SHARUS STEEL PRODUCTS PRIVATE LIMITED,MUMBAI vs. ITO, WARD 2(3)(1), MUMBAI

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ITA 4903/MUM/2025Status: DisposedITAT Mumbai15 December 2025AY 2024-25Bench: SHRI OM PRAKASH KANT (Accountant Member), SHRI RAJ KUMAR CHAUHAN ( (Judicial Member)7 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the filing of Form 10-IC is a procedural requirement and not mandatory. The failure to file it within the prescribed time should not deny the benefit of Section 115BAA if substantive conditions are met.

What were the facts?

The assessee, a domestic company, opted for concessional tax rates under Section 115BAA. However, it inadvertently uploaded Form 10-IB instead of the prescribed Form 10-IC. The assessee later filed the correct form belatedly, but the Assessing Officer and CIT(A) denied the benefit.

What were the issues?

Whether the belated filing of Form 10-IC is fatal to claiming the benefit of concessional tax rates under Section 115BAA, or if it is a procedural lapse that can be condoned.

Which sections of the Income-tax Act were involved?

Section 115BAA,Section 115JB,Section 143(1),Section 154

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI BENCH “F” MUMBAI

Before: SHRI OM PRAKASH KANT & SHRI RAJ KUMAR CHAUHAN

For Appellant: Ms. Mitali Parekh, Mr. Vivek Perampurna, CIT-DR
Hearing: 15/12/2025

ORDER PER OM PRAKASH KANT, AM

This appeal by the assessee is directed against order dated 18.07.2025 passed by the Ld. Additional/Joint Commissioner of Income-tax (Appeals) – Kolkata [in short ‘the Ld. CIT(A)’] for assessment year 2024-25, raising following grounds:

1.

The Ld. CIT(A) has erred in law and in facts in passing order u/s. 250 of the Act and confirming the addition made by Ld. A.O.

2.

The Ld. CIT(A) has erred in law and in facts in confirming the 2. The Ld. CIT(A) has erred in law and in facts in confirming the 2. The Ld. CIT(A) has erred in law and in facts in confirming the action of Ld. A.O. in denying benefit of concessional tax rate opted action of Ld. A.O. in denying benefit of concessional tax rate opted action of Ld. A.O. in denying benefit of concessional tax rate opted by appellant u/s. 115BAA of the Act. by appellant u/s. 115BAA of the Act.

3. The Ld. CIT(A) has erred in law and in facts in confirming 3. The Ld. CIT(A) has erred in law and in facts in confirming 3. The Ld. CIT(A) has erred in law and in facts in confirming the action of Ld. A.O. in determining the tax liability of appellant as per action of Ld. A.O. in determining the tax liability of appellant as per action of Ld. A.O. in determining the tax liability of appellant as per provision of s. 115JB of the Act amounting to Rs. 10,87,39,350/ provision of s. 115JB of the Act amounting to Rs. 10,87,39,350/ provision of s. 115JB of the Act amounting to Rs. 10,87,39,350/- 4. The Ld. CIT(A) has erred in law and in facts in not appreciating 4. The Ld. CIT(A) has erred in law and in facts in not appreciating 4. The Ld. CIT(A) has erred in law and in facts in not appreciating the fact that filing of Form 10 the fact that filing of Form 10-IC for availing benefit of concessional benefit of concessional rate u/s. 115BAA is directory in nature and rate u/s. 115BAA is directory in nature and not mandatory. mandatory. 2. Briefly stated, the assessee is a domestic company engaged in Briefly stated, the assessee is a domestic company engaged in Briefly stated, the assessee is a domestic company engaged in the manufacture of steel doors, frames and fabrication work. For the manufacture of steel doors, frames and fabrication work. For the manufacture of steel doors, frames and fabrication work. For the year under consideration, it filed its the year under consideration, it filed its return of income on return of income on 01.10.2024 declaring a loss of ₹35,47,625/- and claimed a refund 01.10.2024 declaring a loss of and claimed a refund of ₹17,240/-. In the return of income, the assessee opted for . In the return of income, the assessee opted for . In the return of income, the assessee opted for taxation under the concessional rate provided in section 115BAA of taxation under the concessional rate provided in section 115BAA of taxation under the concessional rate provided in section 115BAA of the Income-tax Act, 1961 (“the Act”). tax Act, 1961 (“the Act”).

2.1 The return of income filed by the assessee was processed an The return of income filed by the assessee was processed an The return of income filed by the assessee was processed and intimation order u/s 143(1) of the Act was passed on 22.01.2025 by intimation order u/s 143(1) of the Act was passed on 22.01.2025 by intimation order u/s 143(1) of the Act was passed on 22.01.2025 by the Central Processing Unit, Bangalore [in short ‘the Ld. Assessing the Central Processing Unit, Bangalore [in short ‘the Ld. Assessing the Central Processing Unit, Bangalore [in short ‘the Ld. Assessing Officer CPC’]. The CPC computed tax liability u/s 115JB of the Act Officer CPC’]. The CPC computed tax liability u/s 115JB of Officer CPC’]. The CPC computed tax liability u/s 115JB of disregarding tax liability computed by the assessee under the disregarding tax liability computed by the assessee under the disregarding tax liability computed by the assessee under the concessional tax regime following section 115BAA of the Act. concessional tax regime following section 115BAA of the Act. concessional tax regime following section 115BAA of the Act.

2.2 The assessee submitted that while filing the return of income The assessee submitted that while filing the return of income The assessee submitted that while filing the return of income it had correctly selected the option under section 115BAA in Part A– it had correctly selected the option under section 115BAA it had correctly selected the option under section 115BAA GEN of the ITR form and computed tax accordingly. However, by GEN of the ITR form and computed tax accordingly. However, by GEN of the ITR form and computed tax accordingly. However, by inadvertence, Form No. 10 inadvertence, Form No. 10-IB was uploaded on 01.10.2024 instead IB was uploaded on 01.10.2024 instead of the prescribed Form No. 10 of the prescribed Form No. 10-IC. Thereafter, the assessee IC. Thereafter, the assessee electronically filed the correct Form No. 10 electronically filed the correct Form No. 10-IC on 30.01.2025 IC on 30.01.2025 and sought rectification under section 154 by filing a revised return on sought rectification under section 154 by filing a revised return on sought rectification under section 154 by filing a revised return on 07.02.2025. The rectification request, however, was rejected 07.02.2025. The rectification request, however, was rejected 07.02.2025. The rectification request, however, was rejected without assigning any reason. without assigning any reason.

2.3 Aggrieved with the intimation u/s 143(1) of the Act ggrieved with the intimation u/s 143(1) of the Act ggrieved with the intimation u/s 143(1) of the Act, the assessee filed appeal before the Ld. CIT(A) but could not succeed. filed appeal before the Ld. CIT(A) but could not succeed. filed appeal before the Ld. CIT(A) but could not succeed. The Ld. CIT(A) was of the view that filing of form No. 10-IC for The Ld. CIT(A) was of the view that filing of form No. 10 The Ld. CIT(A) was of the view that filing of form No. 10 claiming concessional tax regime within due date was a statutory claiming concessional tax regime within due date was a statutory claiming concessional tax regime within due date was a statutory requirement and therefore, non requirement and therefore, non-compliance on the part of the compliance on the part of the assessee, he upheld the finding of the Ld. CPC. The relevant finding he upheld the finding of the Ld. CPC. The relevant finding he upheld the finding of the Ld. CPC. The relevant finding of the Ld. CIT(A) is reproduced as under: of the Ld. CIT(A) is reproduced as under:

“5.1 I have carefully gone through the Intimation u/s 143(1), the 5.1 I have carefully gone through the Intimation u/s 143(1), the 5.1 I have carefully gone through the Intimation u/s 143(1), the grounds of appeal and submission made by the appellant in this grounds of appeal and submission made by the appellant in this grounds of appeal and submission made by the appellant in this regard. Briefly statin regard. Briefly stating facts of the case is that the appellant filed g facts of the case is that the appellant filed return of income which was processed u/s 143(1) by CPC making return of income which was processed u/s 143(1) by CPC making return of income which was processed u/s 143(1) by CPC making certain adjustments over and above the returned income. The only certain adjustments over and above the returned income. The only certain adjustments over and above the returned income. The only issue involved in this case is that the appellant which had filed issue involved in this case is that the appellant which had filed issue involved in this case is that the appellant which had filed return of incom return of income opting to be taxed at special rate u/s 115BAA of the e opting to be taxed at special rate u/s 115BAA of the I.T. Act. However, while processing the return u/s 143(1) of the Act, I.T. Act. However, while processing the return u/s 143(1) of the Act, I.T. Act. However, while processing the return u/s 143(1) of the Act, CPC charged tax at normal rate. CPC charged tax at normal rate. 5.2 All the grounds of appeal raised by the appellant are against 5.2 All the grounds of appeal raised by the appellant are against 5.2 All the grounds of appeal raised by the appellant are against charging of tax at normal rate in charging of tax at normal rate instead of that u/s 115BAA as opted stead of that u/s 115BAA as opted in the return of income. As per the provisions of section 115BAA(5) of in the return of income. As per the provisions of section 115BAA(5) of in the return of income. As per the provisions of section 115BAA(5) of the Act, in order to avail the benefit of taxation at special rate under the Act, in order to avail the benefit of taxation at special rate under the Act, in order to avail the benefit of taxation at special rate under this section, a taxpayer is required to e this section, a taxpayer is required to e-file Form 10-IC read with Rule IC read with Rule 21AE of I.T. Rules, 1962 within the due date of filing return of income of I.T. Rules, 1962 within the due date of filing return of income of I.T. Rules, 1962 within the due date of filing return of income as specified in section 139(1) of the Act. In this case, the appellant as specified in section 139(1) of the Act. In this case, the appellant as specified in section 139(1) of the Act. In this case, the appellant filed Form 10 filed Form 10-IB instead of Form 10-IC by mistake within the due IC by mistake within the due date. Since filing of Form 10 date. Since filing of Form 10-IC within due date is s IC within due date is statutory requirement, CPC was justified in computing the tax at normal rate requirement, CPC was justified in computing the tax at normal rate requirement, CPC was justified in computing the tax at normal rate instead of that u/s 115BAA. The appeal is therefore instead of that u/s 115BAA. The appeal is therefore dismissed. dismissed.”

3.

Before us, the learned counsel for the assessee filed a Paper Before us, the learned counsel for the assessee filed a Paper Before us, the learned counsel for the assessee filed a Paper Book (pages 1–28) containing the return of income f 28) containing the return of income f 28) containing the return of income filed on 01.10.2024, Form No. 10 01.10.2024, Form No. 10-IB filed the same day, and Form No. 10 IB filed the same day, and Form No. 10-IC filed on 31.01.2025, among other documents. The assessee filed on 31.01.2025, among other documents. The assessee filed on 31.01.2025, among other documents. The assessee reiterated that the omission was purely inadvertent and that all reiterated that the omission was purely inadvertent and that all reiterated that the omission was purely inadvertent and that all substantive conditions of section 115BAA stood satisfied. substantive conditions of section 115BAA stood satisfied. substantive conditions of section 115BAA stood satisfied.

4.

We have heard rival submissions of the parties and perused We have heard rival submissions of the parties and perused We have heard rival submissions of the parties and perused the relevant materials on record the relevant materials on record. The undisputed facts are that the . The undisputed facts are that the assessee filed return of income on 01.10.2024 opting the assessee filed return of income on 01.10.2024 opting the assessee filed return of income on 01.10.2024 opting the concessional rate of new tax regime u/s 115BAA of the Act under concessional rate of new tax regime u/s 115BAA of the Act under concessional rate of new tax regime u/s 115BAA of the Act under the provisions of the Act and visions of the Act and filed form no. 10-IB under IB under Income-tax Rules, 1962 (in short ‘the Rules’) for opting such concessional tax Rules, 1962 (in short ‘the Rules’) for opting such concessional tax Rules, 1962 (in short ‘the Rules’) for opting such concessional tax regime. But , the correct form correct form prescribed for this purpose was for this purpose was form No. 10-IC of the Rules. The assessee submitted that it has IC of the Rules. The assessee submitted that it has IC of the Rules. The assessee submitted that it has otherwise fulfilled all the terms and conditions for eligibility of all the terms and conditions for eligibility of all the terms and conditions for eligibility of concessional tax regime u/s 115BAA but inadvertently in place of concessional tax regime u/s 115BAA but inadvertently in place of concessional tax regime u/s 115BAA but inadvertently in place of Form No. 10-IC, the assessee filed Form No. 10 IC, the assessee filed Form No. 10-IB of the Rules and IB of the Rules and that was the sole reason the CPC rejected the option of the sole reason the CPC rejected the option of the sole reason the CPC rejected the option of the assessee for assessing under the concessional tax regime and taxed under for assessing under the concessional tax regime and tax for assessing under the concessional tax regime and tax the old tax regime and computed tax liability of Rs.10,59,20,641/-. the old tax regime and computed tax liability of Rs.10,59,20,641/ the old tax regime and computed tax liability of Rs.10,59,20,641/ 4.1 Thus, the limited issue arising for our consideration is Thus, the limited issue arising for our consideration is Thus, the limited issue arising for our consideration is whether the failure to file Form No. 10 whether the failure to file Form No. 10-IC within the prescribed time the prescribed time is fatal to the assessee’s claim, or whether such requirement is is fatal to the assessee’s claim, or whether such requirement is is fatal to the assessee’s claim, or whether such requirement is procedural and can be condoned when the substantive conditions procedural and can be condoned when the substantive conditions procedural and can be condoned when the substantive conditions are met. The learned counsel relied upon the decision of the Co The learned counsel relied upon the decision of the Co- The learned counsel relied upon the decision of the Co ordinate Bench of the Tribunal in ordinate Bench of the Tribunal in Mahalaxmi Asphalt Pvt. Ltd. Asphalt Pvt. Ltd., (A.Y. 2020 No. 1291/Ahd/2024 (A.Y. 2020-21), where a similar issue arose. In 21), where a similar issue arose. In that case, the Tribunal, after examining various High Court that case, the Tribunal, after examining various High Court that case, the Tribunal, after examining various High Court decisions, held that appellate authorities have inherent power to decisions, held that appellate authorities have inherent power to decisions, held that appellate authorities have inherent power to condone delay and accept the belated For condone delay and accept the belated Form No. 10 m No. 10-IC when the assessee otherwise satisfies the statutory requirements of section assessee otherwise satisfies the statutory requirements of section assessee otherwise satisfies the statutory requirements of section 115BAA.

4.2 The present case stands on identical footing. The assessee had The present case stands on identical footing. The assessee had The present case stands on identical footing. The assessee had clearly exercised the option for section 115BAA in the return of clearly exercised the option for section 115BAA in the return of clearly exercised the option for section 115BAA in the return of income, computed tax accord income, computed tax accordingly, and thereafter filed the correct ingly, and thereafter filed the correct Form No. 10-IC albeit belatedly. The omission was a technical IC albeit belatedly. The omission was a technical IC albeit belatedly. The omission was a technical defect and does not go to the root of eligibility. Where substantive defect and does not go to the root of eligibility. Where substantive defect and does not go to the root of eligibility. Where substantive compliance is evident, procedural lapses must be viewed liberally, compliance is evident, procedural lapses must be viewed liberally, compliance is evident, procedural lapses must be viewed liberally, particularly when equity and justice demand that beneficial equity and justice demand that beneficial equity and justice demand that beneficial provisions not be denied on account of inadvertent and curable provisions not be denied on account of inadvertent and curable provisions not be denied on account of inadvertent and curable defects. The Hon’ble Supreme Court has repeatedly held that when The Hon’ble Supreme Court has repeatedly held that when The Hon’ble Supreme Court has repeatedly held that when the purpose and substance of a statutory provision are satisfied, the purpose and substance of a statutory provision are sati the purpose and substance of a statutory provision are sati procedural prescriptions, which are directory in nature, ions, which are directory in nature, ions, which are directory in nature, must not operate as a fetter on legitimate claims. operate as a fetter on legitimate claims.

4.3 In view of the foregoing and respectfully following the decision In view of the foregoing and respectfully following the decision In view of the foregoing and respectfully following the decision of the Co-ordinate Bench in ordinate Bench in Mahalaxmi Asphalt Pvt. Ltd. Mahalaxmi Asphalt Pvt. Ltd. (supra), we hold that the CPC and the learned CIT(A) were not justified in hold that the CPC and the learned CIT(A) were not justified in hold that the CPC and the learned CIT(A) were not justified in denying the assessee’s option under section 115BAA solely for denying the assessee’s option under section 115BAA solely for denying the assessee’s option under section 115BAA solely for failure to file Form No. 10 failure to file Form No. 10-IC within the prescribed time. IC within the prescribed time.

4.4 We accordingly set aside the impugned order and direct We accordingly set aside the impugned order and direct We accordingly set aside the impugned order and direct the Assessing Officer to accept Form No. 10 Assessing Officer to accept Form No. 10-IC filed by the assessee, IC filed by the assessee, subject to verification of the assessee’s compliance with the subject to verification of the assessee’s compliance with the subject to verification of the assessee’s compliance with the substantive conditions prescribed under section 115BAA. The substantive conditions prescribed under section 115BAA. substantive conditions prescribed under section 115BAA. ground of appeal of the assessee is allowed for statistical purposes. ground of appeal of the assessee is allowed for statistical purp ground of appeal of the assessee is allowed for statistical purp

5.

In the result, the appeal of the assessee is allowed for In the result, the appeal of the assessee is allowed for In the result, the appeal of the assessee is allowed for statistical purposes.

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