Graymatter Software Services Private Limited Vs DCIT (ITAT Bangalore)
The Bangalore ITAT in the case of Graymatter Software Services Pvt. Ltd. dealt with denial of Section 10AA deduction solely on the ground that Form 56F (audit report) was not filed along with the return of income.
The Tribunal noted that although filing of Form 56F is a requirement, the assessee had filed the form subsequently during proceedings, and the claim itself was otherwise eligible. Relying on the Madras High Court ruling in Astrotech Steels Pvt. Ltd. (2025), the ITAT held that delay in filing the audit report is a procedural defect and not fatal to the substantive claim.
Importantly, the Tribunal distinguished the Supreme Court ruling in Wipro Ltd. (446 ITR 1), observing that there is no statutory bar prohibiting filing of Form 56F after the due date, and hence deduction cannot be denied merely on timing.
Accordingly, the ITAT directed the AO to allow deduction u/s 10AA, reinforcing that substantive benefits cannot be denied for curable technical lapses.
The appeal was thus allowed in favour of the assessee.
FULL TEXT OF THE ORDER OF ITAT BANGALORE
1. ITA No. 2594/Bang/2025 is filed by M/s. Graymatter Software Services Private Limited against the Appellate Order passed by the Commissioner of Income Tax (Appeals) – 4, Mumbai (the Ld. CIT(A)) for Assessment Year 2018-19 on 24.09.2025 wherein the Appeal filed by the Assessee against the rectification order passed u/s. 154 of the Income Tax Act, 1961 (the Act) by the Central Processing Centre, Bangalore on 11.09.2020 was partly allowed.
