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Facts
The assessee initially filed an original return and subsequently a revised return under Section 139(5), claiming a deduction under Section 80JJAA and submitting Form 10DA. The Centralized Processing Center (CPC) denied the deduction under Section 143(1) on the technical ground that Form 10DA was not filed with the original return, a decision upheld by the Ld.CIT(A).
Held
The Tribunal found that the revised return and Form 10DA were filed within the statutory time and were available to the CPC. Citing various judgments, the Tribunal concluded that denying the deduction on mere technicalities was erroneous. The case was remitted to the Assessing Officer to consider the Form 10DA on merits and grant the Section 80JJAA benefit if otherwise eligible.
Key Issues
Whether a deduction under Section 80JJAA can be denied if Form 10DA is filed with a revised return within the prescribed time, but not with the original return, and if such denial on technical grounds is valid.
Sections Cited
80JJAA, 139(1), 139(5), 143(1), 40(a)(ia), 119(2)(b)
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Income Tax Appellate Tribunal, COCHIN BENCH : COCHIN
Before: SHRI INTURI RAMA RAO & SHRI SOUNDARARAJAN K.
PER SOUNDARARAJAN K., JUDICIAL MEMBER
This is an appeal filed by the assessee challenging the order of the Ld.Addl/JCIT(A)-1, Coimbatore dated 22/07/2024 in respect of the A.Y. 2023-24 and raised the following grounds: 1. The order issued by the Learned Additional/ Joint Commissioner of Income Tax – Appeals(Addl/JCIT-(A))to
Page 2 of 8 the extent appealed against is against law, equity and justice.
The Addl/JCIT(A)-1 erred in law in disallowing a valid claim made u/s 80JJAA of the IT Act, in the proceedings issued u/s. 143(1) when: (i) The original return was filed within the due date prescribed u/s 139(1) and (ii) The revised return was filed claiming deduction u/s 80JJAA together with the report in Form 10DA within the due date prescribed u/s 139(5) of the IT Act
The appellate authority grossly erred in not appreciating that 143(1)(a)(v) requires disallowance only if the original return is furnished beyond the due date prescribed u/s 139(1) which is not applicable to the facts of the case.
3. The Learned Addl/JCIT(A)-1 grossly erred in not allowing a valid claim made u/s 80JJAA in a valid return filed within the due date prescribed for filing the revised return together with the Form 10DA.
Learned Addl/JCIT(A)-1 erred in dismissing the appeal stating that the appeal was filed for condoning the delay in Form 10DA. In any case, the Learned AddI/JCIT(A)-1 ought to have allowed the valid claim made the Act on the basis of report in Form 10DA available at the time of processing the return, by following the ratio of the Delhi HC reported in 435 ITR 85.
For these and other grounds that may be further adduced before or at the time of hearing, the order of the Addl/JCIT(A)-1 requires to be modified.”
2. The assessee filed their return of income u/s. 139(1) of the Act on 27/09/2023. Subsequently, they had filed a revised return, within the time granted, claiming a deduction u/s. 80JJAA of the Act and the prescribed form in Form 10DA was also submitted. The CPC while processing the return u/s 143(1), had not granted the said deduction on the ground that the Form 10DA was not filed within the due date specified in the Act. Another disallowance was made by the CPC u/s. 40(a)(ia) of the Act. As against the said intimation, the assessee filed an appeal before the Page 3 of 8 Ld.CIT(A). The assessee submitted that they had fulfilled all the conditions required for eligibility of deduction u/s. 80JJAA of the Act. Insofar as the disallowance u/s. 40(a)(ia), the assessee submitted that the said amount was already disallowed in the preceding previous year and claimed during the year under the consideration on payment basis. The Ld.CIT(A) had partly allowed the appeal in which the deduction claimed u/s. 80JJAA of the Act was not accepted for the reason that the appellate authorities has no power to condone the delay in filing the return.
As against the said order, the assessee is in appeal before this Tribunal.
4. At the time of hearing, the Ld.AR submitted that mistakenly, the assessee had failed to claim the deduction u/s. 80JJAA of the Act and therefore within the time granted for filing the revised return, the said deduction was claimed in the revised return and therefore the disallowance by the authorities below is not correct. The Ld.AR also submitted that the assessee had complied with all the eligibility criteria prescribed u/s. 80JJAA of the Act to claim the said deduction but the said deduction was denied on the technical reason that the Form 10DA was not filed before the due date for filing the return u/s. 139(1) of the Act. The Ld.AR further submitted that the CPC had accepted the revised return and also processed the said return u/s. 143(1) of the Act and therefore the claim made in the revised return has to be necessarily considered on merits and not on technicalities. The Ld.AR also relied on the Hon’ble Delhi Tribunal order as well as the Hon’ble Jaipur Tribunal order wherein the Tribunals had granted deduction based on the audit report in Form 10DA filed belatedly. The Ld.AR further submitted that as per the judgment of the Hon’ble Delhi High Court reported in 435 ITR 85 the assessee is entitled for deduction and prayed to grant the deduction u/s. 80JJAA of the Act. The Ld.AR filed a paper book enclosing the notes of the submissions and the copies of the returns and the Page 4 of 8 intimation u/s. 143(1) apart from the decisions of the Tribunals in support of their claim.
The Ld.DR relied on the orders of the lower authorities and submitted that admittedly, the Form 10DA was filed belatedly and therefore the authorities below had rightly rejected the claim of deduction made u/s. 80JJAA of the Act.
We have heard the arguments of both sides and perused the materials available on record.
The undisputed facts involved in this case is that the assessee filed their return of income u/s. 139(1) of the Act within the statutory period. Later, the assessee found that some mistakes or errors happened in the original return and therefore filed a revised return u/s. 139(5) of the Act. Along with the said revised return, the assessee also filed their audit report in Form 10DA in support of their claim that they are eligible for deduction u/s. 80JJAA of the Act. The said revised return was also filed within the period prescribed u/s. 139(5) of the Act. The CPC had also processed the revised return filed u/s. 139(5) of the Act and intimation u/s. 143(1) was issued in which the claim of deduction u/s. 80JJAA was denied for the reason that the said Form 10DA was not filed along with the original return filed u/s. 139(1) of the Act.
On going through the above said facts, it is clear that the assessee had filed their revised return in time, in which the defects were rectified and also in support of the claim made u/s. 80JJAA of the Act, the required audit report in Form 10DA was also furnished. Therefore, the revised return filed by the assessee partakes the character of the original return and in fact the same can be taken as a substitute for the original return filed u/s. 139(1) of the Act. When the Statute had granted permission to file a revised return and the assessee had fit into the conditions for filing the revised return, then
Page 5 of 8 naturally, the other benefits for which the assessee is eligible, has to be necessarily granted by the authorities.
In the present case, rightly the CPC had processed the revised return and also passed an order u/s. 143(1) of the Act but failed to grant the deduction claimed u/s. 80JJAA of the Act only since the audit report was not filed in time. The CPC as well as the first appellate authority had not stated anything about the genuineness of the claim made by the assessee but rejected the claim only on technicalities that the audit report in Form 10DA was not filed along with the original return u/s. 139(1) of the Act. Anyhow, we have found that the assessee had submitted the Form 10DA along with the revised return and the said Form 10DA was very much available before the CPC while processing the revised return u/s. 143(1) of the Act. Therefore, as per the principles laid down by the Hon’ble High Courts and the orders of the Hon’ble Tribunals, the CPC instead of not considering the said Form 10DA, ought to have considered the said audit report and ought to have granted the necessary reliefs, if the assessee is otherwise eligible for the same. We, therefore, feel that the CPC only on technicalities had rejected the said claim made u/s. 80JJAA of the Act even though the audit report in Form 10DA was very much available before it while processing the revised return. The Ld.CIT(A) instead of considering the issue on merits, had given a finding that he has no authority to condone the said delay in filing the return of income but only the CBDT has power u/s. 119(2)(b) of the Act and therefore denied the claim made by the assessee.
In this issue, we have come across several orders of the Hon’ble Tribunals in which it was categorically held that the authorities should have considered the audit report in Form 10DA if the same was filed before the processing of the said return.
Page 6 of 8 ITA No. 826/Coch/2024
We have also perused the order of the Hon’ble Pune Tribunal in dated 23/07/2024 in which the Tribunal gave a finding that “the prescribed audit report in Form 10DA was very much available at the time of processing the return of income by the CPC which should have been taken into consideration by the CPC. The timeline prescribed under the Rule 19AB is only a directory.”
Another order of the Hon’ble Kolkata Tribunal reported in 168 taxmann.com 514 wherein the Hon’ble Tribunal has held as follows: “where assessee claimed deduction u/s. 80JJAA but had not filed audit report in Form 10DA along with the return of income, however filed the same before the final order of assessment was made and therefore the assessee was entitled to claim deduction u/s. 80JJAA of the Act.”
We have also perused the order of the another Coordinated Bench of this Tribunal reported in 138 taxmann.com 480 (Bangalore) wherein this Tribunal had held as follows: “Where assessee filed return of income claiming deduction of Rs. 94 under section 80JJAA, however, later revised claim under section 80JJAA to Rs. 7.99 crores stating that in return of income, deduction was inadvertently claimed as Rs. 94, Assessing Authority was not justified in rejecting said claim on ground that no revised return was filed under section 139(5)
Requirement of filing auditors report under section 80JJAA is a directory, requirement and hence would stand satisfied if accountant's report is furnished during course of assessment”
We have also gone through another order of the Hon’ble Delhi Tribunal reported in 155 taxmann.com 607 relied on by the assessee wherein the Hon’ble Delhi Tribunal had held that the audit report which was revised and filed after the original return of income but before the date of intimation has to be accepted and directed to grant the benefit u/s. 80JJAA of the Act.
Page 7 of 8 ITA No. 826/Coch/2024
We have also perused the Division Bench judgment of the Hon’ble Delhi High Court reported in 435 ITR 85 which was relied on by the assessee in which the assessee had not claimed the deduction u/s. 80JJAA of the Act while filing the original return u/s. 139(1) of the Act. Thereafter, the said assessee also not filed any revised return but claimed the said deduction while the assessment proceeding was going on, by filing a statement and claimed the deduction u/s. 80JJAA of the Act. The assessee also filed the audit report in Form 10DA of the Act. The assessing officer had rejected the said claim on the reason that the same was not claimed in the original return and also not claimed by way of revised return.
As against the said order, the assessee field an appeal before the Ld.CIT(A) and the Ld.CIT(A) had examined the claim made by the assessee u/s. 80JJAA of the Act and satisfied himself that the claim was in order and allowed the claim made by the assessee. The department challenged the said order before the Tribunal and the Tribunal remanded the issue to the AO for fresh adjudication since no opportunity was given to the AO to examine the material. The said remand order was challenged by the assessee before the Hon’ble High Court. The Hon’ble High Court has set aside the remand order of the Appellate Tribunal and held that there is no necessity for the remand when the Ld.CIT(A) had examined the claim based on the documents produced before him. The Hon’ble High Court further held that unless and until there was wrong or mistakes in the examination made by the Ld.CIT(A), a remand was not called for.
By respectfully following the above said Division Bench judgment of the Hon’ble Delhi High Court we are remitting this issue to the jurisdictional assessing officer since the authorities below had denied the said deduction, based on technicalities without giving any finding on merits. We also direct the assessing officer to consider the audit report filed in Form 10DA and if Page 8 of 8 found the same is otherwise in order, grant the benefit of deduction u/s. 80JJAA of the Act.
In the result, the appeal filed by the assessee is allowed for statistical purposes.
Order pronounced in the open court on 13th June, 2025.