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Income Tax Appellate Tribunal, “C” BENCH, AHMEDABAD
Before: SMT. ANNAPURNA GUPTA & SHRI SIDDHARTHA NAUTIYAL
PER SIDDHARTHA NAUTIYAL - JUDICIAL MEMBER:
This appeal has been filed by the Assessee against the order passed by the Ld. Commissioner of Income Tax (Appeals), (in short “Ld. CIT(A)”), National Faceless Appeal Centre (in short “NFAC”), Delhi vide order dated 27.06.2023 passed for A.Y. 2021-22.
The brief facts of the case are that the assessee is a private limited company deriving income from business of manufacturing of plain flexible films. The assessee filed its return of income for Assessment Year 2021-22 on 30.12.2021. In the said return of income, the assessee opted for being taxed under Section 115 BAA of the Act at a reduced rate of taxation. However, in the intimation issued by CPC under Section 143(1), the tax was calculated by CPC without considering the option under Section 115BAA, opted by the assessee. Accordingly, the CPC computed additional tax demand of Sunpack Barrier Films Pvt. Ltd. vs. DCIT Asst.Year –2021-22 - 2– Rs.22,90,650/- on the assessee, by computing the tax under the normal provisions.
3. In appeal before Ld. CIT(Appeals), he dismissed the appeal of the assessee on this issue on the ground that as per the provisions of Section 115BAA of the Act, the assessee was required to file relevant Form 10-IC on or before 30.06.2022 from the end of the month in which Circular No. 06/2022 dated 17.03.2022 was issued, whichever is later and has also fulfilled all the conditions laid down in Circular No. 06/2022 dated 17.03.2022. One of the conditions mentioned in Circular No. 06/2022 was that Form 10-IC was required to be filed electronically on or before 30.06.2022 or 3 months from the end of the month in which the Circular was issued, whichever is later. However, the assessee failed to fulfill this condition and there was a delay in filing of 10-IC beyond the stipulated period as mandated in the aforesaid Circular. Accordingly, the Ld. CIT(Appeals) rejected the appeal of the assessee on this issue with the following observations:
“4.5 I have gone through the submission of the appellant and material on record. As per the provision of this Section 115BAA, the appellant was required to file the relevant Form 10- IC as per Rule 21AE on or before 30.06.2022 or 3 months from the end of the month in which circular No0672022 (F.NO. 173/32/2022/ITA-1] DATED17-3-2022 was issued, whichever is later and also fulfilled all the conditions laid down in circular No,06/2022 (F.NO. 173/32/2022/ ITA-1], DATED 17-3-2022. In this regard, the appellant has stated that the option in Form No. 10IC could not be uploaded as there was no intimation or any mail from the department and there was no column in ITR asking date of submission of Form No.10IC. Perusal of submission of the appellant, it has been noticed that the appellant has not filed Form No.10IC before 30.06.2022. In the CBDT circular no. 06/2022, it has been clearly mentioned that in order to avail the benefits of section 115BAA, 3 conditions are required to be fulfilled. One of those condition is that Form 10-IC is to be filed electronically on or before 30.06.2022 or 3 months from the end of the month in which this Circular is issued, whichever is later. In order to get the benefit u/s 115BAA, the appellant has to file application in Form No. 10IC which is an application for exercise of option under sub-section (7) of section 115BAA of the Act. This is the mandatory condition as per CBDT circular no. 6/2022 which the appellant failed to satisfy. Regarding exercising option vide Form No, 10IC, the appellant has submitted that Form No. 10IC could not be uploaded as there was no intimation or any mail from the department and there was no column. In ITR asking date of submission of Form No.10 IC. The appellant has to exercise the option on its own fulfilling all the requirements. The appellant cannot the shift its own responsibility on somebody else. The Sunpack Barrier Films Pvt. Ltd. vs. DCIT Asst.Year –2021-22 - 3– appellant's version that in order to provide any benefit, Income tax department would make a request and then only the appellant would respond to the same is a thinking beyond imagination. 4.6 Further, the appellant has also relied upon the judgment of Hon'ble Supreme Court in suo-moto writ petition No.3/202 dated 23.03.2020 wherein the Hon'ble Supreme Court has ordered that a period of limitation in all such proceedings, irrespective of the limitation prescribed under the general law or Special laws whether condonable or not shall extended w.e.f 15 March 2020 till further orders. Order of the Hon'ble Supreme Court dated 10.01.2022 was in connection with filing petitions/applications/ suits/ appeals/ all other quasi proceedings within the period of limitation prescribed under the general law of limitation or under any special laws (both Central and/or State) due to the outbreak of the COVID19 pandemic. The Hon'ble Supreme Court has extended the period 90 days from the date of 01.03.2022. The relevant portion of the order is placed below the sake of clarity – In cases where the limitation would have expired during the period between 15.03.2020 till 28.02.2022, notwithstanding the actual balance period of limitation remaining, all persons shall have a limitation period of 90 days from 01.03.2022. In the event the actual balance period of limitation remaining, with effect from 01.03.2022 is greater than 90 days, that longer period shall apply. The judgement of the Hon'ble Supreme Court referred by the appellant was in respect of the proceedings which were affecting due to pandemics. The ratio of the said judgement cannot be extended to each and every procedural and mandatory requirements. The case laws relied upon by the appellant were on technical issues and not on the mandatory requirements of law and hence not applicable to the facts of the case. Further, the CBDT has also extended the date for filing of Form 10IC upto 30-6-2022. Keeping in view of the above facts, as the appellant failed to satisfy one of the mandatory requirement of filing Form No. 10IC electronically, the benefit of provisions of section 115BAA of the Act cannot be extended to the appellant. Accordingly, the ground no.2 is dismissed.
In the result, the appeal is partly allowed.”
4. The assessee is in appeal before us against the aforesaid order passed by Ld. CIT(Appeals) dismissing the appeal of the assessee.
5. Before us, the Counsel for the assessee submitted that the assessee company had filed its return of income on 21.01.2022. There was admittedly a delay in filing of Form No. 10-IC by the assessee. Based on the same, in the intimation issued by CPC, the benefit of Section 115 BAA of the Act was not granted to the assessee and instead of calculating tax @22% as per Section 115 BAA, the tax @25% was calculated under normal provisions of Income Tax Laws, thereby creating additional tax demand on the assessee. Before us, the Counsel for the assessee submitted that CBDT has issued Circular No. 19/2023
Sunpack Barrier Films Pvt. Ltd. vs. DCIT Asst.Year –2021-22 - 4– for condoning the delay in filing of Form No. 10-IC for Assessment Year 2021-22. As per the aforesaid Circular, the CBDT has stated that delay in filing of Form No. 10-IC may be condoned, subject to fulfilling of 3 conditions for claiming the concessional rate of tax under Section 115 BAA of the Act. The conditions are as below:
(I) the return of income for has been filed on or before the due date prescribed under Section 139 (1) of the Act (II) the assessee company has opted for taxation under Section 115 BAA 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 31.01.2024 or 3 months from the end of the month in which the circular is issued, whichever is later
Before us, the Counsel for the assessee submitted that the assessee company has fulfilled all the aforesaid conditions, which is evident from the facts available on record. Firstly, the Counsel for the assessee submitted that the assessee company had filed return of income for the relevant assessment year before the due date specified under Section 139 (1) of the Act. The Counsel for the assessee furnished e-filing acknowledgement before us and submitted that as per the same, the date of filing of income tax return is 30.12.2021 and the return of income has been e-verified on 21.01.2022. Therefore, in both the cases the income tax return has been filed within the time allowed by Section 139 (1) of the Act. Accordingly, the first condition as mentioned in aforesaid Circular has been satisfied. Secondly, the Counsel for the assessee submitted that the second condition prescribed by the aforesaid Circular No. 19/2023 i.e. the assessee company has opted for taxation under Sunpack Barrier Films Pvt. Ltd. vs. DCIT Asst.Year –2021-22 - 5– Section 115 BAA of the Act in item (e) of “filing status” in “Part-A-Gen” of the form of return of income ITR-6 has also been satisfied by the assessee company in the instant facts. The Counsel for the assessee produced before us the scanned copy of the intimation issued by CPC dated 28.12.2022, in which it has been specifically mentioned that the assessee has opted for being taxed under the provisions of Section 115 BAA of the Act. Finally, the Counsel for the assessee submitted that the assessee has also satisfied the third condition as specified in the aforesaid Circular No. 19/2023 viz. Form No. 10-IC is filed electronically on or before 31.01.2024 or 3 months from the end of the month in which the Circular is issued, whichever is later. The Counsel for the assessee submitted that in the instant case, Form No. 10-IC has been filed on 07.11.2023. Therefore, clearly Form No. 10-IC has been filed before 31.01.2024. Further, the Circular referred above has been issued on 23.10.2023 and a period of 3 months expired on 22.01.2024. Therefore, looking at both the timelines, Form No. 10-IC has been filed by the assessee company within the stipulated timelines is granted by the Circular No. 19/2023 dated 23.10.2023. Accordingly, the Counsel for the assessee submitted that the assessee company has fulfilled /satisfied all the conditions as stipulated in the aforesaid Circular No. 19/2023 dated 23.10.2023 and the assessee company has duly filed Form No. 10-IC within the stipulated timelines as stipulated in the aforesaid circular. Accordingly, looking into the instant facts, which have been placed on record, the assessee company is eligible for claim of concessional rate of taxation under Section 115 BAA of the Act.
In response, Ld. DR placed reliance on the observations made by Ld. CIT(Appeals) in the appellate order.
We have heard the rival contentions and perused the material on record.
Sunpack Barrier Films Pvt. Ltd. vs. DCIT Asst.Year –2021-22 - 6–
On going to the facts of the instant case, and the conditions as stipulated in Circular No. 19/2023 dated 23.10.2023, we are of the considered view that the assessee has fulfilled all the conditions as mentioned in the aforesaid Circular and the assessee has also filed Form No. 10-IC within the stipulated timelines as specified in the aforesaid Circular, and accordingly is eligible for claim of being taxed under Section 115 BAA of the Act. For the sake of completeness, it would be useful to reproduce the circular, on which reliance has been placed by the assessee, for ready reference:
CIRCULAR NO. 19/2023 [F. NO. 173/32/2022-ITA-I] “ SECTION 119, READ WITH SECTION 115BAA OF THE INCOME-TAX ACT, 1961 AND RULE 21AE OF THE INCOME-TAX RULES, 1962 – CENTRAL BOARD OF DIRECT TAXES – INSTURCTIONS TO SUBORDINATE AUTHORITIES – CONDONATION OF DELAY IN FILING FORM NO. 10-IC FOR ASSESSMENT YEAR 2022-22 CIRCULAR NO. 19/2023 [ F.NO. 173/32/2022-ITA-I], DATED 23-10-2023 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.Y. 2021-22 within the due date or extended due date, as the case may be. It has been requested that the delay in filing of Form No. 10-IC for A.Y. 2021-22 may be condoned.
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 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: 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; 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 31.01.2024 or 3 months from the end of the month in which this Circular is issued, whichever is later.
Sunpack Barrier Films Pvt. Ltd. vs. DCIT Asst.Year –2021-22 - 7–
The assessee Pvt. Ltd. company has fulfilled all the conditions mentioned in such circular as under which makes it eligible for condoning the delay in filing of Form No.10- IC.”
Accordingly, looking into the instant facts, the appeal of the assessee is allowed.
In the result, the appeal of the assessee is allowed. This Order pronounced in Open Court on 24/04/2024