आदशे / O R D E R PER MANU KUMAR GIRI, JM:

The captioned appeal filed by the Revenue is directed against order of the Ld. Commissioner of Income Tax (Appeals)/NFAC, Delhi [‘CIT(A)’ in short] dated 11.08.2023 for Assessment Year 2006-07.

2. Brief facts of the case are that the AO denied the claim u/s.10A of the Income Tax Act, 1961 only on the ground that Form No.56F filed by the assessee is defective on account of not containing any signature of Chartered Accountant whereas, the same was found to be duly signed by "Deloitte Haskins and Sells", which is a well-known multinational Chartered Accountant firms. Nowhere in the assessment order, the AO held that the assessee did not satisfy the other conditions laid down in section 10A of the Act. It is mentioned that in the case of assessee the approval granted by the Director, STPI can be held to be a sufficient compliance with requirements of section 10A(2)(1)(b) of the Act and even as per the CBDT vide Instruction No. 1 of 2006 dated 31-03-2006 the assessee is eligible to claim deduction u/s. 10A of the Act, but, the AO without disputing the same, denied the claim u/s. 10A of the Act vide Para No. 5 of the assessment order.

3. Aggrieved, the assessee challenged the order of the AO before the Ld.CIT(A). The Ld.CIT(A) allowed the grounds of the assessee on this issue by holding as under:

7.1.3 The stand of AO is quite erroneous in not allowing the benefits of section 10A of the Act merely because the prescribed Audit Report in Form No. 56F was defective in his opinion, even when the other conditions laid down in Sec. 10A of the Act stands satisfied. The claim of assessee for deduction u/s.10A can only be rejected if the conditions enumerated u/s.10A are not fulfilled and the same cannot be rejected merely on technical grounds. Accordingly, the AO is directed to allow the deduction u/s. 10A to the assessee.

Thus, Ground No.3 of the appeal is allowed.

Now, the Revenue is in appeal before this Tribunal.

4. The CIT-DR, Ms.E. Pavuna Sundari submitted that the Ld.CIT(A) has wrongly stated that a merely defective Form 56F does not bar assessee from claiming deduction u/s 10A whereas vital details were not found in the said Form 56F. The Ld.CIT(A) allowed the appeal of the assessee merely based on discussion about Form 56F and cursory mentioning of approval granted by the Director, STPI without going into the merits of the case. Ld.CIT-DR further argued that the filing of Form No.56F is mandatory and not directory and referred the judgment of the co-ordinate Bench of the Tribunal in the case of Mr.Mahendra Kumar Damani in ITA Nos.805 & 806/Chny/2022 for AYs 2016-17 & 2019-20 order dated

08.02.2023, wherein the Tribunal held as under:

4. The Ld.CIT(A) after considering relevant submissions of the assessee and also by following the decision of the Hon’ble Supreme Court in the case of Pr.CIT v. Wipro Ltd., reported in [2022] 140 taxmann.com 223 (SC) held that as per provisions of Sec.10A(5) of the Act, filing of Audit Report in Form No.56F and furnishing said report along with return of income is mandatory in nature, but not directory. Since, the assessee did not file Audit Report in Form No.56F as required u/s.10AA(8) of the Act, the AO has rightly disallowed deduction claimed u/s.10AA of the Act, and thus, rejected arguments of the assessee and sustained additions made towards disallowance of deduction claimed u/s.10AA of the Act. The relevant findings of the Ld.CIT(A) are as under:

8. I have carefully considered the facts of the case, the intimation u/s.143(1) and the written submission of the assessee. In the intimation u/s.143(1) dated 24.04.2017, the ADIT (CPC) made disallowance of deduction of Rs.75,71,621/- claimed u/s.10AA of the Act, in view of the failure of the assessee to furnish the audit report in Form 56F in support of the said deduction along with the return of income filed on 16.10.2016. In the written submission, the assessee contended that the requirement to file the audit report i