PCIT-1 Vs Astrotech Steels Private Limited (Madras High Court)
Madras High Court has dismissed an appeal filed by the Principal Commissioner of Income Tax-1, Chennai, affirming that an income tax deduction under Section 10AA cannot be denied solely due to a delay in filing the statutory Form 56F. The court’s decision, pronounced on July 3, 2024, upheld orders by the Income Tax Appellate Tribunal (ITAT), “C” Bench, Chennai, and the Commissioner of Income Tax (Appeals) (CIT(A)).
The case involved Astrotech Steels Private Limited, which filed its income tax return for Assessment Year 2018-2019 on October 16, 2018, declaring a total income of Rs. 17,57,73,823. The company claimed a deduction of Rs. 7,48,71,926 under Section 10AA of the Income Tax Act, 1961. However, when the return was processed under Section 143(1) of the Act, the Section 10AA deduction was disallowed because the audit report in Form 56F, which is required to be filed along with the return, was submitted late.
The prescribed due date for filing Form 56F was October 31, 2018, but Astrotech Steels Private Limited filed it on December 20, 2018, approximately 50 days after the deadline. The company filed a rectification application under Section 154 of the Act, which was rejected by a rectification order on January 28, 2021.
