2026 (2) TMI 752

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....of the case and in law, The CIT(A) failed to appreciate that the Appellant had fulfilled all requisite conditions under the law for AY 2023-24 and, therefore, ought to have been granted the option under Section 115BAA of the Act. 1.2 Whether opportunity of heard was given by CIT(A)? 1.3 On the facts and in the circumstances of the case and in law, The CIT(A) erred in law and on facts by holding that Form 10-IC was filed beyond the prescribed due date for AY 2023-24, despite the fact that it was filed on 31 October 2023, well within the prescribed due date of 31 October 2023. 2. On the facts and in the circumstances of the case and in law, the CIT(A) erred by relying on a circular issued by the Central Board of Direct Taxes ("CBDT") under Section 119(2)(b) regarding the condonation of delay in filing Form 10-IC (F. No. 173/32/2022-ITA-I) dated 18 November 2024, in the present case. 2.1 On the facts and in the circumstances of the case and in law, the CIT(A) failed to appreciate that the aforesaid circular applies only to cases involving a delay in filing Form 10-IC. 22 On the facts and in the circumstances of the case, and in law, the CIT....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....on prescribed as per the provision of Section 115BAA of the Act and further contended that the assessee has complied with all the conditions specified by the CBDT in its circular for application of the concessional rate of tax u/s. 115BAA of the Act. The ld. AR further argued that the assessee cannot be denied the benefit of concessional tax rate u/s. 115BAA merely because the assessee had filed its returns belatedly and that the CBDT circular relied upon by the ld. CIT(A) is not applicable to the assessee as there was no delay in filing Form-10IC. The ld. AR relied on the catena of decisions in support of the assessee's contention. 7. The learned Departmental Representative ('ld. DR' for short) for the revenue on the other hand controverted the said fact and stated that the CBDT circular is only clarificatory in nature which prescribes the condition specified in form 10IC and that it is a fundamental principle that the assessee will have to file its return of income u/s. 139(1) of the Act within the due date specified unless an extension is given for the purpose of claiming any deduction. The ld. DR vehemently contended that the case laws cited by the ld. AR are disting....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....t off of any loss carried forward or depreciation from any earlier assessment year, if such loss or depreciation is attributable to any of the deductions referred to in clause (i); (iii) without set off of any loss or allowance for unabsorbed depreciation deemed so under section 72A, if such loss or depreciation is attributable to any of the deductions referred to in clause (i); and (iv) by claiming the depreciation, if any, under any provision of section 32, except clause (iia) of sub-section (1) of the said section, determined in such manner as may be prescribed. (3) The loss and depreciation referred to in clause (ii) and clause (iii) of sub-section (2) shall be deemed to have been given full effect to and no further deduction for such loss or depreciation shall be allowed for any subsequent year: Provided that where there is a depreciation allowance in respect of a block of asset which has not been given full effect to prior to the assessment year beginning on the 1st day of April, 2020, corresponding adjustment shall be made to the written down value of such block of assets as on the 1st day of April, 2019 in the prescribed manner, if the op....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....n 32 except clause (iia) of sub-section(1) of section 32 along with various other conditions. It is also observed that the provision prescribes that the assessee exercises the said option only when it is in the prescribed manner filed on or before the due date specified in sub section (1) of section 139 of the Act for furnishing of the return of income. Further, the third proviso to the said section states that the option exercised by the assessee becomes invalid when there is violation of condition prescribed in sub clause (ii) or (iii) or clause (a) or clause (b) of sub section (2). From this, we can infer that there has been no express bar for the assessee to claim the benefit of the provision, if there is a delay in filing the return i.e. return filed u/s 139(4) of the Act, though it says in sub section (5) that the assessee has to exercise the option in the prescribed manner on or before the due date specified under sub section (1) of section 139 of the Act. 12. The undisputed fact is that the assessee has filed form 10IC within the prescribed time limit specified in section 115BAA where the assessee shall exercise the option in the prescribed manner on or before the due da....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ng form 10IC/10ID. The Board has decided to condone the delay in filing the form belatedly, provided the assessee has not faulted in filing the return of income on time. Therefore, we deem it fit to hold that the CBDT circular dated 18.11.2024 is in any way not applicable in assessee's case. 15. Having held so, the next issue for consideration is whether the assessee can claim the benefit of section 115BAA on a late return u/s 139(4) of the Act. The discussion on the provision of section 115BAA of the Act in the aforementioned paragraphs categorically states that the assessee will have to exercise the option in the prescribed manner which is by filing form 10IC on or before the due date for filing of the return which can be inferred that the provision does not mandate that the benefit will be applicable only when the assessee files the return within the due date prescribed. The assessee's claim is that not only has it exercised the option u/s 115BAA of the Act within the prescribed due date but has also filed the tax audit report well within the time, which establishes the fact that the assessee intended to opt for the concessional tax regime u/s 115BAA of the Act. We also draw ....