Filing Of Audit Report In Form 10CCB Before Due Date As Per Sec 139(1) Is Only Directory And Not Mandatory: New Delhi ITAT

The Bench of the ITAT comprising of G.S. Pannu (Vice President) and Challa Nagendra Prasad (Judicial Member) reiterated while referring the decision of Karnataka High Court in the case of CIT v. ACE Multitaxes Systems (P.) LTD. [2009] 317 ITR 207 (Kar.) that, “when a relief is sought for under Section 80IB of the Act, there is no obligation on the part of the assessee to file return accompanied by the audit report, thereby, holding that the same is not mandatory. Therefore, it is clear that before the assessment is completed if such report is filed, no fault could be found against the assessee.” (Para 6)

As per the brief facts of the case, the assessee filled his return of income after claiming deduction u/s 80IA. The ADIT(CPC) issued letter proposing various adjustments including disallowance of deduction c laimed u/s 80IA on account of failure to file Form 10CCB before the due date specified u/s 139(1). Assessee filed revised return to correct various adjustments proposed and along with the revised return the assessee filed Form 10CCB for the deduction claimed u/s 80IA. The return was processed u/s 143(1) denying the claim for deduction u/s 80IA.

The CIT(A) also rejected the claim of the assessee filled with the contention that filing of Form 10CCB along with the return of income before the due date for filing return u/s 139(1) is only directory and not mandatory and sustained the disallowance of deduction u/s 80IA.

The Bench noted that the only issue is to be decided is as to whether the Form 10CCB is mandatorily to be filed along with the return or the due date specified u/s 139(1) for claiming deduction u/s 80IA.

The Bench observed while referring the decision of Delhi High Court in the case of CIT Vs. Contimeters Electricals Pvt. Ltd. that the requirement of filing the audit report along with the return is not mandatory but directory.

The Bench reiterated while referring the decision of Madras High Court in the case of CIT v. A.N. Arunachalam [1994] 208 ITR 481 / 75 Taxman 529 and in CIT v.Jayant Patel [2001] 248 ITR 199/ 117 Taxman 707 that, “the filing of audit report along with the return was not mandatory but directory and that if the audit report was filed at any time before the framing of the assessment, the requirement of the provisions of the Act should be held to have been met.”

Therefore, while relying on various decisions squarely applying to the facts of the case, ITAT allowed the assessee's appeal.

Counsel for Appellant/Taxpayer: Mayank Agarwal

Counsel for Respondent/Department: Anuj Garg

Case Title: Sanjay Kukreja verses ACIT

Case Number: I.T.A No.652/Del/2023

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