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Facts
The assessee, a private limited company, opted for concessional tax under Section 115BAA for Assessment Years 2020-21 and 2021-22. However, the CPC denied this benefit as Form 10-IC was not filed within the due date. The CIT(A) upheld this decision, stating they lacked the power to condone the delay.
Held
The Tribunal noted that the assessee did not file Form 10-IC within the prescribed time for both assessment years. For AY 2020-21, the application for condonation was pending before the CBDT, and for AY 2021-22, the CBDT had disposed of the application without specific directions.
Key Issues
Whether the assessee is eligible for the concessional tax rate under Section 115BAA when Form 10-IC was filed beyond the due date, and whether the delay can be condoned.
Sections Cited
115BAA, 143(1), 250, 119(2)(b), 139(1)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “A” BENCH : BANGALORE
Before: SHRI GEORGE GEORGE K & SHRI LAXMI PRASAD SAHU
Per George George K, Vice President:
These appeals at the instance of the assessee are directed against separate Orders dated 22.12.2023 passed by the Additional / Joint CIT(A) under section 250 of the Income Tax Act, 1961 (hereinafter called ‘the Act’). The relevant Assessment Years are 2020-21 and 2021-22. The orders of CIT(A) arise out of intimation issued under section 143(1) of the Act.
2. Common issues are raised in these appeals. Hence, they were heard together and are being disposed off by this consolidated order.
Brief facts of the case are as follows:
Assessee is a private limited company engaged in the business of providing management consultancy services. For the Assessment Years 2020-21 and 2021- 22, assessee had filed the return of income by opting concessional rate of taxation under section 115BAA of the Act. The tax liability under section 115BAA of the Act is calculated at concessional rate at 22% along with surcharge and cess. The returns filed by the assessee for Assessment Years 2020-21 and 2021-22 were processed by the CPC under section 143(1) of the Act. In the said intimation, the concessional rate of tax was denied by the CPC. The reason for denying the concessional rate of tax under section 115BAA of the Act was that assessee did not file Form No.10-IC within the due date prescribed as required under section 115BAA(5) of the Act.
Aggrieved by the intimations issued under section 143(1) of the Act for Assessment Years 2020-21 and 2021-22, assessee filed appeals before the First Appellate Authority. The CIT(A) held that since assessee has not satisfied the provisions of section 115BAA(5) of the Act, assessee is not eligible for tax concession under section 115BAA of the Act. The CIT(A) held that he does not have the power to condone the delay in filing Form 10-IC((iii) under section 119(2)(b) of the Act.
Aggrieved by the Orders of the CIT(A), assessee has filed the present appeals before the Tribunal. The learned AR submitted by placing reliance on the CBDT Circular No.6/2022 dated 17.03.2022 that assesee had filed a condonation application before the Board for Assessment Year 2020-21 and same is pending consideration by the Board. It was submitted that the matter may be restored to the AO and directions may be issued to pass orders in accordance with the order of the CBDT as regards the condonation application that is pending before the Board. As regards Assessment Year 2021-22 is concerned, it was submitted that the assessee’s application for condonation of delay has been disposed off vide Board’s order dated 01.12.2023 (refer page 167 of the Paper Book filed by the assessee). It was submitted that assessee had satisfied all the conditions as stipulated in the Board’s Circular No.19/2023 dated 23.10.2023 and the Board has merely disposed off the assessee’s application for condonation of delay in filing Form 10-IC by referring to Board’s Circular No.19/2023 dated 23.10.2023, without taking any decision in the matter. It was submitted that as regards Assessment Year 2021-22 is concerned, the matter may be restored to the AO to examine whether assessee has satisfied the conditions as per the Board Circular mentioned supra and if so, direction may be issued to AO to grant concessional rate of tax as per provisions of section 115BAA of the Act.
The learned DR supported the orders of the CIT(A).
We have heard the rival submissions and perused the material on record. Admittedly, assessee had not filed Form 10-IC for Assessment Years 2020-21 and 2021-22 within the prescribed time as mandated under section 115BAA(5) of the Act. The CBDT had come up with Circular No.6/2022 dated 17.03.2022 for condoning the delay in filing Form 10-IC subject to the following conditions:
i. The return of income for AY 2020-21 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 (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 30.6.2022 or 3 months from the end of the month in which this Circular is issued, whichever is later.
It is submitted by the learned AR that for Assessment Year 2020-21, assessee had filed an application under section 119(2)(b) of the Act for condoning the delay in filing (non-filing) of Form 10-IC and same is pending consideration before the CBDT. Since the assessee’s application is pending consideration by the CBDT, it is only in fitness of things to restore the matter to the AO. The AO is directed to await the outcome of the order passed by the CBDT in respect of assessee’s application filed under section 119(2)(b) of the Act. The AO on receipt of the CBDT order shall pass consequential / giving effect order as per the directions of the CBDT.
As regards Assessment Year 2021-22 is concerned, we find that the CBDT has disposed off the assessee’s application for condoning the delay in filing Form 10-IC vide its order dated 01.12.2023. The CBDT has not given any specific directions. The CBDT’s order disposing off the assessee’s application reads as follows:
“Sub: Condonation of delay under section 119(2) of the Income-tax Act, 1961 (the Act) relating to Form 10-IC/return of income for AY 2021-22 - Reg. Kindly refer to the above.
In this regard, I am directed to inform you that the Central Board of Direct Taxes has issued Circular No. 19/2023 dt. 23.10.2023 in F.No.173/32/2022-ITA-I (copy enclosed). The Circular is also available on public domain- https://incometaxindia.gov.ini pages/communications/ circulars.aspx.
3. In view of the above, the application submitted by you regarding the subject matter is disposed of and hence, filed.”
The assessee submits that it had satisfied all the conditions as stipulated in Board’s Circular No.19/2023 dated 23.10.2023. In the interest of justice and equity, the matter is restored to the AO. The AO is directed to examine whether assessee has satisfied the conditions as stipulated in the Board’s Circular cited supra. If it is found that assessee had satisfied the condition, the AO is directed to extend the benefit of concessional rate of tax under section 115BAA of the Act. It is ordered accordingly.
In the result, appeals filed by the assessee are allowed for statistical purposes.