Concessional tax regime under section 115BAB upheld where earlier exercise of option continued into subsequent year.

Section 115BAB requires the option for the concessional tax regime to be exercised in the prescribed manner by the due date for the first return, and once validly exercised it applies to subsequent assessment years without withdrawal. Here, the assessee had already exercised the option in the earlier year by filing Form 10-ID, so the present year was only a subsequent year of claim. The later treatment of the return as belated or invalid could not defeat the earlier exercise of option on a technical ground. The concessional tax rate under section 115BAB was therefore available, and the denial was unsustainable.

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Issues: Whether the assessee was entitled to the concessional tax regime under section 115BAB despite the return being treated as invalid and a revised return being filed after the due date, when the option had already been exercised in the preceding assessment year.

Analysis: The governing provision required the option under section 115BAB to be exercised in the prescribed manner by the due date for the first return and provided that once exercised it would apply to subsequent assessment years and could not be withdrawn. The record showed that the assessee had already exercised the option in the earlier assessment year by filing Form 10-ID, and the present year was a subsequent year of claim. The denial made by treating the later return as belated did not address the statutory effect of the earlier exercise of option, and the assessee's entitlement could not be defeated on that technical basis.

Conclusion: The assessee was entitled to the benefit of section 115BAB, and the denial of the concessional tax rate was unsustainable.

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