Loading judgment…
Facts
The assessee company opted for concessional tax under Section 115BAA for AY 2020-21 but failed to file Form 10-IC within the prescribed time. The CPC denied the benefit, and the CIT(A) dismissed the assessee's appeal.
Held
The Tribunal held that while filing Form 10-IC is a statutory precondition, in the interest of justice and following the Gujarat High Court's precedent, the matter should be restored. The assessee is allowed to file a fresh Form 10-IC with a condonation petition before the CBDT.
Key Issues
Whether the assessee is eligible for the concessional tax rate under Section 115BAA despite failing to file Form 10-IC within the prescribed time.
Sections Cited
115BAA, 139(1), 143(1), 119(2)(b), 21AE, 10B, 11, 12, 10(23)C, 12A(1)(b), 143(3)
AI-generated summary — verify with the full judgment below
Detected automatically from the text. The count shows how many other judgments on BharatTax rely on the same authority.
Income Tax Appellate Tribunal, Hyderabad ‘B’ Bench, Hyderabad
Before: SHRI RAVISH SOOD & SHRI MADHUSUDAN SAWDIA
आदेश/ORDER
PER MADHUSUDAN SAWDIA, A.M.:
This appeal is filed by M/s. Finecab Wires & Cables Pvt. Ltd. (“the assessee”), feeling aggrieved by the order passed by the Learned ADDL/JCIT (A)-9, Mumbai,(“Ld. First Appellate Authority”), dated 28.03.2025 for the A.Y. 2020-21.
The grounds of the assessee are as under :
The brief facts of the case that, the assessee is a company, filed its return of income for the Assessment Year 2020–21 on 31.12.2020 under section 139(1) of the Income Tax Act, 1961 (“the Act”) declaring total income of Rs.2,64,79,340/-, opting for concessional tax rate under section 115BAA of the Act. However, while processing the return under section 143(1) of the Act on 18.12.2021, the Centralized Processing Centre (“CPC”) denied the benefit of concessional tax rate under section 115BAA on the ground that the assessee had not filed Form 10-IC electronically within the prescribed time.
Aggrieved with the order of CPC, the assessee filed an appeal before the Ld. CIT(A), who dismissed the appeal as per his observation at page nos. 6 & 7 of his order, that the assessee had not furnished Form 10-IC or even a copy of the return of income for the relevant year before the appellate authority. The observation of the Ld. CIT(A) at page nos. 6 & 7 of his order is reproduced as under :
Aggrieved with the order of Ld. CIT(A), the assessee is now in appeal before this Tribunal. The Learned Authorised Representative (“Ld. AR”) submitted that the assessee filed its return of income for the year under consideration within the time prescribed under section 139(1) and opted for taxation under section 115BAA in the ITR. To demonstrate the facts, the Ld. AR invited our attention to the ITR acknowledgment at page no.1 and the copy of ITR at page nos. 2 to 87 of the paper book. He further submitted that while the assessee had inadvertently not filed Form 10-IC for A.Y. 2020–21, it had filed the same for the subsequent year A.Y. 2021–22 on 14.03.2022. Copies of the acknowledgement and Form 10-IC were placed at page nos. 88 to 90 of the paper book. The Ld. AR placed reliance on the decisions of the Hon’ble Gujarat High Court in the case of Surat Smart City Development Ltd. v. PCIT [2024] 169 taxmann.com 222, as well as the coordinate bench of Tribunal in Tainwala Personal Care Products Pvt. Ltd. v. DCIT (ITA No. 369/Mum/2025, A.Y. 2021–22) and KCreate Konnect E Solutions Pvt. Ltd. v. DCIT (ITA No. 1950/Ahd/2024, A.Y. 2020– 21) and argued that under the similar facts and circumstances, the Court has decided the issue in favour of the assessee. He further submitted that since the section was newly introduced and the assessee had substantively opted for section 115BAA in the return, the procedural lapse of not filing Form 10-IC for A.Y. 2020–21 should be condoned.
Per contra, the Learned Departmental Representative (“Ld. DR”) opposed the arguments of the Ld. AR and submitted that the assessee had not filed Form 10-IC for A.Y. 2020–21 at all, neither within the time prescribed under section 139(1) nor within the extended time permitted by CBDT Circular No. 6/2022 dated 17.03.2022, which allowed filing of Form up to 30.06.2022. He distinguished the judgment of the Hon’ble Gujarat High Court in Surat Smart City Development Ltd. (supra) on the ground that, in that case, the assessee had duly filed an application for condonation of delay under section 119 of the Act and the Hon’ble High Court had specifically directed the CBDT to consider such application. In contrast, in the present case the assessee has made no such application for condonation. Further, the Ld. DR also distinguished the decision of coordinate benches of Tribunal relied on by the assessee, stating that in those cases the auditor of the assessee had opted for section 115BAA of the Act in the form no.3CD (Tax Audit Report). However, in the case of the assessee the tax audit report (Form 3CD) for A.Y. 2020– 21 does not mention that the assessee has opted for section 115BAA of the Act. He submitted that mere filing of Form 10-IC for A.Y. 2021–22 cannot be considered as compliance for A.Y. 2020–21, especially when no prayer for condonation or rectification has been made.
We have carefully considered the rival contentions and perused the material on record including the judicial precedents relied upon. It is not in dispute that the assessee had opted for the concessional tax regime under section 115BAA in its return of income filed within the prescribed time under section 139(1) of the Act. However, the assessee did not file Form 10-IC for A.Y. 2020–21, which is a statutory precondition for availing the benefit under section 115BAA. It is also admitted that Form 10- IC was filed by the assessee on 14.03.2022, but for A.Y. 2021– 22, not for the year under consideration. In this regard, we have gone through para nos.11 to 19 of the decision of the Hon’ble Gujarat High Court in Surat Smart City Development Ltd. (supra) dealing with an identical issue, which is to the following effect :
On perusal of above, we found that in that case also, the assessee had failed to file Form 10-IC for A.Y. 2020–21 but had filed it for A.Y. 2021–22 on 10.02.2022 i.e. before the cut-off date of 30.06.2022 prescribed in CBDT Circular No.6/2022. In that case, the assessee had submitted a condonation petition under section 119 to the CBDT, and the Hon’ble High Court, taking a liberal and practical view, provided the assessee at liberty to file a fresh Form 10-IC for A.Y. 2020–21 and directed the revenue to consider the same in the light of the decision of Hon’ble High Court. In the present case, though the assessee has not filed such a condonation petition before the CBDT, the factual matrix is otherwise similar. The assessee had opted for the concessional regime in the return of income, filed Form 10-IC for A.Y. 2021–22 before the cut-off date of 30.06.2022 prescribed in CBDT Circular No. 6/2022.
In view of the above, and in the interest of substantial justice, we are inclined to follow the ratio laid down by the Hon’ble Gujarat High Court and restore the matter to the file of the Ld. AO with the directions that the assessee is at liberty to file a fresh Form 10-IC for A.Y. 2020–21 along with a petition for condonation of delay under section 119 of the Act before the CBDT. The Ld. AO shall consider the claim of the assessee under section 115BAA only after the CBDT has adjudicated upon the condonation application. Subject to such approval, the concessional tax rate shall be allowed in accordance with law. Accordingly, the appeal filed by the assessee is allowed for statistical purposes.
In the result, the appeal of the assessee is allowed for statistical purposes.