ITAT Allows Section 80-IAC Deduction Despite Delay in Filing Form 10CCB

The assessee company claimed a deduction under Section 80-IAC while filing its return of income within the prescribed due date. However, the required audit report in Form 10CCB was filed with a delay of 43 days, though it was available on record before the return was processed under Section 143(1). The CPC disallowed the deduction solely on the ground that the audit report was not filed within the due date or the extended due date.

The assessee’s rectification application was rejected, and the CIT(A) upheld the disallowance by treating the filing of Form 10CCB within the due date as mandatory. The assessee contended that such a requirement is merely procedural and relied on multiple judicial precedents supporting that delayed filing, if completed during assessment proceedings, should not result in the denial of a deduction.

Issue Raised: Whether the delay in filing Form 10CCB can lead to the denial of the deduction under Section 80-IAC when the form is filed before completion of processing/assessment.

Tribunal Ruling: The Tribunal allowed the appeal of the assessee and held that the deduction under Section 80-IAC cannot be denied merely due to the delayed filing of Form 10CCB. It observed that the audit report was filed within a reasonable time and was available on record before processing of the return under Section 143(1).

The Tribunal held that the requirement of filing such audit reports is procedural in nature. It further noted that the reliance placed by the CIT(A) on contrary decisions was misplaced, as those decisions had either been distinguished or overturned. Since the assessee had complied with the requirement during the pendency of proceedings, the condition stood satisfied. Therefore, the Assessing Officer was directed to allow the deduction.

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