Sahyadri Farmers Producer Company Limited Vs ACIT (ITAT Pune)
The appeal before the ITAT Pune concerned the disallowance of deduction of ₹8.73 crore claimed under section 80IB(11A) of the Income-tax Act, 1961 for assessment year 2017–18. The assessee had filed its return of income declaring nil income after claiming the deduction. While processing the return under section 143(1), the Centralised Processing Centre (CPC) disallowed the deduction on the ground that the audit report in Form 10CCB was filed belatedly. The first appellate authority upheld this disallowance, leading to the appeal before the Tribunal.
The Tribunal noted that although Form 10CCB was not filed along with the return, it was subsequently furnished in response to CPC communication and, crucially, before the intimation under section 143(1) was issued. The Tribunal examined the rival submissions and the judicial precedents relied upon by both sides. It observed that the Revenue’s reliance on decisions such as those relating to exemption provisions was misplaced, as those cases dealt with exemptions and not deductions. The Tribunal emphasized the distinction between exemption provisions and deduction provisions under Chapter VIA of the Act.
The Tribunal placed reliance on the decision of the Supreme Court in GM Knitting Industries Pvt. Ltd., which held that filing of the audit report, though mandatory, is a procedural requirement and that deduction cannot be denied if the audit report is furnished before completion of assessment. It also relied on a recent jurisdictional coordinate bench decision where, under similar circumstances, deductions were allowed when the audit report was available on record prior to processing or assessment. The Tribunal found that the ratio of these decisions squarely applied to the facts of the present case.
