2023 (5) TMI 357 - AT - Income Tax

Deduction u/s. 80JJAA - Form no. 10DA is not filed within due date or extended due date for the A. Y. 2021-22. Hence no deduction will be allowed - HELD THAT - To support the reasons affecting the delay the assessee filed the affidavit of the CA who filed the Form no. 3CD and Form no. 10DA thus it is not disputed that the same CA has certified the claim of the assessee in Form no. 3CD which was submitted in time and Form no. 10DA is not filed on account of the pandemic time wherein everybody life was disturbed for one or the other reasons. In that period it is not unusually that assessee or CA may make mistake and thereby the whole claim of the assessee cannot be denied. As decided in International Tractors Ltd. case 2021 (4) TMI 1033 - DELHI HIGH COURT when the assessee has acted diligently, made the claim which is otherwise eligible cannot be denied merely the delay in filling the procedural form. In terms of these observations the appeal of the assessee is allowed.

Summary

Issues Involved:
1. Disallowance of deduction under section 80JJAA of the Income Tax Act, 1961.
2. Procedural compliance regarding the submission of Form 10DA.

Summary:

1. Disallowance of Deduction under Section 80JJAA:

The assessee, a regular filer of Income Tax Returns (ITR), claimed a deduction of Rs. 7,62,815/- under section 80JJAA for the assessment year 2021-22. The claim was disallowed by the Assessing Officer (AO) under section 143(1)(a) due to the non-attachment of Form 10DA. The National Faceless Appeal Centre (NFAC) upheld the disallowance, citing the mandatory requirement to furnish the prescribed report of an accountant before the specified date as per section 44AB. The assessee argued that all conditions for eligibility under section 80JJAA were met except for the procedural lapse of not attaching Form 10DA, which was later submitted in response to the notice under section 143(1)(a).

2. Procedural Compliance Regarding Submission of Form 10DA:

The assessee's Chartered Accountant had prepared Form 10DA, but due to COVID-19-related disruptions, the form was not signed and submitted on time. The assessee contended that the delay was unintentional and due to unprecedented circumstances. The Chartered Accountant's affidavit confirmed the procedural lapse. The assessee cited several judicial precedents where courts condoned procedural delays if the substantive conditions for deductions were met. These included cases like M/s Unique Builders & Developers v/s DCIT, CIT v/s G.M. Knitting Industries Pvt Ltd, and CIT v/s AKS Alloy Pvt Ltd, among others.

Tribunal's Findings:

The Tribunal noted that the revenue did not dispute the assessee's eligibility for the deduction under section 80JJAA. The only issue was the late filing of Form 10DA. The Tribunal held that the delay was a procedural lapse that could be condoned, especially given the pandemic's impact. The Tribunal referenced the Delhi High Court's decision in International Tractors Ltd. v. DCIT, which supported the view that appellate authorities could entertain claims if the substantive conditions were met, even if procedural lapses occurred.

Conclusion:

The Tribunal allowed the appeal, stating that the assessee's claim for deduction under section 80JJAA should not be denied due to a procedural delay in filing Form 10DA. The appeal was thus allowed, and the order was pronounced in open court on 17/04/2023.