Loading judgment…
Facts
The assessee, an LLP engaged in manufacturing, claimed a deduction under Section 80JJAA for Rs. 30,34,160/-. The initial Form 10DA audit report inadvertently showed zero for new workmen, prompting the assessee to file a revised report during assessment proceedings. The Assessing Officer disallowed the deduction, a decision upheld by the CIT(A), on the grounds that the revised report was not filed online or by the original due date.
Held
The Tribunal ruled that the assessee is entitled to the deduction under Section 80JJAA, considering the late filing of the revised Form 10DA as a procedural omission, citing previous High Court and ITAT judgments. The matter was remanded to the AO solely for the quantification of the deduction. Consequently, the penalty levied under Section 270A, which was based on the disallowed deduction, was also set aside.
Key Issues
Whether the assessee is eligible for Section 80JJAA deduction despite errors in the original Form 10DA and the late filing of a revised report; and the validity of the consequential penalty under Section 270A.
Sections Cited
250, 143(3), 80JJAA, 142, 270A
AI-generated summary — verify with the full judgment below
Detected automatically from the text. The count shows how many other judgments on BharatTax rely on the same authority.
Income Tax Appellate Tribunal, DELHI BENCH ‘E’: NEW DELHI
Before: SHRI SUDHIR KUMAR & SHRI MANISH AGARWAL
O R D E R PER MANISH AGARWAL, AM: These two appeals are filed by the assessee against the two separate orders of Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi for Assessment Year 2018-19.
Since, both the appeals are related to Assessment Year 2018-19, therefore, they are taken together for consideration. First we take ITA No. 3610/Del/2024.
This appeal is filed by the assessee against the order of Ld. CIT(A), NFAC in Appeal No. CIT(A), NFAC/2017-18/10051718 dated 14.06.2024 passed u/s 250 of the Act arising out of the order passed u/s 143(3) dated 24.03.2021 for Assessment Year 2018-19.
4. Brief facts of the case are that assessee is a firm/LLP engaged in the business of manufacturing of wearing apparels since inception. The return of income was filed on 29.10.2018 declaring total income of Rs.20,29,310/- after claiming deduction of Rs.30,34,160/- u/s 8-JJAA which was disallowed by the AO for the reason that audit report in Form 10DA filed along with return of income was incomplete and did not reflect the number of workmen employed during the year. The assessee in terms of latter dated 20.02.2021 filed corrected audit report in Form 10DA before the AO wherein the correct figures of new workmen were filled in. The AO had not accepted the said report as it was not filed online as provided in section 80JJAAA of the Act and deduction claimed was disallowed.
5. Aggrieved by the said order, assessee filed an appeal before Ld. CIT(A) who dismissed the appeal of the assessee, therefore, present appeal is filed by assessee before the Tribunal by taking following grounds of appeal:
1. That the order of learned Commissioner of Income Tax (Appeals)-NFAC, New Delhi is bad in law and on the facts of the case.
1. 2. That the learned Commissioner of Income Tax (Appeals) has erred both on facts and in law in arbitrarily upholding the findings and sustaining the addition made by the learned A.O. on account of claim of deduction being disallowed of Rs.30,34,160/- u/s 80JJAA of the Act arbitrarily and without any justification.
& 4363/Del/2024 O. C. Sweater LLP vs. ITO 3. The learned Commissioner of Income Tax (Appeals) has failed to appreciate and erred in not considering that the assessee/appellant had satisfied all the conditions to claim the deduction and necessary details were submitted to substantiate the same. 3.1 That further the assessee/appellant had furnished form 10DA electronically by uploading it on the e-filing portal and even submitted the same manually during the course of assessment proceedings which is placed on record, containing all the details pertaining to additional employees, which has been arbitrarily ignored by lower authorities.
The learned Commissioner of Income Tax (Appeals) has passed the Order brushing aside arbitrarily the replies filed by assessee during the course of appellate proceedings and written submissions filed before it justifying their claim of deduction u/s 80JJAA of the Act.
The learned Commissioner of Income Tax (Appeals) has failed to appreciate that the appellant had duly discharged its onus by bringing all material facts on record, in order to substantiate the genuineness of the claim of deduction u/s 80JJAA of the Act and the order so passed by learned CIT (A) is without following the principles of natural justice.
The assessee craves to leave add, alter, and modify any other ground of appeal
at the time of hearing.”
6. Before us, Ld. AR submits that assessee filed revised / modified audit report in Form 10DA containing complete particulars of new workmen employed during the year for claiming the deduction u/s 80JJAA in column 5A and 5B of the report which inadvertently filled as 0(Zero) in Form 10DA filed along with return of income. Copy of the corrected/modified report duly signed by the auditor is placed before us at pages 48-50 of the PB. He further submits that the said report was filed in reply to the notice u/s 142 dated 09.11.2020 on 28.12.2020. It is further submitted by Ld. AR that in subsequent assessment year, claim of deduction u/s 80JJAA of this new workmen in the instant year was allowed by the AO without any doubts. It is thus, requested that the assessee is entitled for the deduction u/s 80JJAA in the year under appeal. Reliance is also placed on various judgements including the judgment of Hon’ble Delhi High Court in the case of International Tractors Ltd. vs.
& 4363/Del/2024 O. C. Sweater LLP vs. ITO DCIT reported in 435 ITR 85 and Co-ordinate Bench of the ITAT, Delhi in the case of Jubilant Food Works Ltd. vs. ACIT reported in 177 taxmann.com 374.
Heard both the parties and perused the materials available on record. In the instant case, assessee e-filed report in Form 10DA alongwoth the return of income filed and deduction u/s 80JJAA was also claimed in the return as is apparent from perusal of the return of income placed at pages 54 to 130 of the Paper Book. It is also seen that originally in Form 10DB inadvertently the column No.5(a) and 5(b) of the audit report, the figures of new workmen employed was filled as 0(Zero) however, the said report was revised and modified report duly signed by the Auditors was filed before the AO vide letter dated 28.12.2020.
It is not the case of the Revenue that any additional / fresh claim was made by the assessee during the course of the assessment proceedings rather deduction u/s 8- JJAA was already made in the return of income filed which was available before the AO. However, solely due to some typographical error in the said report, revised report was filed before the Assessing Officer. It is also seen that Assessing Officer has not disbelieved the claim of deduction u/s 80JJAA on merits as he never verified the details filed by the assessee.
The Hon’ble High Court in the case of International Tractors Ltd. vs. DCIT (supra) allowed the deduction u/s 80JJAA even when it was claimed for the first time before the Ld. CIT(A). The Co-ordinate Bench of ITAT in the case of Jubilant Food Works Ltd. vs. ACIT (supra) allowed the deduction u/s 80JJAA where the report in Form 10DA was filed alongwith revised return and was not filed before the due date of furnishing of the original return. The Co-ordinate Bench held that non filing of the audit Form 10DA on or before the due date of furnishing of return of & 4363/Del/2024 O. C. Sweater LLP vs. ITO income was a procedure omission and Assessing Officer should not disallowed the deduction u/s 80JJAA of the Act.
In view of the above facts and by respectfully following the aforesaid decisions of the hon’ble jurisdictional high court and of the coordinate Delhi bench of Tribunal, we hold that the assessee is entitled for deduction u/s 80JJAA of the Act and the same could not be denied solely for the reason that revised Form 10DA was filed during the course of assessment proceedings and was not filed before the due date of filing of return. However, from the order of the lower authorities, we find that the correctness of claim was not examined, therefore, for the limited purpose of verification of the quantification of the deduction u/s 80JJAA, the matter is sent to the file of the AO. The assessee is also directed to file all the necessary details with respect to the deduction claimed u/s 80JJAA. All the grounds of appeal are partly allowed for statistical purposes.
11. In the result, the appeal of the assessee is partly allowed. is filed by assessee against the order of confirming the levy of penalty u/s 270A of the Act on the disallowance of deduction claimed u/s 80JJAA of Rs.30,34,160/-. Since, we have already allowed the appeal of the assessee in wherein it is observed that assessee is entitled for deduction u/s 80JJAA and for the purpose of verification of the quantification of deduction, the issue is remanded to the file of the AO. Therefore, there remain no addition for which the penalty could levied u/s 270A of the Act, thus, the present appeal of the assessee is hereby allowed.