LOTUSDEW WEALTH AND INVESTMENT ADVISORS PRIVATE LIMITED,HYDERABAD vs. DCIT., CIRCLE - 5(1), HYDERABAD

Brief facts of the case are that the assessee company filed return of income for assessment year 2021-22 disclosing “Nil” income after claiming deduction of Rs.1,05,18,520/- under section 80-IAC of the Income tax Act, 1961 (“the Act”). Assessee received an intimation order dated 13/11/2022, determining taxable income of Rs.1,05,18,520/- by disallowing the claim of Rs.1,05,18,520/-.

Aggrieved by the intimation assessee preferred an appeal before the learned CIT(A) and the learned CIT(A) dismissed the appeal of the assessee.

Against which the assessee filed appeal before the Tribunal and at the outset, learned AR submitted that they have filed Form 10CCB within the due date for filing the return of income under section 139(1) of the Act, but due to lack of knowledge, they failed to submit the same in the portal, resulting in not allowing deduction under section 80-IAC of the Act at the stage of 143(1) process. Impugned order shows that the assessee submitted the same during the first appellate proceedings stating that the technical or venial breach of law shall not result in denial of deduction under section 80-IAC of the Act. Learned CIT(A), however, did not accept the same, holding that such denial by the CPC was in accordance with law and on that count dismissed the appeal.

Aggrieved by the order of the learned CIT(A), assessee is in appeal before the Tribunal. Assessee placed reliance on the decision of Hon'ble Karnataka High Court in the case of Sutures India (P.) Ltd. [2021] 125 taxmann.com 226 (Karnataka), wherein also the assessee filed Form 10CCB along with written submissions before the learned CIT(A). Hon'ble High Court taking notice of the decision in CIT Vs. Ace Multitaxes Systems (P.) Ltd. [2009] 317 ITR 207(Kar.) and CIT Vs.A.N.Arunachalam [1994] 75 Taxman 529/208 ITR 481 (Mad.) held that the assessee is entitled to the deduction even if the audit report was filed at appellate stage.

On a careful consideration of the matter, we are of the considered opinion that the decision of Hon'ble Karnataka High Court in the case of Sutures India (P.) Ltd. (supra) is applicable to the facts of the case on all fours. Respectfully following the same, we answer the grounds in favour of the assessee and restore the issue to the file of the learned Assessing Officer to receive the Form 10CCB and take a view and decide the issue relating to the eligibility of the assessee to claim deduction under section 80-IAC.

In the result, the appeal of the assessee allowed for statistical purpose.