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Income Tax Appellate Tribunal, INDORE BENCH, INDORE
Before: SHRI B.M. BIYANI & SHRI PARESH M. JOSHI
आदेश/ O R D E R
Per B.M. Biyani, A.M.:
Feeling aggrieved by order of first-appeal dated 14.01.2025 passed by learned Commissioner of Income-Tax (Appeals)-Addl/JCIT(A)-8, Mumbai [“CIT(A)”] which in turn arises out of intimation of assessment dated 20.03.2017 passed by learned CPC, Bengaluru [“AO”] u/s 143(1) of Income- tax Act, 1961 [“the Act”] for Assessment-Year [“AY”] 2015-16, the assessee has filed this appeal on following grounds:
Page 1 of 13 AY 2015-16 “1.BECAUSE, the Ld. AO (CPC) disallowed the deduction on the pretext that sub-head of the Schedule for Chapter VI-A of the Act has not been populated in the correct sub-head. However, it is the case of the Appellant that due to minor inadvertent mistake on the part of the Appellant the amount entitled for deduction got reflected in the sub-head 'e' instead of sub-head 'd'. Therefore, the Appellant cannot be denied the deduction based on the ground that the Appellant has marked the deduction under the wrong the sub-head. 2.BECAUSE, the Hon'ble CIT(A) failed to take into consideration various judicial pronouncements which have highlighted the fact that the Appellant/ Assessee cannot be denied deductions under section 80IA of the Act merely on the ground that the Appellant has not duly filed form 10CCB within the stipulated time period as per the Income Tax Act. 3.BECAUSE, the delay in filing Form No. 10CCB should not result in the denial of deduction u/s 80IA of the Act. In the case of Delhi MSW Solutions Ltd. (ITAT Hyderabad) supported the view that the mere delay in submitting Form No. 10CCB does not invalidate the deduction, especially when the return was filed within the due date and the tax auditor had certified the claim.
4. BECAUSE, the denial of the deduction solely on the ground of a delay in filing Form No. 10CCB is contrary to the established legal principles, and the Appellant should be entitled to the deduction as claimed. 5.That, each ground is independent of and without prejudice to the other grounds raised
herein.
6. The Appellant craves, leave to add, amend, alter, modify or withdraw any of the above grounds of appeal at the time of hearing.
7. BECAUSE, the order dated 14.01.2025 passed by the Respondent under Section 250 of the Income tax Act, 1961 is bad in law and is liable to be quashed. 8.BECAUSE, the Respondent erred in considering the fact that the denial of the claim of deduction u/s 80IA of Rs. 1,68,90,212/- is beyond the scope of adjustments provided in section 143(1)(a) of the Act. 9.BECAUSE, the Intimation order dated 20.03.2017 passed by the Assessing Officer (CPC) is a non-speaking order wherein the reason for the variance and further creation of demand was not explained, hence the same is liable to be quashed. 10.BECAUSE, the Respondent failed to appreciate the fact that the Income Tax Return which is a statutory compliance was duly filed by the Appellant, and therefore when the Appellant and its Auditor duly affirmed the inclusion of deduction pertaining to Section 80IA of the Act, then the same ought not to be denied merely on technical grounds.”
Page 2 of 13 such that the assessee-company filed its return of income of AY 2015-16 on 28.09.2015 [i.e. before the due date of 31.10.2015 for filing of return u/s 139(1)] declaring a total income of Rs. 5,20,57,980/- after claiming a deduction of Rs. 16,85,867/- u/s 80-IA(4)(iv) in respect of income derived from business of ‘power generation’ carried on by assessee. The AO processed this return vide intimation dated 20.03.2017 u/s 143(1) denying the deduction claimed by assessee. Ld. AR submits that the denial of deduction was mainly for the reason of non-filing of Form No. 10CCB (C.A.
Certificate) by specified date [i.e. by 30.09.2015 being one month prior to the due date for filing of return u/s 139(1)]. The assessee, however, subsequently filed Form No. 10CCB on 11.10.2017 after processing of return u/s 143(1). Aggrieved by action of AO, the assessee filed first-appeal to CIT(A) and made submissions but the CIT(A) was not satisfied with submissions of assessee and dismissed assessee’s appeal by concluding thus:
“7.8 It is pertinent to note that the appellant has filed form no. 10CCB on 11.10.2017 i.e. after passing the intimation under section 143(1) dated 20.03.2017. Thus, it is well established fact that at the time of passing the intimation under section 143(1), the form No. 10CCB was not available on record. Accordingly. I am not inclined to interfere with the decision of the Assessing Officer. The above ground of appeal is hereby dismissed.” Now, aggrieved by CIT(A)’s order, the assessee has come in next appeal before us.
Page 3 of 13 perused.
Before us, Ld. AR for assessee at first submitted following facts:
(i) That, the assessee filed return of income on 28.09.2015 well before due date u/s 139(1). In the return so filed, the assessee claimed deduction of Rs. 16,85,867/- u/s 80-IA and filled details in “Schedule
80-IA”, copy of relevant page of return is scanned and re-produced on Page No. 5 of Written-Submission of Ld. AR, although the assessee inadvertently selected sub-head (e) relating to “the business of revival of power-generating plant u/s 80-IA(4)(v) and business of cross- country natural gas distribution network u/s 80-IA(4)(vi)” whereas the correct selection should be sub-head (d) relating to “the business of power generation u/s 80-IA(4)(iv)”. Ld. AR submitted that the mistake is a human mistake, apparent, inadvertent and unintentional.
However, the fact remains that the assessee has claimed deduction u/s 80-IA in the return of income filed before due date. Therefore, the mistake of selection of sub-head which had occurred due to oversight, should not take away the statutory deduction available to assessee. Ld.
AR submitted that although there is no serious objection of AO on this premise but the bench may take a call and decide this issue also so that there does not remain any ambiguity or mis-understanding in this regard.
Chhajed & Co., Chartered Accountants”, in fact prepared certificate in Form 10CCB on 25.09.2015 before preparing return of income wherein the deduction of Rs. 16,85,867/- available to assessee was certified [Pages 45-48 of Paper-Book]. Thus, the exercise of obtaining
Form No. 10CCB was done before specified date of 30.09.2015 for same. However, what could not be done was the uploading of Form No.
10CCB and this lapse too happened due to the reason explained by auditors of assessee in following affidavit submitted at Page 49 of Paper-Book:
Page 6 of 13 filed/uploaded Form No. 10CCB on 11.10.2017.
Ld. AR next submitted that the delayed filing/uploading of Form No. 10CCB was a procedural lapse which should not obstruct the substantive benefit of statutory deduction legally allowable to assessee. He contended that the assessee has not only filed uploaded Form No. 10CCB subsequently but also explained the reason of non-filing of same by specified date with the affidavit of auditors. Ld. AR then relied upon CBDT Circular No. 669 dated 25.10.1993 and No. 689 dated 24.08.1994 wherein the CBDT has clarified that if the evidence supporting deduction had been omitted to be furnished alongwith return, the AO is empowered to entertain application u/s 154 for rectification of intimation u/s 143(1) or order u/s 143(3) and decide issue on merit. Ld. AR submitted that the CBDT Circulars are clear pointer to the proposition that even if the evidence of deduction is not filed before assessment u/s 143(1)/143(3) but the same is filed subsequently, the deduction must be allowed. Ld. AR also relied upon certain decisions, more prominent and relevant are extracted below:
(a) Hon’ble Karnataka High Court in ITO Vs. Smt. Mandira D. Vakharia
(2001) 250 ITR 432:
“8. By the Board circular, it has been made clear that if the audit report specified under Section 80HHC(4) is not furnished with the return, then the deduction may be disallowed as a prima facie adjustment. But, if evidence is subsequently furnished, rectification under Section 154 should be carried out to the extent permitted by the Board Circular No. 669, dated October 25, 1993 (see [1993] 204 ITR (St.) 105). The circular then proceeds to mention some
Page 7 of 13 AY 2015-16 other provisions in regard to the non-filing of the audit report or other evidence along with the return of income as required under various Sections such as 12A(b), 33AB(2), 35E(6), 43B (first proviso), 80-I(7), 80-IA(8) and the like. The case of the Revenue is that since Sections 80HHE and 80GG are not specifically mentioned in the Board circular, the assessee would not be entitled to the benefit of deductions under Sections 80HHE and 80GG on the furnishing of the audit report/proof with the rectification application.
The submission is without any substance. The intention of the Board is clear. The illustrations and instances referred to in the Board circular are qualified by the words ". . . and the like". The illustrations and instances given by the Board are not exhaustive. The intention behind the Board circular is that in case the audit report required to be filed, was not furnished with the return of income, then the deduction claimed can be disallowed as a prima facie adjustment. But, if it is furnished subsequently, then rectification should be carried out to the extent permitted by the Board Circular No. GG9, dated October 25, 1993 (see [1993] 204 ITR (St.) 105). The illustrations given in the Board circular, being not exhaustive, it would include provisions like Sections 80HHE and 80GG as well. The assessee has claimed the same relief as would have been admissible to an assessee who was claiming deduction under Section 80HHC(4) and other sections mentioned in the Board's circular. The assessee claiming deduction under Sections 80HHE and 80GG of the Act would be similarly situated as an assessee claiming deduction under Section 80HHC(4) of the Act or other provisions mentioned in the Board circular. The use of the words " . . . . and the like", in the Board circular, would include the assessees who are claiming a similar relief although the provision of the Act is not specifically mentioned in the Board circular.
10. The assessee would be entitled to the deductions in the rectification under Section 154 to the extent permitted by the Board Circular No. 669, dated October 25, 1993 (see [1993] 204 ITR (St.) 105). The Assessing Officer was not right in law in disallowing the rectification application only on the ground that the assessee had failed to furnish the audit report along with the return of income.
The Tribunal was right in law in extending the benefit of the Board circular to the assessee's case as well. The Assessing Officer has rightly been directed to rectify his order and extend the benefit of deductions under Sections 80HHE and 80GG of the Act to the assessee in terms of the Board's circular.
For the reasons stated above, the substantial questions of law on which the appeal is admitted, are answered in the affirmative, i.e. in favour of the assessee and against the Revenue.” (b) ITAT, Lucknow in M/s Satish Cold Storage Vs. DCIT, &
77/Lucknow/2021, AY 2017-18 & 2018-19:
Page 8 of 13 AY 2015-16 “4. I have heard the rival parties and have perused the material available on record. I find that it is undisputed fact that the claim of the assessee u/s. 80IB has not been allowed by the authorities below only because of the reason that the audit report in Form-10CCB was not filed along with return of income and was only filed after receipt of intimation u/s. 143(1) and therefore, the assessee filed rectification applications u/s. 154 of the Act after uploading Form-10CCB which was rejected by CPC. The ld. CIT(A) has rejected the appeals by holding that there was no mistake apparent from record. However, while holding so, he escaped the contents of Circular No.689 dated 24.8.1994 which clearly directs the Officers to allow rectification u/s. 154 for non-filing of audit report or other evidence which could not be filed with the return of income. For the sake of completeness, the contents of Circular No.689 are reproduced below: XXX 5. I further find that taking cognizance of this circular the Hon'ble High Court of Karnataka in the case of ITO vs. Smt. Mandira D Vakharia vide order dated 17.11.2000 has decided similar issue in favour of the assessee. The findings of Hon'ble Karnataka High Court are reproduced below: XXX 6. In view of above facts and circumstances and judicial precedents, I find merit in the arguments of assessee and therefore, the appeals of assessee are allowed.” (c) ITAT, Delhi in Baldev Singh & Sons Vs. DCIT, ITA No. 3103/Del/2023,
AY 2021-22:
“4. The Ld. AR Submitted that the core issue involved in this appeal was denial of deduction under section 80IB of the Act for the reason that the audit report in Form-10CCB was not filed along with the ITR and was only filed after the receipt of intimation under section 143(1) of the Act. The Ld. AR submitted that auditor of the assessee who was also dealing with tax matters omitted to upload the audit report in Form-10CCB and therefore, the AO-CPC rejected its claim of deduction under section 80IB of the Act and the assessee, on receipt of intimation under section 143(1) of the Act, filed an application under section 154 of the Act after uploading the copy of audit report in Form-10CCB, which was rejected by the AO-CPC. Further, the appeal filed before the Ld. CIT(A) against the order passed under section 154 of the Act by the AO-CPC also dismissed as above. 4.1 The Ld. AR in this respect submitted that the CBDT, vide Circular Nos. 669 dated 25-10-1993 and Circular No. 689, dated 24.8.1994, had allowed rectification to be carried out under section 154 of the Act in case the evidence of the claim of deduction under section 80HHC of the Act was filed subsequent to the date of furnishing of the ITR for claim. The Ld. AR prayed that the intent of the above-mentioned CBDT Circulars should be followed in the letter and Page 9 of 13 AY 2015-16 spirit in this case also. The Ld. AR also placed reliance on the decisions of the Hon’ble Madras High Court in the cases of Craftsman Automation P. Ltd. 435 ITR 558 and L-Cube Innovative Solutions P. Ltd. 435 ITR 566 and the decision of the Hon'ble Karnatka High Court in the case of Mandira D Vakharia 250 ITR 432; wherein similar issue in respect of deduction under section 80HHC had been decided in favour of assessees. Further, the Ld. AR, placing reliance on the decision of Tribunal (SMC Bench, Lucknow) in the case of Satish Cold Storage in & 77/Lkw/2021 (date of order: 25.05.2022), submitted that the present case was squarely covered by this decision. Accordingly, in view of these facts, circumstances and judicial pronouncements, he prayed for relief by allowing the claim under section 80IB of the Act particularly when the said deduction had been allowed in preceding years in past by the AO only.
5. On the other hand, the Ld. Sr. DR supported orders of authorities below. He contended that the appeal before the Addl. CIT was against the order passed under section 154 of the Act. Since there was no mistake in the said order as the audit report in Form 10CCB was not available when the AO-CPC passed order under section 143(1) of the Act. Therefore, the Ld. Addl. CIT(A) had rightly dismissed the appeal of the assessee. He prayed for dismissal of this appeal accordingly.
We have heard both parties and have perused the material available on the records. There is no dispute in facts. Undisputedly, the AO-CPC and the Addl. CIT(A) disallowed the deduction under section 80IB of the Act for sole reason that the audit report in Form-10CCB was not filed along with the ITR and was only filed after the receipt of intimation under section 143(1) of the Act. There is no question on the eligibility of the claim of deduction under section 80IB of the Act. It is an undisputed fact that the said deduction under section 80IB of the Act has been allowed over the years in the past. Only a genuine failure of not uploading the audit report in Form- 10CCB along with the ITR by the person uploading the ITR is the root cause of the dispute. The Tribunal (SMC Bench, Lucknow) in the case of Satish Cold Storage (supra) has allowed the appeal on the similar issue. The relevant part of the said decision in & 77/Lkw/2021 (date of order: 25.05.2022) reads as under: XXX 7. In view of the foregoing discussion, we are of the considered view that this case is squarely covered by the decision of Tribunal (SMC Bench, Lucknow) in the case of Satish Cold Storage (supra). We therefore, following the reasoning given by the SMC Bench of Lucknow Tribunal in the case of Satish Cold Storage (supra), allow the deduction under section 80IB of the Act. The assessee gets consequential relief on this score.”
6. Thus, the Ld. AR, referring to CBDT Circulars and judicial precedents cited above, submitted that the AO is wrong in not giving benefit of Page 10 of 13 Ld. AR prayed to allow deduction to assessee.
Ld. DR for revenue though relied upon orders of lower-authorities but was not against the submissions made by Ld. AR for assessee.
We have considered rival contentions of both sides and perused the orders of lower-authorities as well as the material held on record to which our attention has been drawn. The controversy in present case is very narrow. The chronology of events explained by Ld. AR with reference to the documents held on record show that (i) the assessee claimed deduction u/s 80-IA(4) in the return of income filed on 28.09.2015 before due date u/s 139(1); (ii) the auditors of assessee issued Form No. 10CCB on 24.09.2015 before specified date; (iii) though there was delay in uploading of Form No. 10CCB by auditors to AO’s office but the same is explained by an affidavit of auditors; (iv) the assessee has subsequently filed Form No. 10CCB to AO’ office on 11.10.2017. Therefore, in this situation, what we find is that there is a delay in filing Form No. 10CCB but this delay is a procedural lapse and the reason of delay is also adequately explained by means of affidavit of auditors. Therefore, taking into account the view taken in judicial precedents relied by Ld. AR as discussed above, we are of the considered opinion that the deduction statutorily available to assessee cannot be denied.
Page 11 of 13 again agree with Ld. AR that the inadvertent mistake of selecting wrong sub- head (e) relating to “the business of revival of power-generating plant u/s 80-IA(4)(v) and business of cross-country natural gas distribution network u/s 80-IA(4)(vi)” in place of correct sub-head (d) relating to “the business of power generation” cannot obstruct the deduction statutorily available to assessee when the facts/documents are very clear that the assessee is engaged in the business of power generating and eligible for deduction u/s 80-IA(4). Therefore, we direct the AO not to take any adverse view of this aspect.
In view of details discussions and for the reasoning stated therein, we direct the AO to allow deduction to assessee u/s 80-IA(4)(iv) on the basis of Form No. 10CCB filed by assessee on 11.10.2017 which is available in departmental database. The assessee accordingly succeeds in this appeal.
11. Resultantly, this appeal is allowed for statistical purpose.
Order pronounced in open court on 30/09/2025