ERADICATUS INFECTUS PRIVATE LIMITED,NEW DELHI V. DEPUTY COMMISSIONER OF INCOME TAX, NEW DELHI

ITA 5164/DEL/2024

AI Insights

Eradicatus Infectus Private Limited, formerly known as Genestore India (P) Ltd., appealed against the order of the CIT(A) which upheld the disallowance of a deduction of Rs. 20,27,56,020 claimed under section 80-IAC of the Income Tax Act for the assessment year 2021-22. The deduction was initially disallowed by the CPC, Bangalore due to the non-filing of Form 10CCB, which is required to certify the fulfillment of conditions under section 80-IAC. The CIT(A) and the Tribunal both found that the appellant's failure to file this form within the specified due date was a valid ground for disallowing the deduction.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 315811 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-05-2025
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2021-2022
• Laws Referred To: Income Tax Act
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SURENDER PAL SINGH
• Assessee Lawyers: V.K. JAIN; VIKAS

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “B”, NEW DELHI BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER, AND SHRI SUDHIR PAREEK, JUDICIAL MEMBER ITA NO. 5164/Del/2024 A.YR. : 2021-22 ERADICATUS INFECTUS PRIVATE LIMITED, (FORMERLY KNOWN AS GENESTORE INDIA (P) LTD., D-34, THIRD FLOOR, ANAND NIKETAN, NEW DELHI – 21 (PAN: AAICG1096M) VS. DCIT, CIRCLE 7(1), C.R. BUILDING, NEW DELHI (APPELLANT) (RESPONDENT) Appellant by : Shri V.K. Jain, CA & Shri Vikas Singh, CA Respondent by : Shri Surender Pal Singh, CIT(DR) Date of hearing : 01.05.2025 Date of pronouncement : 16.05.2025 ORDER PER SHAMIM YAHYA, AM : The Assessee has filed the instant Appeal against the Order of the Ld. Addl./JCIT(A)-1, Chandigarh dated 19.09.2024, relating to assessment year 2021-22. 2 | P a g e 2. In this case CPC, Bangalore did not allow the deduction u/s. 80IAC of the Act being 100% of the profits and gains derived from such business amounting to Rs. 20,27,56,020/- by making adjustment u/s. 143(1)(a)(ii) on the ground that Form 10CCB is not filed or not filed within the due date. 3. Upon assessee’s appeal, Ld. CIT(A) elaborately dealt with the issue in this case and upheld the order of the CPC, Bangalore. The order of the Ld. CIT(A) in this regard reads as under:- The issue involved in all these appeal is regarding denial of deduction claimed under section 80-IAC of the Act amounting to Rs.20,27,56,020/- and the appellant has furnished the combined submission on these grounds and therefore, these ground are being taken together. While processing the return of income under section 143(1) of the Act, the deduction claimed by the appellant has been disallowed by the CPC on the reasons that the report in Form No. 10CCB was not filed or not filed within due date. 5.1 have considered the submission made by the appellant and also gone through the material available. The appellant company is engaged in the business of Healthcare & Lifesciences Industry & Medical Devices/Biomedical sector and 3 | P a g e has obtained Certificate for Recognition as Start-up from Department for Promotion of Industry & Internal Trade (DPIIT) via Certificate No. DIPP62084 dated 06-08-2020 valid for 10 years up to 03-12-2029. In the return of income, the appellant has claimed deduction of Rs.20,27,56,020/- under section 80- IAC of the Act in respect of business as eligible start-up. Admittedly, the report in Form No. 10CCB was not filed by the appellant. 5.2 As per provisions of Section 80-IAC of the Act, there are various conditions prescribed therein which are required to be satisfied to become eligible for such deduction. The requirement of getting the books audited, obtaining such audit report and furnishing the same within specified due date which is one month prior to the due date for filing the return of income under section 139(1) of the Act, is one of many such conditions. The audit report in Form No. 10CCB is in fact a certificate from the Auditor regarding satisfaction of all other conditions prescribed under section 80-IA of the Act. Therefore, the filing of the same is all the more important in view of the fact that the return form does not have any column regarding satisfaction of other prescribed conditions. In the absence of the audit report, there is no other way to ascertain the fulfillment of such conditions. It is not out of place to mention here that the adjustments made at the time of processing of return are prima-facie adjustments required to be made on the face of the return. At 4 | P a g e present, to remove the human interface between income-tax department and assessee, a 100% technology-driven process has been adopted to process the return in accordance the prescribed procedure and format wherein the adjustments, if any are made on the basis of the entries made by the assessee at different places in the relevant Schedules of the return or in the documents attached with the return of income and any inconsistency in these entries are picked by the system and the disallowance or addition is made accordingly. Therefore, the filing of audit report along within specified time frame is mandatory to avoid any such adjustment. But, admittedly the appellant has not filed such report at all. 5.3 The appellant's submission that the furnishing of Form No. 10CCB has not been mandated under section 80-IAC r.w.s 80- IA of the Act and Rule 18BBB of the Income-tax Rules, 1962(hereinafter referred to as Rules) is not tenable if provisions of section 80-IAC and section 80-lA are read in conjunction. The sub-section (4) of section 80-IAC provides as under- \"The provisions of sub-section (5) and sub-sections (7) to (11) of section 80-IA shall apply to the start-ups for the purpose of allowing deductions under sub-section (1). The sub-section (7) of section 80-IA reads as under- \"The deduction under sub-section (1) from profits and gains derived from an undertaking shall not be admissible 5 | P a g e unless the accounts of the undertaking for the previous year relevant to the assessment for which the deduction is claimed have been audited by an accountant, as defined in explanation below sub-section (2) of Section 288, before the specified date referred to in section 44AB and the assessee furnishes by that date the report of such audit in the prescribed form duly signed and verified by such accountant.\" The form for the audit report required to be furnished as per section 80-IA (7) has been prescribed under Rule 18BBB of the Rules which is Form No. 10CCB. From the above provisions, it may be seen that by virtue of provision of sub-section (4) of section 80-IAC, the provisions of subsection (7) of section 80-IA have been made applicable to the start-ups for claiming deduction under section 80-IAC of the Act although the word start-ups has not been used in said sub- section. Consequently, Rule 18BBB of the Rules prescribing the form 10CCB has also become applicable to the start-ups. As per sub-section (7) of section 80-IA so made applicable to the assesse claiming deduction under section 80-IAC, the furnishing of audit report in Form 10CCB within specified date is mandatory for claiming deduction under section 80-IAC also. So, it is incorrect to say that the furnishing of. Form 10CCB has not been prescribed under section 80-IAC r.w.s 80-IA of the Act and Rule 18BBB of the Rules. 6 | P a g e 5.4 So far as the contention of the appellant that there is no column in Form 10CCB regarding deduction under 80-IAC is concerned, the same is not tenable. As per relevant provisions of the Act and Rules as reproduced above, the appellant was required to furnish audit report in Form 10CCB. The appellant ought to have filled the form to the extent applicable to it and furnish the same online. But, the appellant has not furnished the same and has also not placed any document or evidence to show that the online facility provided by the Income-tax Department did not allow him to furnish the Form 10CCB so filled by him. In view of these facts and legal position, the action of the CPC in disallowing the deduction claimed under section 80-IAC is valid and as per provisions of law. 5.5 The case laws relied upon by the appellant are distinguishable as the facts of those cases are different from the facts of the present case. In those cases, Form No. 10CCB was not filed along with the return of income but the same was filed before completion of assessment or before processing of return under section 143(1) of the Act, whereas in the present case, Form 10CCB has not been filed at all. 5.6 In view of the discussion above, the disallowance of deduction of Rs.20,27,56,020/- claimed under section 80-IAC for the failure of the appellant to furnish the Form No. 10CCB is hereby confirmed.” 4. Against the above order, assesse is in appeal before us. 7 | P a g e 5. We have heard both the parties and perused the records. Ld. Counsel for the assessee reiterated the submissions made before the Ld. CIT(A) that the amount claimed is correct as section 80IAC does not provide for filing of Form 10CCB. Further, he submitted that Form 10CCB does not mention that the said form has to be furnished under the provisions of section 80IAC. Per contra, Ld. DR referred to sub-section 80IAC(4) and also referred to section 80IAC and submitted that Ld. CIT(A) has passed a correct order which does not need any interference on our part. 6. Upon careful consideration, we find that Ld. CIT(A) is correct in negating the assessee’s submissions that furnishing of Form 10CCB is not mandated u/s. 80IAC. The provisions of section 80IAC are to be read in conjunction with 80IA of the Act. The sub-section (4) of section 80-IAC provides as under- \"The provisions of sub-section (5) and sub-sections (7) to (11) of section 80-IA shall apply to the start- ups for the purpose of allowing deductions under sub-section (1). 6.1 The sub-section (7) of section 80-IA reads as under:- \"The deduction under sub-section (1) from profits and gains derived from an undertaking shall not be admissible 8 | P a g e unless the accounts of the undertaking for the previous year relevant to the assessment for which the deduction is claimed have been audited by an accountant, as defined in explanation below sub-section (2) of Section 288, before the specified date referred to in section 44AB and the assessee furnishes by that date the report of such audit in the prescribed form duly signed and verified by such accountant.\" 7. On perusal of the aforesaid, it transpires that it is incorrect to say that the Form No. 10CCB does not require to furnish as per section 80IAC as prescribed under Rule 18BBB of the Income Tax Rules, 1962. Ld. CIT(A) is correct in holding that from the above provisions, it is seen by virtue of provision of sub-section (4) of Section 80IAC, the provisions of sub-section (7) of section 80-IA have been made applicable to the start-ups for claiming deduction under section 80-IAC of the Act although the word start-ups has not been used in said sub-section. Rule 18BBB of the Rules prescribing the Form 10CCB has also become applicable to the start-ups and then for a claim u/s. 80IAC it is essential report in Form 10CCB is duly furnished. In this view of the matter, we find that Ld. CIT(A) has passed a reasonable order in the cogent manner, which does not 9 | P a g e require any interference on our part, hence, we affirm the same and accordingly, the ground raised by the assessee stands rejected. 8. In the result, the Assessee’s appeal is dismissed. Order pronounced on 16/05/2025. SD/- (SUDHIR PAREEK) SD/- (SHAMIM YAHYA) JUDICIAL MEMBER ACCOUNTANT MEMBER SRBHATNAGAR Copy forwarded to:- 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR, ITAT Assistant Registrar "