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2024 (5) TMI 1076 - AT - Income TaxAddition u/s 80JJAA - claim denied Assessee failed to file the Form 10DDA within the prescribed time under the Statute - HELD THAT - From the facts placed on record, it is observed that the chartered accountant of the assessee filed Accountant s report in Form 10DA before the due date of filing of return of income. This position has not been disputed by the Department. Admittedly, the above report was not accepted by the assessee before the due date of filing of return of income. Report in Form 10DA filed by the accountant of the assessee was accepted by the assessee on 06.01.2023, whereas in this case the order u/s 143 (1) was passed on 16.03.2023, denying the claim of deduction u/s 80JJA which means that at the time when the order u/s 143(1) of the Act was passed by the CPC, the assessee had accepted the Report filed by the accountant of the assessee in Form 10DA. It would be useful to reproduce the relevant extracts of the decision of in the case of Association of Indian Panel Board Manufacturer 2023 (3) TMI 1374 - GUJARAT HIGH COURT in which the Gujarat High Court, while dealing with similar issue held that although the requirement of furnishing report was mandatory, filing thereof is a procedural aspect. Once, it is seen that the audit report, in Form 10B was available with the assessing officer at the time of framing of assessment, even though the same may not have been filed along with the return of income, the assessee is entitled to claim of exemption u/s 11(1) and 11(2) of the Act. We are of the considered view that the claim of the assessee/appellant for deduction u/s 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. Appeal of the assessee is allowed.
Issues Involved:
1. Whether the deduction under Section 80JJAA of the Income Tax Act was correctly disallowed due to the late filing of Form 10DA. 2. Whether procedural lapses in filing Form 10DA can be excused if the form was available before the assessment was completed. Issue-wise Detailed Analysis: 1. Disallowance of Deduction under Section 80JJAA: The Assessee filed its return of income for the Assessment Year 2022-23 declaring a total income of Rs. 1,50,72,480/-. The return was processed under Section 143(1) of the Income Tax Act, determining the total income at Rs. 1,76,55,670/-. The Centralized Processing Centre (CPC) rejected the Assessee's claim for a deduction under Section 80JJAA amounting to Rs. 25,83,187/- due to the late filing of Form 10DA. The Assessee contended that the Form 10DA was uploaded by the Chartered Accountant on 01.10.2022, before the extended due date of 07.10.2022, but was accepted by the Assessee only on 06.01.2023, after the due date. The CIT(A) upheld the CPC's decision, emphasizing that as per Rule 19AB of the Income Tax Rules, 1962, the Form 10DA must be filed along with the return of income under Section 139(1) of the Act. The CIT(A) cited the Supreme Court's decision in Principal Commissioner of Income Tax-III, Bangalore vs. M/s Wipro Limited, which held that the requirement of filing a declaration within a timeline is "mandatory." The CIT(A) also referred to the Supreme Court's decision in CC v. Dilip Kumar & Company, which stated that exemption provisions should be interpreted strictly, and the onus is on the Assessee to prove compliance with the statutory provisions. 2. Procedural Lapses and Availability of Form 10DA: The Assessee appealed to the ITAT, arguing that the procedural lapse of not accepting the Form 10DA before the due date should not result in the denial of the deduction. The Assessee relied on the Gujarat High Court's decision in the case of Association of Indian Panel Board Manufacturer, which held that the procedural aspect of filing the audit report should not impede the claim for exemption if the report was available with the Assessing Officer at the time of assessment. The ITAT observed that this was not the first year the Assessee claimed the deduction under Section 80JJAA and that the Form 10DA was indeed uploaded before the due date. The ITAT noted that the form was accepted by the Assessee on 06.01.2023, before the order under Section 143(1) was passed on 16.03.2023. The ITAT referred to the Gujarat High Court's decision, which emphasized that the mode and stage of filing the audit report are procedural aspects and that the claim for deduction should not be denied if the report is available before the assessment order is framed. The ITAT also cited the Supreme Court's decision in CIT v. GM Knitting Industries, which held that the Assessee is entitled to claim a deduction if the required certificate is filed before the final assessment order, even if it was not filed with the return of income. Conclusion: The ITAT concluded that the claim for deduction under Section 80JJAA should not be denied due to the procedural lapse of late acceptance of Form 10DA. The ITAT allowed the Assessee's appeal, noting that the form was uploaded before the due date, accepted before the final assessment, and that similar procedural lapses had been excused in previous judicial decisions. Judgment: The appeal of the Assessee was allowed, and the disallowance of the deduction under Section 80JJAA was reversed. The ITAT's order was pronounced in open court on 20/05/2024.
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