Tasa Foods Private Limited Vs DCIT (ITAT Bangalore)
Portal Cannot Demand a Form It Did Not Provide—ITAT Allows ₹94.85 Lakh Deduction u/s 80-IB on Scanned Form 10CCB
SEO Description: Bangalore ITAT allows Section 80-IB deduction where Form No.10CCB was timely prepared and uploaded as an attachment due to portal limitations.
Summary:
The controversy
The assessee, Tasa Foods Private Limited, was engaged in manufacturing, processing & selling fruit products. It had established a manufacturing plant at Chittoor, Andhra Pradesh, for processing fruits and vegetables.
For AY 2018-19, the assessee filed its return on 28 November 2018 declaring total income of ₹1,55,21,730 after claiming deduction of ₹94,84,865 u/s 80-IB.
On the same date, the tax auditor uploaded Form Nos.3CA & 3CD, Form No.3CEB relating to international or specified domestic transactions & Form No.29B concerning MAT u/s 115JB.
The auditor had also prepared and signed Form No.10CCB on 30 October 2018, well before the return-filing due date. However, the income-tax portal did not provide either an online facility or offline utility for independently filing Form No.10CCB.
The auditor therefore scanned the duly signed physical Form No.10CCB and uploaded it as an attachment to Form Nos.3CA & 3CD.
CPC denied deduction despite portal limitation
CPC issued a communication u/s 143(1)(a), proposing to deny the deduction because the corresponding Schedule 80-IB or Form No.10CCB had not been electronically filed within the prescribed time.
The assessee explained that Form No.10CCB could not be separately e-filed because the necessary functionality was unavailable on the portal. It had therefore adopted the only practical course available by attaching the scanned report to the tax audit report.
CPC did not accept the explanation. By intimation dated 17 June 2019, it denied the entire deduction of ₹94,84,865, increased the taxable income to approximately ₹2.50 crore & raised a demand of ₹42,94,770.
The assessee filed an online rectification application u/s 154 on 27 June 2019. CPC rejected the application on 26 July 2019, stating that the intimation contained no apparent error.
CIT(A) sent assessee to seek condonation
In appeal, the Addl./JCIT(A) accepted the existence of the technical difficulty but did not grant the deduction.
Instead, he directed the assessee to file a formal petition before the jurisdictional CCIT/CIT seeking condonation of delay in electronically filing Form No.10CCB. The competent authority was further requested to dispose of the condonation petition expeditiously after considering the non-availability of the online facility.
The assessee challenged this direction before the ITAT. It contended that this was not a case of complete failure to obtain or furnish the prescribed audit report. The report was prepared within time and uploaded along with the tax audit report because the portal provided no other method.
Revenue demanded strict compliance
The Revenue argued that deduction u/s 80-IB was an incentive provision subject to compliance with specified statutory conditions. Such conditions had to be strictly fulfilled.
Reliance was placed upon the Supreme Court’s decision in Commissioner of Customs (Import) v. Dilip Kumar & Co., which requires exemption and incentive provisions to be strictly construed.
According to the Revenue, no prejudice was caused by the CIT(A)’s direction because the assessee could approach the competent authority for condonation.
Substantial compliance already achieved
The ITAT noted the following undisputed facts:
Form No.10CCB had been prepared and signed by the auditor on 30 October 2018; the scanned report was uploaded on 28 November 2018 as an attachment to Form Nos.3CA & 3CD; and the portal did not then contain either an online Form No.10CCB or an offline utility permitting separate filing.
The Revenue produced no evidence rebutting the assessee’s claim regarding the portal’s technical incapacity. It did not contend that the scanned report was fabricated, prepared belatedly or unavailable to the Department.
The Tribunal therefore held that the assessee had substantially complied with the statutory requirement.
The requirement behind Form No.10CCB is to ensure that the eligible undertaking’s accounts are audited by a Chartered Accountant and that a signed and verified report supports the deduction. Both substantive requirements were satisfied. TaxGuru’s material on Rule 18BBB likewise identifies Form No.10CCB as the audit report for claims under sections 80-I, 80-IA, 80-IB and 80-IC.
Later e-filing strengthened bona fides
Once the portal facility became functional, the assessee independently e-filed Form No.10CCB on 23 January 2020.
This later filing did not create the audit report for the first time. It merely placed, in the newly enabled electronic format, a report that had already been prepared, signed & furnished as an attachment within the relevant time.
The Tribunal observed that courts have consistently held that even where an audit report is not filed along with the return, the deduction cannot be denied if the report is made available to the AO before completion of assessment.
The present case stood on an even stronger footing because the report was actually uploaded within time, though not through a separate electronic field.
ITAT’s ruling
The ITAT held that no fault could be attributed to the assessee for failing to use a filing facility that did not exist.
Strict interpretation of incentive provisions could not justify penalising the assessee for the Department’s technical shortcoming. The assessee had complied with the spirit and substance of the reporting requirement.
The CIT(A)’s order was therefore set aside, and the AO was directed to allow the deduction of ₹94,84,865 u/s 80-IB. The appeal was allowed.
Author’s comments
The ruling draws a sensible distinction between absence of an audit report and inability to upload an existing report through a prescribed electronic route.
Procedural conditions serve the substantive law; they should not defeat it where compliance became technologically impossible due to the Department’s own portal.
The contemporaneous preparation date, attachment to the tax audit report & prompt electronic filing once the facility became available collectively established bona fides.
The CIT(A)’s direction to seek condonation was unnecessary because there was no culpable delay requiring forgiveness. The assessee had already done everything the portal permitted.
The principle is simple: technology may prescribe the route, but when the route itself is closed, a taxpayer who takes the only available path cannot be denied a lawful deduction.
Cases Discussed
- Commissioner of Customs (Import) v. Dilip Kumar & Co. [2018] 272 Taxman 275 (Supreme Court)
FULL TEXT OF THE JUDGMENT/ORDER OF ITAT, BANGALORE BENCH
This appeal at the instance of the assessee is directed against the order of the ld. Addl/JCIT (A), Ranchi dated 23.10.2025 vide DIN & Order No. ITBA/APL/S/250/2025-26/1081942737(1) passed u/s 250 of the Income Tax Act, 1961 (in short “the Act”) for the assessment year 2018-19.
2. The assessee has raised the following grounds of appeal:-
1 . The orders of the authorities below in so far as they are against the appellant are opposed to law, equity, weight of evidence, probabilities, facts and circumstances of the case.
2. The learned ADDL/JCIT[A], Ranchiis not justified in upholding the Intimation u/s 143(1) of the Act, dated 17/06/2019 determining the total income of the appellant at Rs.2,50,06,593/- as against the returned income of Rs.1,55,21,730/- by denying deduction claimed u/s 80IB of Rs. 94,84,865/- under the facts and in the circumstances of the appellant’s case.
3. The learned ADDL/JCIT[A], Ranchi, ought to have allowed the rightful claim u/s 80IB of the Act that was denied on the ground that Form 10CCB was not e-filed, keeping in mind the fact that there was no facility to e-file Form No IOCCB on the e-filing portal at the relevant point of time and hence, the appellant was entitled to claim to deduction claimed under the facts and in the circumstances of the appellant’s case.
4. The learned ADDL/JCIT[[… ELLIPSIZATION …] form no.10CCB dated 30.10.2018 as an attachment to the form no.3CA-3CD that was uploaded on the e-filing portal.
3.1 After e-filing the return of income for the AY 2018-19, the assessee thereafter received a notice u/s 143(1)(a) of the Act dated 27.02.2019 stating that there was an error warranting adjustment u/s 143(1)(a) of the Act in respect of the claim of deduction under Chapter VI-A Part C as follows:
“In Schedule VI-A, under part – C deduction in respect of certain incomes, in serial no.2.h, deduction is claimed under section 80IB without filing the corresponding schedule 80IB/Form 10CCB or Form 10CCB has not been e-filed within the due date – Rs.94,84,865/-.”
The assessee company in its response submitted that there was no availability of online Form No.10CCB and hence the physical copy of audit report were scanned and attached to the Form No.3CA – 3CD and uploaded by the tax auditor.
3.2 It is submitted that the CPC without considering the aforesaid bonafide explanation of the assessee with regard to the non-availability of online Form 10CCB proceeded to pass the intimation u/s 143(1) of the Act dated 17.06.2019 by denying the deduction claimed by the assessee u/s 80IB of the Act amounting to Rs.94,84,865/- and accordingly computed the taxable income of the assessee company at Rs.2,50,06,590/- and raised the demand of Rs.42,94,770/-. The assessee had also filed an online request for rectification u/s 154 of the Act on 27/06/2019, however the CPC had passed an order u/s 154 of the Act on 26/07/2019 rejecting the request for rectification made by the assessee by affirming that there is no prima-facie error in the intimation sought to be rectified.
4. However, aggrieved by the intimation passed u/s 143(1) of the Act dated 17.06.2019, the assessee preferred an appeal before the CIT(A)/Addl./JCIT(A).
5. The ld. Addl/JCIT(A), Ranchi partly allowed the appeal of the assessee by directing the assessee to file a formal petition to the competent authority (jurisdictional CCIT/CIT) for condonation of the delay in the electronic filing of Form No.10CCB explaining the technical non-availability of the Form on the e-filing portal as the cause. The ld. Addl/JCIT(A) also instructed the competent authority to adjudicate the said petition expeditiously and on merits giving due consideration to the assessee’s explanations regarding the non-availability of the online Form No.10CCB facility at the time of filing the return of income.
6. Again aggrieved by the order of the ld. Addl/JCIT(A), Ranchi dated 23.10.2025, the assessee has filed the present appeal before this Tribunal.
7. Before us, the ld. A.R. of the assessee vehemently submitted that it is not a case that no Form 10CCB has been filed by the assessee. In fact, due to non-availability of online form no.10CCB, the assessee was compelled to scan the physical copy of audit report in Form no.10CCB and uploaded in Form no.3CA – 3CD which can be viewed along with report as an attachment and accordingly prayed that the appeal of the assessee may be allowed.
8. The ld. D.R. on the other hand, vehemently submitted that the ld. Addl/JCIT(A) has rightly directed the assessee to file the formal petition to the competent authority for the condonation of delay in filing the form no.10CCB and accordingly submitted that no prejudice is caused to the assessee. Further, the ld. D.R. submitted that it is well settled legal proposition that deduction is available on complying with certain conditions, those conditions have to be strictly complied with. Lastly the ld. DR by heavily relying on the judgment of the Hon’ble Apex Court in the case of Commissioner of Customs (Import) v. Dilip Kumar and Co. [2018] 272 Taxman 275 vehemently submitted that the incentive provisions like section 80IB of the Act are subjected to strict interpretation and in the present case, as the assessee had not filed the form no.10CCB as required for claiming deduction u/s 80IB of the Act hence the appeal of the assessee may be dismissed.
9. We have heard the rival submissions and perused the materials available on record. It is an undisputed fact that the audit report in Form no.10CCB was prepared and signed by the auditor on 30/10/2018 i.e. well within the due date of furnishing the return of Income. It is also an undisputed fact that the physical copy of the Form No.10CCB dated 30/10/2018 were also scanned & uploaded by the tax auditor by way of an attachment to the tax audit report filed in form no. 3CA–3CD on 28.11.2018. The contention of the assessee is that the tax auditor wanted to e-file the Form No.10CCB separately on the income tax portal in support of the deduction claimed u/s 80IB of the Act, however, as there was no online Form No.10CCB available in the e-filing portal and hence the tax auditor having no other alternative attached the scanned copy of the physical form no.10CCB dated 30.10.2018 and uploaded the same as an attachment to the tax audit report filed in the form no.3CA-3CD. The Revenue before us, also could not refute the claim of the assessee and also could not brought any evidences/ material in rebuttal to say that the claim of filing the Form No.10CCB as an attachment to the tax audit report in the absence of availability of form No.10CCB online in the e-filing portal are baseless or absurd. Further, on perusal of the order of the ld. Addl/JCIT(A), we observed that the ld. Addl/JCIT(A) after considering the technical constraints reported by the assessee had directed the assessee to file a formal petition to the ld. jurisdictional CCIT/CIT for condonation of delay. We also observed that the ld. Addl/JCIT(A) out of impetuousness even did not hesitate to give instruction to the ld. CCIT/CIT to adjudicate the condonation petition expeditiously after considering the assessee’s explanation. Thus, in our considered opinion, it is not a case of the Revenue that no audit report in Form No.10CCB had been filed by the assessee on or before the due date of furnishing the return. In fact, the assessee had substantially complied with the requirement of law by filing the scanned copy of physical report in form 10CCB in the absence of availability of online form 10CCB.
9.1 Undisputedly, the deduction u/s 80IB of the Act is admissible only if the accounts of the undertaking have been audited by a chartered accountant, and the audit report duly signed and verified by such accountant is furnished in form no.10CCB. The courts have consistently held that even if the audit report is not filed but it is made available to the Assessing Officer before the completion of assessment, the benefit under section 80IB of the Act cannot be denied. Before us, the ld. DR heavily relied on the judgment of the Hon’ble Apex Court in the case of Commissioner of Customs (Import) v. Dilip Kumar and Co. [2018] 272 Taxman 275 and vehemently submitted that the incentive provisions like section 80IB of the Act should be strictly interpreted. However, in the present case, as the audit report in Form no.10CCB was prepared and signed by the auditor on 30/10/2018 i.e. well within the due date of furnishing the return of Income and the physical copy of the Form No.10CCB dated 30/10/2018 were also scanned & uploaded by the tax auditor by way of an attachment to the tax audit report filed in form no. 3CA–3CD on 28.11.2018 & therefore we are of the considered opinion that there was no fault on the part of the assessee company as there was neither any facilities to e-file the form no.10CCB in the e-filing portal nor there was availability of the offline form utility for filing form no.10CCB. Thus, in our considered view, the assessee has complied with the spirit behind the requirement to file the said form 10CCB along with the return of income. We also take note of the fact that the assessee had also e-filed the form no.10CCB on 23/01/2020, once the facility was enabled on the income tax portal. In view of the above, we held that merely because of the technical shortcomings which also cannot be attributed to the assessee company, the deduction claimed u/s 80IB of the Act cannot be denied. Accordingly, we set-aside the order of the ld. Addl/JCIT(A) & direct the AO to allow the deduction u/s 80IB of the Act as claimed by the assessee.
10. In the result, the appeal filed by the assessee is allowed.
Order pronounced in the open court on 7th Sept, 2026
