SHABARI TELECABLE NETWORK PRIVATE LIMITED,BANGALORE vs. DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-6(1)(1), BANGALORE
Facts
The assessee, a private limited company, engaged in facility and housekeeping services, filed its income tax return for AY 2021-22 opting for taxation under Section 115BAA. However, it failed to file Form 10-IC before filing the return. Consequently, the CPC processed the return under regular provisions, applying a 30% tax rate and raising a demand. The CIT(Appeals) dismissed the assessee's appeal.
Held
The Tribunal noted that the assessee had exercised the option under Section 115BAA and filed the return within the due date. Subsequently, CBDT Circular No. 19/2023 condoned the delay in filing Form 10-IC for AY 2021-22, extending the due date. As the assessee filed Form 10-IC within the extended due date, it was considered eligible for the benefit of Section 115BAA.
Key Issues
Whether the assessee is eligible for the concessional tax rate under Section 115BAA despite delayed filing of Form 10-IC, considering the CBDT condonation circular.
Sections Cited
115BAA, 139(1), 143(1), 234A, 234B, 234C, 119(2)(b)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “B” BENCH : BANGALORE
Before: SHRI LAXMI PRASAD SAHU & SHRI SOUNDARARAJAN K.
Per Laxmi Prasad Sahu, Accountant Member This appeal is filed by the assessee against the order dated 01.07.2024 of the Addl./Jt.CIT(Appeals)-6, Delhi for the AY 2021-22 on the following grounds:-
“1. On the facts and in the circumstances of the case, the Ld.CIT(A) has wrongly dismissed the appeal in violation of principles of natural justice. Only one notice of hearing was issued by the Ld.CIT(A) on 21-09-2023 to which the appellant furnished reply on 12-01-2024 and thereafter no further
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opportunity to explain its compliance to Circular No.9/2022, subsequently issued by the CBDT, has been granted. 2. In ensuing circumstances, particularly after appellant complied with CBDT Circular No.9/2022 on condonation of delay in filing Form No.10-IC, the adjustment made in the intimation does not survive any more and therefore liable to be deleted. 3. The AO, has erred in not suo moto passing rectification order against intimation nullifying the demand even after the appellant complied with CBDT Circular No.9/2022. 4. The CPC erred in levying interest U/s.234A, 234B & 234C of the Act. 5. The appellant craved leave to add, alter, amend, substitute, change and delete any grounds of appeal.” 2. Briefly stated the facts of the case are that the assessee is a private limited domestic company engaged in providing facility management and house keeping services to various corporate clients. It filed return of income on 28.02.2022 for AY 2021-22 declaring total income at Rs.5.17 crores by clearly stating its option of getting taxed as per section 115BAA in the appropriate columns of the return. However, the assessee did not file Form 10-IC before filing its return. While processing the return u/s. 143(1) by CPC, the tax liability was calculated as per regular provisions of the Act applying 30% tax rate raising the demand to Rs.84,23,890. Aggrieved from the above order, the assessee filed appeal before the First Appellate Authority (FAA).
The ld. FAA dismissed the appeal of the assessee. Aggrieved, the assessee is in appeal before the ITAT.
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The ld. AR of the assessee reiterated the submissions made before the FAA. He submitted that there was a procedural lapse on the part of assessee in not filing Form 10-IC, but the option for taxation as per section 115BAA was duly exercised in the return of income. During the pendency of appeal before the CIT(Appeals), the CBDT issued Circular No.19/2023 (F.No.173/32/2022-ITA-1) dated 23.10.2023 which is placed on record as Annexure-A on condonation of delay in filing Form 10-IC and gave opportunity to the assessee who missed out filing Form 10-IC within the stipulated time to electronically file that Form on or before 31.01.2024. He submitted that sufficient opportunity was not provided to the assessee during the course of appellate proceedings to put forth that Form 10-IC was filed within the due date prescribed by CBDT Circular No.19. The ld. FAA provided only one opportunity to the assessee. The assessee has filed return as per section 139(1) on 28.02.2022 which is within the extended due date on 15.03.2022, therefore the return is filed within due date. The assessee opted for taxation u/s. 115BAA and Form 10-IC was filed electronically on 31.01.2024. The assessee complied all the provisions and conditions stipulated. Therefore the assessee should be given benefit of section 115BAA.
The ld. DR relied on the order of lower authorities.
Considering the rival submissions, we note that while filing return of income the assessee exercised option u/s. 115BAA and filed return of income on 28.02.2022 and the extended due date is
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15.03.2022. The CBDT vide Circular No.19 dated 23.10.2023 condoned the delay in filing Form 10-IC for AY 2021-22 u/s. 119(2)(b) and extended the due date upto 31.01.2024 or three months from the end of the month in which this Circular is issued, whichever is later. The assessee has filed Form 10-IC on 31.01.2024 and acknowledgement is placed at page 13-14 of PB. Accordingly the assessee is eligible for benefit of section 115BAA. Therefore, we remit this issue to the file of AO for fresh consideration for verification of Form 10-IC filed by the assessee and grant of benefit of section 115BAA of the Act. Needless to mention that assessee be given reasonable opportunity of hearing. The assessee is directed to provide necessary documents as per the requirement of the AO.
In the result, the appeal by the assessee is allowed for statistical purposes.
Pronounced in the open court on this 23rd day of October, 2024. Sd/- Sd/- ( SOUNDARARAJAN K.) (LAXMI PRASAD SAHU ) JUDICIAL MEMBER ACCOUNTANT MEMBER
Bangalore, Dated, the 23rd October, 2024.
/Desai S Murthy /
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Copy to:
Appellant 2. Respondent 3. Pr.CIT 4. CIT(A) 5. DR, ITAT, Bangalore.
By order
Assistant Registrar ITAT, Bangalore.
