2022 (3) TMI 531 - HC - Income Tax

Court orders rectification for failure to file Form 10-IC under Section 115BAA, stresses statutory compliance .

Rajkamal Healds and Reeds Pvt. Ltd. Versus Assistant Director of Income Tax

The court directed the applicant, who failed to file Form 10-IC electronically under Section 115BAA, to rectify the omission by applying to the tax ... Entitlement to benefits u/s 115BAA - Tax on income of certain domestic companies - absence of the Form 10-IC, the return was assessed in a regular form and a intimation u/s 143(1) of the Act came to be served upon the writ applicant raising a demand - HELD THAT:- We are of the view that the writ-applicants should at the earliest file an appropriate application in writing addressed to the Principal Chief Commissioner/Chief Commissioner making a request to permit him to file the Form 10 IC electronically after condoning the delay in that regard so that the return of the writ-applicant can be re-processed or regular assessment can also be framed accordingly and the liability can be determined. We dispose of this writ application reserving the liberty for the writ applicant to file an appropriate application addressed to the Chief Commissioner Income Tax under Section 119(2) (b) of the Act referred to above with a request to permit him to file the Form 10 IC electronically. If any such application is filed then the Chief Commissioner shall look into it expeditiously and may exercise his discretion in accordance with law more particularly keeping in mind the object behind Section 119(2)(b) of the Act. The Chief Commissioner/Commissioner shall also consider the hardships that the writ-applicant may have to face in the event if he is not permitted to file the Form 10 IC electronically. Issues:1. Failure to file Form 10-IC electronically under Section 115BAA of the Income Tax Act, 1961 for A.Y. 2020-21.2. Demand raised under Section 143(1) for the A.Y. 2020-21.3. Legal remedy available to the assessee under Section 119(2)(b) of the Act.Issue 1: Failure to file Form 10-IC electronically under Section 115BAA:The writ-applicant, an assessee, filed the return of income for A.Y. 2020-2021 under Section 115BAA but failed to submit Form 10-IC electronically, resulting in a regular assessment and a demand of Rs. 1,05,18,030 under Section 143(1) of the Act. The applicant contended that being a domestic company falling under Section 115BAA, the benefits should apply. The counsel argued that the omission to file Form 10-IC electronically was inadvertent and not deliberate, leading to the high tax liability.Issue 2: Demand raised under Section 143(1) for A.Y. 2020-21:The Senior Counsel opposed the writ-application, highlighting the statutory remedy available to the applicant under Section 119(2)(b) of the Act. It was emphasized that to avail benefits under Section 115BAA, the option must be exercised by filing Form 10-IC electronically. The Court directed the applicant to apply to the Principal Chief Commissioner/Chief Commissioner to file Form 10-IC electronically, condoning the delay, for reprocessing the return or framing a regular assessment to determine the liability.Issue 3: Legal remedy available to the assessee under Section 119(2)(b) of the Act:Section 119 empowers the Board to issue orders for proper administration of the Act. Subsection (2)(b) authorizes income-tax authorities to admit applications for relief after the specified period for genuine hardship. The Court disposed of the writ-application, allowing the applicant to address the Chief Commissioner under Section 119(2)(b) to file Form 10-IC electronically. The Chief Commissioner was instructed to consider the request expeditiously, taking into account the applicant's hardships.In conclusion, the judgment addressed the failure to file Form 10-IC electronically under Section 115BAA, the demand raised under Section 143(1), and the legal remedy available to the assessee under Section 119(2)(b) of the Act, providing detailed analysis and directions for the applicant to rectify the non-compliance and seek relief through the prescribed legal channels.