3 Generations vs DCIT, Circle 49(1)

PER MAHAVIR SINGH, VICE PRESIDENT:

This appeal of assessee is arising from the order dated 16.1.2025 of the Ld. Addl/ JCIT(A)-3, Bengaluru in appeal No. Addl/JCIT(A)-3, Bengaluru/10024/2023-24. In this case, intimation order dated 20.2.2025 u/s. 143(1) of the Income Tax Act, 1961 (hereinafter referred as Act), passed by the CPC for the relevant assessment year 2024-25.

The grounds raised by the assessee in the appeal are as under:

The brief facts of the case are that the assessee is a partnership firm having its registered office at Janakpuri, New Delhi. The assessee is in the business of manufacturing and sale of helmets, pannier boxes, crash guards and other automobile accessories. The assessee filed its return of income for the A.Y. 2024-25 on 23/10/2024, declaring an income of Rs. 13,16,39,800. The same was processed by CPC, Income-tax Department, Bengaluru, vide intimation under Section 143(1) of the Income-tax Act, dated 22-2-2024. The Assistant Director, CPC Bengaluru, has disallowed deduction under Section 80JJAA of the Income-tax Act, as claimed by the assessee, of Rs. 16,19,138 on account of non-filing of Form 10DA before the due date specified in the Income-tax Act. The assessee has obtained the audit report in Form 10DA from chartered accountant before the due date of furnishing return under Section 139(1) of the Act, but inadvertentl y the chartered accountant was not able to upload the same on Income-tax portal. Aggrieved by the impugned order and deduction made on account of above mentioned disallowance, totaling Rs.16,19,138, the assessee has preferred the appeal before the learned CIT(A), who, vide his order dated 16th January 2026, has dismissed the appeal of the assessee. Aggrieved with the order of the learned CIT(A), the assessee is in appeal before us.

We have heard the rival contentions and gone through the facts and and circumstances of the case. Before us, it was submitted by the learned counsel for the assessee that the CPC Bengaluru has disallowed deduction under Section 80JJAA of the Income Tax Act as claimed by the assessee of Rs. 16,19,138 on account of non-filing of Form 10DA before the due date prescribed in the Income Tax Act. It was the further contention that the auditor has, that assessee has assigned the work to a professional, but this was the first year when the assessee was claiming deduction under Section 80JJAA of the Act. It was further informed that the person who has assigned the task to upload the said Form 10DA was not aware of the procedure. The assignment of Form 10DA to a chartered accountant on 30th September 2024 itself, but inadvertentl y it was not able to complete the step 2 and step 3 of available on portal. At the time of assigning the Form to chartered accountant, step 1, which was dul y completed on 30th September, the staff of chartered accountant had even attached the scanned copy of the signed Form 10DA procured from chartered accountant dated 30th September 2024, thus a scanned copy of Form 10DA was even uploaded on the Income Tax portal on 30th September 2024 itself. The non-filing of Form 10DA before the due date on Income Tax portal was purel y a procedural lapse on the part of staff of chartered accountant due to complicated procedure and the assessee was not at fault. Thus for no fault on this part, the assessee should not suffer. It was further submitted that assessee realized its mistake that he has not completed the procedure prescribed for furnishing of Form 10DA on 16-12-2024. Immediatel y on realizing the same, the assessee approached the chartered accountant and completed the rest of two steps as well. The Form 10DA was finall y uploaded by M/s. Vikas Khat yal and Associates Chartered Accountant on 18 December 2024 and was e-verified as well on 18 December 2024, which was way before the processing of return under Section 143(1) of the Act. The return was processed vide order dated 22-2-2024. The timeline prescribed under Rule 19AB of the Income Tax Rules 1962 is merel y directory in nature, since the prescribed audit report in Form 10DA was available with CPC as on the date of processing the return of income, and no prejudice is caused to the revenue on account of delay in submission of the audit report in Form 10DA. The filing of audit report in Form 10DA is merel y a procedural formalit y for the purpose of enabling the assessing officer to allow the benefit exemption to the assessee, and such procedure defect onl y makes the return become defective and rectifiable. For the aforesaid proposition, Ld. AR for the assessee relied upon the decision of the Hon'ble Delhi High Court in the case of International Tractors Limited versus DCIT, (LTU), [2021] 127 Taxman.com 822 (Delhi). Learned DR could not controvert the aforesaid proposition. Keeping in view of the aforesaid factual matrix, we find that the issue in dispute is squarel y covered by the decision of the ITAT Delhi Bench in the case of Sai Computers Limited versus ADIT, CPC, [2023] 155 Taxman.com 607 (Delhi Tribunal), dated 18-10-2023, wherein it has been held that, “in consonance with the view taken by the coordinated bench, the denial of deduction under Section 80JJAA solely for reasons of belated filing of the prescribed form is not justified. Consequently, the action of the CIT is set aside and the assessing officer is directed to grant relief by way of deduction as claimed. Ground number one is accordingly allowed.”

We further find that on identical facts and circumstances of the case, the Hon'ble Delhi High Court in the case of International Tractors Limited versus DCIT, LTU 2021 127 Taxman.com 82 Delhi, held that the assessee company had failed to claim deduction in respect of Section 80JJAA in its return as well as revised return. Thereafter it made said claim before Assessing Officer by way of communication statement along with the auditor's report. Assessing Officer, while framing assessment, declined the said claim on the ground that it did not form part of return. However, Commissioner(Appeal) ruled that fresh claims made by the assessee could not be entertained and allowed said deduction. Tribunal though sustained view of CIT(A) that fresh claim could be entertained, but remanded matter to the file for fresh verification. It was found that CIT(A) had considered and examined report of CA in Form 10D and details concerning new workmen hired during which they worked and details of remuneration and then concluded that deduction was rightly claimed. Whether on facts Tribunal was not justified in remanding matter back to the AO and thus order passed by the C IT was to be sustained, held yes. The Hon'ble High Court of Delhi, which is the jurisdictional High Court, held that even if the assessee had submitted the Form 10D at the time of assessment, the fresh claim can be entertained, whereas in the case of assessee the form was dul y completed and furnished long before passing of the assessment order.

Further, the Coordinate Bench of Delhi Tribunal on exactl y similar facts and circumstances of the case, in the case of G4S Secure Solutions (India) Private Ltd. vs CPC, Bengaluru 2025 (5) TM I 1492 – ITAT Delhi order dated 16.5.20025 has held that “filing form 10DA is directory and deduction under section 80JJA cannot be denied solely for belated filing. The Tribunal found that Form 10DA was filed on 30.12.2023, prior to intimation u/s. 143(1) issued on 27.3.2024. Since the form was available with CPC during processing, the deduction was allowable. The AO’s rejection based on belated filing was deemed incorrect. Appeal decided in favour of assessee.”

Respectfull y following the aforesaid precedents, we are of the considered view that lower authorities below have wrongly rejected the claim of deduction u/s. 80JJAA of the Act for belated filing of Form 10DA, as the filing of Form 10DA is directory in nature and deduction u/s. 80JJAA cannot be denied solel y for belated filing thereof. Thus, we allow the ground raised by the assessee by directing the Assessing Officer to allow the claim of deduction in dispute under Section 80JJAA of the Act in accordance with law to the assessee. Accordingl y, the ground raised by the assessee is allowed.

In the result, appeal of the assessee is allowed.