CANADIAN SPECIALITY VINYLS,NEW DELHI V. DCIT CIRCLE 61(1), NEW DELHI

ITA 2943/DEL/2024

AI Insights

The case involves Canadian Speciality Vinyls appealing against the order of the Commissioner of Income Tax (Appeals), Aurangabad, which had dismissed their appeal regarding the disallowance of deduction under section 80IC of the Income Tax Act, 1961. The primary issue was the late filing of the Audit Report in Form 10CCB, which was filed on the due date of the extended deadline for filing the income tax return. The assessee argued that the delay was not intentional and cited the Supreme Court's extension of deadlines due to the COVID-19 pandemic. The tribunal, referencing various High Court judgments and the Supreme Court's decision, concluded that the filing of the Audit Report, even on the due date, was acceptable and directed the AO to verify compliance with other conditions for the deduction.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 126230 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-04-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2020-2021
• Other Referred Cases: Sanjay Kukreja vs ACIT, CIT vs AKS Alloys Pvt.Ltd., CIT vs Contimeters Electricals (P.) Ltd., CIT vs Web Commerce (India) (P.) Ltd., CIT vs Punjab Financial Corpn., CIT vs Print Systems & Products, CIT vs Medicaps Ltd., CIT vs Shivanand Electronics, CIT vs G.Krishnan Nair
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJESH KUMAR DHANESTA
• Assessee Lawyers: K. SAMPATH; V. RAJKUMAR
• Keywords: Condonation of delay; Period of limitation; Time period of passing order
• Section: 250; 143(1); 80IC; 80IC

Judgement Text

"ITA No.2943/Del/2024 Page | 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI “B” BENCH: NEW DELHI BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER & SHRI MANISH AGARWAL, ACCOUNTANT MEMBER ITA No.2943/Del/2024 [Assessment Year : 2020-21] Canadian Speciality Vinyls, 49, Rani Jhansi Road, Jhandewalan, New Delhi-110055. PAN-AAGFC0200J vs DCIT, Circle-61(1), Delhi APPELLANT RESPONDENT Appellant by Shri K.Sampath, Adv. & Shri V. Rajkumar, Adv. Respondent by Shri Rajesh Kumar Dhanesta, Sr.DR Date of Hearing 16.04.2025 Date of Pronouncement 23.04.2025 ORDER PER MANISH AGARWAL, AM : The present appeal has been filed by the assessee seeking to assail the First Appellate order dated 31.05.2024 passed by Ld. Commissioner of Income Tax (A)/ADDL/JCIT(A), Aurangabad [“Ld.CIT(A)”] in Appeal No.ADDL/JCIT(A) AURANGABAD/10001/2019-20 u/s 250 of the Income Tax Act, 1961 [“the Act”] pertaining to assessment year 2020-21. 2. From the perusal of the appellate order, it is seen that the assessee has failed to file the Audit Report in Form 10CCB within stipulated time period provided under the Act, therefore, the AO has disallowed the deduction under s. 80IC of the Act claimed by the assessee. 3. Before the Ld.CIT(A), the assessee claimed that the Audit Report was filed on 15.02.2021 i.e. the same day when return of income was filed being the last date of filing of return as extended from time to time by CBDT. He placed reliance on the judgement of the Co-ordinate Bench of ITAT in the case of Sanjay Kukreja vs ACIT in ITA No.652/Del/2023 dated 30.01.2024 wherein it is held that the delay in filing the Audit Report in Form 10CCB ITA No.2943/Del/2024 Page | 2 before the due date is only directory and not mandatory and requested to allow the deduction under section 80 IC of the Act. 4. However, the appellate authority by observing that the assessee has not obtained any condonation of delay in filing the Form 10CCB within due date, and dismissed the appeal of the assessee. 5. Before us, the Ld.AR submits that the delay was neither intentional nor deliberate and the Hon’ble Supreme Court in the case of Suo Moto Writ Petition SMW(C) No.03/2022 has extended the period of limitation falling under Covid-19 period, till 31.05.2022 due to Covid pandemic. He thus submits that the delay in filing of form 10CCB has already been condoned by the Hon’ble Supreme Court and therefore, there is no delay in filing of the Audit Report in Form 10CCB. Accordingly, he prayed that the assessee is entitled for deduction under s. 80IC of the Act. 6. On the other hand, Ld. Sr. DR for the Revenue vehemently supported the orders of the lower authorities and submitted that the assessee was a habitual defaulter as neither the Audit Report in Form 10CCB was filed on time nor the appeal before the CIT(A) was filed on time and therefore, he requested for confirmation of the order of the lower authorities. 7. We have considered the rival submissions and perused the material available on record. In this case while processing the return of income of the assessee under s. 143(1) of the Act, the Central Processing Centre (“CPC”) disallowed the claim of the assessee of deduction under s. 80 IC of the Act claimed at INR 64,04,787/- by holding that the Audit Report in Form 10CCB was not filed within stipulated time period as provided under the Act. Admittedly, the Audit Report was filed on 15.02.2021 for AY 2020-21 where the due date of filing of return of income was 30.11.2020 and the same was extended upto 15.02.2021. This position is clearly evident from the intimation order of CPC dated 24.12.2021 against which the present appeal is preferred. As per Section 80 IC r.w. Rule 18BBB of the Income Tax Rules, 1962 (“Rules”), it is provided that Audit Report under Form 10CCB should be filed one month before the due date of filing of return of income. In the instant case, the due date of filing of return of income was extended upto 15.02.2021. However, the ITA No.2943/Del/2024 Page | 3 Audit Report was filed only on 15.02.2021, simultaneously alognwtih return of income filed on the same day. Thus, the assessee has failed to comply with the provisions of Rule 18BBB of the Rules. However, in view of the judgement of Hon’ble Supreme Court in the case of Suo Moto Writ Petition (supra), the period of limitation was extended by the Hon’ble Supreme Court upto 31.05.2022. Therefore, there was no delay in filing the Audit Report by the assessee in Form 10CCB. Further, the Co-ordinate Bench of the Tribunal in the case of Sanjay Kukreja (supra) has also expressed the view that filing of Audit Report alongwith return of income is not mandatory but directory and if the Audit Report is filed at any time before framing the assessment, it would be sufficient to hold that the assessee has complied with the provision of filing of Audit Report. This view is further supported by the judgement of Hon’ble Madras High Court in the case of CIT vs AKS Alloys Pvt.Ltd. [2012] 18 taxmann.com 25 (Madras) and also in the following judgement by various High Courts:- [i] CIT vs Contimeters Electricals (P.) Ltd. 317 ITR 249 (Del); [ii] CIT vs Web Commerce (India) (P.) Ltd. 318 ITR 135 (Del); [iii] CIT vs Punjab Financial Corpn. 254 ITR 6 (P & H); [iv] CIT vs Print Systems & Products 285 ITR 260 (Mad.); [v] CIT vs Medicaps Ltd. 323 ITR 554 (MP); [vi] CIT vs Shivanand Electr5onics 209 ITR 603 (Bom.); and [vii] CIT vs G.Krishnan Nair 259 ITR 727 (Ker.) 8. By following the above-mentioned judgements of various Hon’ble High Courts and also considered the order of the Hon’ble Supreme Court in the case of Suo Moto Writ Petition (supra) where limitation period was extended by Hon’ble Supreme Court falling under Covid period, we are of the view that there is no delay in filing the Audit Report in Form 10CCB in the instant case. Therefore, we allowed the said Audit Report to be considered for deduction under section 80 IC of the Act however, we are not aware whether the other conditions for claiming deduction under section 80 IC of the Act, have been ITA No.2943/Del/2024 Page | 4 coupled with or not. Therefore, the AO is directed to verify all such conditions and if it is found that the assessee has duly complied with all conditions, the deduction claimed under section 80 IC be allowed. 9. In the result, the appeal of the assessee is allowed with above directions. Order pronounced in the open Court on 23.04.2025. Sd/- Sd/- (SATBEER SINGH GODARA) JUDICIAL MEMBER *Amit Kumar, Sr.P.S* (MANISH AGARWAL) ACCOUNTANT MEMBER Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI "