The Income Tax Appellate Tribunal (ITAT), Pune Bench, has ruled that late filing of an audit report in Form 10DA is not a reason to deny an income tax deduction claim u/s 80JJAA of the Income Tax Act, 1961.
The taxpayer, Expert Global Solutions Private Limited, has submitted its income tax return for the AY 2021-22 on 16.02.2022, declaring a total income of ₹8,12,99,130 and claiming a deduction of ₹26,06,220 u/s 80JJAA. The claim was denied because Form 10DA was submitted late.
The Additional/Joint Commissioner of Income Tax (Appeals) (Addl./JCIT(A)) maintained the disallowance, noting that the CBDT Circular had extended the audit report filing due date only up to 15.02.2022. A similar disallowance of ₹15,96,293 was made for the AY 2022-23.
The dissatisfied taxpayer has submitted appeals for both the assessment years, and both appeals were heard together.
It was claimed by the appellant that the deduction for AY 2021-22 shows merely the balance deduction from assessment years 2019-20 and 2020-21, which were analysed and permitted. He claimed that Form 10DA is a directory requirement and that failing to follow procedures cannot negate a substantive deduction entitlement.
He put reliance on the Kolkata Bench ruling in Tarasafe International (P.) Ltd. vs. DDIT (2024) and the Supreme Court decisions in CIT vs. G.M. Knitting Industries (P.) Ltd. (2016) and PCIT vs. Wipro Ltd. (2022), where the tribunal had permitted similar deductions.
On the orders of Addl./JCIT(A), the Revenue put reliance and expressed that the taxpayer had not completed the regulatory norms and the timeline for filing the form, therefore warranting the disallowance.
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The bench, including R.K. Panda (Vice President) and Astha Chandra (Judicial Member), observed that the problem was covered via the ruling of the Kolkata bench in Tarasafe International, which had followed G.M. Knitting Industries, which held that filing of an audit report before finalisation of assessment is enough to keep the deduction claim.
The Tribunal observed that the Supreme Court, in the case of Wipro Ltd., distinguished between two lines of precedent. It held that strict compliance is necessary only for exemption provisions under Chapter III. In contrast, the deduction provisions under Chapter VIA, which include Section 80JJAA, are regulated under a more flexible principle established in the case of G.M. Knitting Industries.
Subsequently, both appeals were permitted.
| Case Title | Expert Global Solutions Private Limited Vs. DCIT |
| Case No. | ITA Nos.2556 & 2557/PUN/2025 |
| For Petitioner | Shri Rajat Soni |
| For Respondent | Shri Mukul Kulkarni (virtually) |
| Pune ITAT | Read Order |
