AGRAWAL METAL WORKS PRIVATE LIMITED,NEW DELHI V. ACIT, CIRCLE-1(2), DELHI

ITA 3458/DEL/2024

AI Insights

Agarwal Metal Works P. Ltd. appealed against the order of the Commissioner of Income Tax (Appeals) which upheld the Assessing Officer's decision to reject the deduction claimed under section 80JJAA of the Income Tax Act, 1961 in the revised return. The Tribunal noted that the deduction was claimed in the revised return filed within the permissible time, and the necessary Form 10DA was submitted before the completion of the assessment. The Tribunal referenced decisions from the Supreme Court and other benches which supported the view that the filing of the form during the assessment proceedings suffices for compliance. Consequently, the Tribunal allowed the appeal, directing the Assessing Officer to verify the eligibility for the deduction and its quantification.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 298889 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-01-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2017-2018
• Other Referred Cases: CIT vs. G.M Knitting Industries (P.) Ltd. & AKS Alloys (P.) Ltd., Tarasafe International P. Ltd C/O Dutta Properties vs. DDIT
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIPUL KASHYAP
• Assessee Lawyers: VED JAIN
• Keywords: Condonation of delay; Revised return; Competent authority; Procedural lapse
• Section: 139(1); 139(5)

Judgement Text

"आयकर अपीलीय अिधकरण िदʟी पीठ “ए”, िदʟी ŵी िवकास अव̾थी, Ɋाियक सद˟ एवं ŵी नवीन चंū, लेखाकार सद˟ क े समƗ IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “A”, DELHI BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER & SHRI NAVEEN CHANDRA, ACCOUNTANT MEMBER आअसं.3458/िदʟी/2024 (िन.व. 2017-18) ITA No.3458/DEL/2024 (A.Y.2017-18) Agarwal Metal Works P. Ltd., 205, 2nd Floor, Arunachal Building, 19, Bharakhamba Road, New Delhi 110001 PAN: AABCA-4897-R ...... अपीलाथᱮ/Appellant बनाम Vs. Assistant Commissioner of Income Tax, Circle-1(2), Delhi ..... ᮧितवादी/Respondent अपीलाथŎ Ȫारा/ Appellant by : Shri Ved Jain, Advocate Ms. Uma Upadhyay, Chartered Accountant ŮितवादीȪारा/Respondent by : Shri Vipul Kashyap, Sr.DR सुनवाई कᳱ ितिथ/ Date of hearing : 29/10/2024 घोषणा कᳱ ितिथ/ Date of pronouncement : 27/01/2025 आदेश/ORDER PER VIKAS AWASTHY, JM: This appeal by the assessee is directed against the order of Commissioner of Income Tax (Appeals)/Additional/Joint Commissioner of Income Tax-(Appeals)-4, Kolkata (hereinafter referred to as 'the CIT(A)') dated 28.06.2024, for assessment year 2017-18. 2. The assessee in appeal has raised as many as seven grounds. The short issue in appeal is disallowance of assessee’s claimed of deduction u/s. 80JJAA of the 2 ITA No. 3458/DEL/2024 (AY 2017-18) Income Tax Act, 1961 (hereinafter referred to as 'the Act’). The brief facts of the case as emanating from records are: The assessee is engaged in manufacturing and trading of copper & copper alloy foils, strips, sheets and flat role products. The assessee filed its original return of income for impugned assessment year on 31.10.2017. Thereafter, the assessee filed revised return of income on 18.09.2018 claiming deduction u/s. 80JJAA of the Act. The Assessing Officer (AO) rejected assessee’s claim of deduction u/s. 80JJAA of the Act at threshold on the ground that assessee has claimed deduction in revised return of income filed u/s. 139(5) of the Act filed beyond time. Aggrieved, by assessment order dated 18.12.2019 the assessee carried the issue in appeal before the CIT(A). The First Appellate Authority endorsed view of the Assessing Officer and dismissed appeal of the assessee. The CIT(A) further held that report from the Accountant in Form 10DA was not filed within the scheduled date as per Rule19AB of the Income Tax Rules, 1961. Hence, present appeal by the assessee. 3. Shri Ved Jain, appearing on behalf of the assessee submits that the assessee in original return of income inadvertently failed to claim deduction of Rs.19,70,996/- u/s. 80JJAA of the Act. The assessee filed revised return of income u/s. 139(5) of the Act on 18.09.2018 claiming deduction u/s. 80JJAA of the Act. Along with revised return of income, the assessee filed report of the Accountant in Form 10DA. The revised return filed by the assessee u/s. 139(5) of the Act was filed within time limit to revise the return. The AO completed assessment on revised return of income. It is an undisputed fact that at the time of completion of assessment Form 10DA which is mandatory for claiming deduction u/s. 80JJAA of the Act was available before the Assessing Officer. The AO has erred in not taking 3 ITA No. 3458/DEL/2024 (AY 2017-18) cognizance of said mandatory Form while considering assessee’s revised return of income for making assessment. The assessee is otherwise eligible for the deduction claimed. Merely, for the reason that deduction has not been claimed in the original return of income filed u/s. 139(1) of the Act is procedural irregularity. What is relevant is that at the time of making assessment, the relevant details were available before the AO. In support of his submissions he placed reliance on following decisions: 1. CIT vs. G.M Knitting Industries (P.) Ltd. & AKS Alloys (P.) Ltd., 2015 (11) TMI 397 decided on 27.07.2015; & 2. Tarasafe International P. Ltd C/O Dutta Properties vs. DDIT, 2024 (10) TMI 363 decided on 03.10.2024. 4. Per contra, Shri Vipul Kashyap representing the department vehemently defending the impugned order submits, that in order to claim deduction u/s. 80JJAA of the Act, the assessee was required to make claim in the return of income filed u/s. 139(1) of the Act. The assessee made claim for the first time in revised return of income filed u/s. 139(5) of the Act and that to filed beyond time. Hence, claim of the assessee was rejected. He further submitted that the assessee was also required to furnish Form 10DA along with the original return of income. The requisite form was not furnished by the assessee along with the original return of income and was only filed with the revised return. Further, the assessee failed to file any application for condonation of delay in filing of Form 10DA before the Competent Authority. In the absence, of condonation of delay in filing of Form 10DA, the assessee’s claim of deduction u/s. 80JJAA of the Act could not have been entertained. 4 ITA No. 3458/DEL/2024 (AY 2017-18) 5. Both sides heard, orders of the authorities below considered. The short issue in appeal is, Whether the assessee’s claim of deduction u/s. 80JJAA of the Act, is allowable in the facts of the case? It is an accepted fact that no claim u/s. 80JJAA of the Act was made by the assessee in original return of income filed u/s. 139(1) of the Act. The assessee for the first time made claim of deduction u/s. 80JJAA of the Act in revised return of income filed u/s. 139(5) of the Act on 18.09.2018. The assessment in the case of assessee was completed based on revised return of income. Thus, at the time of making assessment, the mandatory Form 10DA for claiming deduction u/s. 80JJAA of the Act was available with the Assessing Officer. The assessee’s claim was rejected at threshold by the Assessing Officer as he was of the view that claim of deduction u/s. 80JJAA of the Act was not made in the time. 6. The AO completed the assessment based on assessee’s revised return of income. Once, the AO accepts revised return of income, the AO is bound to consider deductions claimed therein. The assessee’s claim of deduction cannot be rejected at threshold on the ground that revised return of income was beyond time. The Hon’ble Apex Court in the case of CIT vs. G.M Knitting Industries (P.) Ltd. and AKS Alloys (P.) Ltd. (supra) has held that even if the prescribed form for claiming deduction is filed during assessment proceedings, before passing of assessment order, it would be sufficient compliance of the provisions of the Act. 6.1. The Coordinate Bench in the case of Tarasafe International P. Ltd. (supra) in somewhat similar case, placing reliance on the decision rendered by Hon’ble Apex Court in the case of G.M Knitting Industries (P.) Ltd. (supra) allowed assessee’s 5 ITA No. 3458/DEL/2024 (AY 2017-18) claim of deduction u/s. 80JJAA of the Act. The Tribunal held that the Audit Report in Form 10DA even if not filed along with return of income, but was filed subsequently before passing of assessment order, the assessee would be eligible for deduction as it amounts to sufficient compliance of the provisions of section 80JJAA. 7. Thus, in light of facts of the case and the decisions referred above, we find merit in the case of assessee. The deduction claimed u/s. 80JJAA of the Act is allowable to the assessee subject to the other conditions being satisfied as prescribed under said section for claiming deduction. Since, claim of the assessee was rejected at the brink, we deem it appropriate to restore the matter back to AO for limited purpose to examine as to whether assessee qualifies the other conditions set out in the section and quantify assessee’s claim of deduction u/s. 80JJAA of the Act. 8. In the result, appeal of the assessee is allowed for statistical purpose in the terms aforesaid. Order pronounced in the open court on Monday the 27th day of January, 2025. Sd/- Sd/- (NAVEEN CHANDRA) (VIKAS AWASTHY) लेखाकार सद᭭य/ACCOUNTANT MEMBER ᭠याियक सद᭭य/JUDICIAL MEMBER िदʟी/Delhi, ᳰदनांक/Dated 27/01/2025 6 ITA No. 3458/DEL/2024 (AY 2017-18) NV/- ᮧितिलिप अᮕेिषतCopy of the Order forwarded to : 1. अपीलाथᱮ/The Appellant , 2. ᮧितवादी/ The Respondent. 3. The PCIT 4. िवभागीय ᮧितिनिध, आय.अपी.अिध., िदʟी /DR, ITAT, िदʟी 5. गाडᭅ फाइल/Guard file. BY ORDER, //True Copy// (Dy./Asstt. Registrar) ITAT, DELHI "