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Facts
The assessee, a domestic company engaged in manufacturing furniture, filed its return for AY 2020-21 declaring income taxed at 22% under Section 115BAA, and also filed Form 10-IC. However, the return was processed taxing income at 25% due to alleged non-filing of Form 10-IC within the due date. The assessee's appeal before the CIT(A) was rejected ex-parte due to notices being sent to an incorrect email address.
Held
The Tribunal held that the CIT(A) erred in disposing of the appeal ex-parte without proper consideration and by sending notices to an incorrect email address. The Tribunal also noted that the assessee had met the conditions stipulated in CBDT Circular No. 6/2022 for condonation of delay in filing Form 10-IC.
Key Issues
Whether the ex-parte order passed by the CIT(A) is valid, and whether the assessee is eligible for taxation at 22% under Section 115BAA after condonation of delay in filing Form 10-IC.
Sections Cited
250, 115BAA, 244A, 143(1), 139(1), 21AE
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, ‘B’ BENCH, CHENNAI
Before: SHRI GEORGE GEORGE K & SHRI S.R. RAGHUNATHA
O R D E R
PER GEORGE GEORGE K, VICE PRESIDENT:
This appeal at the instance of the assessee is directed against order of the Addl / JCIT(A)-12 Delhi dated 03.12.2024 passed u/s.250 of the Income Tax Act, 1961 (hereinafter called as “Act”). The relevant assessment year is 2020-21.
The grounds raised by assessee read as follows:-
1. The JCIT(A) erred in disposing of the appeal ex parte without considering the facts of the case and the submissions made in the proper perspective.
2. The JCIT(A) went wrong in sending the notices u/s. 250 of the IT Act dated 22.11.2024 and 27.11.2024, to the old e-mail address which was duly updated on 29-08-2024. As, the communications and intimations were not sent to the Appellant, the Appellant was unaware of such intimations and could not respond.
3. MERITS 3.1 The JCIT(A) erred in taxing the Appellant's income at 25% instead of 22% u/s. 115BAA of the IT Act, which has come into effect from 20.09.2019. The Appellant having fulfilled all the conditions mentioned under the statute including filing of Form 10-1C, denial is unjustified. 3.2 The JCIT(A) erred in passing the impugned rectification order by taxing the Appellant's income at 30% instead of 22% as given under the statute. Therefore, the order of the JCIT(A) is void and the amount demanded by such impugned order is void. 3.3 The impugned order is liable to be quashed as the same has resulted in reduction of appropriate and legitimate refund due to the Appellant without providing any opportunity of being heard.
Interest U/s. 244A: 4.1. The JCIT(A) failed to consider the grounds and the submissions relating to levy of interest u/s 244A which is not just, fair, or reasonable.”
Brief facts of the case are as follows:- The assessee is a domestic company. It is engaged in the business of manufacturing of furniture. For the assessment year 2020-21, return of income was filed on 18.10.2020 declaring income of Rs.17,70,640/- and calculated net tax payable at Rs.4,45,645/- being 22% [taxation of income u/s.115BAA of the Act]. The assessee company also filed necessary Form 10-IC for opting taxation u/s.115BAA of the Act on 18.06.2022.
4. The return of income filed by the assessee was processed and an intimation u/s.143(1) of the Act, was passed on 29.03.2021. In the said intimation, income was taxed at 25% as against 22% opted by the assessee company u/s.115BAA of the Act. The reason for adopting tax @ 25% was due to non-filing of Form 10-IC within the due date prescribed i.e., on or before 15.02.2021 for the assessment year 2020-21.
Aggrieved by the intimation issued u/s.143(1) of the Act, the assessee company filed appeal before First Appellate Authority. For the two notices issued from Office of the CIT(A), there was no response by the assessee. Consequently, First Appellate Authority passed an ex-parte order rejecting appeal of the assessee.
Aggrieved by the order of the CIT(A), the assessee has filed present appeal before the Tribunal. The Ld.AR submitted that Office of the First Appellate Authority has erroneously sent hearing notice to the e-mail ID ‘pkrishnan_us@yahoo.com’, instead of assessee’s e-mail ID ‘vel.monads@gmail.com’ shown in Form 35.
On merits, the Ld.AR submitted that the CBDT vide its Circular No.6/2022 dated 17.03.2022 had stated that if the assessee has satisfied three conditions mentioned on para 3 of the circular, the delay in filing of Form 10-IC for the AY 2020-21 shall stand 115BAA of the Act, for taxation at concessional rate @ 22% will apply. It was stated by the Ld.AR that assessee has satisfied the said three conditions mentioned in the circular and issue may be decided on merits.
The Ld.DR was duly heard.
We have heard rival submissions and perused material on record. The CIT(A) had issued two hearing notices dated 22.11.2024 and 27.11.2024, the latter of which called for a response to file on or before 03.12.2024. The CIT(A) proceeded to pass impugned order on 03.12.2024 ex-parte, even before the time for furnishing response by the assessee has not expired. Moreover, we find notices of hearing sent from Office of the First Appellate Authority was not sent to e-mail ID shown in Form No.35. Therefore, there was non-compliance to the hearing notices issued from the Office of First Appellate Authority, which had resulted in ex-parte order.
As regards the issue on merits is concerned, the CBDT in its Circular No.6 of 2022 dated 17.03.2022 had stated that delay in filing Form No.10-IC, as per Rule 21AE of the Rules for the previous year relevant to AY 2020-21 is condoned in cases where following conditions are satisfied:-
The return of income for AY 2020-21 has been filed on or before the due date specified u/s.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 30.06.2022 or 3 months from the end of the month in which this Circular is issued, whichever is later.”
On perusal of the material on record, it is an admitted fact that assessee had satisfied all the aforesaid three conditions mentioned in the Board’s Circular No.6 of 2022 dated 17.03.2022. In view of the assessee satisfying all the three conditions mentioned above, delay in filing Form 10-IC stands condoned and accordingly, the assessee would be entitled to be taxed at concessional rate of tax at 22% as per provisions of section 115BAA of the Act. It is ordered accordingly.
In the result, appeal filed by the assessee is allowed. Order pronounced in the open court on 20th February, 2025.