Submission of form 10CCB is directory not mandatory – ITAT allows deduction u/s 80IB

Submission of form 10CCB is directory in nature and not mandatory – ITAT

In a recent judgment, the ITAT Amritsar has held that submission of form 10CCB is directory in nature and not mandatory and it is sufficient compliance if the said report is filed with the AO, before completion of assessment.

ABCAUS Case Law Citation:
4193 (2024) (08) abcaus.in ITAT

In the instant case, the assessee had challenged the order passed by the CIT(A) in confirming the disallowance u/s 80IB by the CPC vide intimation u/s 143(1) of the Income Tax Act, 1961 (the Act).

The appellant assessee was an individual engaged in the eligible business. The assessee was entitled to deduction u/s 80IB of the Act and the same had been duly claimed under Chapter VIA in the return of income filed u/s 139(1) but the corresponding audit report in Form 10CCB required to be filed for claiming deduction u/s 80IB of the Act had been belatedly filed after the stipulated date u/s 139(1) of the Act.

The assessee received a communication of proposed adjustment u/s 143(1)(a) of the Act, from CPC, Bangalore, containing error description, relating to non-filing of Form 10CCB in respect of the deduction claimed u/s 80IB of the Act, which allowed 30 days’ time for correction of the error.

The grievance of the assessee was that, the said communication was received by post but was never issued through email or any other mode of service. However, the assessee corrected the error by submitting the audit report in Form 10CCB within 30 days from receipt of communication by post.

Thereafter, the said return was processed u/s 143(1) of the Act by CPC, Bangalore after the date of filing the report in Form 10CCB. However, deduction claimed u/s 80IB was denied by the CPC.

The CIT(A) rejected the claim of the assessee by observing that when the provisions of the Act and the relevant rules strictly provide that all necessary documents must be filed and approved along with the return of income or prior to that, subsequent filing of any document could not be considered for processing of the return and intimation under section 143(1) of the Act.

The CIT(A) rejected the reliance placed by the assessee on judgments for the reason that those decisions did not pertain to the era of the electronic filing of return / documents and therefore, they did not apply to the facts of the case under consideration.

The Tribunal observed that the audit report in Form 10CCB had been uploaded in the portal by the auditor in response to the error communication received by the assessee on within 30 days of receipt by post and the return of income filed u/s 139(1) had been processed by CPC, Bangalore after the uploading of Form 10CCB which means that the report in Form 10CCB, claiming the deduction u/s 80IB, was before the AO at the time of assessment, but the same had not been considered.

The Tribunal observed that this issue is already been decided in favour of the assessee and held by various coordinate benches of the tribunal and upheld by the Hon’ble High Court that the submission of Form 10CCB is directory and not mandatory, and compliance of the provisions will suffice, if the auditor’s report in Form 10CCB, is filed before completion of assessment, in respect of deductions claimed under section 80IB.

Therefore, following the decisions of various High courts and the coordinate benches of the tribunal, the Tribunal held that the submission of Form 10CCB is directory in nature and not mandatory and it is sufficient compliance if the said report is filed with the AO, before completion of assessment, which is an admitted fact in the instant case. As such the assessee was entitled to the claim of deduction u/s 80IB of the Act, as per claim in his return of income, and the same was allowed.

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