Condonation of delay in Form 10-IC filing under the concessional tax regime was held unsustainable where merits were not examined.

Delay in filing Form No. 10-IC for the concessional regime under Section 115BAA was treated as a procedural lapse, not a substantive bar, because the return was filed in time and the option was exercised therein. The authority wrongly conflated the form-filing date with the condonation application and did not assess reasonable cause or genuine hardship under the applicable CBDT circular framework. The rejection of condonation was therefore unsustainable, and the matter was required to be reconsidered on merits without treating delay or limitation as a bar.

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Issues: Whether the delay in filing Form No. 10-IC for availing the concessional regime under Section 115BAA of the Income-tax Act, 1961 was liable to be condoned and the rejection order under Section 119(2)(b) was sustainable.

Analysis: The return for the relevant assessment year had been filed within the due date and the option for taxation under Section 115BAA had been exercised in the return itself. The only lapse was the later filing of Form No. 10-IC, which was treated as a procedural requirement under Rule 21AE of the Income-tax Rules. The record showed that the form had in fact been filed on 30.01.2023, within the period contemplated by the CBDT circular governing condonation, and the competent authority had conflated the date of filing of the form with the date of the formal condonation application. The authority also failed to examine the matter on the merits of reasonable cause and genuine hardship in the manner required by the circular framework.

Conclusion: The rejection of condonation was unsustainable and the delay in filing Form No. 10-IC was liable to be condoned. The petitioner was entitled to have the matter reconsidered on merits without treating delay or limitation as a bar.

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