TaxTMI 
TaxTMI 
TaxTMI 
2025 (7) TMI 515
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....ld. CPC, Bangalore, without appreciating that the appellant had duly complied with the conditions prescribed under the said section and exercised option in the year of commencement of actual manufacturing activity as per provisions of sub-section (2) read with sub-section (7) of sec.115BAB of the Act. 3. The impugned order is bad in law and on facts. 4. The appellant reserves the right to add, alter, omit all or any of the grounds of appeal with the permission of the Hon'ble appellate authority." 2. The relevant facts in this case are that the assessee filed its return of income declaring total income at Rs. 1,98,50,380/- on 12.11.2024 u/s. 139(1) of the Income Tax Act, 1961 (for short 'the Act') opting to avail lower tax rate u/s. 115BAB of the Act. The due date for filing of ITR for year under consideration was on or before 31.10.2024 and extended due date by 15.11.2024. This ITR was processed u/s. 143(1) of the Act by the CPC (AO) on 04.02.2025 applying tax @ 30% i.e. Rs. 59,55,114/- on total income instead of tax calculated by the assessee @ 15% on the total income. The assessee has reported in the ITR that it has opted taxation under the provision of section 115BAB of....
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....ng such income: Provided further that the income-tax payable in respect of the income of the person deemed so under second proviso to subsection (6) shall be computed at the rate of thirty per cent: Provided also that the income-tax payable in respect of income being short term capital gains derived from transfer of a capital asset on which no depreciation is allowable under the Act shall be computed at the rate of twenty-two per cent: Provided also that where the person fails to satisfy the conditions contained in sub-section (2) in any previous year, the option shall become invalid in respect of the assessment year relevant to that previous year and subsequent assessment years and other provisions of the Act shall apply to the person as if the option had not been exercised for the assessment year relevant to that previous year and subsequent assessment years. (2) For the purposes of sub-section (1), the following conditions shall apply, namely:- (a) the company has been set-up and registered on or after the 1st day of October, 2019, and has commenced manufacturing or production of an article or thing on or before the 31st day of March, 5112024] and,- (i) the business ....
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....re or production of any article or thing referred to in clause (b) shall not include business of,- (i) development of computer software in any form or in any media; (ii) mining; (iii) conversion of marble blocks or similar items into slabs; (iv) bottling of gas into cylinder; (v) printing of books or production of cinematograph film; or (vi) any other business as may be notified by the Central Government in this behalf; and (c) the total income of the company has been computed,- (i) without any deduction under the provisions of section 10AA or clause (iia) of sub-section (1) of section 32 or section 32AD or section 33AB or section 33ABA or sub-clause (ii) or sub-clause (iia) or sub-clause (iii) of sub-section (1) or sub-section (2AA) or sub-section (2AB) of section 35 or section 35AD o section 35CCC or section 35CCD or under any provisions of Chapter VI-, other than the provisions of section 80JJAA or section 80M; (ii) without set-off of any loss or allowance for unabsorbed depreciation deemed so under section 72A where such loss or depreciation is attributable to any of the deductions referred to in sub-clause (i). Explanation.-For the removal of doubts, it is ....
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.... be deemed to be the income of the person. (7) Nothing contained in this section shall apply unless the option is exercised by the person in the prescribed manner on or before the due date specified under subsection (1) of section 139 for furnishing the first of the returns of income for any previous year relevant to the assessment year commencing on or after 1st day of April, 2020 and such option once exercised shall apply to subsequent assessment years: Provided that once the option has been exercised for any previous year, it cannot be subsequently withdrawn for the same or any other previous year. Explanation.-For the purposes of section 115BAA and this section, the expression "unabsorbed depreciation" shall have the meaning assigned to it in clause (b) of sub-section (7) of section 72A." That keeping in view the mandate of the provision of the Act, the CPC/AO had rightly disallowed the concessional tax rate u/s. 115BAB of the Act which was upheld by the Ld. CIT(Appeals)/NFAC. 5. We are of the considered view as per mandate of the provision particularly clause (7) which reads as follows: "(7) Nothing contained in this section shall apply unless the option is exercised....