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Facts
The assessee company filed its Income Tax Return for AY 2020-21 claiming a lower tax rate under Section 115BAA but failed to upload Form 10IC. The CPC denied the benefit, assessing a higher tax liability. The Ld. CIT(A) dismissed the assessee's appeal, noting the belated filing of Form 10IC.
Held
Citing a relevant Calcutta High Court judgment, the ITAT allowed the appeal for statistical purposes and restored the matter to the Assessing Officer. The AO is directed to consider the belatedly filed Form 10IC and decide on the relief the assessee is entitled to, subject to fulfilling all other legal conditions.
Key Issues
Whether the benefit of a lower tax rate under Section 115BAA can be granted if Form 10IC is filed belatedly, and if the matter should be remanded to the AO for considering the delayed submission.
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 Pradip Kumar Choubey& Shri Sanjay Awasthi]
ORDER / आदेश Per Pradip Kumar Choubey, JM:
This is the appeal preferred by the assessee against the order of Commissioner of Income Tax (Appeal)-27, Kolkata (hereinafter referred to as the Ld. CIT(A)] dated 31.07.2024 for AY 2020-21.
Assessment Year: 2020-21 Kalyaneshwari Tracon Pvt. Ltd.
Brief facts of the case of the assessee are that the assessee company filed return of income for the relevant assessment year on 05.02.2021 without uploading Form 10IC for claiming lower rate of tax i.e. 22% u/s 115BAA of the act which was processed by the CPC vide intimation order dated 18.12.2021 by not giving benefit of lower rate of tax since Form 10IC is not attached. The CPC has determined the gross tax liability was Rs. 42,95,450/- whereas the same was calculated by the assessee at Rs. 32,38,321/- while filing original return of income.
Aggrieved by the said order the assessee preferred an appeal before the Ld. CIT(A) wherein the appeal of the assessee has been dismissed on the ground that the Form no. 10IC has belatedly been filed i.e. on 20.02.2023.
Being aggrieved and dissatisfied the present appeal has been filed by the assessee before us.
The Ld. Counsel for the assessee challenges the very impugned order thereby submitting that the Ld. CIT(A) ought to have considered Form no. 10IC filed before him as sufficient compliance when option was exercised and claim was made u/s 139(1) of the Act. The Ld. CIT(A) cited a decision 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.
The Ld. D.R supports the impugned order.
Upon hearing the submission of the ld. Counsel of the respective parties, we have gone through the order passed by the Ld. CIT(A) and the operative portion of the Ld. CIT(A) by which he declined the claim of the assessee is as follows:
“5.2.1. I have perused the assessment order as well as the submission of the assessee. On examining the same, it is observed that the Appellant is a domestic company registered under Reserve Bank of India Act, 1934 as a “Non-Banking Financial Company” (NBFCs). It is also observed from the submission of the assessee that during the relevant previous year 2019-20, from the business as a provider of loan, the Appellant had earned a turnover of Rs. 1.36 crore and earned net profit of Rs. 1,27,25,614/-. It is also observed that, in its return of income, the Assessment Year: 2020-21 Kalyaneshwari Tracon Pvt. Ltd. Appellant had declared a total taxable income of Rs. 1.28 crore. It had claimed to charge tax at a concessional rate of 22% by exercising option u/s 115BAA of the Act without filing Form 10IC. The assessee stated that the CPC had erred in holding that the Appellant did not opt for being taxes as per the provisions of Section 115BAA of the Act since the Form 10IC is not filed along with the Return of income. The assessee indicated its option at page 1 of ITR 6 in 4th row form bottom option u/s 115BAA is mentioned in online ITR filed u/s 139(1) on 05.02.2021 without attaching Form 10IC. The assessee filed Form no. 10IC on 20.02.2023 and claiming lower rate of tax for the assessment Year 2020-21. The CPC after examining the fact that the assessee has failed to file Form No. 10IC along with the ROI which is the basic requirement to claim the benefit of lower tax rates u/s 115BAA of the Act. In the absence of Form no. 10IC, the CPC rightly denied the benefit of lower tax rates u/s 115BAA of the Act and made the tax calculations at normal rates. Hence, there is no need to intervene with the decisions of the CPC. Consequently, these grounds of appeal raised by the appellant are dismissed.”
7. 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 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.
8. 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 Assessment Year: 2020-21 Kalyaneshwari Tracon Pvt. Ltd. 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 27th February, 2025
Sd/- Sd/- (Sanjay Awasthi /संजय अव�थी) (Pradip Kumar Choubey /�द�प कुमार चौबे) Accountant Member/लेखा सद�य Judicial Member/�या�यक सद�य Dated: 27th February, 2025 SM, Sr. PS Copy of the order forwarded to: 1. Appellant- Kalyaneshwari Tracon Pvt. Ltd. , 65, Cotton Street, 3rd Floor, Kolkata-700007 2. Respondent – DCIT, Central Circle-4(1), Kolkata 3. Ld. CIT(A)-27, Kolkata 4. Ld. Pr. CIT- , Kolkata 5. DR, Kolkata Benches, Kolkata (sent through e-mail)