TaxTMI 
TaxTMI 
TaxTMI 
2025 (8) TMI 41
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....ng for the concessional tax regime under section 115BAA of the Act. The assessee exercised such option by selecting the appropriate field in Part A-GEN of ITR-6, and the computation was made accordingly. The said return was processed by the Centralized Processing Centre (CPC), Bengaluru, under section 143(1) of the Act vide intimation dated 18.12.2021, wherein the CPC computed tax at the normal corporate tax rate of 30% plus cess, instead of 22% under section 115BAA, thereby raising a demand of Rs. 4,01,560/-. The reason for such demand was the non-filing of Form No. 10-IC electronically within the time prescribed under Rule 21AE r.w.s. 115BAA(5). 2.2 Aggrieved by the said intimation, the assessee filed an appeal before the CIT(A), contending that the benefit under section 115BAA could not be denied solely for not filing Form 10-IC, particularly when the intention to opt for the concessional regime was declared in the ITR itself and the return was filed within the extended due date under section 139(1). It was also contended that the assessee had filed Form 10-IC for A.Y. 2021-22 and that the default was inadvertent and procedural in nature. The CIT(A), however, dismissed the appe....
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....hich was filed on 04.11.2020 within the time prescribed under section 139(1) of the Act. The AR submitted that although Form No. 10-IC was not filed electronically for A.Y. 2020-21, the intention to opt for section 115BAA was unambiguously recorded in the return, and the computation of income was made accordingly at the concessional rate. He submitted that the omission to file Form 10-IC was inadvertent and procedural in nature, and did not reflect any contrary intention or default on the part of the assessee. The AR further placed reliance on the Form No. 3CD tax audit report filed along with the return of income, wherein in Clause 8(a), the assessee had clearly stated its election to be governed by section 115BAA. This declaration, being part of the statutory tax audit report under section 44AB, was submitted to demonstrate the bona fide intention and affirmative act of the assessee in opting for the concessional tax regime. 4.1 The AR further invited attention to CBDT Circular No. 6/2022 dated 17.03.2022, which clarified that certain e-forms, including Form 10-IC, which could not be filed within the prescribed time due to technical difficulties on the portal, could be filed on ....
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.... at the rate of 25% under the first proviso to section 115BA, the DR did not raise any serious objection if the matter was restored for limited verification on that ground. 6. We have carefully considered the rival submissions, perused the record, examined the intimation issued under section 143(1) of the Incometax Act, 1961 ("the Act"), the appellate order passed by the CIT(A), and the judicial authorities cited before us. The sole issue in dispute is whether the assessee is entitled to be taxed at the concessional rate of 22% under section 115BAA for A.Y. 2020-21, despite not having electronically filed Form No. 10-IC within the original due date prescribed under Rule 21AE(2) of the Income-tax Rules, 1962. 6.1 It is not in dispute that the assessee filed its return of income for A.Y. 2020-21 within the due date prescribed under section 139(1) of the Act. In Part A-GEN of ITR-6, under item (e) of Filing Status, the assessee clearly selected the option for taxation under section 115BAA. The return was accordingly prepared, disallowing all specified deductions and exemptions under sub-section (2) of section 115BAA, and computing tax at the rate of 22% plus applicable surcharge and....
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....; e. Declaration that the company has exercised the option under section 115BAA for the relevant assessment year; f. Verification and signature by authorised signatory. 6.5 In the present case, although the assessee did not file Form No. 10- IC electronically within the due date (or extended date prescribed in CBDT Circular No. 6/2022), the substance of all the above declarations was already made by the assessee through contemporaneous filings, as detailed below: * In Part A-GEN of the ITR-6, under item (e) "Filing Status", the assessee selected "Yes" to the query: "Whether the company has opted for taxation under section 115BAA?". This is the primary declaration that Form 10-IC is intended to record. * The computation of total income filed along with the return excluded all disallowable deductions, including additional depreciation under section 32(1)(iia), deductions under sections 10AA, 35(1)(ii), etc., thereby complying with the conditions of sub-section (2) of section 115BAA. * In the tax audit report (Form No. 3CD), specifically under Clause 8(a), the auditor disclosed that the assessee has opted to be taxed under section 115BAA. This amounts to third-party statuto....
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....d supporting documents, as recognised in the decisions discussed in subsequent paragraphs. A. The CBDT, vide Circular No. 6/2022 dated 17.03.2022, acknowledged the hardship caused to domestic companies due to procedural lapses in filing Form 10-IC for A.Y. 2020-21. In exercise of its powers under section 119(2)(b), the Board directed that delay in filing Form 10-IC be condoned, provided three conditions are satisfied: a. The return for A.Y. 2020-21 was filed on or before the due date under section 139(1), b. The assessee opted for section 115BAA in "Filing Status" of ITR-6, c. The form was subsequently filed electronically by 30.06.2022. Crucially, the Circular does not expressly state whether these conditions are to be read cumulatively or if partial compliance with substantial intent can suffice. In this regard, the Hon'ble Calcutta High Court in PCIT v. Fastner Commodeal Pvt. Ltd. [ITAT/267/2024, dated 10.01.2025],[TS-5010-HC- 2025(Calcutta)-O] observed that - "The Circular does not specifically state as to whether all three conditions have to be cumulatively complied with or the condition of the assessee can be condoned with regard to partial compliance or part compli....
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....ause the assessee was never put to notice of the adverse adjustment and hence had no opportunity to rectify the omission within the prescribed time. - In Traxit Engineers Pvt. Ltd. v. CPC [ITA No. 2793/Mum/2023], the ITAT Mumbai Bench accepted the assessee's claim under section 115BAA despite belated filing of Form 10-IC, holding that declaration in ITR and Form 3CD constituted valid compliance. - Similar relief was also granted by ITAT in Neptunes Power Plant Services Pvt. Ltd. v. CPC [ITA No. 2796/Mum/2023], noting that procedural non-compliance must not override genuine substantive compliance. These decisions collectively uphold a liberal interpretation of procedural requirements, especially in the context of optional tax regimes like section 115BAA, where the claim is not in the nature of exemption or deduction, but only a rate-based option. While in the cases of the decisions of Co0ordinate Bench as cited above, the Form No. 10-IC was admittedly filed belatedly, the respective Benches granted relief on the strength of substantive compliance discernible from the contemporaneous records. In the present case as well, the assessee has demonstrably complied with all substanti....