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Income Tax Appellate Tribunal, DELHI “A” BENCH: NEW DELHI
Before: SHRI MAHAVIR SINGH & SHRI MANISH AGARWAL
Year : 2014-15] vs ACIT SBL Pvt. Ltd. Central Circle-13 Plot No.3, Sector-12, IIE, New Delhi. Sideul, Haridwar, Uttarakhand-249403. PAN-AACCD0037H APPELLANT RESPONDENT Revenue by Shri Jitender Singh, CIT DR Assessee by Shri Shaurya Jain, Adv. Date of Hearing 03.12.2025 Date of Pronouncement 03.12.2025 ORDER
PER MANISH AGARWAL, AM :
The present appeal is filed by Revenue against the order dated 15.04.2025 passed by Ld. Commissioner of Income Tax (A)-26, New Delhi [“Ld.CIT(A)”] in Appeal No. 26/10525/17-18 u/s 250 of the Income Tax Act, 1961 [“the Act”] arising out of assessment order dated 30.12.2016 passed u/s 143(3) of the Act pertaining to Assessment Year 2014-15.
Brief facts of the case are that assessee company engaged in manufacturing of homoeopathy medicines in India and has Two manufacturing units situated at Haridwar which are eligible for deduction u/s 80-IC of the Act and also has units at Jaipur and Sahibabad, which are non-eligible units. The assessee company filed its return of income on 29.09.2014, declaring total income of INR 18,85,40,940/-. The case was selected for scrutiny through CASS and notice u/s 143(2) was issued on 31.08.2015, followed by notices u/s 142(1) alongwith questionnaire. In response, requisite details and replies were from time to time. After considering the submissions and replies filed by the assessee in support of its claim, AO assessed the income of the assessee company at INR 52,74,33,562/- vide assessment order dated 30.12.2016 passed u/s 143(3) of the Act by making estimation of income at Sahibabad plant and further by making disallowance out of various expenses and by not allowing the deduction u/s 80IC of the Act.
Against the said order, assessee filed an appeal before Ld. CIT(A) who vide order dated 15.04.2025, partly allowed the appeal of the assessee.
Aggrieved by the order of Ld. CIT(A), Revenue is in appeal before the Tribunal by taking following grounds of appeal:- 1. “Whether the Ld. CIT(A) has erred on facts and in law in deleting the disallowance made u/s 80IC of the Act when the assessee had not filed Form 10CCB electronically as was required?
2. Whether the Ld. CIT(A) has erred on facts and in law in not appreciating that requirement of furnishing report of audit u/s 80-IC electronically was made mandatory with addition of proviso to Rule 12(2) of Income Tax Rules w.e.f. 1.04.2013, thus the provision had no occasion to be examined and interpreted by Supreme Court in case of GM Knitting (AY 2005-06) OR Wipro Ltd (AY 2001-02)?
3. (a) The order of the Ld. CIT(A) is erroneous and not tenable in law and on facts. (b) The appellant craves to add, alter OR amend any/all of the grounds of appeal before OR during the course of the hearing of the appeal.”
5. Heard the contentions of both parties and perused the material available on record. Ld. CIT(A) decided the issue partially in favour of the assessee in para 7.7 to 7.23 available at pages 34 to 47. For ready-reference, the relevant contents of the impugned order are reproduced as under:-
6. We find that Ld. CIT(A) has given findings based on the facts that the report u/s 80-IC of the Act, was filed by the assessee which was available before the AO when the assessment was completed and since it is directory requirement. The Hon’ble Delhi High Court in the case in CIT Vs. Contimeters Electricals (P.) Ltd. reported in [2009] 317 ITR 249 (Delhi) by following the judgements of the hon’ble Madras High Court in the case of CIT Vs. A.N. Arunachalam reported in [1994] 208 ITR 481 and in the case of CIT v. Jayant Patel reported in [2001] 248 ITR 199 held that filing of audit report along with the return was not mandatory but directory and that if the audit report was filed at any time before framing the assessment, the requirement of provisions of the Act should be held to have been met. Further the judgments of hon’ble Apex court in G.M. Knitting Industries (supra) in juxtaposition to Wipro Limited (supra), the principle which emerges is that the fulfillment of requirement of making a claim for exemption under the relevant sections of Chapter III of the Act in the return of income is mandatory, but when it comes to the claim of a deduction, inter alia, under the relevant sections of Chapter VI-A, such requirement becomes directory. In the latter case, making of a claim even after the filing of return but before completing the assessment, meets the directory requirement of making a claim in the return of income. In the instant case involves deduction u/s 80IC of the Act and hence, would be governed by the principle laid down in G.M. Knitting Industries (supra), as per which making of a claim of deduction is mandatory but the timing is directory. In the instant case, even the claim of deduction was made in the original return but inadvertently the report in form 10CCB was filed manually, therefore the requirement of the Act that the claim should be made with the return of income filed was duly complied with accordingly, such a claim has to be allowed.
In view of the proposition rendered by the Hon’ble Supreme Court in the case of G.M. Knitting Industries Pvt. Ltd. (supra), the claim of the assessee has reached to a higher pedestal because the Hon’ble Supreme Court has categorically held that for making a claim under Chapter VI-A of the Act which also includes provision of deduction u/s 80IC of the Act and the making of such claim for deduction is permissible even after filing of the return, but, before completing the assessment meets directory requirement in the filing of return of income. Therefore, we find no error in the order of Ld. CIT(A) more particularly when the Revenue has failed to controvert the findings of Ld. CIT(A) by placing any contrary judgement before us. Accordingly, all the Grounds of appeal raised by the Revenue are dismissed.
In the result, the appeal of the Revenue is dismissed.
Order pronounced in the open Court on 03.12.2025.