MILES EDUCATION PRIVATE LIMITED,HYDERABAD vs. ITO, WARD-16(3), HYDERABAD

The assessee company, being aggrieved with the order of the CIT(A) has carried the matter before us.

We have heard the learned Authorized Representatives of both parties, perused the material available on record as well as considered the judicial pronouncements that have been pressed into service by the Ld.AR to drive home his contentions.

Shri A.V. Raghuram, Ld.AR for the assessee company, at the threshold of hearing of the appeal, submitted that the declining of the assessee’s claim for concessional tax rate u/s 115BAA of the Act by the AO/CPC, Bangalore was violative of the CBDT Circular No.6/2022 dated 17.03.2022. Elaborating on his contention, the Ld.AR submitted that the CBDT based on the representations regarding the genuine hardships which were being faced by the domestic companies in exercising the option u/s 115BAA of the Act for A.Y.2020-21 i.e., the first year of the filing of “Form 10-IC”, had in the exercise of the powers vested with it under section 119(2)(b) of the Act, vide Circular No. 6/2022, dated 17/03/2022 directed that the delay in filing of “Form 10-IC” read with Rule 21E of Income Tax Rules, 1962 for the previous year, relevant to A.Y.2020-21 is to be condoned in a case, where certain conditions are cumulatively satisfied, viz. (i) the return of income for A.Y.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 the concessional 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 the subject Circular is issued, whichever is later. The Ld.AR submitted that as the assessee company had filed its return of income on 15.02.2021, i.e. within the extended “due date” u/s 139(1) of the Act and had in its return of income opted for taxation u/s 115BAA of the Act; and also electronically filed Form 10-IC on 04.03.2021, therefore, it was duly eligible for claim of the concessional tax rate u/s 115BAA of the Act. The Ld. AR to buttress his claim that the assessee company had cumulatively satisfied the aforementioned pre-conditions taken us to the relevant pages of the assessee’s paper book. Carrying his contentions further, the Ld.AR submitted that the CIT(A) had declined the assessee’s claim for concessional tax rate u/s 115BAA of the Act, for the reason, that he had remained under a misconception that the assessee company was obligated to have applied for condonation of delay in filing “Form 10-IC” with the appropriate authority. The Ld.AR submitted that the CBDT in its Circular No.6/2022 (supra), had in unequivocal terms directed u/s 119(2)(b) of the Act, that on a cumulative satisfaction of the three conditions therein laid down, the delay in filing of “Form 10-IC” as per Rule 21AE is to be condoned.

Per contra, the Ld. DR relied on the orders of the lower authorities. The Ld. D.R submitted that as the assessee company had failed to demonstrate the genuine hardship leading to the delay in e-filing of “Form 10-IC”, therefore, it was not entitled for the concession provided in the CBDT Circular 6/2022. Apart from that, the Ld. D.R submitted that as the assessee company had also in its return of income claimed the set-off of its brought forward losses, and also raised the claim for allowability of depreciation u/s 32(i)(ii) of the Act, therefore, for the said reason also, it was not eligible for claim of the concessional tax rate u/s 115BAA of the Act.

We have heard the learned Authorized Representatives of both parties on the aforesaid issues in the backdrop of the orders of the lower authorities.

Admittedly, the provisions of section 115BAA(5) of the Act, which contemplates a concessional tax rate of 22% in respect of the total income of the domestic company, for any previous year relevant to the assessment year beginning “on or after 1st of April 2020” lays down as a pre-condition, the cumulative satisfaction of three conditions viz. (i) that the assessee company had filed its return of income on or before the “due date” specified u/s 139(1) of the Act; (ii). the assessee company has opted for the concessional taxation u/s 115BAA of the Act in its return of income; and (iii) the assessee company had electronically e-filed “Form 10-IC” r.w Rule 21AE on or before the “due date” for filing of return of income u/s 139(1) of the Act. The CBDT vide its Circular No.6/2022, considering the genuine hardships which were being faced by the domestic companies in exercising option u/s 115BAA of the Act, had in the exercise of powers conferred u/s 119(2)(b) of the Act, directed that the delay in filing of “Form 10-IC” as per Rule 21AE of IT Rules for the previous year relevant to A.Y.2020-21 is to be condoned in a case of cumulative satisfaction of certain conditions. For the sake of clarity, we deem it fit to cull out the CBDT Circular No.6/2022, dated 17.03.2022, which reads as under :

Ostensibly, the assessee company had filed its return of income within the extended “due date” of filing of the same u/s 139(1) of the Act i.e. 15.02.2021. Also, there is no denial of the fact that the assessee company had in its return of income opted for the concessional tax rate u/s 115BAA of the Act. Although the assessee company had delayed the filing of “Form 10-IC”, which was uploaded only on 04.03.2021, but, we find that the same was filed electronically much prior to the lapse of the period provided in Para 3(iii) of the CBDT Circular No.6/2022 i.e. on or before 30.06.2022.

Considering that the assessee company had cumulatively satisfied all the aforementioned three conditions laid down in Circular No.6/2022 (supra), therefore, we are unable to comprehend that as to why it was to be held as not entitled for the concessional tax rate u/s 115BAA of the Act.

Apropos the observation of the CIT(A) that the assessee company ought to have sought for the condonation of delay involved in filing the “Form 10-IC” with the appropriate authority, we are unable to concur with the same. As the CBDT Circular No.6/2022 (supra) provides that on cumulative satisfaction of conditions provided in Para 3, the delay in filing of “Form 10-IC” r.w Rule 21AE is to be condoned, therefore, there is nothing to infer that the assessee company was required to separately apply for condonation of the same.

We thus, in terms of our aforesaid deliberations set aside the order of the CIT(A) and direct the AO to compute the tax liability of the assessee company as per the concessional tax rate provided in section 115BAA of the Act.

Before parting, we may herein observe, as a word of caution, that the AO while giving effect to our aforesaid observations, verify that the “total income” of the assessee company is computed within the four corners of the mandate of section 115BAA of the Act.

Resultantly, the appeal filed by the assessee is allowed in terms of our aforesaid observations. …..मई, 2025 को खुली अदालत में सुनाया गया आदेश।