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Facts
The assessee, a company, filed its return for AY 2023-24 claiming the beneficial tax rate under Section 115BAB as a manufacturer, a status previously accepted. However, the CPC, through an intimation under Section 143(1), denied this benefit, asserting the normal tax rate. The Ld.CIT(A) upheld the CPC's decision, concluding that the assessee was not a manufacturer.
Held
The Tribunal observed that for the very same assessment year (2023-24), the Department itself, in a scrutiny assessment under Section 143(3) (order dated 11.03.2025), had already accepted the assessee as a manufacturer and applied the Section 115BAB rate. Consequently, the Tribunal ruled that the CPC had no basis to deny the benefit, set aside the lower authorities' orders, and directed the AO to apply the tax rate as per Section 115BAB.
Key Issues
Whether the assessee is eligible for the beneficial tax rate under Section 115BAB as a manufacturer, particularly when the Department's own scrutiny assessment for the same year accepted this status.
Sections Cited
250, 143(1), 115BAB, 143(3)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI “G” BENCH: NEW DELHI
Before: SHRI ANUBHAV SHARMA & SHRI MANISH AGARWAL
The present appeal is filed by assessee against the order dated 22.07.2024 passed by Ld. Commissioner of Income Tax (A)/ADDL/JCIT(A)-7, Mumbai [“Ld.CIT(A)”] in Appeal No.ADDL/JCIT(A)-7, MUMBAI/10013/2022-23 u/s 250 of the Income Tax Act, 1961 [“the Act”] arising out intimation order by CPC, Bengaluru dated 10.01.2024 passed u/s 143(1) of the Act pertaining to assessment year 2023-24.
Brief facts of the case are that the assessee is a company and filed its return of income on 22.11.2023, declaring total income of INR 2,38,13,110/- and tax has been paid in terms of section 115BAB of the Act. The assessee has also filed form 10-ID in AY 2021-22 opting the provision of section 115BAB which was accepted and return was processed u/s 143(1) of the Act charging the tax @ prescribed u/s 115BAB of the Act. For the year under appeal, the CPC vide intimation order dated 10.01.2024 passed u/s 143(1) denied the benefit of section 115BAB of the Act and charge the tax @ normal rate of 30%.
Against this order, the assessee filed an appeal before Ld.CIT(A) who held that the assessee is not a manufacturer and therefore, the provision u/s 115BAB was not available to the assessee and accordingly, the appeal of the assessee was dismissed.
Before us, Ld.AR vehemently submitted that the assessee since 2020-21, is claiming consistently rate of tax u/s 115BAB of the Act and filed the necessary Audit Report within the time. It is further submitted that assessee is a manufacturer and rightly claimed the subject rate of tax. Ld.AR further submits that Ld.CIT(A) by wrongly considering the returns of the assessee, has held that assessee is not a manufacturer. In this regard, attention of the Bench is invited to the facts that the case of the assessee was selected for scrutiny and the assessment for the year under appeal was completed u/s 143(3) of the Act wherein vide order dated 11.03.2025, the assessee was held as manufacturer and tax is Page | 2 charged at the subject rate provided u/s 115BAB of the Act. Ld.AR of the assessee drew our attention to page 254 to 257 which is the computation sheet issued by the AO alongwith order passed u/s 143(3) of the Act dated 11.03.2025 wherein tax is computed as per subject rate of tax provided u/s 115BAB of the Act. He thus, submits that the order of the lower authorities be set aside on this score and assessee be allowed to pay tax in terms of the rate prescribed u/s 115BAB of the Act.
On the other hand, Ld. Sr. DR for the Revenue vehemently supported the orders of the lower authorities and submits that the assessee has failed to establish with its manufacturer and therefore, Ld.CIT(A) has rightly hold that the assessee has not satisfied with the condition of section 115BAB of the Act which order deserves to be uphold.
Heard the contentions of the both parties and perused the material available on record. At the outset, the main crux of the issue is whether the assessee is a manufacturer or not so as to claim the benefit of subject rate of tax as prescribed u/s 115BAB of the Act. From the perusal of the records, we find that the Department itself in the case of the assessment order passed u/s 143(3) for the impugned order dated 11.03.2025, has accepted that the assessee is a manufacturer and charge the tax @ subject rate of tax provided u/s 115BAB of the Act therefore, there is no occasion for the CPC to deny the benefit as claimed by the assessee u/s 115BAB of the Act for payment of tax at subject rates. Accordingly, Page | 3 we set aside the orders of both the lower authorities and direct the AO to charge the tax as per section 115BAB of the Act in the case of the assessee. Accordingly, all the grounds of appeal of the assessee related to single issue therefore, are allowed.
In the result, appeal of the assessee is allowed. Order pronounced in the open Court on 19.09.2025.