M/S. REOTECH PROCESS EQUIPMENT PVT. LTD.,CHENNAI vs. ITO, CORP. WARD-5(3), CHENNAI

1 The Commissioner of Income Tax (Appeals) erred in upholding the order passed by the Learned Assessing officer.

2 The Appellant filed its Return of Income u/s 139(1) within the due date on 26.10.2024 for the Assessment Year 2024-25 admitting a taxable income of Rs 63,02,120/- and paid the corresponding taxes thereon. M/s. Reotech Process Equipment :: 2 ::

3 The Learned CIT(A) ought to have appreciated that the Appellant had opted for the concessional rate of tax u/s 115BAA and filed Form 10 IC electronically on 29.03.2021 vide Ack No. 314812621290321. 2.4 The Learned CIT(A) ought to have appreciated that Form 10 IC was accepted by the department and the returns for AY 2020-21 to AY 2022-23 were processed duly by the department accepting the concessional rate of tax claimed by the Appellant. For AY 2023-24 a rectification request u/s 154 dt. 19.02.2025 vide Ack No. 877027720190225 is pending with a request to accept the concessional rate of tax u/s 115BAA claimed by the Appellant.

5 The Learned CIT(A) ought to have appreciated that the Form 10 IC was filed on 29.03.2021 anterior to the extended due date to file Form 10 IC for AY 2020-21 i.e. 30.06.2022 as per CBDT Circular No.6 of 2022 dated 17.03.2022. (Copy of the Circular No.6 dated 17.03.2022 - Enclosed as Annexure 1).

6 The Learned CIT(A) ought to have appreciated that the Appellant a diligent tax payer had inadvertently filed a belated return for AY 2020-21 due to unforeseen circumstances coupled with the COVID pandemic situation which prevailed during the period under consideration.

7 The Learned CIT(A) ought to have appreciated that the Appellant had indeed exercised his option to avail the benefit u/s 115BAA in the ITR Form 6 filed for AY 2020-21 and a lapse in filing the return before the due date will not invalidate the assessee's substantive right to claim the benefit of Section 115BAA.

The Appellant craves leave to adduce additional grounds at the time of hearing.

Brief facts of the case are that the assessee filed its return of income under section 139(1) of the Act on 26.10.2024 for AY 2024-25 declaring total income of ₹.63,20,120/-. In the return, the assessee had continued the option exercised under section 115BAA of the Act. The said return was processed vide dated 22.01.2025 under section 143(1) of the Act wherein the option exercised Section 115BAA of the Act was denied. Being aggrieved, the assessee preferred an appeal before the ld. CIT(A) and made following submissions: 1. The Appellant had filed the present appeal before the Learned Commission of Income Tax appeal, NFAC vide ack #878226910200225 dated 20-02-2025 against the order dated 22- 01-2025 of the CPC issued u/s.143(1) of the Act. This appeal has been filed within the permitted time under the statute and there has been no delay.

The CPC has erred in ignoring the fact that the appellant had exercised the option in availing concessional rate of tax u/s. 115BAA of the Act for the AY 2020-21 by choosing the option in the relevant ITR 6 and filed the form 10-IC vide ack # 314812621290321 dated 26-03-2021 which was accepted and the returns were processed by the department for the AY 2020-21 and the return of income for the subsequent assessment years were processed duly accepting the concessional rate of tax as claimed by the appellant.

The Appellant has not withdrawn the option exercised to avail concessional rate of tax u/s.115BAA of the Act and pursuant to second provision to sec 115BAA(5) of the Act and the appellant is entitled to avail concessional of tax for the AY 2024-25,

The CPC has erred in processing the return of income under sec 143(1) of the Act by applying MAT Tax u/s.115JB, The CPC failed to appreciate that the appellant is eligible for benefit of provisions of sec 115BAA of the Act. M/s. Reotech Process Equipment :: 4 ::

The CPC has erred in determining the tax at normal rate particularly when the appellant had filed Form 10-IC for AY 2020- 21 vide ack #314812621290321 dated 26-03-2021 and by virtue of section 115BAA of the Act option exercised for AY 2020-21 is applicable for subsequent years. The CPC has failed to appreciate that the appellant has satisfied all the conditions of sec 115BAA of the Act read with rule no.21AE of the Act and hence is eligible for the beneficial rate of taxation.

The CPC ought to have determined tax as per the rate specified in sec 1158AA of the Act as against the normal rate of tax or MAT tax.

The CPC does not have juri iction to deny the benefit of section 115BAA of the Act under section 143(1) of the Act.

The CPC has erred in applying MAT tax u/s.115JEB in the case of the appellant.

The appellant craves the leave of your Honours to adduce additional grounds in support its contentions before and during the course of hearing of this appeal.

After considering the submissions of the assessee, the ld. CIT(A) dismissed the ground raised by the assessee by observing as under: 5.3 Ground No. 2 to 7: In these grounds, the appellant has assailed the order of the AO denying the option exercised u/s 115BAA. The appellant has submitted that it had exercised the option of the concessional rate of tax u/s 115BAA for AY 2020-21 by filing form 10IC on 26.03.2021. The appellant has further submitted that return of income for the subsequent assessment years were duly processed accepting the concessional rate of tax. As the appellant had not withdrawn the option exercised u/s 115BAA, the AO CPC was not correct in denying the benefit of concessional tax rate u/s 115BAA.

3.2 The submission made is considered. It is seen from CPC 2 Portal that the appellant had filed form 10IC for AY 2020-21 on 29.03.2021. As per Section 139(1), the extended due date of filing of return, for AY 2020- 21, was on 15.02.2021. As per section 115BAA (5) the appellant was required to exercise the option by filing Form 10IC before 15.02.2021. Thus the appellant had not made a valid exercise of the option u/s 115BAA for AY 2020-21. It is seen from the order u/s 143(1) dated 30.12.2021, the AO CPC had computed the tax at normal rates and not at concessional rate u/s 115BAA. The appellant's claim that it was allowed the lower tax rates M/s. Reotech Process Equipment :: 5 ::

2.3 It may be mentioned that as the Form 10-IC was non-est/invalid for A.Y. 2020-21, the same is also invalid for subsequent years Therefore, the appellant company was required to file fresh valid Form-10IC for subsequent assessment years for making a claim of taxation u/s 115BAA of the Act. However, no such form was filed by the appellant for any subsequent assessment years. It is claimed by the appellant that the concessional rate of tax u/s 115BAA was allowed in the subsequent assessment years. However, this claim of the appellant is not factually correct as in the order u/s 143(1) dated 29.11.2023, the claim made u/s 115BAA was not allowed in AY 2023-24. 5.2.4 At this point of time, it is pertinent to refer to the decision of the Hon'ble Apex Court in the case Principal Commissioner of Income Tax-III, Bangalore and another Vs. M/s Wipro Limited (Judgment dated 11.07:2022 in the Civil Appeal No. 1449 OF 2022) wherein it has reiterated the age- old principle that a taxing statute should be read as it is and held that the beneficial provisions should be "strictly" and "literally" complied with and, therefore, a strict interpretation should be adopted. It is a trite law that if a thing is said to be done in a particular manner, then it shall be done in that manner and its performance in any other mode or fashion shall be of no consequence. As the appellant had violated the provisions of section 115BAA(5), therefore, there is no merit in the claim of the appellant for allowance of claim made u/s 115BAA of the Act. As the appellant was not eligible for the option claimed u/s 115BAA of lower tax rate, hence, the calculation of tax by the CPC was in accordance with the provisions of statute. These grounds of appeal are, therefore, dismissed.

On being aggrieved, the assessee is in appeal before the Tribunal.

The ld. Counsel for the assessee has filed a chart showing all the assessment years and dates in which 115BAA option via Form 10IC has been exercised. By referring the said chart, the ld. Counsel has submitted that even in the first AY (AY 2020-21) when the Form was filed belatedly it was accepted by the department and allowed for AY 2020-21 and further, M/s. Reotech Process Equipment :: 6 ::

On the other hand, the ld. DR supported the order passed by the ld. CIT(A).

We heard both the parties perused the material available on record. This appeal has been filed by the Assessee against the order passed by the lower authorities in relation to the denial of the concessional tax regime M/s. Reotech Process Equipment :: 7 ::

1 The second proviso to section 115BAA(5) makes it clear that once the option for the concessional tax regime under section 115BAA is exercised for any previous year, it cannot be subsequently withdrawn for the same or any other previous year. The Central Board of Direct Taxes (CBDT) had also issued frequently asked questions stating that if the taxpayer had opted for the concessional rate of tax once, that option would apply to subsequent AYs and could not be withdrawn. Even in the instructions issued by the CBDT for filing Form ITR 6, it was specifically mentioned that Form 10-IC was required to be filed only in the first year in which the taxpayer wished the concessional rate of tax to apply. Thus, not only the statutory provisions, but the periodic clarifications issued by the CBDT clearly state that a taxpayer seeking to benefit from the concessional rate of tax under section 115BAA need only exercise its option on Form 10-IC once in the initial AY; there was no requirement to exercise the option again in subsequent years.

In the present case, as admitted by both the parties, the last date of filing of return of income for A.Y. 2021-22 was 15.03.2022 and the assessee has filed the return of income along with Form 10-IC on 29.03.2022, which is relevant for the assessment year 2021-22. The issue which fell for consideration before us is whether the assessee having filed a belated form 10-IC i.e., on 29.03.2022 for the previous year 2021-22, can continue to avail the benefit of Section 115BAA of the Act in the assessment year 2022- 23 or not. In our considered opinion, sub-section (5) of Section 115BAA of the Act clearly mentions that the option, once exercised, will be applicable for the subsequent assessment years.

1. If we examine the facts and law, as argued before us, it is clear that the provisions of Section 115BAA of the Act are beneficial legislation, aiming to extend certain benefits to domestic companies with a reduced rate of taxation. This essential provision was designed to boost the industries and reduce unnecessary litigation, and it should not be denied on account of some technical reasons.

In the present case, admittedly, the assessee has exercised his option for the previous year 2020-21 and thereafter, based on the same declaration, M/s. Reotech Process Equipment :: 9 ::

In the present case, sub-section (5) of Section 115BAA of the Act has not restricted the application for one year alone, even if it has filed belatedly, however, it has been extended and applicable for the subsequent assessment years. However, if the application has been filed belatedly for the earlier year, as canvassed by the Revenue, on 29.03.2022 i.e., after the due date of filing of return of income on 15.03.2022, then the Revenue can withhold or deny the benefit of Section 115BAA for A.Y. 2021-22. But for the purpose of giving benefit for A.Y. 2022-23, the Revenue cannot raise this issue of filing of Form 10-IC belatedly for A.Y. 2022-23. Furthermore, we are of the considered opinion that this beneficial provision is required to be read in light in favour of the assessee, as held by the Hon'ble Supreme Court in the case of Commissioner of Customs Vs. Dilip Kumar reported in Civil Appeal No. 3327 of 2007, has held as under:

1 In the present case, though there is no ambiguity in the taxing statute, however, even if there was any, that is to be for the benefit of the assessee. M/s. Reotech Process Equipment :: 10 ::

Needless to say the Form 10-IC on 29.03.2022 for A.Y. 2021-22, will also be treated as filed for A.Y. 2022-23 and subsequent years. Therefore, in our considered opinion, the assessee is eligible for the benefit provided u/s 115BAA for the A.Y. 2022-23. In light of the above, we are of the considered opinion that the grounds raised by the Revenue are dismissed.

Considering the above facts and submissions, and respectfully following the decision of the coordinate bench in the case cited above, we find merit in the contentions of the assessee. The assessee had exercised the option under Section 115BAA in a timely manner in the ITR filed for AY 2024-25. Given the acceptance of the same option by the revenue in earlier years and the statutory bar on its withdrawal as per the second proviso to Section 115BAA(5), we are of the considered view that the benefit under Section 115BAA cannot be denied to the assessee for the impugned year. 9. Accordingly, we direct the Assessing Officer to allow the concessional tax rate under Section 115BAA to the assessee for Assessment Year 2024-25. 10. In the result, the appeal of the assessee is allowed. Order pronounced on the 01st day of September, 2025, in Chennai. (ŵी अिमताभ शुƑा ) (AMITABH SHUKLA) लेखा सद᭭य/ACCOUNTANT MEMBER (मनु कुमार िगįर) (MANU KUMAR GIRI) ᭠याियक सद᭭य/JUDICIAL MEMBER

अपीलाथŎ/Appellant 2. ŮȑथŎ/Respondent 3. आयकरआयुƅ/CIT, Chennai / Madurai / Salem / Coimbatore.

िवभागीयŮितिनिध/DR 5. गाडŊफाईल/GF