Tribunal Allows Deduction u/s 80JJAA Despite Late Audit Report Filing, Following Supreme Court Precedent.

The ITAT ruled in favor of the assessee, allowing the deduction under section 80JJAA of the Income-tax Act, 1961, despite the late filing of the audit report in Form 10DA. The Tribunal set aside the order of the CIT(A), directing the AO to grant the claimed deduction, referencing the precedent set by the Supreme Court in the G. M. Knitting Industries case. The decision distinguished between exemption and deduction provisions, concluding that the latter allows for more flexibility in compliance. The assessee's appeal was thus allowed, and the decision was pronounced on 03.10.2024.

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Issues: Late filing of audit report affecting deduction under section 80JJAA of the Income-tax Act, 1961.

Analysis:

The appeal was filed against the order of the Ld. Commissioner of Income Tax (Appeals) ADDL/JCIT(A)-5, Mumbai, regarding the disentitlement of the assessee from claiming deduction u/s. 80JJAA due to the late filing of audit report in Form 10DA. The Form 10DA was filed after the due date but was available to the Assessing Officer (AO) during assessment proceedings. The main issue was whether the late filing would impact the assessee's eligibility for the deduction.

The decision of the Hon'ble Supreme Court in the case of CIT, Maharashtra Vs. G. M. Knitting Industries Pvt. Ltd. was cited, emphasizing that even if the necessary certificate was not filed with the return of income but was submitted before the final assessment order, the assessee could still claim the deduction. This precedent supported the assessee's position that the availability of Form 10DA during assessment proceedings should allow for the deduction u/s. 80JJAA.

Regarding the argument based on another Supreme Court decision in the case of Pr. CIT-III, Bangalore Vs. M/s. Wipro Ltd., it was noted that the exemption provisions under section 10B, as discussed in the Wipro case, were distinct from the deduction provisions under Chapter VIA, which included section 80JJAA. The court clarified that exemption provisions required strict compliance, unlike deduction provisions. Therefore, the Wipro case was not directly applicable to the present scenario, and the decision in the G. M. Knitting Industries case was more relevant.

Ultimately, the Tribunal ruled in favor of the assessee, citing the G. M. Knitting Industries case as a precedent. The Ld. CIT(A)'s order was set aside, and the AO was directed to grant the deduction u/s. 80JJAA as claimed by the assessee. Consequently, the appeal of the assessee was allowed, and the order was pronounced in open court on 03.10.2024.

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