Filing audit report in Form 10CCB within due date is mandatory. The assessee cannot claim deduction u/s 80-IA(7) he ground that Form 10CCB was filed before passing of assessment order – ITAT
In a recent judgment, ITAT Raipur has held that the audit report in Form 10CCB had to be filed within the due date which is mandatory. The assessee cannot take shelter that since Form 10CCB was filed before passing of assessment order by the AO, they can still get benefit of deduction under section 80-IA(7) of the Income Tax Act.
ABCAUS Case Law Citation:
4962 (2025) (12) abcaus.in ITAT
In the instant case, the assessee had challenged the order passed by the CIT(A) in confirming the addition made by the AO by disallowing the deduction claimed u/s 80-IAC of the Act on the ground that the audit report in Form 10CCB was not filed on or before the specified date i.e., at least one month prior to the due date for furnishing return of income u/s 139(1) of the Income Tax Act, 1961 (the Act).
The AO had denied the deduction u/s 80IAC on the ground that Form 10CCB was not filed within the specified due date. In other words, as per Section 80-IA(7) of the Act, the deduction claimed shall not be admissible unless the accounts of the undertaking for the previous year relevant to the assessment year, for which, the deduction is claimed, have been audited by an accountant as defined in the Explanation to subsection (2) of Section 288 of the Act before the specified date referred to in Section 44AB and the assessee furnishes by that date, the report of such audit in the prescribed form duly singed and verified by such accountant.
The claim of the assessee was that though the audit was completed within the due date but it had not furnished Form 10CCB within such specified due date in accordance with Section 80-IA(7) of the Act due to the fault of the auditor.
The assessee further contended that the requirement of e-filing of audit report in Form 10CCB is only directory in nature and failure to e-file the same before the specified due date cannot be so fatal so to deny the claim of deduction under section 80IAC of the Act specifically when Form 10CCB is available on record before the assessment/intimation was completed u/s 143(1) of the Act. In other words, the said Form 10CCB though was not filed within the due date specified in accordance with Section 80-IA(7) of the Act, however, it was available on record with the A.O before assessment was completed and hence, claim of deduction should have been allowed.
In support of his argument, the assessee relied upon the judgment of the Hon’ble Supreme Court wherein it had been held that even though necessary certificate in Form 10CCB along with return of income had not been filed but same was filed before final order of assessment, in such case, the assessee was entitled to claim deduction u/s. 80-IB of the Act.
On the other hand the Revenue submitted that the case law referred by the assessee pertained to the year 2015 and in the subsequent decision, the Hon’ble Supreme Court had distinguished the said decision and clearly held that in order to claim any deduction within the statute, the assessee shall have to comply with the provisions of the statute itself. If the assessee do not satisfy the provisions of the statute, in such scenario, the assessee shall not be entitled to claim any deduction within that statute.
The Tribunal opined that the statute is crystal clear as emanating from Section 80IAC(4) r.w.s. 80-IA(7) of the Act that in order to claim deduction u/s. 80IAC, the assessee shall have to file audit report within specified due date referred in Section 44AB of the Act in the relevant specified Form 10CCB as in the case of the assessee, duly signed and verified by such accountant.
The Tribunal further noted that assessee relying on the decision of the Hon’ble Apex Court contended that Form 10CCB is only directory in nature and not mandatory, therefore, the claim of the assessee for necessary deduction as per Section 80IAC should be allowed. However, the subsequent decision of Apex Court held that in order to claim the relevant deduction within the statute the compliance of the provisions of that statute has to be done mandatorily by the assessee and the fiscal statutes have to be interpreted in its strictest sense and there cannot be any liberty provided to the assessee for not following both the substantive and procedural clause within the said statute.
The Tribunal opined that in order to claim deduction under Section 80IAC, the relevant provision of Section 80-IA(7) has to be complied with and thus, the audit report a/w. Form 10CCB had to be filed within the due date as specified as per Section 44AB of the Act and these compliances are mandatory. The assessee cannot take shelter in their submission that since they have filed Form 10CCB before passing of the assessment by the A.O and though they have not complied with Section 80-IA(7) still they can get benefit of deduction. Such contention, if allowed, shall dilute the intention of the legislature emanating from the relevant provisions.
Since the order of the CIT(A)/NFAC was passed ex-parte, the matter was restored back to the file of the CIT(Appeals)/NFAC to examine first and decide whether the assessee had filed audit report in Form 10CCB within the specified due date as per Section 44AB of the Act in compliance to Section 80-IA(7) of the Act.
It was directed that if it is found that the assessee has not filed Form 10CCB and audit report within the specified due date referred to Section 44AB of the Act, in such scenario, as per ratio-decidendi of the Hon’ble Apex Court, no deduction shall be allowed to the assessee. However, as per enquiry, if conclusion is drawn that the findings of the AO was incorrect, in such scenario, the deduction may be allowed as per law provided and always only when the relevant provisions are complied with by the assessee both substantive and procedural.
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