TaxTMI 
TaxTMI 
2026 (7) TMI 699
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....donation of delay in filing the Form 10-IC for the assessment year 2020-21 and consequentially denied the benefit under 115BAA of the Act to the petitioner. 4. The brief facts of the case are that the petitioner is a private limited company promoted by non-resident Indians and its administrative affairs, accounts, and tax compliance for the assessment year 2020-21 were handled entirely by its then Finance Manager, who was responsible for all the tax-related filings. That, for assessment year 2020-21, the petitioner filed its Return of Income (ITR-6) on 15.02.2021 within the due date prescribed under Section 139(1) of the Act, declaring total income of Rs.1,37,48,490/-. In the said return, the petitioner availed the benefit of concessional tax rate of 22% under Section 115BAA of the Act. The Tax Auditor also confirmed the same in the Tax Audit Report in Form 3CD. Accordingly, taxes were computed and paid at the concessional rate of 22%, resulting in a refund of Rs.11,53,930/- to the petitioner. 5. That since the assessment year 2020-21 was the first year of introduction of the provision, the petitioner was under a bona fide and honest belief that the declaration of the option ....
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....Form 10-IC is a mandatory statutory requirement and a substantive requirement and not a mere procedural formality, and that ignorance of law, procedural oversight, or negligence on the part of a consultant of the petitioner cannot be treated as circumstances beyond the control of the petitioner. 7. It is this rejection of condonation of delay application by respondent No.1 which is under challenge in the instant Writ Petition. 8. Learned counsel of the petitioner submitted that the respondents proceeded on an erroneous footing that filing of Form 10-IC is a mandatory statutory requirement and a substantive requirement and not a mere procedural formality and that the petitioner demonstrated substantial compliance with Section 115BAA as it declared the option for the concessional tax rate of 22% in its Return of Income (ITR-6) and the same was also confirmed by the Tax Auditor of the petitioner in Form 3CD and that the taxes were paid at 22% without claiming any deduction or incentive barred under Section 115BAA. 9. Learned counsel of the petitioner also argued that the petitioner has satisfied all the conditions specified in Sub-Section (2) of Section 115BAA for availing th....
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....IC which was genuine and inadvertent error of procedural requirement. To support this stance, the learned counsel for the petitioner relied upon the case of Cell Com Teleservices (P) Ltd. vs. Union of India [2026) 487 ITR 47] wherein the Allahabad High Court had relied upon a judgment of the High Court of Madras in the case of MRF Ltd. vs. Central Board of Direct Taxes [[2025] 172 taxmann.com 776 (Madras)] For ready reference, paragraph Nos.5 and 8 of the MRF Ltd. (supra) for ready reference are reproduced hereunder: "5. In this regard. it was submitted by the learned counsel for the petitioner that Section 119(2)(b) has been considered by various High Courts including Hon'ble Supreme Court and it has consistently been held that the discretion under this provision ought to be exercised liberally. It was then submitted by the learned counsel for the petitioner that the belated filing of Form 10-1C in support of the option exercised under Section 115BAA of the Act had been dealt with by this Court in Axe Bpo Services (P) Ltd. v. Director [W.P. No. 3425 of 2024, dated 13-11-2024] wherein after referring to various case laws on the scope of the expression "genuine hardship....
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....rpose for granting/vesting of such power. In other words, this Court is of the view that the power under Section 119(2)(6) though seemingly an enabling provision, conferring discretionary power, such power is coupled with duty. 16. I also find that, there has been substantial compliance of the requirement under Section 115BAA of the Act, as evident from the fact that while filing the returns, it was declared/stated by the petitioner that the option to discharge the tax was exercised under Section 115BAA of the Act and taxes were in fact paid@ 22% without claiming deductions as contemplated under Section 115BAА of the Act. In this regard, it may be relevant to refer to the Hon'ble Supreme Court, in the case of Dilip Kumar (2018) 9 SCC, wherein while deciding the Doctrine of Substantial Compliance held as under: "33. A fiscal statute generally seeks to preserve the need to comply strictly with regulatory requirements that are important, especially when a party seeks the benefits of an exemption clause that are important. Substantial compliance with an enactment is insisted, where mandatory and directory requirements are lumped together, for in such a case,....
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....Madras High Court in MRF Ltd. v. CBDT [(2026) 486 ITR 81 (Mad).], firmly stated that the "an assessee feels that he would be paying more tax if he does not get the advantage of deduction will certainly constitute genuine hardship". 20. The judgments discussed hereinabove collectively stress that when substantial justice and technical considerations are aligned against each other, preference should be given to the cause of substantial justice and the authorities' approach should be justice-oriented on the merits. The clear and repeated position of law is that even if a procedural delay occurs due to "genuine hardship", it should not prevent an assessee from receiving a rightful tax benefit. Therefore, in the light of the aforesaid judgments of the hon'ble Supreme Court and the hon'ble High Courts, we are of the view that filing of form 10-IC prior to filing of return is not mandatory and if "genuine hardship" is shown then delay may be condoned and in this respect the provision of law shall be taken as a beneficial piece of legislation." 15. Secondly, the petitioner has relied upon two Circulars issued by the CBDT, namely, Circular No. F.No.173/32/2022-ITA-1 issued on 23....
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.... for Form No. 10ID, in "Filing Status" in "Part A-GEN" of the Form of Return of Income ITR-6; and c) The assessee was prevented by reasonable cause from filing such Form before the expiry of the time allowed and the case is of genuine hardship on merits." 16. It is an undisputed fact that the filing of Form 10-IC is a mandatory statutory requirement to avail the benefit of concessional tax rate of 22% under section 115BAA which the petitioner failed to submit. This was due to the inadvertent lapse by the petitioner's tax manager / consultant. But, the two Circulars which were issued on 23.10.2023 and 18.11.2024 on record shows that the CBDT witnessed a huge number of representations wherein taxpayers / assessees across the country like the petitioner have failed to fulfil the statutory mandatory requirement of submitting the Form 10-IC for the financial year of 2019-20 and the relevant assessment year of 2020-21, which was a duration of peak COVID-19 and the two Circulars directed the respondents to condone the delay in cases of non-submission of the Form 10-IC. Admittedly, the petitioner had filed an application for condonation of delay on 03.01.2023 on the grounds of ....