ARYA ALLOYS PVT LTD,ALWAR vs. ACIT CIRCLE 2, ALWAR

Per Ratnesh Nandan Sahay, Accountant Member:

The present appeal has been preferred by appellant against the order of Ld. Commissioner of Income Tax Appeal ADDL/JCIT (A)-3, Bengaluru (hereinafter referred to as “Ld. CIT(A)”) dated 26.09.2025 u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as “Act”). 2. Following grounds of appeal have been raised by the appellant: -

P a g e | 2 ITA No.1592/JPR/2025 Arya Alloys Pvt. Ltd.

P a g e | 3 ITA No.1592/JPR/2025 Arya Alloys Pvt. Ltd. (i) Disallowance of Rs.95,006/- under section 36(1)(va) towards employees' contribution to PF/ESI, (ii) Disallowance of Rs.5,80,811/- which was subsequently deleted by the CIT(A) and (iii) Application of tax rate @ 30% instead of 25%, despite the appellant's turnover for FY 2015-16 being Rs. 46,44,17,803/-, i.e., well below Rs.50 crores as required under the Finance Act, 2017 for the concessional tax rate. 4. Not satisfied with the above adjustments made by the CPC, Bangalore, the appellant filed an application under section 154 of the Income Tax Act to rectify the mistake in applying the incorrect tax rate. However, CPC, Bengaluru, while passing order under section 154 of the Act, did not rectify the error pointed out by the assessee and instead, reduced the interest under section 244A from Rs.87,685 to Rs.59,995 and raised an additional demand of Rs.27,690/- 5. Aggrieved by order of the CPC, Bangalore, the appellant preferred an appeal before the learned CIT(A), who vide the impugned order decided the appeal as under: - (i) The disallowance of Rs.95,006 under section 36(1)(va) of the Act was confirmed. (ii) The disallowance of Rs.5,80,811 was deleted, treating the same as a double disallowance. (iv) The ground taken to apply the tax rate @25%instead of30%, was rejected.

P a g e | 4 ITA No.1592/JPR/2025 Arya Alloys Pvt. Ltd.

“The issue involved in the present appeal is confined to the applicability of the correct rate of tax for AY 2018-19, i.c., whether the appellant is liable to tax at 25% or 30%. It is respectfully submitted that the appellant is a domestic company and its turnover for the previous year 2015-16 is Rs. 46,44,17,803, which is below the prescribed threshold of Rs. 50 Crore. This fact is borne out from the audited financial statements placed on record, Income Tax Return Form for PY 2015-16 and has not been disputed at any stage. Further, for completeness, the turnover for the year under consideration (FY 2017-18) is Rs. 37,23,51,871. As per the Finance Act, 2017 (Paragraph E of Part I of the First Schedule), a domestic company whose turnover in the previous year 2015-16 does not exceed Rs. 50 crore is liable to income-tax at the rate of 25% and in all other cases at 30%. Thus, the applicability of the concessional rate is purely governed by the turnover of FY 2015-16, and no other condition is prescribed under the statute. The appellant satisfies the above statutory condition and had accordingly computed and paid tax at 25% under the normal provisions. It is an undisputed position that the appellant has not opted for section 115BA, which is evident from the return of income itself. It is respectfully submitted that the learned CIT(A), while adjudicating the issue, has proceeded on an incorrect factual assumption that the appellant had claimed benefit under section 115BA and has examined the eligibility of the appellant with reference to the conditions of that section. However, section 115BA was never invoked by the appellant and has no application to the present case. The entire reasoning of the learned CIT(A) is therefore based on a provision which is factually inapplicable and the conclusion drawn therefrom does not address the actual issue involved. Once the correct factual position is appreciated, the issue becomes straightforward. The Finance Act, 2017 alone governs the rate of tax and the appellant having turnover below Rs.50 crore in FY 2015-16 is clearly eligible for taxation at 25%. The higher rate of 30% applied by CPC in under intimation section 143(1) is not in accordance with the statutory provisions. It is therefore respectfully submitted that the matter essentially turns on the verification of turnover of the previous year 2015-16, which is already available on record and not in dispute and the applicability of the concessional rate may kindly be considered in that context.

P a g e | 5 ITA No.1592/JPR/2025 Arya Alloys Pvt. Ltd. In view of the above, it is humbly prayed that the appellant be held eligible for taxation at the rate of 25%. Without prejudice, in case the Hon'ble Bench deems it appropriate to restore the matter, it is respectfully prayed that such restoration may kindly be confined only to the limited purpose of verification of turnover of the previous year 2015-16, being the sole determinative factor and no other issue may be kept open. 7. The ld. Senior DR, on the other hand, justified the impugned order. 8. We have carefully considered the rival submissions. It is found that there is only one issue involved in this appeal as to whether the Assessing Officer has correctly applied the rate of tax for the A.Y. 2018-19 at 25% or 30%. The appellant has made out a case that it is eligible for taxation @ 25% as it fulfills all the conditions mentioned in Section 115BA of the Act and eligible to be taxed @ 25% instead of 30% as applied by the Assessing Officer. The ld. CIT(A) in the impugned order, on the other hand, has stated that Section 115BA of the Act provides to be taxed @ 25%, the assessee has to exercise the option under Section 115BA(1) of the Act. However, in the present case, the assessee has not exercised such option. Secondly, it is one of the conditions that the lower rate of taxation under Section 115BA of the Act requires that the business of the company must have commenced after 01/04/2017 whereas the assessee company was an existing company, therefore, not entitled to get benefit under Section 115BA of the Act. We have duly considered the submissions from both the parties and it is found that the appellant has relied on the negative connotation that since the assessee has not exercised the option under Section 115BA and otherwise eligible under Section 115BA of the Act, therefore, it is entitled to be taxed at the lower rate of 25% instead of

P a g e | 6 ITA No.1592/JPR/2025 Arya Alloys Pvt. Ltd. 30% whereas it is the contention of the ld. CIT(A) that the first and foremost condition to get benefit under Section 115BA of the Act, the assessee has to opt the lower rate of taxation under this Section subject to fulfillment of other conditions. In the present case, since the assessee has not exercised such option, therefore, we hold that the appellant is not eligible to be taxed at the lower rate of tax @ 25%. Thus, we find no infirmity in the impugned order, accordingly, we uphold the same. 9. In the result, appeal of the assessee stands dismissed. Order is pronounced under the provisions of Rule 34 of ITAT Rules, 1963 on 15/05/2026.

Sd/- Sd/- (Sanjay Garg) (Ratnesh Nandan Sahay) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated 15/05/2026 Mittali/Ranjan, Sr. PS Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT By Order,

Asst. Registrar ITAT, Jaipur