Loading judgment…
Facts
The assessee filed an appeal against the CIT(A) order which upheld an adjustment by CPC Bangalore, disallowing a deduction of Rs. 11,37,59,267/- under Section 80IA. The disallowance stemmed from the late filing of the audit report in Form 10CCB, even though it was filed before the due date for filing the return of income under Section 139(1) and prior to the final assessment order.
Held
The Tribunal, referencing precedents from the Supreme Court, High Courts, and co-ordinate benches, ruled that the requirement of filing Form 10CCB along with the return of income is directory, not mandatory. It concluded that since the audit report was submitted before the assessment was framed, the assessee should not be denied the Section 80IA deduction. Consequently, the Tribunal set aside the lower authority's order and directed the AO to remove the disallowance.
Key Issues
Whether the late submission of the audit report in Form 10CCB, when filed before the completion of assessment, justifies the disallowance of deduction under Section 80IA of the Income Tax Act, 1961, through an adjustment under Section 143(1)(a).
Sections Cited
143(3), 143(1), 143(1)(a), 80IA, 139(1), 234B, 234C, 80IB, 80JJA, 80IA(7), 80J(6A)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH, ‘C’: NEW DELHI
Before: SHRI ANUBHAV SHARMA&
ORDER PER AMITABH SHUKLA, AM,
The captioned appeal has been preferred by the assessee against order dated 04.02.2025 of the Commissioner of Income Tax (Appeals)/Addl/JCIT(A)-8, Mumbai, [hereinafter referred to as ‘ld. CIT(A)’] arising out of assessment order dated 16.03.2023 passed u/s 143(3) of the Income Tax Act, 1961 pertaining to Assessment Year 2022- 23. The word ‘Act’ herein this order would mean Income Tax Act, 1961.
The assessee has raised following grounds of appeal:-
“1. That the order of Id. CIT (A) is against the law, facts, principles of natural justice and all other principles and rules of law and therefore liable to be set aside.
2. That Ld CIT(A) is not justified in not deleting adjustment made Us 143(1) by Ld DCIT (CPC Bangalore as Ld Assessing Officer in the assessment order subsequently passed U/s 143(3) has not made any addition on account of adjustments made Us 143(1) and assessed the income at returned income and as such not doing so is wrong and contrary to facts, circumstances of the case and provisions of law. As such the action of Ld CIT(A) needs to be undone and the adjustment made Us 143(1) by ld DCIT (CPC Bangalore which has not been made in final assessment order Us 143(3) needs to be deleted.
3. That Ld CIT(A) is not justified in not deleting the disallowance of deduction U/s 80-IA made in order passed Us 143(1) of the Income Tax Act,1961 amounting to Rs. 11,37,59,267 - which is not based on any item specified U/s 143(1)(a) of the Income Tax Act,1961. Hence, the adjustment is based on surmises, conjectures and same is contrary to the facts and provisions of law and liable to be reversed.
4. That Ld. CIT(A) is not justified in confirming the adjustment made by Ld. CPC, Bangalore of Rs. 11,37,59,267/- by not allowing deduction Us 80 IA on account of late filing of Audit report in Form 10CCB within due date though filed before due date of fling Income Tax return Usec 139(1) of Income Tax Act 1961 which is based on surmises, conjectures and is contrary to the facts, provisions of law and principles of natural justice, hence, the adjustment so made needs to be deleted.
5. That Ld. CPC, Bangalore is not justified in charging interest Us 234B and 234C of the Income Tax Act,1961 which is contrary to facts borne on record and provisions of law. As such interest levied by Ld. CPC, Bangalore Us 234B and 234C needs to be deleted.”
The principal controversy raised by the assessee through its grounds of appeal no.1 to 4 is regarding and adjustment made by CPC Bangalore amounting to Rs.11,37,59,267/- by not allowing deduction under section 80IA on account of late filing of audit report in Form 10CCB. It was Page 2 of 6 submitted that the impugned audit report was filed beyond the due date but before the due date of filing of return of income under section 139(1) of the Act. It has also been argued that the impugned adjustment per se is not permissible for adjustment under section 143(1)(a) of the Act.
The ld. Counsel for the assessee vehemently argued submitting that the filing of audit report is not mandatory and merely directory in nature and hence the disallowance was unwarranted and unjustified. It was submitted that the impugned order of the ld. First Appellate Authority which has confirmed the action of CPC, Bangalore therefore be set-aside.
Per Contra, the ld. DR relied upon the orders of the authorities below.
We have heard rival submissions in the light of material available on record. The issue as to whether filing of Form 10CCB is mandatory or directory in nature has been a subject matter of consideration before Co- ordinate Benches of the Tribunals, Hon’ble High Courts and Hon’ble Supreme Court. We have noted that a co-ordinate Bench of Ahmedabad in the case of Akuntha Projects (P.) Ltd. Vide IT APPEAL NO. 52 (AHD.) OF 2024 for ASSESSMENT YEAR 2022-23 vide its order dated 20.05. 2024 has held as under:-
“…….Further, we observe that these Hon'ble Supreme Court in the cases of CIT v. G. M. Knitting Industries (P.) Ltd. [2016] 71 taxmann.com 35/[2015] 376 ITR 456 held that, even though it is necessary to file certificate in Form 10CCB along with the return of income, but even if the same has not been filed with the return of income, but the same was Page 3 of 6 filed before the final order of assessment was made, the assessee was entitled to claim deduction under Section 80- IB of the Act.
Accordingly, looking into the instant facts, and the decisions of the Hon'ble Supreme Court and jurisdictional Gujarat High Court referred to above, we are of the considered view that the claim of the assessee/appellant for deduction under Section 80JJA of the Act cannot be denied for the reason that firstly, the chartered accountant of the assessee had uploaded Form 10DDA before the due date of filing of return of income, and it was only because of procedural lapse/mistake on the part of the appellant/assessee that the aforesaid form could not be accepted before the due date of filing of return of income, secondly, the assessee/appellant had duly accepted the Form 10DDA before the return of income was processed by the CPC on 16.03.2023, thirdly, the Gujarat High Court, has on similar facts observed that although the furnishing of report for claiming the deduction/exemption is mandatory requirement, the mode and stage of filing thereof is a procedural aspect and if the requisite audit report is available with the assessing officer before the assessment order is framed, then the claim of deduction cannot be denied to the assessee/appellant, even if the audit report may not have been filed along with the return of income……” Further, Hon’ble jurisdictional High Court in the case of 7. Contimeters Electricals (P.) Ltd. as at 317 ITR 249 held as under:-
“…...5. Being aggrieved by the said order, the assessee preferred an appeal before the Tribunal which was allowed by the Tribunal by virtue of the impugned order. The Tribunal took the view that the provisions of section 80-IA(7) with regard to filing of the audit report along with the return were not mandatory and were merely directory. In coming to such conclusion, the Tribunal referred to the decision of the Gujarat High Court in CIT v. Gujarat Oil & Allied Industries [1993] 201 ITR 325. In that decision the provisions of section 80J(6A) were considered. The wording of section 80J(6A) is similar to that of section 80-IA(7) which is in issue in the present appeal. The Gujarat High Court took the view that the word 'shall' which occurs in section 80J(6A) be read as 'may' and that the requirement of filing of an audit report along with the return was Page 4 of 6 only to be taken as directory in nature. The Gujarat High Court took the view that in case the audit report is submitted at any time before the framing of the assessment, there would be substantial compliance with the provisions of section 80J(6A).
6. The Tribunal also relied on the decision of the Madras High Court in CIT v. A.N. Arunachalam [1994] 208 ITR 481 which, again, while considering the provisions of section 80J(6A), took the same view as that of the Gujarat High Court.
We notice that there are other decisions of other Courts taking the same view. The decisions being, CIT v. Shivanand Electricals [1994] 209 ITR 63 (Bom.); Zenith Processing Mills v. CIT [1996] 219 ITR 721 (Guj.); CIT v. Jayant Patel [2001 248 ITR 199 (Mad.) and CIT v. Mahalaxmi Rice Factory [2007] 294 ITR 631 (Punj. & Har.).
In view of this long line on decisions of various High Courts in considering the provisions of section 80J(6A) which are similar to the provisions of section 80-IA(7), we feel that the Tribunal has arrived at the correct conclusion that the requirement of filing the audit report along with the return is not mandatory but directory and that if the audit report is filed at any time before the framing of the assessment, the requirement of section 80-IA(7) would be met…..”
8. Thus, the Hon’ble jurisdictional High Court, Hon’ble Apex Court as well as Co-ordinate Bench of the Ahmedabad Tribunal have held that filing of Form 10CCB is not mandatory and merely directory in nature. We have noted that facts of the present case are similar to those available in the judicial precedents discussed hereinabove. In respectful compliance thereof, it is held that the delayed filing of Form 10CCB in this case by the appellant would not deprive the assessee of its claim made under section 80IA. We therefore set-aside the order of the lower authority and direct the ld. AO to delete the impugned disallowance of Rs.11,37,59,266/- made under section 80IA for late filing of Form 10CCB. Grounds of appeal no.1 to 4 raised by the assessee are therefore allowed. Page 5 of 6
In the result, the appeal of the assessee is partly allowed.
Order pronounced in the open court on 17th December, 2025.