Delay in filing Form No.10-IC for claiming s.115BAA tax benefit condoned u/s 119(2)(b); refusal set aside

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 filings; administrative Circulars and precedents (V M Procon, Axe BPO) support relief where non-filing produced genuine hardship. Reasoning: AY 2020-21 was first year requiring Form 10-IC, inadvertent omission plausible, and levy/demand caused concrete prejudice contrary to substantive entitlement under s.115BAA. Outcome: impugned refusal reversed; delay in filing Form No.10-IC condoned and related refusal set aside by the HC.

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1. ISSUES PRESENTED AND CONSIDERED

(i) Whether the competent income-tax authority, exercising delegated power under Section 119(2)(b) of the Income-tax Act, 1961, was empowered to condone delay in filing Form No. 10-IC for claiming the concessional tax regime under Section 115BAA for Assessment Year 2020-21.

(ii) Whether, on the facts found and not disputed, refusal to condone an 11-day delay solely because Form No. 10-IC was not filed electronically and on the ground of absence of "genuine hardship" was sustainable in law.

2. ISSUE-WISE DETAILED ANALYSIS

Issue (i): Power to condone delay in filing Form No. 10-IC under Section 119(2)(b)

Legal framework (as considered by the Court): The Court examined Section 119(2)(b), which enables the Board, to avoid "genuine hardship", to authorise an income-tax authority to admit an application/claim for exemption, deduction, refund, or "any other relief" after expiry of the statutory period and to deal with it on merits in accordance with law. The Court also considered that, by a circular, the Board delegated the power to condone delay in filing Form No. 10-IC to the concerned authority.

Interpretation and reasoning: The Court held that the statutory text of Section 119(2)(b) clearly covers condonation in appropriate cases and that, by virtue of the delegation, the concerned authority was competent to consider and grant condonation for delayed filing of Form No. 10-IC. The Court treated the condonation power as available to prevent hardship where relief is otherwise allowable on merits.

Conclusion: The Court conclusively decided that the authority had the legal power (by delegation under Section 119(2)(b)) to condone the delay in filing Form No. 10-IC.

Issue (ii): Sustainability of refusal to condone 11-day delay and finding on "genuine hardship"

Legal framework (as applied by the Court): The Court applied the "genuine hardship" standard embedded in Section 119(2)(b) and assessed whether the impugned refusal aligned with the purpose of that provision.

Interpretation and reasoning: The Court noted that the material facts asserted for the delay were not doubted or denied, including the brief duration of delay (11 days), the circumstances described as technical and inadvertent, and that the relevant assessment year was the first year in which filing Form No. 10-IC was required to claim the benefit under Section 115BAA. The Court found "genuine hardship" established because a substantial demand was raised due to denial of the beneficial regime, whereas on application of Section 115BAA no tax would be payable. The Court further held that denying the benefit for such inadvertent delay, particularly in the first year of the requirement and in the context of administrative mechanisms created to condone delay in genuine cases, was not justified. On this reasoning, the Court rejected the respondent's submissions and held the impugned order unsustainable.

Conclusion: The Court quashed the refusal order and itself condoned the delay in filing Form No. 10-IC, directing that the claim for assessment under Section 115BAA be allowed for the relevant year and that assessment not be made under Section 115JB for that year, in consequence of granting the Section 115BAA option.

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