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Facts
The assessee filed its return of income for AY 2021-22 on March 1, 2022, opting for the concessional tax regime under Section 115BAA of the Income-tax Act but did not file Form 10-IC. Subsequently, the return was processed under Section 143(1) determining total income under Section 115JB. The CIT(A) upheld the action of the CPC, dismissing the assessee's appeal.
Held
The Tribunal noted that a subsequent CBDT circular (Circular No. 19/2023 dated 23-10-2023) provided for condonation of delay in filing Form 10-IC under certain conditions. The assessee had filed Form 10-IC on November 13, 2023, which was after the CIT(A)'s order but within the condonable period as per the circular.
Key Issues
Whether the assessee is entitled to the concessional tax regime under Section 115BAA despite delayed filing of Form 10-IC, especially in light of subsequent CBDT circulars.
Sections Cited
115BAA, 115JB, 139(1), 119(2)(b), 250, 246A
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Income Tax Appellate Tribunal, “E” BENCH, MUMBAI
O R D E R
PER PAVAN KUMAR GADALE JM:
The assessee has filed the appeal against the order of the National Faceless Appeal Centre (NFAC)/CIT(A), Delhi passed u/sec 250 of the Act. The assessee has raised the following grounds of appeal:
1. The Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi (hereinafter referred to as "the CIT(A)") erred in upholding the action of the Centralized Processing Centre (hereinafter referred as "CPC") in computing the appellant's tax liability as per the Konti Infrapower & Multiventures Pvt Ltd, Mumbai - 2 -
provision of section 115JB of the Income-tax Act 1961(hereinafter referred as "Act") although the provisions are not applicable since the assessee has opted for concessional tax regime under section 115BAA of the Act, for reasons which are contrary to the facts of the case and provision of law;
2. The CIT(A) / CPC failed to appreciate that the filing of Form 10-IC to claim concessional tax regime is a procedural requirement and mere delay in filing the same would not disentitle the assessee of such claim;
3. The above grounds/sub-grounds are without prejudice to each other;
4. The appellant craves the leave to add, amend or alter all or any of the grounds of appeal.
The brief facts of the case are that, the assessee company is engaged in the business. The assessee has filed the return of income for the A.Y 2021-22 on 01.03.2022 disclosing a total income of Rs. Nil after set off of the brought forward losses. The assessee has filed the return of income opting the provisions of section115BAA of the Act and the Form No. 10-IC was not filed along with the return of income. Subsequently, the return of income was processed u/sec 143(1) of the Act determining total income u/sec115JB of the Act at Rs.1,13,72,448/- Vide order dated 13-11-2022.
Konti Infrapower & Multiventures Pvt Ltd, Mumbai - 3 -
3. Aggrieved by the order the assessee has filed an appeal before the CIT(A), whereas the CIT(A) considered the grounds of appeal, submissions of the assessee and findings of the AO and observed that the assessee has not filed the Form No.10-IC before the due date prescribed under the Act and hence not complied with the provisions of section 115BAA of the Act and has dismissed the assessee appeal. Aggrieved by the CIT(A)order, the assessee has filed an appeal before the Hon’ble Tribunal.
4. At the time of hearing, the Ld. AR submitted that the CIT(A) has erred in not considering the fact that the assessee has filed the return of income as per the provisions u/sec139(1) of the Act within the extended due date time period and entitle to opt for provisions U/sec115BAA of the Act. Subsequently, the assessee has complied with the conditions of CBDT circular dated 23-10-2023 and filed Form No.10-IC on 13-11- 2023. Further the Ld. AR substantiated the submissions with the judicial decisions, CBDT circular, factual paper book and prayed for allowing the appeal. Per Contra, the Ld. DR supported order of the CIT(A).
Konti Infrapower & Multiventures Pvt Ltd, Mumbai - 4 -
5. We heard the rival submissions and perused the material on record. The sole disputed issue envisaged by the Ld.AR that the CIT(A) has erred in dismissing the claim of the assessee opting for the provisions of Sec. 115BBA of the Act. The Ld.AR contentions are that the assessee has filed the return of income for A.Y.2021-22 within the extended due date u/sec 139(1) of the Act on 01.03.2022 as per CBDT press release dated 11-01-2022. Further the Ld. AR has referred to the Form 10-IC filed on 13.11.2023 as per the acknowledgement receipt of Income Tax Forms placed at page 174 to 176 of the paper book. The Ld.AR demonstrated the CBDT circular no 19/2023 dated 23-10-2023 placed at page 172 & 173 of the paper book as under:
F.No.173/32/2022-ITA-1 Government of India, Ministry of Finance Department of Revenue Central Board of Direct Taxes Circular.No.19/2023. New Delhi the 23rd October 2023
Konti Infrapower & Multiventures Pvt Ltd, Mumbai - 5 - “Sub: Condonation of delay under section 119(2)(b) of the Income-tax Act, 1961 in filing of Form No. 10-IC for Assessment Year 2021-22-Reg.
In exercise of the powers conferred under section 119(2)(b) of the Income-tax Act, 1961 ('the Act'), the Central Board of Direct Taxes ('CBDT') by Circular No. 6/2022 of even number dated 17.03.2022 condoned the delay in filing of Form No. 10-IC as per Rule 21AE of the Income-tax Rules, 1962 ('the Rules') for the previous year relevant to A.Y. 2020-21 in cases where the conditions stipulated in the said Circular are satisfied.
2. Representations have been received by CBDT stating that Form No. 10-IC could not be filed for A.Y2021-22 within the due date or extended due date, as the case may be. It has been requested that the delay in filing of Form No10-IC for A.Y. 2021-22 may be condoned.
3. On consideration of the matter, with a view to avoid genuine hardship to the domestic companies in exercising the option u/s 115BAA of the Act, CBDT in exercise of the powers conferred under section 119(2)(b) of the Act hereby directs that: - The delay in filing of Form No10-IC as per Rule 21AE of the Rules for previous year relevant to A.Y2021-22 is condoned in cases where the following conditions are satisfied: i) The return of income for relevant assessment year has been filed on or before the due date specified under section 139(1) of the Act;
Konti Infrapower & Multiventures Pvt Ltd, Mumbai - 6 - ii) The assessee company has opted for taxation u/s 115BAA of the Act in item (e) of "Filing Status" in "Part A- GEN" of the Form of Return of Income ITR-6; and iii) Form No. 10-IC is filed electronically on or before 31.01.2021 or 3 months from the end of the month in which this circular is issued, whichever is later.” Director (ITA-1) “ 6. The Ld.AR explained that the assessee has satisfied the conditions prescribed in the CBDT circular in respect of condonation of delay in filling of Form.No.10-IC. i.e (i) the assessee has filed the return of income for A.Y.2021-22 within the extended due date u/sec 139(1) of the Act on 01.03.2022 as per CBDT press release dated 11-01-2022 (ii)the assessee has opted for taxation under section 115BAA of the Act in the Part A- GEN –(e) in the return of income ITR-6 filed and (iii) the Form. No. 10-IC as per CBDT circular has to be filed on or before 31.01.2024 or 3 months from the end of the month in which this circular is issued, whichever is later. Whereas the assessee has filed the Form .No. 10-IC on 13.11.2023 as per the acknowledgement receipt of Income Tax Forms and the revenue has not disputed the facts of filling the Form. No 10-IC. We find the Hon’ble High
Konti Infrapower & Multiventures Pvt Ltd, Mumbai - 7 - Court of Delhi in the case of A.C. Surgipharma (P.) Ltd Vs. DCIT, [2023] 157 taxmann.com 360 (Delhi)(30-11-2023) has considered the CBDT Circular and the observations are as under:
On 14-12-2022, after hearing learned counsel for the parties, we had broadly set out the grievance of the petitioner. For convenience, the relevant part of the order dated 14-12-2022 is extracted hereafter:
2. A challenge in this writ petition is laid to the impugned intimation dated 13-11-2022 issued by respondent no. 2 under Section 143(1) of the Income Tax Act, 1961 [in short "Act"].
2.1 Via this intimation, a demand amounting to Rs. 1,03,94,820/- has been raised against the petitioner.
3. The principal grievance of the petitioner is, that although in the income tax return, enough and more information had been given, that the petitioner has opted for being taxed at the rate of 22% as provided under Section 115BAA of the Act, the impugned order was passed, only on account of the fact that the petitioner had failed to file Form 10-IC.
4. It is the submission of Mr Vibhor Garg, who appears on behalf of the petitioner, that before passing the impugned
Konti Infrapower & Multiventures Pvt Ltd, Mumbai - 8 - intimation dated 13-11-2022, an opportunity could have been granted to the petitioner, to correct course.
4.1 To be noted, in the instant writ petition, we are concerned with Assessment Year (AY) 2021-2022.
5.Mr Garg informs us, that for AY 2022-2023, once again, in accordance with the provisions of sub-section(5) of Section 115BAA of the Act, the petitioner continued to opt for being taxed at the rate of 22%, and has accordingly indicated the option in the prescribed form i.e., Form 10-IC.
6. Mr Zoheb Hosaain, who appears on behalf of the respondent/revenue, on the other hand, says that the provisions of Section 115BAA and Rule 21AE clearly mandate that Form 10-IC should be filed, along with the return.
6.1 Mr Hossain also says, that there is an alternate remedy available under Section 246A of the Act.
Perhaps, the issue that requires consideration, is that if every information that is sought for in the form is available with the return, and there is indication in the return, that the assessee has exercised his option in terms of sub- section (1) of Section 115BAA, then, before proceeding further, should the Assessing Officer (AO) not give an Konti Infrapower & Multiventures Pvt Ltd, Mumbai - 9 - opportunity to the assessee [in this case the petitioner] to make course correction
8. We may note, that when the provision ie, Section 115BAA was inserted, the Central Board of Direct Taxes (CBDT) via circular dated 17-3-2022 had relaxed the rigour of the law, in exercise of its powers under section 119(2)(b) of the Act.
9 To our minds the matter requires to be delved into.
Accordingly, issue notice.
10.1 Mr Zoheb Hossain accepts notice on behalf of the respondents/revenue.
Counter-affidavit will be filed within the next four weeks.
11.1 Rejoinder theretoif any, be filed before the next date of hearing.
List the matter on 19-5-2023.
In the meanwhile, no precipitate action will be taken against the petitioner in respect of the demand raised via the impugned intimation dated 13-11-2022, till further orders of the Court."
2.As would be evident from the aforesaid extract, the only reason that the petitioner was not taxed at the rate of 22%, as provided under section 115BAA of the Income-tax Act, 1961 [in short, "Act"], was on account of the fact that it failed to file Form 10-IC.
Konti Infrapower & Multiventures Pvt Ltd, Mumbai - 10 -
Mr Garg has placed before the court Circular No. 19/2023 dated 23-10-2023 issued by the Central Board of Direct Taxes (CBDT) which, in effect, condones the delay in filing Form 10-1C. In this regard, Mr Garg draws our attention to paragraph 3 of the aforementioned circular, which is extracted hereafter: "3. On consideration of the matter, with a view to avoid genuine hardship to the domestic companies in exercising the option u/s 115BAA of the Act. CBDT in exercise of the powers conferred under section. 119(2)(6) of the Act, hereby directs that: - The delay in filing of Form No. 10-IC as per Rule 21AE of the Rules for previous year relevant to A.Y. 2021-22 is condoned in cases where the following conditions are satisfied:
(1) The return of income for relevant assessment year has been filed on or before the due date specified under section 139(1) of the Act; (ii) The assessee company has opted for taxation u/s 115BAA of the Act in item (e) of "Filing Status" in "Part A- GEN" of the Form of Return of Income ITR-6; and (iii) Form No. 10-IC is filed electronically on or before 31-1- 2024 or 3 months from the end of the month in which this Circular is issued, whichever is later."
We are informed by Mr Garg that in terms of the said circular, a fresh Form 10-IC has been filed, albeit, electronically.
Accordingly. Mr Garg says that the petitioner fulfills the conditions referred to in paragraph 3 of the said circular.
Konti Infrapower & Multiventures Pvt Ltd, Mumbai - 11 -
In these circumstances, the writ petition is disposed of, with a direction to the CBDT to process the petitioner's request contained in Form 10-IC.
7. The CBDT will process the aforementioned prescribed form within eight (8) weeks from the date of receipt of the order passed today. 8. The interim order dated 14-12-2022, which was made absolute on 19-5-2023, shall continue to operate pending the aforementioned exercise, and for further three (3) weeks, in case the result is adverse to the interest of the petitioner. 9. Parties will act based on the digitally signed copy of the order.” 7. We considering the facts, circumstances, CBDT circular and ratio of the judicial decision, find that the assessee has complied with the conditions as per CBDT circular discussed above. Whereas the CIT(A) order was passed on 27-07-2023, but the CBDT circular No.19/2023 was issued on 23-10-2023 and the assessee has filed the Form.No. 10-IC on 13.11.2023. And these details of filling of Form.No.10 IC and CBDT circular were not available at the time of processing of return of income U/sec 143(1) of the Act with the Assessing Officer. Accordingly, we set aside the order of the CIT(A) and restore the issues to the file of the assessing officer to verify and examine the Konti Infrapower & Multiventures Pvt Ltd, Mumbai - 12 - claim and consider the applicability of provisions under section 115BAA of the Act opted by the asseessee. And we allow the grounds of appeal for statistical purpose.
In the result, the appeal filed by the assessee is allowed for statistical purpose.
Order pronounced in the open court on 01.01.2024.