2022 (11) TMI 1202 - AT - Income Tax

Assessee's Tax Appeal: Rates Dispute Remanded for Verification

The appeal by the assessee was partly allowed for statistical purposes. The challenge to the computation of tax liability at 30% instead of the ... Levy of income tax - Applying the concessional rate of tax @ 22% u/s 115BAA - assessee did not file Form 10–IC before the due date of filing the return of income, i.e. 15/02/2021, in the present case, which is mandatory condition for claiming the option available under section 115BAA - HELD THAT:- The coordinate bench of the Tribunal in Suminter India Organics Private Ltd [2022 (7) TMI 1219 - ITAT MUMBAI] held that the time permitted for filing Form 10-IC by virtue of section 3(1)(b) of Taxation and Other Laws (Relaxations and Amendment of Certain Provisions) Act, 2020, must be treated as 31/03/2021, even as the time permitted for filing the income tax return under aforesaid section, in light of the 3rd proviso to section 3(1) of said Act and read with subsequent notification, was only up to 15/02/2021. AR, during the hearing, fairly submitted that in the present case Form 10-IC has not been filed by the assessee till date. Thus, in view of the above, we find no infirmity in the impugned order passed by the learned CIT(A) on this issue. We may, however, clarify that our findings on this issue shall not affect any other alternative remedy available/pursued by the assessee. Accordingly, ground No.1 raised in the assessee’s appeal is dismissed. Applying the rate of tax @25% since the total turnover of the company in financial year 2018–19 is less than Rs. 400 crore - AR by referring to the profit and loss account for the year ending 31/03/2017 submitted that the gross revenue from operations of the assessee was Rs. 10.82 crore and thus in view of the aforesaid provision the rate of tax applicable in case of assessee should be 25% - HELD THAT:- We deem it appropriate to remand this issue to the file of AO for necessary verification. We further direct that the tax liability of the assessee be computed by applying the rate of tax as per the applicable provisions of law. Needless to mention that no order shall be passed without affording reasonable opportunity of being heard to the assessee. Accordingly, ground No. 2 raised in the assessee’s appeal is allowed for statistical purposes. Issues:1. Challenge to the computation of tax liability at 30% instead of 22% under section 115BAA of the Income Tax Act.2. Request to apply the tax rate of 25% instead of 30% due to turnover being less than Rs. 400 crore.Issue 1: Challenge to Tax Liability Computation at 30% instead of 22% under Section 115BAA:The appeal filed by the assessee contested the computation of tax liability at 30% instead of the concessional rate of 22% available under section 115BAA of the Income Tax Act. The Assessing Officer determined the total income and tax liability, which the assessee disputed before the Commissioner of Income Tax (Appeals). However, the appeal was dismissed as the mandatory requirement of filing Form 10-IC before the due date was not fulfilled by the assessee. The Tribunal noted that the due date for filing the return of income was extended to 15/02/2021, but the Form 10-IC was not submitted by the assessee, rendering them ineligible for the reduced tax rate. The Tribunal referred to a previous decision where it was clarified that the time for filing Form 10-IC was not extended beyond a certain date. Consequently, the Tribunal upheld the decision of the Commissioner of Income Tax (Appeals) on this issue, dismissing the appeal.Issue 2: Request to Apply Tax Rate of 25% Due to Turnover Criteria:The second issue raised by the assessee was regarding the application of the tax rate at 25% instead of 30% based on the turnover criteria. The assessee argued that the turnover in the financial year 2018-19 was less than Rs. 400 crore, making them eligible for the lower tax rate. The Tribunal, after considering the submissions from both sides, decided to remand this issue back to the Assessing Officer for factual verification. The Tribunal directed the AO to compute the tax liability applying the appropriate tax rate as per the provisions of the law and ensuring a fair opportunity for the assessee to present their case. Consequently, the second ground raised by the assessee was allowed for statistical purposes.In conclusion, the appeal by the assessee was partly allowed for statistical purposes, with the first issue regarding the reduced tax rate under section 115BAA being dismissed, and the second issue related to the turnover criteria for tax rate application being remanded to the Assessing Officer for further verification.