Section 115BAA of the Income Tax Act
Income-tax Act, 2025: ss.200, 205
Section 115BAA of the Income-tax Act, 1961 corresponds to section 200 (Tax on income of certain domestic companies) and section 205 (Conditions for tax on income of certain companies and cooperative societies) of the Income-tax Act, 2025.
Read section 200 of the 2025 ActRead section 205 of the 2025 Act
Correspondence checked against the ICAI tabular mapping of the two Acts and the BharatTax.co section commentary.
The decision most relied on for Section 115BAA is CIT v. Fine Jewellery (India) Ltd. (372 ITR 303), cited in 93 of the 225 judgments on BharatTax that turn on this section.
Leading authorities on Section 115BAA
An assessment order is not erroneous and prejudicial to the revenue merely because it does not explicitly discuss an issue for which the Assessing Officer had raised queries and the assessee had provided a response. In such a scenario, the Principal Commissioner cannot invoke revisionary powers under Section 263.
Payments that are compensatory in nature, such as interest paid for the delayed payment of statutory dues like cess, are an allowable business deduction under section 37(1) of the Income-tax Act. Such payments are not considered a penalty for an infringement of law.
Interest on arrears of tax is compensatory in nature, not penal, and is therefore an allowable deduction under the Income-tax Act. This decision reversed a previous Full Bench ruling.
A revised return cannot be used to rectify a deliberate omission or wilful mistake made in the original return.
Laws providing tax concessions to encourage industrial activity are to be liberally construed. This principle is applied to ensure that the object of such beneficial provisions is achieved.
An assessee cannot suffer due to a mistake made by their auditor or counsel. The courts will condone delays or delete additions made on account of such errors if reasonable cause is shown.
No income tax addition can be made based on documents seized from a third party if there is no corroborative evidence or business connection linking the assessee to that third party.
Delay in filing Form 10-IC, which is a procedural requirement for claiming the benefit of section 115BAA, should not invalidate the assessee's substantive right to such benefit.
