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Judgment
PER MADHUMITA ROY, JM:
The instant appeal filed by the assessee is directed against the order dated 14.10.2025 passed by the Commissioner of Income Tax (Appeals)-1, Ahmedabad [hereinafter referred to as ‘the Ld. CIT(A)] against the rectification order dated 28.11.2024 passed by the AO under Section 154 of the Income Tax Act, 1961 (hereinafter referred as ‘the Act’) for Assessment Year 2023-24.
Brief facts of the case are that the Assessee is a Private Limited Company, filed its return of income under Section 139 of the Act on 30.11.2023, declaring total taxable income at Rs.39,91,040/-. It is a DPIIT-recognized Startup and is eligible to claim deduction under Section 80-IAC of the Act particularly amounting to Rs.14,98,44,410/- as claimed by the assessee. It has disclosed about being recognized as a Startup by DPIIT at Serial No. Q in the ITR-6 of return of income. While filing return of income, however, as per Rules, the assessee was required to file its audit report in Form 10CCB to claim the deduction under Section 801AC, one month prior to the due date of filing of return of income i.e. by 31.10.2023, inadvertently, the same was filed on 05.02.2024, but prior to the intimation order dt. 03.05.2024. As it was delayed, the subject deduction was disallowed by the CPC, and a demand to the tune of Rs. 2,27,86,690/- was raised in the intimation order dt. 03.05.2024, passed under Section 143(1) of the Act.
The appellant was filing ROI for the first time and the said Form 10CCB does not have any specific column for reporting the deduction to be claimed under Section 80-IAC of the Act, and, therefore, the auditor failed to understand that how and where the requisite details in relation to deductions under Section 80-IAC to be filed and thus, delay in filing form 10CCB form as submitted by the Ld.AR. It is relevant to mention that the claim of deduction under Section 80 IAC for the subsequent AYs 2024-25 and 2025-26 have been duly accepted by the CPC as also contended by the Ld. AR.
Being aggrieved, the appeal was filed against the intimation as well as subsequent rectification orders before the Ld. CIT(A), and vide its order dt.14.10.2025 under Section 250 of the Act, the Ld. CIT(A) was allowed the appeal observing that “audit report is a procedural requirement meant to verify the correctness of the deduction claimed, and as long as the report is filed before the completion of the assessment proceedings, the claim made by the assessee cannot be rejected merely in not enclosing the report with the return", after relying on the judgments of Hon’ble Supreme Court and High Court in the case of CIT, Maharashtra vs. G.M. Knitting Industries (P.) Ltd. reported [2016] 71 taxmann.com 35 (SC), Commissioner of Income-tax, Maharashtra v. G. M. Knitting Industries (P.) Ltd. [2024] 165 taxmann.com 733 (Delhi). Shree Bhavani Power Projects (P.) Ltd. v. Income-tax Officer [2012] 18 taxmann.com 25 (Mad.) HIGH COURT OF MADRAS Commissioner of Income- tax-l v. AKS Alloys (P.) Ltd. [2024] 165 taxmann.com 146 (Amritsar -Trib.) IN THE ITAT AMRITSAR BENCH Harbans Singh v. AO, CPC.
The Ld. DR relied upon the order of the Ld. AO.
Having regard to the entire aspect of the matter when filing of Form 10CCB is a directive in nature, the same cannot lead to denial of deduction under Section 80IACC of the Act which has been rightly considered by the Ld. CIT(A) in its proper prospective will granting relief to the assessee by allowing the appeal. In our considered opinion the order impugned is just and proper so as not to warrant inference. Hence, the order passed by the First Appellate Authority is upheld.
In the result, the appeal filed by the Revenue is dismissed.