Assessee granted section 115BAA lower tax rate despite late Form 10IC filing due to technical system glitch

ITAT Mumbai allowed the appeal where the assessee was denied lower tax rate under section 115BAA for AY 2021-22 due to non-filing of Form 10IC by the due date. The assessee had filed Form 10IC for AY 2022-23 on 22.09.2022, before CBDT's circular dated 23.10.2023 which condoned delays in filing Form 10IC. When the assessee attempted to file Form 10IC for AY 2021-22 following the circular, the system rejected it due to technical glitch as one form was already uploaded for AY 2022-23. ITAT held that the assessee deserved the benefit of lower tax rate as all conditions were satisfied and denial due to technical system issues was unjustified.

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The appeal in this case was filed by the assessee against the order of the Learned Commissioner of Income-tax (Appeals), Mumbai/National Faceless Appeal Centre, Delhi, dated 05.06.2024, for Assessment Year 2021-22. The core issues presented and considered in this case are as follows:Issues Presented and Considered:1. Whether the assessee's failure to file Form 10IC for AY 2021-22 should disqualify them from availing the lower tax rate under section 115BAA of the Income Tax Act, 1961.2. Whether the CBDT circular dated 23.10.2023, allowing condonation of delay in filing Form 10IC for AY 2021-22, should be applicable to the assessee.Issue-Wise Detailed Analysis:Issue 1: Failure to File Form 10IC for AY 2021-22- The assessee opted to pay taxes at a lower rate under section 115BAA but failed to file Form 10IC, required for opting for the simplified tax regime.- The CBDT circular dated 23.10.2023 allowed condonation of delay till 31.01.2024 for filing Form 10IC for AY 2021-22.- The Ld. CIT(A) dismissed the appeal due to the non-filing of Form 10IC for AY 2021-22.- The assessee argued that the failure to file Form 10IC was due to a technical glitch in the portal and that they had filed it for AY 2022-23 before the CBDT circular was issued.Issue 2: Applicability of CBDT Circular- The CBDT circular provided relief for late submission of Form 10IC for AY 2021-22 if certain conditions were met.- The assessee had filed Form 10IC for AY 2022-23 before the circular was issued but faced system issues when trying to file for AY 2021-22.- The Tribunal considered the genuine hardship faced by assessees during the Covid pandemic and the technical glitch in the portal that prevented the filing of Form 10IC for AY 2021-22.Significant Holdings:- The Tribunal held that the assessee should be allowed the benefit of the lower tax rate under section 115BAA for AY 2021-22 despite the technical glitch in the system.- The Form 10IC filed for AY 2022-23 was deemed to have been filed for AY 2021-22 in the peculiar circumstances of the case.- The appeal of the assessee was allowed, and the lower tax rate under section 115BAA was granted for AY 2021-22.In conclusion, the Tribunal found in favor of the assessee, considering the unique circumstances and the technical issues faced in filing Form 10IC for AY 2021-22. The CBDT circular providing relief for late submission was deemed applicable, and the assessee was granted the benefit of the lower tax rate under section 115BAA for the relevant assessment year.

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