2024 (6) TMI 538

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....ng total income of Rs. 10,15,26,720/-. The said return of income was processed u/s 143(1) of the Act, wherein the income returned was accepted u/s 143(1) of the Act. However, the CPC rejected the claim of option exercised by the assessee u/s.115BAA of the Act which resulted into tax being charged on the income at normal rate i.e.30% instead of at the rate of 22% as per provisions of section 115BAA of the Act as both the return and the Form 10-IC were filed belated. 3. Aggrieved by the intimation under section 143(1) of the Act, the assessee filed an appeal before Ld. CIT(A). Before Ld.CIT(A), the assessee submitted that the filing of form is mandatory but directory in nature. The assessee also submitted that the delay in filing Form 10-IC should be condoned in accordance with the provisions of section 119(2)(b) of the Act. Ld. CIT(A), however, dismissed the appeal stating that the beneficial provisions should be "strictly" and "literally" complied with and, therefore, a strict interpretation should be adopted. While doing so, he relied on the judgement of Hon'ble Apex court in the case of Principal Commissioner of Income Tax-III, Bangalore and another Vs. M/s.Wipro Limited (Judgme....

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..... c. Considering the genuine hardship to the domestic companies in exercising the option u/s 115AA, the CBDT, in exercise of powers conferred u/s 119(2)(b) of the Act had issued circulars extending the due date for filing such forms for earlier assessment years. d. The non-filing of Form 10IC within the stipulated time is a procedural matter, and the substantive right of the assessee to avail the lower tax rate should not be denied on such technical grounds. While stating so he placed reliance on following judicial pronouncements: i. Anjana Foundation Vadodara Vs CPC Bangalore (ITA No.695/Ahd/2023 dated 7.2.2024) which deals with filing of form No. 10B. ii. Ms. Brinda Rama Krishna Vs. Income Tax Officer, Ward 5(3)(1), Bangalore (ITA. No. 454/Bang/2021 dated 17-11-2021) which deals with filing of form No.67 iii. Niteshkumar J. Shah Vs DCIT, Circle-2(1)(1), Ahmedabad (ITA No. 430/Ahd/2022 dated 12-7-2023) which deals with filing of form No.10CCB. 5. On the other hand, the Ld.DR relied on the order of Ld.CIT(A). 6. We have considered the rival submissions and perused the material available on record. Section 115BBA of the Act was introduced for the purpose of granting bene....

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....ITR 1. The assessee furnished the original return taking the benefit of section 10B and did not carry forward the loss. Thereafter, a revised return was filed foregoing the claim of deduction u/s 10B. The AO rejected the withdrawal of exemption under section 10B by holding that assessee did not furnish the necessary declaration in writing before due date of filing return of income, which was an essential requirement for not claiming the benefit of section 10B. The Hon`ble High Court decided the issue in favour of the assessee by holding that the requirement of filing the declaration was mandatory but filing it along with the return of income u/s 139(1) was a directory requirement. The matter was brought by the Revenue before the Hon`ble Supreme Court. The assessee, inter alia, relied on the judgment of the Apex Court in G.M. Knitting Industries (P.) Ltd. (supra). Their Lordships held that the requirement of filing the report in support of deduction u/s 10B was not a directory but a mandatory requirement. It further held that both the conditions of - filing the declaration and filing it before the time limit u/s 139(1) -were mandatory and had to be cumulatively satisfied. Rejecting ....

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....ould, in turn, avail the benefit of carry forward losses in the revised return of income). (ii) Secondly, the Hon`ble Supreme Court in the case of Wipro Limited held that section 10B of the Act is an "exemption provision" and hence, assessee claiming such exemption has to be "strictly" comply with the exemption provisions. However, notably, the Hon`ble Supreme Court in the case of CIT v. Yokogawa India Ltd 391 ITR 274 (Supreme Court), held that section 10A of the Act is a "deduction provision" and not an "exemption provision". Therefore, apparently there seems to be a difference of opinion to whether section 10A/B provisions qualify as "Exemption" or Deduction" provisions. Therefore, since it is well-settled principle of law that deduction provisions, which have been introduced in the Statute to provide incentive to the assessee, should be construed "liberally", in our considered view, once it is not disputed that the instant set of facts, the assessee claimed the benefit of provisions under section 10AA in the return of income (which in our view is a mandatory/directory requirement), the benefit of section 10AA cannot be denied only on the ground that the assessee could not file....