2025 (8) TMI 1644 - AT - Income Tax

Denial of s.80IAC deduction due to non e-filing of Form 10CCB set aside; matter remitted for fresh decision

M/s. Right Health Platter Pvt. Ltd. Versus The ITO, Corporate Ward-2 (2), Chennai.

M/s. Right Health Platter Pvt. Ltd. Versus The ITO, Corporate Ward-2 (2), Chennai. - TMI ISSUES PRESENTED AND CONSIDERED 1. Whether a deduction claimed under Chapter VIA (specifically section 80IAC) can be denied at the CPC/assessment stage solely because Form No.10CCB was not e-filed by the assessee within the statutory timeline. 2. Whether the decision of the Supreme Court in the matter dealing with compliance for exemption under Chapter III (as relied upon by the first appellate authority) is applicable to deny a Chapter VIA deduction where non-compliance is alleged to have arisen from technical glitches on the e-filing portal and a contemporaneous bona fide attempt to file physically. 3. Whether the first appellate authority erred in failing to examine factual assertions of inability to e-file (portal glitch) and contemporaneous efforts to file a hard copy with the tax officer, and whether the matter requires remand for fresh adjudication in light of those facts. ISSUE-WISE DETAILED ANALYSIS Issue 1 - Legality of denying section 80IAC deduction for non-e-filing of Form No.10CCB Legal framework: Section 80IAC provides specified deductions under Chapter VIA; various procedural/formal requirements (including filing of prescribed forms such as Form No.10CCB) are relevant to claim and verification of such deductions. Assessment/intimation under section 143(1) may process returns and exclude claimed benefits where prescribed documentation is not available. Precedent Treatment: The Tribunal notes reliance by the first appellate authority on a Supreme Court decision addressing strict compliance in the context of exemption provisions under Chapter III. That precedent pertains to exemption provisions (Chapter III) rather than deduction provisions (Chapter VIA). Interpretation and reasoning: The Tribunal distinguishes the regime for exemptions (Chapter III) from that for deductions (Chapter VIA), observing that the Supreme Court itself recognized differing principles between the two chapters. The Tribunal emphasizes that automatic disallowance at CPC on ground of non-e-filing requires examination of circumstances, particularly where the assessee claims inability to e-file due to technical glitches and has contemporaneous documentary evidence of attempts to comply. Ratio vs. Obiter: The Tribunal treats the inapplicability of the Chapter-III exemption precedent to a Chapter-VIA deduction as a ratio supporting the need for fact-sensitive inquiry; the statement distinguishing chapters in the cited Supreme Court decision is relied upon as controlling for the present ratio. Conclusion: The Tribunal holds that denial of section 80IAC deduction solely on the ground of non-e-filing without considering the assessee's factual explanations and attempts to comply is not sustainable and requires further adjudication. Issue 2 - Applicability of the cited Supreme Court authority (on Chapter III exemptions) to Chapter VIA deductions Legal framework: Distinction between exemption provisions (Chapter III - incomes excluded from total income) and deduction provisions (Chapter VIA - items deductible in computing total income); established principle that exemption provisions are interpreted strictly, whereas deductions are subject to their own interpretive rules. Precedent Treatment: The Tribunal notes that the Supreme Court decision relied upon by the first appellate authority itself recognized that Chapter III and Chapter VIA operate in different realms and that the strict approach applicable to exemptions cannot be equated with the mechanism for deductions. Interpretation and reasoning: Applying that authoritative observation, the Tribunal finds that the first appellate authority misapplied the Supreme Court decision to the present case involving a Chapter VIA deduction. The Tribunal reasons that reliance on a Chapter-III exemption precedent to deny a Chapter-VIA deduction without fact-specific enquiry was a legal error. Ratio vs. Obiter: The Tribunal treats the distinction articulated by the Supreme Court (para extracted) as binding for purpose of distinguishing the precedent - this constitutes the operative ratio for non-application. Conclusion: The cited Supreme Court authority is not applicable to deny the Chapter-VIA deduction claimed here; the first appellate authority erred in treating it as determinative. Issue 3 - Effect of technical glitches and contemporaneous attempts to file physically; adequacy of appellate fact-finding and need for remand Legal framework: Procedural compliance requirements may be subject to considerations of bona fide attempts, reasons for non-compliance (e.g., technical failure), and whether alternatives (physical filing with AO) were sought and permitted; appellate authorities are required to consider relevant factual material brought on record. Precedent Treatment: Absent direct precedent cited in the text for technical glitches, the Tribunal relies on general principles of fact-sensitive adjudication and requirement that first appellate authorities consider asserted facts before applying legal precedent. Interpretation and reasoning: The Tribunal records that the assessee filed the return and audit report on the same date the Form was to be uploaded, attempted electronic upload but encountered portal glitches, and contemporaneously filed a letter seeking permission to file a hard copy with the JAO. The Tribunal finds that the first appellate authority did not adjudicate these factual assertions and instead dismissed the appeal by mechanical application of the Supreme Court decision (see Issue 2). Because these facts, if found, could vitiate a strict e-filing denial, the Tribunal concludes that the appeal must be remitted for fresh consideration. Ratio vs. Obiter: The requirement that the first appellate authority examine and adjudicate factual assertions of bona fide inability to e-file is treated as ratio in ordering remand; discussion of the portal glitch and the JAO's non-response functions as operative factual basis rather than mere obiter. Conclusion: The Tribunal sets aside the first appellate order for failure to consider material factual assertions regarding technical inability to e-file and contemporaneous attempts to file physically; the matter is remitted to the first appellate authority for fresh adjudication after giving the assessee opportunity to place documents/written submissions and after deciding in accordance with law. Disposition The Tribunal allows the appeal for statistical purposes, sets aside the impugned appellate order, and restores the appeal to the first appellate authority for fresh adjudication on the merits after considering the assessee's factual contentions and documentary evidence concerning inability to e-file and attempt to file physically. The Tribunal expressly directs that the first appellate authority decide the appeal in accordance with law.