Concessional tax option: substantive exercise in return permits concessional rate despite late filing of prescribed form, subject to recomputation.

Where an assessee unequivocally exercised the option for a concessional tax regime in the return with a matching computation and no inconsistent deductions or shown prejudice to the revenue, the prescribed electronic intimation form is procedural and belated filing does not defeat the option; the assessing officer is directed to recompute tax at the concessional rate. A contested addition requires factual verification of ledgers and evidence and is remitted to the assessing officer for fresh consideration. A claim for additional tax deducted at source requires verification of tax credit records and is allowed for statistical purposes pending that verification.

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Issues: (i) Whether the assessee is entitled to taxation at the concessional rate under section 115BAA of the Income-tax Act, 1961 despite delay in filing Form 10-IC; (ii) Whether the addition of Rs. 6,10,030 under section 41 of the Income-tax Act, 1961 should be sustained; (iii) Whether the short grant of TDS claimed by the assessee requires verification and relief.

Issue (i): Whether the assessee is entitled to concessional tax rate under section 115BAA notwithstanding belated filing of Form 10-IC.

Analysis: Sub-section (5) of section 115BAA prescribes exercise of the option in the prescribed manner on or before the due date under section 139(1), and Form 10-IC is the prescribed mode of intimation. The Tribunal examined whether the substantive exercise of the option in the return of income, accompanied by computation of tax under section 115BAA and absence of any inconsistent deductions, fulfils the statutory requirement despite procedural delay in uploading Form 10-IC. The Tribunal considered CBDT administrative guidance including Circular No.6/2022 dated 17.03.2022 and Circular No.17/2024 dated 18.11.2024, the impact of COVID-19 related extensions, the absence of any shown prejudice to revenue, and authorities cited by the parties, and analysed the scope of section 119(2)(b) and the Tribunal's appellate jurisdiction under section 254.

Conclusion: The delay in filing Form 10-IC is procedural and directory where the option has been clearly exercised in the return, all substantive conditions of section 115BAA are satisfied, and no prejudice to the Revenue is shown. The assessee's option under section 115BAA is accepted and the assessing officer is directed to recompute tax at the concessional rate in accordance with law. (In favour of the assessee)

Issue (ii): Whether the addition of Rs. 6,10,030 under section 41 should be upheld.

Analysis: The Tribunal noted the assessee's factual contentions and evidences regarding ledgers and the basis for the claimed entries and considered that factual examination and verification are necessary to determine correctness of the addition under section 41.

Conclusion: The matter is remitted to the Assessing Officer for consideration in accordance with law after verifying the evidences filed by the assessee. (Remitted)

Issue (iii): Whether the claim of short grant of TDS requires relief.

Analysis: The Tribunal observed that the claim of additional TDS credit requires verification against records and tax credit documents available to the Assessing Officer.

Conclusion: The ground is allowed for statistical purposes and the Assessing Officer is directed to consider the claim in accordance with law. (In favour of the assessee for statistical purposes)

Final Conclusion: The appeal is partly allowed - the assessee's entitlement to tax at the concessional rate under section 115BAA is upheld and the assessing officer is directed to recompute tax accordingly; a factual addition under section 41 is remitted for verification; the TDS claim is allowed for statistical purposes.

Ratio Decidendi: Where the substantive option for a concessional tax regime under section 115BAA is unequivocally exercised in the return of income, supported by computation consistent with that regime and with no inconsistent deductions or prejudice to revenue, the prescribed filing of Form 10-IC is a procedural requirement and a belated electronic filing of Form 10-IC does not invalidate the exercised option.

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