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of <h1>Delay in filing Form No.10-IC for claiming s.115BAA tax benefit condoned u/s 119(2)(b); refusal set aside</h1> Whether delay in filing Form No.10-IC precludes claim under s.115BAA - Held that s.119(2)(b) empowers CBDT (and delegated authority) to condone delayed ... Denial of benefit of Section 115BAA - Rejection of Petitioners application for condonation of delay in filing Form No. 10-IC on the sole ground that the Petitioner has not filed the form electronically and that the Petitioner had not made out a case of genuine hardship - HELD THAT:- Section 119(2)(b) clearly empowers the CBDT (and the 1st Respondent by virtue of Circular No. 17 of 2024 dated 18th November 2024) to condone the delay in filing Form No. 10-IC. We are fortified in our view by the decision of V M Procon Pvt. Ltd [2024 (9) TMI 216 - GUJARAT HIGH COURT] and in the case of Axe BPO Services (P.) Ltd. [2024 (11) TMI 1434 - MADRAS HIGH COURT] Petitioner has been subjected to genuine hardship by virtue of the fact that an amount has been levied / demanded from it when on application of the provisions of Section 115BAA of the Act, no tax would be payable by it. Admittedly, Assessment Year 2020-2021 was the first year where filing of Form No. 10-IC was required in order to avail of the beneficial treatment under Section 115BAA of the I.T. Act [by the amendment made by the Taxation Laws (Amendment) Act, 2019]. Hence, the possibility of the Petitioner having inadvertently and / or for the various reasons aforementioned, failed to file the same within time cannot be ruled out and the Assessee ought not to be denied the benefit of the provisions for such inadvertent delay. Precisely for this reason, the Board had issued various Circulars empowering Respondent No.1 to condone the delay in filing of Form 10-IC in genuine cases. We are unable to accept the submissions of the learned counsel for the Respondents and are of the opinion that the impugned order cannot be sustained. We quash and set aside the impugned order passed by Respondent No. 1 under Section 119(2)(b) of the I.T. Act and condone the delay in filing Form No. 10-IC by the Petitioner. Issues: (i) Whether the authority under Section 119(2)(b) of the Income-tax Act, 1961 could condone an 11-day delay in filing Form No. 10-IC for Assessment Year 2020-21; (ii) Whether the impugned order rejecting the condonation application ought to be quashed and the delay condoned, thereby permitting assessment under Section 115BAA.Issue (i): Whether the authority under Section 119(2)(b) of the Income-tax Act, 1961 could condone an 11-day delay in filing Form No. 10-IC for Assessment Year 2020-21.Analysis: Section 119(2)(b) empowers the Board to authorise an income-tax authority to admit applications or claims after the expiry of the statutory period to avoid genuine hardship. The CBDT issued Circulars delegating and permitting condonation for filing Form No.10-IC and extended a window to 30th June 2022; subsequently power to condone was delegated to the authority. The factual matrix shows a first-time filing requirement, technical difficulties on the portal with a saved draft, reliance on the CBDT circular reliefs, and an 11-day physical filing after the extended window. The financial consequence (levy of tax and interest) constituted genuine hardship and the circumstances indicated inadvertent/technical failure rather than deliberate default.Conclusion: The authority under Section 119(2)(b) had the power to condone the 11-day delay and such power was properly available to be exercised in the petitioner’s case.Issue (ii): Whether the impugned order rejecting the condonation application ought to be quashed and the delay condoned, thereby permitting assessment under Section 115BAA.Analysis: The impugned order refused condonation solely on the ground that the form had not been filed electronically and found no genuine hardship. The record did not controvert the petitioner’s factual explanation of technical difficulties, the saved draft on the portal, or the absence of intentional default or revenue loss due to delay. Precedents and the CBDT Circulars supported a pragmatic, justice-oriented approach for first-time filing and technical failures. Given the substantial tax demand that would be avoided if the option under Section 115BAA is treated as valid, denying relief on a hyper-technical basis amounted to denying genuine hardship relief contemplated by Section 119(2)(b).Conclusion: The impugned order is quashed and set aside; the delay in filing Form No. 10-IC is condoned and the petitioner’s claim to be assessed under Section 115BAA is accepted in consequence.Final Conclusion: The administrative refusal to condone a short, inadvertent delay caused by technical difficulties in a first-time compliance requirement, where substantial hardship would result, should be set aside and the discretion under Section 119(2)(b) exercised to avoid genuine hardship.Ratio Decidendi: Section 119(2)(b) of the Income-tax Act, 1961 authorises condonation of statutory filing delays to avoid genuine hardship, and where a short, inadvertent delay due to technical failure in a first-time filing results in substantial prejudice, the authority must exercise its discretion to condone the delay and allow the statutory option under Section 115BAA.
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