Condonation of delay in Form 10-IC filing may protect Section 115BAA concessional tax benefit where lapse was bona fide.

Delay in filing Form 10-IC under Section 119(2)(b) may be condoned where the assessee had exercised the option for concessional taxation in the return, paid tax at the concessional rate, and the omission was a bona fide, inadvertent lapse in the first year of operation. The Telangana HC noted that CBDT circulars addressing hardship in filing Form 10-IC reflected a liberal approach for cases where the return was filed on time, the Section 115BAA option was disclosed in the return, and genuine hardship was shown. On that basis, a rigid refusal to condone delay was inconsistent with the beneficial object of the provision, and the procedural omission should not by itself deny the Section 115BAA benefit.

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Issues: Whether the petitioner was entitled to condonation of delay in filing Form 10-IC under Section 119(2)(b) of the Income-tax Act, 1961, and consequent benefit of concessional taxation under Section 115BAA of the Income-tax Act, 1961 despite non-filing of the prescribed form within time.

Analysis: The petitioner had declared the option for concessional taxation in the return of income, paid tax at the concessional rate, and the omission to file Form 10-IC arose from a bona fide and inadvertent lapse during the first year of the provision's operation. The Court also noted the CBDT circulars issued to address hardship in filing Form 10-IC for the relevant assessment years, which reflected a liberal approach where the return had been filed in time, the option under Section 115BAA had been exercised in the return, and genuine hardship was shown. In this backdrop, the rejection of condonation on a rigid view of the requirement was held to be inconsistent with the beneficial object of the provision and the hardship-based standard under Section 119(2)(b).

Conclusion: Delay in filing Form 10-IC ought to have been condoned and the petitioner could not be denied the benefit under Section 115BAA solely for that procedural omission.

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