, in respect of filing of Form No. 10CCB are pari-materia to section 80IAC of the Act. The issue of delay in filing Form No. 10CCB, under these sections, has been adjudicated by various judicial forums which have held that Shri Poornima Entertainments LLP such lapse in compliance of procedural requirement can in no way lead to denial of deduction under respective sections. The following judicial pronouncements were brought to the notice of ld. Lower Authorities:
S No. Title of the case Forum 1. G.M. Knitting Industries (P.) Ltd, Supreme Court Civil Appeal Nos. 10782 of 2013 and 4048 of 2014 2. Novelty Garments [2002] 256 ITR Rajasthan High Court 688 (Raj) 3. Fortuna Foundation Engineers & Allahabad High Court Consultants (P.) Ltd. [2017] 81 taxmann.com 189 (Allahabad) 4. AKS Alloys (P.) Ltd. [2012] 18 Madras High Court taxmann.com 25 (Mad.) 5. Zenith Processing Mills V. CIT [1996] Gujarat High Court 219 ITR 721 (Gujarat) 6. Shivanand Electronics [1994] 75 Bombay High Court Taxman 93 (Bom.) 7. Ambience Holiday Resorts Ltd., ITA ITAT Delhi No. 1820/Del/2020 8. Nitesh Kumar J. Shah Ahmedabad 430/Ahd/2022 9. Surendra Steels Private Limited ITA ITAT Kolkata No. 78/Kol/2022 10. Dunichand Khitri Raja Bangalore 315/Bang/2023 11. RSM Sapthagiri Finance Ltd ITA Nos. ITAT Chennai 96/CHNY/2021 and 269/CHNY/2021 12. Hi-Tech Sweet Water Technologies ITAT Surat (P.) Ltd ITA No. 230/SRT/2022 Shri Poornima Entertainments LLP 8. Ld. AR placed further reliance on certain recent judicial pronouncements wherein also the proposition that delay in filing Form No. 10CCB is only a procedural requirement and such delay cannot lead to denial of deduction under respective sections was held: i. Desai Infra Projects (I) Private Limited v. CIT(A) in ITA No. 1852/PUN/2024
“6.4. Since the assessee in the instant case has admittedly filed the audit report in Form- 10CCB prior to the processing of the return, therefore, respectfully following the decisions cited (supra), we are of the considered opinion that assessee cannot be denied deduction u/sec.80IA(4) of the Act. Accordingly, the order of the Ld. CIT (A) is reversed and the grounds raised by the assessee are allowed.” ii. Roxiler Systems Pvt. Ltd. v. ITO in ITA No. 2078/PUN/2024
“The Audit Report was uploaded before filling of return of Income. Thus at the time of Order u/s 143(1) the Audit report was before the Assessing Officer. In these facts and circumstances, as Hon’ble Supreme Court in the case of G.M Knitting (supra) and Hon’ble Jurisdictional High Court in the case of Shivanand Electronics (supra)had held that once the Audit report was available to the Assessing officer at the time of passing Assessment Order the AO should have considered it.” iii. Nitesh kumar J. Shah v. DCIT in ITA No. 430/Ahd/2022
“7.1 Accordingly, in the light of the above discussion, in our considered view, ld. CIT(A) has erred in facts and in law in not allowing the claim of the assessee on the ground that benefit of section 80-IA of the Act is not available to the assessee if the assessee does not e-file Form 10CCB along with return of income when the assessee admittedly furnished From 10CCB, prior the return of income filed by the assessee being processed by the Department u/s. 143(1) of the Act.”
Per Contra the ld. DR submitted that filing of Form No. 10CCB within specified date is a mandatory requirement for claiming deduction under section 80IAC of the Act. He, therefore, supported the Order of ld. CIT (A). We have gone through the Orders of the ld. Lower Authorities, heard the rival submissions and appreciated the various judicial pronouncements cited before us. It is undisputed that the Assessee Appellant did not file Form No. 10CCB along with the original Return of Income. However, it is also undisputed that after receiving the intimation for proposed adjustment, Assessee Appellant filed the Form No. 10CCB, revised the Tax Audit Report as well as the Return of Income. Thus, Form No. 10CCB along with Revised Tax Audit Report as well Revised Return of Income was on record well before the date of processing the Return under section 143(1) of the Act.
The various Courts have held that filing of Form is only a procedural requirement. The substantive compliance in respect of eligibility of the claim has been made by the Assessee Appellant. The basic eligibility criteria of Eligible Start Up are not in dispute. Lapse of procedural requirement that too made good before the processing of Return cannot be fatal to deny the claim of deduction under section 80IAC of the Act.
In view of the settled judicial view that such procedural lapse should not lead to denial of claim, we hold that the Assessee Appellant is eligible for deduction and, therefore, the Lower Authorities were not justified in denying the claim for mere procedural lapse. Accordingly, the Grounds as taken by the Assessee Appellant stand allowed.
In the result, the appeal of the assessee is allowed.
The Order is pronounced in the open court on the 19th day of August 2025.