2025 (1) TMI 31 - AT - Income Tax

Denial of deduction u/s 80IA(4) - audit report in Form-10CCB was filed belatedly i.e., not along with the return of income - HELD THAT - We find the Kolkata Bench of the Tribunal in the case of Tarasafe International (P.) Ltd 2024 (10) TMI 363 - ITAT KOLKATA after considering the decision of Wipro Ltd., 2022 (7) TMI 560 - SUPREME COURT has held that when the audit report is filed before the final order of assessment, the assessee was entitled to claim deduction under section 80JJAA. Since the assessee in the instant case has admittedly filed the audit report in Form-10CCB prior to the processing of the return, therefore, assessee cannot be denied deduction u/sec.80IA(4) - Assessee appeal allowed.

1. ISSUES PRESENTED and CONSIDERED

The core legal questions addressed in the judgment are:

Whether the assessee was entitled to claim a deduction under Section 80IA(4) of the Income Tax Act, despite the late filing of Form 10CCB.
Whether the Centralized Processing Centre (CPC) had the jurisdiction to disallow the deduction claim under Section 80IA(4) while processing the return under Section 143(1) of the Act.
Whether the technical glitches on the income tax e-filing portal justified the delay in filing Form 10CCB and if such glitches should prevent the disallowance of the deduction claim.

2. ISSUE-WISE DETAILED ANALYSIS

Issue 1: Entitlement to Deduction under Section 80IA(4)

Relevant Legal Framework and Precedents: Section 80IA(7) mandates the filing of Form 10CCB by the specified date for claiming deductions under Section 80IA(4). The Finance Act, 2020 made it mandatory to file Form 10CCB within the prescribed time limit.
Court's Interpretation and Reasoning: The court noted that the assessee filed Form 10CCB on 31.10.2022, after the due date but before the CPC processed the return on 16.03.2023. The tribunal referred to precedents where late filing of audit reports did not disentitle deductions if filed before the assessment was completed.
Key Evidence and Findings: The assessee argued that technical glitches prevented timely filing. The tribunal found the audit report was filed before the processing of the return.
Application of Law to Facts: The tribunal applied the principle that filing the audit report before the assessment's finalization suffices for deduction eligibility.
Treatment of Competing Arguments: The tribunal considered the department's argument that late filing precluded deduction but found the precedents supporting the assessee's position more compelling.
Conclusions: The tribunal allowed the deduction under Section 80IA(4), reversing the CIT(A)'s decision.

Issue 2: Jurisdiction of CPC to Disallow Deduction

Relevant Legal Framework and Precedents: Section 143(1)(a)(ii) allows adjustments for incorrect claims apparent from the return.
Court's Interpretation and Reasoning: The tribunal found that the CPC could not deny the deduction since the audit report was filed before the return processing.
Key Evidence and Findings: The tribunal noted the audit report's filing date and the CPC's processing date.
Application of Law to Facts: The tribunal determined that the CPC's action was not justified under Section 143(1)(a).
Treatment of Competing Arguments: The tribunal rejected the department's claim of CPC's jurisdiction to disallow based on late filing.
Conclusions: The tribunal concluded that the CPC lacked the jurisdiction to deny the deduction.

Issue 3: Technical Glitches and Filing Delay

Relevant Legal Framework and Precedents: The tribunal considered precedents where technical issues justified late filings.
Court's Interpretation and Reasoning: The tribunal acknowledged the assessee's claim of portal issues but focused more on the timing of the audit report filing.
Key Evidence and Findings: The tribunal reviewed screenshots and grievances submitted by the assessee.
Application of Law to Facts: The tribunal found the technical glitch argument less critical than the fact that the audit report was filed before return processing.
Treatment of Competing Arguments: The tribunal did not heavily weigh the technical glitch argument against the department's position.
Conclusions: The tribunal ruled in favor of the assessee, allowing the deduction.

3. SIGNIFICANT HOLDINGS

Preserve Verbatim Quotes of Crucial Legal Reasoning: "Since the assessee in the instant case has admittedly filed the audit report in Form-10CCB prior to the processing of the return, therefore, respectfully following the decisions cited (supra), we are of the considered opinion that assessee cannot be denied deduction u/sec.80IA(4) of the Act."
Core Principles Established: Filing of the audit report before the assessment's finalization suffices for deduction eligibility. Technical glitches, if proven, can justify late filings.
Final Determinations on Each Issue: The tribunal allowed the deduction under Section 80IA(4), reversed the CIT(A)'s decision, and ruled that the CPC lacked jurisdiction to deny the deduction based on late filing.

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