Deduction u/s 80JJAA allowed for delayed filing of Form 10DA as Form 3CD showing the quantum of deduction was filed prior to one month from filing of return of income.
In a recent judgment, ITAT Bengaluru has allowed deduction u/s 80JJAA as Form 3CD showing the quantum of deduction was filed prior to one month from filing of return of income showing that details were certified by tax auditor, the delay was only for certifying and uploading Form 10DA.
ABCAUS Case Law Citation:
4323 (2024) (11) abcaus.in ITAT Bangalore
In the instant case, the assessee had challenged the order passed by the CIT(A) national Faceless Appeal Centre (NFAC) in confirming disallowance of deduction u/s 80JJAA of the Income Tax Act, 1961 (the Act).
The assessee filed return of income within the extended due date claiming deduction u/s. 80JJAA of the Act. The deduction u/s. 80JJAA was denied by the CPC u/s 143(1)(a) of the Act while processing the return for the reason that Form 10DA was not filed by the assessee within the due date prescribed.
Aggrieved from the above order, the assessee filed appeal before the First Appellate Authority (FAA)/CIT(A). During the appellate proceedings the assessee filed detailed written submissions. The FAA noted that Form 10DA was obtained on 30th September and the same was digitally signed and filed in subsequent month electronically.
The CIT(A) observed that as per Rule 19AB of the Income-tax Rules, it was mandatory to file the accountant’s report in Form 10DA at least one month prior to date of filing of return u/s. 139(1), failing which deduction u/s. 80JJAA of the Act will not be admissible. He further noted that Form 10DA was filed after the prescribed due date which was 30th September of the Assessment Year.
The CIT(A) placed reliance on Hon’ble Apex Court judgment wherein on strict construction the findings of Hon’ble High Court allowing carry forward of losses were reversed. Accordingly, the CIT(A) confirmed the order of the CPC u/s. 143(1)(a) of the Act.
Before the Tribunal the assessee contended that filing of Form 10DA was directory in nature which was filed before filing return of income. The assessee had duly filed the tax audit report within due date specified claiming deduction u/s 80JJAA in column 33 of Form 3CD. The same was certified by independent CA on the same date.
It was submitted that the assessee had also obtained Form 10DA from the auditor claiming deduction u/s. 80JJAA, however due to technically difficulty, the CA was unable to file the said form along with tax audit report. The said Form was later filed next month along with return of income i.e., before due date specified u/s. 139(1).
It was further submitted that there was no dispute on quantum of deduction and while processing the return u/s. 143(1), Form 10DA was available with CPC. In view of this the assessee was eligible for deduction.
The Tribunal noted that the perusal of tax audit report Form 3CD at Serial No.33, it was evident that tax auditor had reported about the deduction u/s. 80JJAA and there was no variation reported in Form 10DA. Form 3CD was signed prior to one month from filing of return of income. It clearly showed that details were certified by tax auditor, only there is delay for certifying and uploading Form 10DA.
The Tribunal further observed that the assessee had relied on the judgment of ITAT Ahmedabad in which the bench held that the claim of the assessee for deduction under Section 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, thirdly, the Gujarat High Court, had 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.
The Tribunal observed that since in the instant case, the CIT(Appeals) had not doubted on the quantum of deduction u/s. 80JJA of the Act claimed by the assessee, following the judgment of the Co-ordinate Bench, the appeal of the assessee was allowed.
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