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Facts
The assessee, a manufacturing concern and contractor, filed its income tax return for AY 2022-23 opting for the concessional tax rate under Section 115BAA. The return was processed, but the assessee failed to file Form 10IC within the extended due date.
Held
The Tribunal held that the failure to file Form 10IC was due to an inadvertent procedural error, especially considering the Covid pandemic and difficulties with the IT portal. Relying on the Calcutta High Court's judgment, the Tribunal restored the matter to the Assessing Officer.
Key Issues
Whether the failure to file Form 10IC within the extended period for opting Section 115BAA is a procedural lapse or a fundamental non-compliance, and whether the assessee should be granted an opportunity to rectify it.
Sections Cited
115BAA, 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]
(PAN: AABCR 2809 Q) ( अपीलाथ� ) Respondent / ��यथ� Appellant / Date of Hearing / सुनवाई 19.02.2025 क� �त�थ Date of Pronouncement/ 17.03.2025 आदेश उ�घोषणा क� �त�थ For the assessee / Shri Manish Tiwari, FCA �नधा�रती क� ओर से For the revenue / राज�व Shri Sailen Samadder, Addl. CIT Sr. D.R क� ओर से ORDER / आदेश Per Pradip Kumar Choubey, JM: This is the appeal preferred by the assessee against order of Commissioner of Income Tax (Appeal)- Addl/JCIT(A)-1, Ludhiana (hereinafter referred to as the Ld. CIT(A)] dated 27.09.2024 for AY 2022-23.
Brief facts of the case of the assessee are that the assessee is a manufacturing concern and a contractor of Indian Railway, filed income tax return for AY 2022-23 declaring a total income of Rs. 31,50,65,330/- for taxation 22% as per the provision of Assessment Year: 2022-23 Rahee Infratech Ltd. Section 115BAA of the Act. The return was processed determining total income at Rs. 31,50,65,330/- and charging tax at normal rate @ 30% instead of 22% as claimed by the assessee.
Aggrieved by the said order, the assessee preferred an appeal before the Ld. CIT(A) wherein the appeal of the assessee has been dismissed by holding that the assessee failed to file form 10IC within extended period of time i.e. 07.11.2022.
Being aggrieved and dissatisfied the present appeal has been preferred by the assessee before us.
The ld. Counsel challenges the impugned order thereby submitting that due date of filing of IT return was 07.11.2022 and the delay of 23 days was due to the illness of the accountant and the delay was unintentional and beyond the control of the management. The Ld. Counsel submits that the company has established its eligibility to claim u/s 115BAA of the Act and the assessee has filed Form 10IC on 30.11.2022. The Ld. Counsel has relied on the judgement of Hon’ble Calcutta High Court in the case of PRINCIPAL COMMISSIONER OF INCOME TAX, CENTRAL-2, KOLKATA VERSUS FASTNER COMMODEAL PVT. LTD. ITAT/267/2024 IA NO: GA/2/2024 Dated: - 10-1-2025.
Upon hearing the counsel of the respective parties, we have perused the order of the Ld. CIT(A) and find that the Ld. CIT(A) has declined the claim of the assessee by holding thus:
“6.3. In view of the facts discussed above, it is held that AO has rightly charged tax while processing the return of income at normal rate @ 30% instead of 22% u/s 115BAA of the Act as the appellant failed to file Form 10IC within extended period of time i.e. 07.11.2022. Hence, based upon the facts, the appellant’s plea is rejected and the action of the AO of charging tax at normal rates @30% is hereby upheld and confirmed. Thus, ground of appeal is hereby dismissed.” We have also gone through the judgment of the Hon’ble Calcutta High Court in the case of PCIT vs. Fastner Commodeal Pvt. Ltd. (supra) wherein it has been 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 Assessment Year: 2022-23 Rahee Infratech Ltd. 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, 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 requisite condition as per law. Accordingly, the appeal of the assessee is allowed for statistical purposes.
In the result, the appeal filed by the assessee is allowed for statistical purposes.
Order is pronounced in the open court on 17th March, 2025