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Facts
The assessee filed its income tax return for AY 2022-23 and opted for the new tax regime under Section 115BAA. The return was filed beyond the due date, and Form 10IC was filed on March 26, 2022. The AO processed the return and denied the claim under Section 115BAA, raising a demand. The CIT(A) partly allowed the appeal, rejecting the claim on the grounds of late filing of the return and Form 10IC.
Held
The Tribunal held that the filing of Form 10IC is procedural in nature and cannot disentitle the assessee from opting for the new tax regime if it has been claimed in the return. The error in filing the form was considered an inadvertent procedural error.
Key Issues
Whether the assessee can opt for the new tax regime under Section 115BAA if Form 10IC is filed after the due date, and if the delay in filing the form can be condoned.
Sections Cited
115BAA, 139(1), 119(2)(b)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “B” BENCH: KOLKATA
Before: Shri Rajesh Kumar&Shri Pradip Kumar Choubey]
ORDER / आदेश Per Pradip Kumar Choubey, JM: This is the appeal preferred by the assessee against the order of Commissioner of Income Tax (Appeals)- Addl/JCIT(A)-2, Chennai (hereinafter referred to as the Ld. CIT(A)] dated 23.03.2024 for AY 2022-23.
Brief facts of the case of the assessee are that the assessee filed return of income for AY 2022-23 declaring total income of Rs. 1,55,20,15,750/-. Subsequently the AO Assessment Year: 2022-23 Shree Capital Services Ltd. (CPC) processed income tax return and determining of total income CPC has denied the above claim u/s 115BAA of the Act and raised a demand of Rs. 12,84,37,570/-.
Aggrieved by the said order of the CPC, the assessee preferred an appeal before the Ld. CIT(A) wherein the appeal of the assessee has been partly allowed as the Ld. CIT(A) rejected the claim of the assessee u/s 115BAA of the Act on the ground the assessee filed income tax return after extended date beyond time limit prescribed u/s 139(1) of the Act and also filed form 10IC on 2nd March, 2022.
Being aggrieved and dissatisfied the assessee preferred an appeal before us.
The Ld. Counsel of assessee challenges the very impugned order by submitting that as per the provision of Section 115BAA(5) read with Rule 21AF for opting new tax regime, the assessee is required to file form 10IC on or before due date is specified u/s 139(1) of the Act. The Ld. Counsel submits that it has clearly been held that second proviso to second proviso to Section 115BAA(5) that once the option has been exercised for any previous year, it cannot be subsequently withdrawn for the same or any other previous year. The Ld. Counsel submits that Form 10IC was field by the assessee on 26.03.2022 for AY 2021-22 & onwards, so in view of the provision of Section 115BAA and CBDT Instruction declaration so filed in form 10IC for AY 2021-22 was not filed again for AY 2022-23 as the same was applicable for the year under consideration i.e A.Y. 2022-23 hence there was no delay in filing Form no. 10IC. The Ld. Counsel further submits that the Hon’ble Calcutta High Court in the case of PCIT vs. Fastner Commodeal Pvt. Ltd. in ITAT/267/2024 IA NO: GA/2/2024 Dated: - 10-1-2025 has clearly held that filing of Form 10IC being procedural in nature and cannot disentitle assessee from opting new tax regime if same has been undisputedly claimed in income tax return filed by the assessee. The Ld. Counsel has also cited a decision of Tribunal passed in ACIT vs. Sandor Medicaids pvt. Ltd. in dated 16.01.2025.
Contrary to that the Ld. DR supports the impugned order.
Assessment Year: 2022-23 Shree Capital Services Ltd.
Upon hearing the submission of the Counsel for the respective parties, we have perused the facts of the case of the assessee and find that while filing return of income for AY 2022-23 the assessee had filed tax audit report on 06.10.2022 and ITR on 6.11.2022 wherein it has clearly been mentioned that new tax regime u/s 11BAA got in AY 2021-22 shall be continued to be opted by the assessee in AY 2022-23. The Ld. CIT(A) dismissed the appeal of the assessee by stating that since the return of income was filed beyond the due date prescribed u/s 139(1) of the Act, hence the option exercised u/s 115BAA for AY 2021-22 cannot be extended and granted for subsequent year. In the present case Form no. 10IC field by the assessee on 26.03.2022. it is further important to mention here that for AY 2021-22 delay of filing income tax return has been condoned by the income tax authority vide order dated 14.11.2024. we have gone through the order passed by the Hon’ble Calcutta High Court passed in the case of PCIT vs. Fastner Commodeal Pvt. Ltd. and the Hon’ble Court has held thus:
Denial of benefit u/s 115BAA - assessee did not file the Form 10IC along with the return within the extended period, as extended by the Circular issued by the Central Board of Direct Tax dated 17th March, 2022 - whether filing of such form would be mandatory or directory? - whether the assessee should be given an opportunity to file Form 10IC before the AO in order to claim the benefit? - HELD THAT:- It is not in dispute that the assessee company has opted for taxation u/s 115BAA and the option was available to the assessee by opting the option given in filing status in Part AGE of the form by return of income in ITR-6. This conduct of the assessee will undoubtedly go to show that the assessee intended to opt to pay tax under the simplified tax regime as also accepted in the Circular issued by the Central Board. During the relevant period there was Covid pandemic which also led to certain other difficulties for the assessee to upload the form along with the return within the extended time thereof. That apart, the assessee has specifically stated that they had certain difficulties in uploading the form in the Income tax portal. Also assessee pointed in case of a HUF opting under the new taxation scheme under Section 115BAC, the portal requires management number of 10IE while filing the income tax return as this being a mandatory column and the assessee continue process of filing ITR without filling the same and if there was non-compliance in filing Form 10IE, the assessee would be aware of that and will submit the same but such facilities is not provided when returns are filed by companies. The peculiar facts and circumstances would show that the error was an inadvertent procedural error and the conduct of the assessee will clearly show that they had opted for taxation u/s 115BAA of the Act. Appeal is disposed of and the matter stands restored back to the file of the Assessing Officer to permit the assessee to file the report in Form 10IC and the Assessing Officer shall consider as to what relief the assessee would be entitled to subject to the conditions that the assessee fulfils all other requisite conditions as per law.
Going over the facts of the case of the assessee, the order passed by the Ld. CIT(A), circular No.19/2023 and 17/2024 for condonation of delay under section 119(2)(b) of the IT Act, and considering the judgment of Hon’ble Calcutta High Court, Assessment Year: 2022-23 Shree Capital Services Ltd. the matter is restored back to the file of Assessing Officer with this direction to consider the Form 10IC filed by the assessee and shall consider as to what relief the assessee would be entitled to subject to the condition that the assessee fulfils all other requisites condition as per law. Accordingly, the appeal of the assessee is allowed for statistical purposes.
In the result, the appeal filed by the assessee allowed for statistical purposes.
Order is pronounced in the open court on 26th March, 2025