Deduction under section 80IAB allowed despite late Form 10CCB filing due to IT Portal technical issues

ITAT Hyderabad allowed appellant's deduction claim under section 80IAB despite failure to file Form 10CCB due to technical glitches in IT Portal. Following Arunachalam precedent, the tribunal held that filing audit reports is directory, not mandatory. Since appellant filed Form 10CCB for section 80IA deduction timely and demonstrated good conduct, and the audit report was available before AO passed assessment order under section 143(1), the deduction under section 80IAB should be allowed. ITAT set aside CIT(A) order and directed AO to allow the deduction.

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Issues:
1. Disallowance of deduction claimed u/s 80IAB for belated filing of audit report.
2. Consideration of audit report for deduction u/s 80IAB.
3. Technical glitches in filing audit report.
4. Applicability of judicial precedents in similar cases.
5. Mandatory vs. directory nature of filing audit reports.
6. Decision on the appeal filed by the assessee.

Analysis:

The first issue in this case revolves around the disallowance of deduction claimed under section 80IAB of the Income Tax Act due to the belated filing of the audit report. The appellant filed its return of income for the relevant assessment year, claiming deductions under sections 80IA and 80IAB. While the audit report for section 80IA was filed on time, the report for section 80IAB was submitted after the due date, leading to the Assessing Officer denying the deduction claimed under section 80IAB.

The second issue concerns the consideration of the audit report for deduction under section 80IAB. The appellant argued that despite the delayed filing of the audit report, it was submitted before the Assessing Officer passed the assessment order. The appellant contended that the audit report should have been considered as the filing is directory, not mandatory, and the report was available to the Assessing Officer during the assessment process.

The third issue raised was regarding technical glitches faced by the appellant in uploading the second Form-10CCB for claiming deduction under section 80IAB. The appellant cited technical issues with the Income Tax Portal as the reason for the delay in filing the report and communicated this to the authorities. This technical difficulty was a crucial factor in the appellant's argument for the acceptance of the belated audit report.

The fourth issue involved the application of judicial precedents to support the appellant's case. The appellant referred to decisions from the Hon'ble Madras High Court and the Hon'ble Delhi High Court, emphasizing that the filing of the audit report before the assessment order is passed should warrant consideration for allowing deductions under the Income Tax Act.

The fifth issue tackled the debate over the mandatory versus directory nature of filing audit reports. The Tribunal analyzed the legal position on this matter, citing the decision of the Hon'ble Madras High Court, which held that filing the audit report before the assessment order is passed should be sufficient for considering the deduction, even if filed after the due date.

Finally, the Tribunal decided in favor of the assessee, allowing the appeal and directing the Assessing Officer to permit the deduction claimed under section 80IAB of the Income Tax Act. The Tribunal emphasized the importance of considering the audit report filed before the assessment order and highlighted the technical challenges faced by the appellant in filing the report on time.

In conclusion, the Tribunal's decision was based on the principles of timely consideration of audit reports for deductions and the recognition of technical difficulties faced by taxpayers in fulfilling compliance requirements.

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