TaxTMI 
TaxTMI 
2026 (3) TMI 1275
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....5AD of the Act. 2. That on facts and circumstances of the case and in law, the Id. CIT(A) has erred in directing the Assessing Officer to recompute the income of the assessee firm u/s 115JC after considering the deduction u/s 35AD without appreciating the findings of AO that as the assessee has failed to file Form. 10CCB. before the due date of filing of return of income, the assessee is not eligible for claiming deduction u/s 35AD of the Act and thus income u/s 115JC is not required to be recomputed (Please refer ground no.1). 3. The appellant craves leave to add to or deduct from or otherwise amend the above." 2. The background facts leading to present appeal are as under: (i) The assessee is a partnership firm engaged in the business of building and operating a cold storage in which fruits and vegetables are processed through scientific technology and refrigeration and storing them in controlled conditions to increase the product self-life. (ii) For AY 2018-19, the assessee filed return declaring a loss of Rs. 7,73,47,127 / total income of Rs. Nil. In the return so filed, the assessee claimed deduction of Rs. 8,60,92,248/- u/s 35AD. ....
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.... sides have made their vehement contentions in favour of respective orders i.e. while the Ld. DR for revenue/appellant has defended the assessment-order passed by AO, the Ld. AR for assessee/respondent has supported the order of first-appeal passed by CIT(A). We have heard learned Representatives of both sides and carefully considered the material held on record including the orders of lower-authorities and the documents filed in Paper-Books. 4. At first, we re-produce the impugned order of first-appeal passed by CIT(A) giving relief to assessee, which also includes the facts of assessee as well as relevant portion of assessment-order passed by AO: "1. Decision 7.1 I have carefully considered the submission of the appellant as reproduced in the preceding paragraphs and the facts emanating from the AO's order, wherein addition has been made. In this regard my decision on various Grounds of appeal are as under: In this case, assessee is engaged in the business of building and operating a cold storage in which fruits and vegetables were processed through scientific technology and refrigeration and storing them in controlled condition in cold storage. ....
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....though this is the fact that initial issue on which the case was selected was "Share Capital/Other Capital". But, it was open to Assessing Officer to examine other issues as well, which he apparently has not done by him and hence, 263 proceedings took place. Relevant para of assessment order is reproduced as below, which clearly shows that it is a complete scrutiny assessment. ASSESSMENT ORDER "1. The case was selected for Complete Scrutiny assessment under the E-assessment Scheme, 2019 on the following issues:- S. No. Issues i. Share Capital/Other Capital" 1. During 263 proceedings, assessee firm has submitted all the details regarding 35AD deduction and also submitted that Form 10CCB is left to be e-filed along with return due to some technical glitches and it was bonafide mistake. Hon'ble PCIT has duly considered the submissions of the assessee and set aside the Issue to the Assessing Officer for making detailed enquiry regarding all aspects of Sec. 35AD deduction. 1. During proceedings u/s. 143(3) r.w.s 263, Assessing Officer has called for all the details regarding Section 35AD from the assessee, which has been duly submitted....
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....orm No. 10CCB along with the return, he cannot be divested of the benefit of section 80-I. It is not a case where the form was filed after the assessment, but before it and, therefore, when the authorities assessed the income, the form was before the Assessing Officer. Under these circumstances, we find that the approach of the CIT(A) and the Tribunal was proper." "9. We, therefore, hold that in the facts and circumstances of the case, the Tribunal was justified in law in holding that the claim of the assessee under section 80-I is justified even if he had not filed the audit report in Form No. 10CCB along with the return. We, therefore, answer the question against the revenue and in favour of the assessee." Similar view was taken by Hon'ble ITAT Jaipur Bench in case of DCIT V/s. M/s. Ksheer Sagar Developers Private Ltd., ITA No. 1158 to 1162/JP/2019 dated 31.08.2021, wherein it was held that filing of Form 10CCB, for claiming deduction u/s. 35AD is only directory and not mandatory and deduction u/s. 35AD should be allowed even when Form 10CCB was filed before completion of assessment. From the above factual matrix and judicial pronouncements, it is c....
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....03.2024. The assessee has filed Form No. 10CCB on 08.02.2024 during the proceeding of fresh assessment and not during the proceeding of original assessment. He submitted that the decisions relied by Ld. CIT(A) including the decision of Hon'ble Jurisdictional High Court and Supreme Court have dealt a situation where the assessee filed Form No. 10CCB before completion of original assessment. Those decisions did not deal a situation involved in present case of assessee. Therefore, those decisions cannot help assessee. He also submitted that had there been no action of revision u/s 263 by Ld. PCIT, the assessee would have not filed Form No. 10CCB. He submitted that filing of Form No. 10CCB is mandatory for claiming deduction. 7. In reply, Ld. AR for assessee/respondent made following submissions: (i) The present AY 2018-19 was the first year of operations of assessee. The assessee obtained Form No. 10CCB on 31.03.2020 from Chartered Accountant. However, the same was not filed inadvertently to Income-tax Department. (ii) The assessee, however, also obtained Report of Tax Audit (Form No. 3CD) u/s 44AB signed by its auditors-cum-Chartered Accountants, and in Clause No....
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....ve filed grievances on the portal but the same could not be rectified by the department. Therefore, due to technical issue of portal, the same could not be filed on the time. 2.3] That after multiple attempts and grievances logged on the portal for Form 10CCB, the same could be filed." 8. Having submitted thus, the Ld. AR made following contentions: (i) That irrespective of whether it was original assessment or fresh assessment, when the Form No. 10CCB was available with AO at the time of framing fresh assessment, the AO must have considered the same and allowed deduction to assessee. (ii) That, in the revision-order, the PCIT has restored the issue to AO for a fresh examination. Therefore, when the AO conducted proceeding of fresh assessment to re-examine the issue of allowability of deduction and the assessee filed Form No. 10CCB during such proceeding, the same should be construed as a sufficient compliance. (iii) That, the crux of the decisions of CIT Vs Panama Chemical Works [2007] 292 ITR 147 (MP) and the Hon'ble Supreme Court in CIT vs. G.M. Knitting Industries (P.) Ltd. [2015] 376 ITR 456 (SC) is such that if the report in Form No. 10C....
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.... filed along with the return of income. Similar view has been taken by the Hon'ble jurisdictional High Court of Madhya Pradesh in CIT vs. Panama Chemical Works (supra) wherein it was held that filing of the prescribed audit report along with the return is a directory requirement and if the report is furnished before completion of assessment, the assessee cannot be denied the benefit of deduction. 14. The contention of the Ld. DR that the aforesaid judicial precedents are applicable only where the report is filed before completion of the original assessment and not in the course of fresh assessment proceedings pursuant to section 263, in our view, is devoid of merit. Once the original assessment is set aside by the PCIT and the matter is restored to the file of the AO for fresh examination, the proceedings conducted thereafter assume the character of a fresh assessment and the AO is required to consider all relevant material available on record while adjudicating the issue. Therefore, when the assessee furnished the audit report in Form No. 10CCB before completion of such fresh assessment, the same constituted sufficient compliance of the procedural requirement. 15. We also fi....