Condonation of delay in Form 10-IC filing allowed where statutory benefit was not contingent on timely return filing.

Bombay HC held that a short, bona fide delay in filing Form 10-IC could be condoned under Section 119(2)(b) where Section 115BAA(5) did not treat timely filing of the return as a condition precedent for the tax benefit. The Court found that Circular No. 06/2022 could not override the statutory scheme and that the delay was explained by COVID-19 disruption, staff termination in the finance function, and genuine hardship. As this was the first year of compliance, a liberal approach was warranted. The rejection of condonation was set aside and the assessee was granted the benefit under Section 115BAA.

---

---

Issues: Whether the rejection of the application for condonation of delay in filing Form 10-IC under Section 119(2)(b) of the Income-tax Act, 1961, for Assessment Year 2020-21 was justified.

Analysis: The delay was only 23 days. The conditions in Circular No. 06/2022 requiring the return to have been filed within the due date under Section 139(1) of the Income-tax Act, 1961, could not override the statutory scheme of Section 115BAA(5) of the Income-tax Act, 1961, which did not make timely filing of the return a condition precedent for the benefit. The delay was explained by the COVID-19 situation and employee termination in the Finance and Accounts Department, and the surrounding circumstances showed bona fide hardship. The fact that Assessment Year 2020-21 was the first year for filing Form 10-IC also warranted a liberal approach in genuine cases.

Conclusion: The rejection was unsustainable and the delay was liable to be condoned.

Final Conclusion: The impugned order was set aside and the petitioner was granted the benefit of condonation, with consequential modification of the assessment to apply Section 115BAA of the Income-tax Act, 1961.

Ratio Decidendi: A short, bona fide delay in filing Form 10-IC may be condoned under Section 119(2)(b) of the Income-tax Act, 1961, where the statutory provision does not make timely filing of the return a condition precedent and the facts disclose genuine hardship, especially in the first year of compliance.

---