TaxTMI 
TaxTMI 
2026 (6) TMI 1256
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....the Hon'ble CIT(A) has erred on facts, in circumstances of the case and in law by upholding computation as per old tax regime and computing tax liability under MAT, though MAT provisions are not applicable to companies which have opted for new tax regime u/s. 115BAA of the Act, which is in teeth of the mandate of Article 265 of the Constitution of India. 3. That the Hon'ble CIT(A) has erred on facts, in circumstances of the case and in law by ignoring that for AY 2022-23, the statutory due date for filing ITR was 30th November 2022, for all assesses on which Transfer Pricing provisions were applicable, which was independent of timing and manner of compliances undertaken by the Appellant. 4. That the Hon'ble CIT(A) has erred on facts, in circumstances of the case and in law by considering that there was delay in filing Form 10-IC, without appreciating that the said form was duly filed within timelines, after satisfaction of conditions as prescribed in section 115BAA(5) r.ws. 139(1) and Income Tax Rule 21AE. 5. That the Hon'ble CIT(A) has erred on facts, in circumstances of the case and in law in disregarding Appellant's right to be asse....
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....otice under Section 143(2) of the Income-Tax Act, 1961 was issued, followed by notices under Section 142(1) of the Act, calling for details. In response, the assessee furnished partial information. Subsequently, the case was transferred to Central Circle, Tirupati under Section 127 of the Act, and further notices under Section 142(1) of the Act, were issued. In response to the notices, the assessee furnished details from time to time and also submitted replies to show-cause notices issued during the course of assessment proceedings. After considering the information furnished by the assessee, the A.O. completed the assessment under Section 143(3) of the Act, by accepting the return of income filed by the assessee and determined total income at Rs. NIL. 3. Aggrieved by the assessment order, the assessee preferred an appeal before the Ld. CIT(A). Before the Ld. CIT(A), the assessee has challenged the assessment order and the consequential computation of tax liability on the ground that while processing the return of income under Section 143(1) of the Act, the CPC has wrongly invoked the provisions of Section 115JB of the Act and computed tax liability under MAT, by treating Form 1....
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....BAA are conditional and the assessee is required to strictly comply with the statutory conditions including timely filing of Form 10-IC, and in the absence of such compliance, the assessee cannot claim benefit under the said provision. The Ld. CIT(A) further held that the CPC was justified in computing tax liability under Section 115JB of the Act in the absence of valid exercise of option under Section 115BAA, and accordingly upheld the computation of tax under MAT provisions. The Ld. CIT(A) also rejected the contentions of the assessee that the delay in filing Form 10-IC is procedural and observed that the requirement of filing the form within due date is mandatory in nature. The Ld. CIT(A) further confirmed the levy of interest under Sections 234A, 234B and 234C of the Act as consequential in nature and also upheld initiation of penalty proceedings. Thus, the Ld. CIT(A) dismissed the appeal of the assessee. The relevant portion of order of Ld. CIT(A) is reproduced as under : "6.1. I have carefully examined the assessment order dated 30.03.2024 passed under section 143(3) of the Act, Form 35, the grounds of appeal, the statement of facts and the detailed written submissio....
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....or filing the return and exercising the option under section 115BAA was 30.11.2022; (ii) the answer "No" in the ITR column relating to section 92E was an inadvertent clerical error arising out of attrition and lack of coordination in the Finance and Accounts team and should not be used to deny the extended due date; (iii) the appellant had filed Form 10IC on 30.11.2022 and the particulars of Form 10IC had been duly reflected in the return of income; (iv) the option under section 115BAA should be treated as validly exercised; (v) Form 3CEB was subsequently filed on 08.06.2023 and, although the related-party transactions disclosed therein differed from those in the ITR, this shows that the appellant was always bona fide in treating international transactions as applicable; and (vi) the A.O., while passing the order under section 143(3) without making any addition to income, merely followed the CPC's view without independent application of mind, without rectification by filing appeal against the intimation under section 143(1), filing rectification applications under section 154, attempting online rectification and lodging grievances on the CPGRAMS, and therefore the error in the ITR ....
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....ection 143(1) dated 20.02.2023 (filed by the appellant as Annexure 6), it is evident that, as on the date of such processing, no report under section 92E in Form 3CEB had been filed or recognised by the system. The intimation proceeds on the basis of due date 07.11.2022 and records tax liability under MAT without any reference to section 92E or Form 3CEB. Thus, for several months after filing the return on 30.12.2022, the appellant did not act as if it were a case covered by section 92E. Form 3CEB was ultimately filed only on 08.06.2023, and that too after issue of notice under section 143(2) on 01.06.2023. This is inconsistent with the pleading of a simple ticking mistake. 6.6 The further explanation that there were unforeseen circumstances and attrition in the Finance and Accounts team is also of no assistance. These are internal administrative matters of the company and cannot extend or relax the statutory time-limits laid down in section 139(1) or the mandatory condition in section 115BAA(5) that the option must be exercised on or before the due date. Reliance on the disclosures of related-party transactions in the audited financial statements and tax-audit re....
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....ding the MAT provisions, even if the returned income is accepted. Liability arising from the applicable rate or method of computation cannot be treated as an "addition" to income and does not render the assessment order bad in law. 6.9 The appellant has relied on subsequent steps-filing of appeal against the intimation under section 143(1), filing of rectification applications under section 154 before the Assessing Officer, attempts at online rectification and multiple grievances on the CPGRAMS-as evidence of bona fides. These actions, however, are post-processing events and cannot alter the factual position as on the relevant statutory dates. Particular emphasis has been placed on the reply dated 31.08.2023 in response to notice under section 143(2), wherein a petition was enclosed explaining the error and requesting deletion of the MAT demand, and on the rectification petition dated 05.09.2023 filed under section 154 before the DCIT, Tirupati, which, according to the learned AR, remained pending even before the assessment order was passed and therefore shows that the issue was squarely raised at the assessment stage itself. These actions only show that, after CP....
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....r the due date under section 139(1). (c) ACIT v. Magik Kraft (P.) Ltd. [2025] 179 taxmann.com 632 (Mumbai Trib.), where the Mumbai Bench of the Hon'ble ITAT held that inadvertent filing of Form 10-IB instead of Form 10IC, when all substantive conditions of section 115BAA were otherwise fulfilled and the correct form was later filed electronically and manually, was a curable technical lapse and did not disentitle the assessee from the concessional rate. I have carefully considered the above decisions relied upon by the appellant And that they do not assist the appellant on the peculiar facts of the present case. Cell Com Teleservices (P.) Ltd. (supra), the assessee had approached the Principal Commissioner of Income-tax with a specific application under section 119(2)(b) seeking condonation of delay in filing Form 10IC and had placed on record exceptional and tragic circumstances family of the person handling tax matters severe illness and successive deaths in the constitute clear "genuine hardship". The Court's interference was directed at the which the Hon'ble High Court found to manner in which the Principal Commissioner had exercised the statutory p....
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....al compliance" applied in the above ITAT decisions cannot be mechanically imported to rewrite the assessee's own categorical declaration and to alter the statutorily prescribed due date for exercising the option under section 115BAA. Further the reliance of the learned AR of the appellant on the judgments in Principal Commissioner of Income-tax v. Fastner Commodel (P.) Ltd. [2025] 172 taxmann.com 573 (Calcutta) and Arrow Electronics India (P.) Ltd. v. Deputy Commissioner of Income-tax [2025] 179 taxmann.com 518 (Bangalore Trib.) are factually distinguishable. In those cases, the assessee's had filed their returns within the prescribed/extended time, had clearly exercised the option under section 115BAA and satisfied all substantive conditions; only a procedural lapse in timely filing of Form 10IC was condoned. In the present case, financials were not audited by the due date, Form 3CEB was filed belatedly and section 92E was expressly shown as "No" in the retum, indicating non-fulfilment of basic statutory pre-conditions, not a mere procedural defect. On the other hand, guidance is available from binding decisions of the Hon'ble Supreme Court on the manner ....
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....see Ms. Ruchika Gupta, C.A. submitted that, the learned CIT(A) erred in upholding tax computed by the A.O. in terms of Section 115BAA of the Income Tax Act, 1961, even though the assessee has exercised option to pay tax as per Section 115BAA of the Act, from the assessment year 2022-23 by filing relevant Form 10-IC on 30.11.2022, which is on or before the due date provided under Section 139(1) of the Income Tax Act, 1961. The learned counsel for the assessee, referring to dates and events, submitted that, the assessee company was engaged in the business of manufacturing and trading of mobile phones, etc., is subjected to tax audit under Section 44AB of the Income Tax Act and Transfer Pricing Audit under Section 92E of the Act, because the assessee company is having cross border transactions with it's A.E., and related parties. Further, the required audit report under Section 44AB of the Act, has been filed along with return of income on 30.12.2022. The learned counsel for the assessee further submitted that, the assessee company has also furnished audit report in Form 3CEB on 08.06.2023 along with the Transfer Pricing Study details in order to comply with the provisions of Section ....
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....Audit Report under Section 44AB of the Act, and filed return of income on 30.12.2022, well within the extended time limit for holding Annual General Meeting. Therefore, the allegation of the A.O. and learned CIT(A) that the assessee has not finalized its books of accounts and also not filed audit report on or before the due date is incorrect and for this reason, the option exercised by the assessee for paying tax as per new regime in terms of Section 115BAA of the Act, cannot be denied. 8. The learned counsel for the assessee further, referring to financial statements and tax audit report, submitted that the assessee company is having financial transactions with its related parties and the same has been reported in financial statements and audit report. However, there is a delay in submission of audit report in Form 3CEB due to various reasons, including due to high attrition of employees, and the same has been finally filed on 08.06.2023. Therefore, the allegation of the learned CIT(A) that the assessee company has filed audit report in Form No. 3CEB only after issuance of notice under Section 143(2) of the Act, is misleading and cannot be accepted. Therefore, she submitted tha....
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....f extension of AGM by the Ministry of Corporate Affairs in light of staff attrition and lack of coordination and also the delay in filing the accounts is also not supported the case of the assessee, because these are internal matters of the assessee and nothing to do with filing relevant form No. 10-IC within the due date provided under the Act. Since the assessee has not complied with the provisions of Section 115BAA of the Act, by filing Form No. 10-IC within the due date, the A.O. has rightly computed tax by applying provisions of Section 115JB of the Act, in accordance with normal provisions. The learned CIT(A), after considering relevant facts, has rightly upheld the tax computation under normal provisions of the Act. Therefore, she submitted that there is no merit in the arguments of the learned counsel for the assessee and the same should be rejected. 10. The Ld. CIT-DR Further, referring to the decision of Hon'ble Supreme Court in the case of Commissioner of Customs (Import) Vs. Dilip Kumar and Co., (2018) 9 SCC 1 and Pr.CIT Vs. Wipro Limited, (2022) 140 taxmann.com 223 (SC), submitted that in order to claim deductions/exemption under the Act, it is mandatory for the....
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....e ground that when the A.O./CPC processed the return of income on 20.02.2023, the assessee company has not submitted audit report in Form No. 3CEB and further, the assessee has selected the columns in the ITR filed for the assessment year under consideration, which are applicable to cases where the due date was up to 31.10.2022 and was finally extended up to 07.11.2022. There is no dispute on these aspects. In fact, in the ITR filed for the year under consideration, the assessee company has chosen the "not applicable" column for filing the audit report under Section 92E of the Act. However, it was argued by the counsel for the assessee that choosing the said column in the ITR form is only an inadvertent clerical error arising out of his attrition and lack of coordination between Finance and Accounts department and should not be used to deny the benefit of the extended due date. 13. We have given our thoughtful consideration to the reasons given by the learned CIT(A) to uphold the action of the A.O., in computing tax under normal provisions of the Act, on income computed under Section 115JB of the Act, in light of various arguments of the learned counsel for the assessee and we o....
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....2022 for two reasons i.e., (i) non-furnishing of return of income on or before the due date of 30.11.2022 and (ii) non-submission of audit report as required under Section 92E of the Act in Form No. 3CEB on or before the due date under Section 139(1) of the Act. The assessee has explained the reasons for the delay in filing of the return of income. We find that, the assessee company has obtained permission from the Ministry of Corporate Affairs for holding Annual General Meeting on or before 31.12.2022. The Ministry of Corporate Affairs, after considering the relevant reasons given by the assessee company, has extended the due date for holding AGM up to 31.12.2022. The assessee company has conducted Annual General Meeting on 30.12.2022 and also filed its return of income along with the audit report under Section 44AB of the Income Tax Act on 30.12.2022. Since the assessee had filed the return of income after conducting the Annual General Meeting on 30.12.2022, in our considered view, the observations of the learned CIT(A) in light of the audit report obtained under Section 44AB of the Act on 14.12.2022, i.e., after the due date of 07.11.2022 as per the A.O./CIT(A) and 30.11.2022 as....
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.... of the Income Tax Act, even if such audit report is not filed then the due date for filing return of income under Section 139(1) of the Act, is not changed depending upon filing or not filing of audit report by the assessee. In case, any of the assessee is not complying with the filing of audit report, then there are other provisions for penalising the assessee. Therefore, for not furnishing Form No. 3CEB, the A.O. cannot prepone or postpone the due date for filing return of income. Further, the arguments of the counsel for the assessee are also fortified by the fact that the assessee company has furnished relevant audit report in Form No. 3CEB on 08.06.2023, even though belatedly, but before the A.O. completed the assessment under Section 143(3) of the Act. Since the entire data which relates to related party transactions is available with the A.O., including Form No. 3CEB, in our considered view, the A.O. ought to have considered the case of the assessee in light of relevant facts while deciding the due date for filing return of income under Section 139(1) of the Act. The learned CIT(A) on flimsy grounds rejected the explanation of the assessee by holding that these are internal....
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.... taxpayer to opt for payment of taxes at concessional rate, in case, if they forego to claim exemptions/ deductions provided under the Act. Therefore, once any provision has been inserted, which is beneficial to the taxpayer then the purpose of the said provision cannot be doubted by bringing into any technical issues, including non-filing of relevant statutory forms on or before the due date, if an assessee explains reasons for not filing relevant forms within the due date provided under the Act. In the present case, the assessee has filed relevant form with the due date provided under the Act, and opted to pay tax as per concessional rate of tax in terms of Section 115BAA of the Act, and therefore, in our considered view, by interpreting the provisions in a different manner which is convenient to the A.O., the purpose of said provisions cannot be denied. Since the assessee has opted to pay tax as per Section 115BAA of the Act, in our considered view, the A.O. ought not to have denied the benefit by misinterpreting the provisions of the Act, and taking advantage of certain due dates provided under the Act. In our considered view, once the assessee has exercised the option under Se....