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Issues: Whether a domestic company is entitled to the concessional tax regime under Section 115BAA of the Income-tax Act, 1961 when Form 10IC was filed within the prescribed time but the return of income was filed belatedly under Section 139(4), and whether CBDT Circular F.No.173/32/2022-ITA-1 dated 18.11.2024 (condoning delay in filing Form 10IC) is applicable.
Analysis: The statutory scheme of Section 115BAA requires that the option be exercised in the prescribed manner on or before the due date specified in Section 139(1), and contemplates filing Form 10IC in the prescribed time as the manner of exercise of option. The CBDT circular dated 18.11.2024 deals with condonation of delay in filing Form 10IC/Form 10ID and makes applicability contingent on the return of income having been filed on or before the due date under Section 139(1); the circular is aimed at condoning belated filing of the form where the return itself was timely. In the present case Form 10IC was filed within the prescribed time but the return was filed belatedly under Section 139(4); therefore the circular's delay-condonation mechanism does not apply. The Tribunal examined precedent where coordinate benches held that delay in filing Form 10IC/returns is a procedural requirement and should not defeat an assessee's substantive right to the concessional regime where conditions are otherwise satisfied, and found those precedents applicable. Having accepted that Form 10IC was filed within the prescribed time and that statutory conditions for Section 115BAA were otherwise fulfilled, the Tribunal held that a belated return under Section 139(4) does not automatically disentitle the assessee from the benefit of Section 115BAA.
Conclusion: The assessee is entitled to the concessional tax regime under Section 115BAA of the Income-tax Act, 1961 despite filing the return belatedly under Section 139(4), and the CBDT circular dated 18.11.2024 is not applicable where Form 10IC was filed within the prescribed time. Appeal allowed in favour of the assessee.
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