NEON PROPERTIES PRIVATE LIMITED ,MUMBAI vs. INCOME TAX OFFICER 13(1)(1), MUMBAI

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ITA 2329/MUM/2025Status: DisposedITAT Mumbai25 July 2025AY 2024-25Bench: Shri Narender Kumar Choudhry (Judicial Member), Shri Omkareshwar Chidara ( (Accountant Member)1 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal held that neither the CPC nor the CIT(A) provided the appellant with a proper opportunity to explain its case. The submissions filed by the appellant were not considered. Therefore, the Tribunal remitted the issue back to the CIT(A) for fresh adjudication.

What were the facts?

The appellant company filed its return of income opting for the concessional tax regime under Section 115BAA of the Income Tax Act. However, it inadvertently uploaded Form 10-IB instead of Form 10-IC, leading to rejection of the claim by the CPC and CIT(A) on the grounds of not filing the mandatory form within the due date.

What were the issues?

Whether the assessee could be denied the benefit of Section 115BAA due to a procedural error in uploading the form, and whether adequate opportunity was provided by the authorities below.

Which sections of the Income-tax Act were involved?

Section 143(1),Section 115BAA,Section 21AE,Section 139(1),Section 115JB,Section 115IB(5A),Section 143(1)(a)

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Income Tax Appellate Tribunal, Mumbai “B” Bench, Mumbai.

Before: Shri Narender Kumar Choudhry (JM) & Shri Omkareshwar Chidara (AM)

For Appellant: Shri Leyaqat Ali Aafaqui
Pronounced: 25/07/2025
1.

On the facts and circumstances of the case and in law, the learned Addl/JCIT (A) erred in upholding the Centralised Processing Centre's computation of tax vide intimation u/s 143(1) dated 22nd January, 2025 under regular provisions of the Act and not u/s 115BAA of the Act for Return of Income filed for AY 2024-25 on 30th October, 2024 on the grounds that the Appellant failed to upload Form 10-IC before due date of filing of return. In actuality, through oversight, Form 10-IB was filed as against Form 10-IC which was required to be filed as per section 115BAA(5) read with rule 21AE. It appears that the assistant committed mistake in selecting the incorrect form.

2.

On the facts and circumstances of the case and in law, the learned Addl/JCIT(A) as well as Centralised Processing Centre erred in not appreciating the fact that the Appellant has satisfied the conditions specified in sub-section (2) of 115BAA of the income Tax Act, 1961 by and hence it is entitled to be taxed as per provisions of section 115BAA of the Act as adopted in the Income Tax Return filed for AY 2024-25.

2 Neon Properties Pvt. Ltd.

3.

On the facts and circumstances of the case and in law, the learned Addl/JCIT(A) erred in ignoring the intention of the Appellant to opt for a concessional tax regime under section 115BAA of the Act by specifically selecting the same in the ITR Form - 6 [Snapshot attached below] which was denied to the Appellant merely because of an error in filing the incorrect Form No. due to a clerical error which occurred on account of bona fide circumstances, without any mala fide mens rea.

4. On the facts and circumstances of the case and in law, the Appellant was incorrectly charged with Taxes under MAT provisions u/s 115JB when the same is not applicable for Appellant opting for tax regime u/s 115BAA as per section 115IB(5A) of the Act.

5.

On the fact and Circumstances of the case and in law, the learned Addl/JCIT(A) erred in upholding the Centralised Processing Centre's computation of tax under regular provisions of the Act and NOT u/s 115BAA of the Act as opted by the Appellant in the Return of Income without issuing any intimation as mandated under the first proviso to Sec 143(1) (a) of the Act.

6.

On the facts and circumstances of the case and in law, the Appellant ought to be given the benefit of the concessional tax regime u/s 115BAA of the Act more so when the appellant had uploaded the correct Form 10-1C on 23rd January, 2025 i.e. immediately after notification of the error so made and the which was accepted vide Acknowledgement No. 836394390230125 [Snapshot attached below). The Appellant should not be penalised for mere procedural lapse which is squarely covered in the case of Sonakshi Sinha vs CIT(A) [197 ITD 263] wherein it was held that "while laying down a particular procedure, if no negative or adverse consequences are contemplated for non-adherence to such procedure, the relevant provision is normally not taken to be mandatory and is considered to be purely directory".

2. From the above, it can be seen that the CPC and Ld. CIT(A) denied the benefit of section 115BAA of the Act which deals with concessional rate of tax. The Ld. CIT(A) dismissed appellant’s appeal and held as follows:-

“It is pertinent to mention here that if a domestic company chooses to pay tax at concessional rate of 22% under Section 115BAA, it is required to file From 10-IC on or before due date of furnishing return of income u/s 139(1). As discussed above, the appellant had admittedly not furnished the mandatory Form 10-IC within stipulated time and hence the AO, CPC had rightly denied benefit of concessional rate of 22% under Section 115BAA to the appellant. Thus, I find no merit in the grounds of appeal

3 Neon Properties Pvt. Ltd. taken by the appellant. Hence the grounds of appeal taken by the appellant are hereby dismissed.”

3. Aggrieved by the order of Ld. CIT(A), the appellant filed an appeal before the ITAT with the grounds of appeal as mentioned in page No. 1 of this order.

4.

The Ld. AR of the appellant company has argued extensively and filed written submissions and the synopsis of the same is as follows :- a) Due to oversight and clerical error, Form 10IB (i.e., the Form to opt for tax regime under section 115BAA of the Act) was filed instead of correct Form 10IC.

b) The return of income and Form 10IB were filed before the due dates. c) The CPC has calculated the taxes as per regular provisions of ITAT and accordingly charged tax as MAT regime @ 15% of the book profit. d) The CPC has not given an opportunity to rectify the mistake. e) The Ld. CIT(A) has not given opportunity to explain its case through video conference, despite making request before passing an order against it. f) The written submission explaining its case was uploaded on 17.3.2025 was not considered by Ld. CIT(A) and the order was passed against it.

6. The Ld. Dr relied on the order of Ld. CIT(A).

7.

Heard both sides. There is considerable force in the arguments made and submissions filed by Ld. AR of the appellant before the Bench. Neither the CPC nor the Ld. CIT(A) have given proper opportunity to the appellant to explain its case. The submissions uploaded by the appellant company dated 17.3.2025 were not taken into consideration, probably because the appeal order was passed on the same day. In these circumstances, the Bench decided to afford one more effective opportunity to the appellant to substantiate its case before the first appellate authority. Hence, the Ld. CIT(A) is directed to give an opportunity, take all

4 Neon Properties Pvt. Ltd. its submissions including the written submissions filed on 17.3.2025 on record and decide the appeal afresh. The issue is remitted to the file of Ld. CIT(A).

8.

The appeal of appellant is allowed for statistical purposes.

Order pronounced in the open Court on 25/07/2025.

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