Loading judgment…
Facts
The assessee filed its return for AY 2023-24 claiming a concessional tax rate of 22% under Section 115BAA, but the CPC processed it at 25%. The benefit was denied by the Ld. CIT(A) because Form 10IC and the return for AY 2022-23 were filed after their respective due dates, despite the AY 2023-24 return being filed on time.
Held
The tribunal observed that the Form 10IC for AY 2023-24 was filed within the extended due date as per the CBDT Circular No. 19/2023. It clarified that Form 10IC is a one-time filing requirement and directed the AO to allow the benefit of Section 115BAA for the assessment year 2023-24.
Key Issues
Whether the assessee is entitled to the benefit of Section 115BAA for AY 2023-24 when the Form 10IC and previous year's return were filed late, but the current year's return was filed on time and Form 10IC filing was condoned by a CBDT circular.
Sections Cited
115BAA, 143(1), 139(1), 119(2)(b), 115BAA(5)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, ‘B’ BENCH, CHENNAI
Before: SHRI MANU KUMAR GIRI & SHRI JAGADISH
The captioned appeal filed by the assessee is directed against the order of the Ld. Addl/Joint Commissioner of Income Tax (Appeals)-11, Mumbai [‘CIT(A), in short] of dated 25.10.2024 for Assessment Years 2023-24.
Brief facts are as under:- The assessee has filed its return of income for the Assessment Year 2023-24 with acknowledgment number 404364711121023 on 12/10/2023 (where due date for filing return of income was on 31/10/2023). In the return, the assessee declared a total taxable income of Rs. 5,73,87,190/-. The return of income was processed by CPC u/s.143(1) of the Act on 21/05/2024, assessing total income at Rs. 5,73,87,190/- where no adjustment was made, however, tax rate was taken at 25% instead of @ 22% as claimed by the assessee u/s.115BAA of the Act and raised tax liability. Aggrieved against the Order of CPC intimation u/s.143(1) vide dated 21/05/2024, the assessee preferred the instant appeal before the Ld.CIT(A). In fact, the AO has also not calculated the tax as per the new regime u/s 115BAA of the Act. The assessee filed an appeal before the ld. CIT(A) wherein ld. CIT(A) has dismissed the appeal with respect to the benefit under the new regime u/s 115BAA of the Act as the appellant’s case do not fall within the CBDT Circular for which the delay in filing Form-10IC has been condoned. Aggrieved, assessee is in appeal before us. The ld. CIT(A) in its order at para 5.2 held that the appellant has filed form 10IC on 30.12.2022 and the return of income on 31.12.2022 for AY 2022-23 after the extended date 07.11.2022 which is beyond the extended due date u/s. 139(1) of the Act.
Ld. Counsel for the assessee challenges the impugned order thereby submitting that requirement of filing Form-10IC was only procedural and according to him ld. CIT(A) did not consider this fact that the return of income for this AY 2023-24 was filed on 12.10.2023 well within time. The learned counsel further submits that claim of the assessee u/s 115BAA has been denied by the ld. CIT(A) on the basis that Form-10IC which is to be filed on 07.11.2022 has been filed on 30.12.2022 i.e. beyond the time. The Ld. Counsel for the assessee further submits that the AO, CPC on the basis of return for AY 2022-23 which was filed after due date has disallowed the benefit u/s 115BAA for this AY 2023-24. Ld. Counsel for the assessee further referred second proviso to sub-section (5) of section 115BAA and submits that once option has been exercised by the assessee for any previous year, it cannot be subsequently withdrawn for the same or any previous year. Ld. Counsel for the assessee further submits that vide Circular No. 19/2023 dated 23.10.2023 CBDT has extended the period for filing Form-10IC on the term and condition that the return of income has been filed on or before the due date. Ld. Counsel for the assessee submits that the claim of the assessee has been denied by the ld. CIT(A) by saying that appellant filed the return of income on 31.12.2022 after the extended due date of 07.11.2022 ignoring the fact that in this AY 2023-24 there is no delay in filing return of income. Ld. Counsel for the assessee further submits that ld. CIT(A) ought to have condoned the delay of the assessee keeping in view of the circular referred supra. Ld. Counsel for the assessee cited decisions which are as follows: a) Concentrix Daksh Services India Pvt. Ltd. Vs ACIT, order dated 20.09.2023. b)Fastner Commodeal Pvt. Ltd. vs. ADIT, order dated 07.03.2024. c) Aprameya Engineering Limited vs. ITO, ITA No. 456/AHD/2024 order dated 11.06.2024. d) Energy Mission Machneries (India) Pvt. Ltd Vs DCIT [ITA No.411/Ahd/2024 order dated 09.10.2024.
Ld. Counsel for the assessee further contended that no prior information u/s 143(1)(a) of the Act was received by the assessee before making the adjustment by ld. CPC, hence any adjustment is also bad in law.
The ld. DR supports the impugned order.
We have heard the rival contentions and perused the material on record. It would be useful to reproduce the relevant extracts of section 115BAA of the Act, for ready reference: "115BAA. [Tax on income of certain domestic companies. (1)Notwithstanding anything contained in this Act but subject to the provisions of this Chapter, other than those mentioned under section 115BA and section 115BAB, the income-tax payable in respect of the total income of a person, being a domestic company, for any previous year relevant to the assessment year beginning on or after the 1st day of April, 2020, shall, at the option of such person, be computed at the rate of twenty-two per cent., if the conditions contained in subsection (2) are satisfied: Provided that where the person fails to satisfy the conditions contained in sub-section (2) in any previous year, the option shall become invalid in respect of the assessment year relevant to that previous year and subsequent assessment years and other provisions of the Act shall apply, as if the option had not been exercised for the assessment year relevant to that previous year and subsequent assessment years. (2)For the purposes of sub-section (1), the total income of the company shall be computed, (i)without any deduction under the provisions of section 10AA or clause (iia) of sub-section (1) of section 32 or section 32AD
or section 33AB or section 33ABA or sub-clause (ii) or sub- clause (iia) or sub-clause (iii) of sub-section (1) or sub-section (2AA) or sub-section (2AB) of section 35 or section 35AD or section 35CCC or section 35CCD or under any provisions of Chapter VI-A under the heading "C.DDeductions in respect of certain incomes" other than the provisions of section 80JJAA; (ii)without set off of any loss carried forward or depreciation from any earlier assessment year, if such loss or depreciation is attributable to any of the deductions referred to in clause (i); (iii) without set off of any loss or allowance for unabsorbed depreciation deemed so under section 72A, if such loss or depreciation is attributable to any of the deductions referred to in clause (i); and (iv)by claiming the depreciation, if any, under any provision of section 32, except clause (iia) of sub-section (1) of the said section, determined in such manner as may be prescribed. (3)The loss and depreciation referred to in clause (ii) and clause (iii) of sub-section (2) shall be deemed to have been given full effect to and no further deduction for such loss or depreciation shall be allowed for any subsequent year: Provided that where there is a depreciation allowance in respect of a block of asset which has not been given full effect to prior to the assessment year beginning on the 1st day of April, 2020, corresponding adjustment shall be made to the written down value of such block of assets as on the 1st day of April, 2019 in the prescribed manner, if the option under sub- section (5) is exercised for a previous year relevant to the assessment year beginning on the 1st day of April, 2020. (4)In case of a person, having a Unit in the International Financial Services Centre, as referred to in sub-section (1A) of section 80LA, which has exercised option under subsection (5), the conditions contained in sub-section (2) shall be modified to the extent that the deduction under section 80LA shall be available to such Unit subject to fulfilment of the conditions contained in the said section. Explanation. - For the purposes of this sub-section, the term "Unit" shall have the same meaning as assigned to it in clause (zc) of section 2 of the Special Economic Zones Act, 2005. (5)Nothing contained in this section shall apply unless the option is exercised by the person in the prescribed manner on or before the due date specified under sub-section (1) of section 139 for furnishing the returns of income for any previous year relevant to the assessment year commencing on or after the 1st day of April, 2020 and such option once exercised shall apply to subsequent assessment years: Provided that in case of a person, where the option exercised by it under section 115BAB has been rendered invalid due to violation of conditions contained in sub-clause (ii) or subclause (iii) of clause (a), or clause (b) of sub-section (2) of said section, such person may exercise option under this section: Provided further that once the option has been exercised for any previous year, it cannot be subsequently withdrawn for the same or any other previous year."
We further find that the appellant’s case has been assessed by the ld. CIT(A) and the chart has been prepared which is as under: Condition mentioned in the Appellant’s case Circular
The return of income for AY Satisfied; the appellant filed 2023-24 filed on or before the the return on 12.10.2023. due date specified under section 139(1) of the Act The assessee company has Satisfied; the appellant has opted for taxation u/s 115BAA chosen Section 115BAA in the of the Act in (e) of "Filing return for AY 2022-23 & AY Status" in "Part A-GEN" of the 2023-24. Form of Return of Income ITR-6 Form 10-IC filed electronically Satisfied; Form 10IC was on or before 31-01-2024 or 3 electronically filed on months from the end of the 30.12.2022. month in which this Circular is issued, whichever is later
The CBDT issued Circular No. 19/2023 dated 23.10.2023 and after considering the representation received by the Board stating with regard to Form-10IC the Board has held thus: “3. On consideration of the matter, with a view to avoid genuine hardship to the domestic companies in exercising the option u/s 115BAA of the Act, the Central Board of Direct Taxes, in exercise of the powers conferred under section 119(2)(b) of the Act, hereby directs that: The delay in filing of Form 10-IC as per Rule 21AE of the Rules for the previous year relevant to AY 2021-22 is condoned in cases where the following conditions are satisfied:
(i) The return of income for relevant assessment year has been filed on or before the due date specified under section 139(1) of the Act; (ii) The assessee company has opted for taxation u/s 115BAA of the Act in (e) of "Filing Status" in "Part A- GEN" of the Form of Return of Income ITR-6 and (iii) Form 10-IC is filed electronically on or before 31.01.2024 or 3 months from the end of the month in which this Circular is issued, whichever is later.”
On perusal of the above chart and CBDT circular referred supra, there is no denying to the fact that Form10IC as per the extended date by the CBDT, was filed in time but since return was filed after the due date for AY 2022-23, ld. CIT(A) did not consider the case of the assessee and rejected his claim.
After hearing the submissions of the Counsels of the respective parties, we have perused the order and the facts of the case. The facts of the present case of the assessee are that the assessee filed its Form 10IC on 30.12.2022 and return of income for the AY 2022-23 on 31.12.2022 after the due date 07.11.2022 however, the return of income for this AY 2023-24 filed on 12.10.2023 well within due date. The AO who is seized with matter for AY 2023-24 denied the benefit of new tax regime u/s 115BAA of the Act to the assessee for the reason that return for AY 2022-23 was filed after due date for filing the return and Form 10IC was also filed after due date of filing the return. Section 115BAA of the Act was introduced for the purpose of granting benefit of reduced corporate tax rate for the domestic companies. In order to avail the benefit, such companies are required to exercise the option in prescribed manner on or before due date specified u/s 139(1) of the Act for furnishing the return of income. As per Rule 21AE of the Income Tax Rules, 1962, such option can be exercised by filing Form 10-IC. Sub-Section (5) of Section 115BAA of the Act, makes it mandatory to file this form on or before the due date of furnishing the return of income as specified u/s 139(1) of the Act.
In the present case, while we perused the order of ld. CIT(A), it appears to us that the ld. CIT(A) has denied the claim of the assessee with respect to the allowing the benefit of new tax regime u/s 115BAA of the Act. On perusal of the order of the ld. CIT(A), it appears to us that appellant filed its return of income for the relevant assessment year on 12.10.2023 although filed Form-10IC on 30.12.2022 and return of income for AY 2022-23 on 31.12.2022. We also note that in AY 2022- 23, there is no finding to the effect that the assessee has failed to satisfy the conditions in sub-section (2) of section 115BAA of the Act. The assessee has also complied with all three ingredients of the CBDT circular mentioned supra. The word ‘relevant assessment year’ means the return for the claim year. The section 115BAA gives right to the assessee to claim relief under section 115BAA for any year however, subject to the filing of Form 10IC within stipulated due date u/s 139(1) of the Act. We also gather from this section that Form 10IC is required to be filed only once and it cannot be required to file every time of claim. Therefore, we direct the AO to allow benefit of new tax regime u/s 115BAA as claimed by the assessee.
In the result, the appeal filed by the assessee is allowed for statistical purposes.