TaxTMI 
TaxTMI 
2026 (9) TMI 1541
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....ferred to as 'the Act'), arising out of the intimation dated 16.05.2025 issued under section 143(1) of the Act by CPC, Bangalore (hereinafter referred to as the 'Assessing Officer' or simply the 'AO') for A.Y 2024-25. 2. Brief facts of the case are that the assessee has filed its Income Tax Return (ITR) for the Assessment Year 2024-25 on 24.10.2024, declaring a total income of Rs. 3,67,63,080/-, claiming therein additional depreciation under Section 32(1)(iia) of the Act on the new plant and machinery. The said return was processed under Section 143(1) of the Act by the Central Processing Unit on 16.05.2025, assessing the total income of the assessee at Rs. 5,73,52,240/-. The upward adjustment was made on the ground that the assessee had....
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.... in fact and in law by making an addition of Rs. 2,05,89,160/- to the total income on account of disallowance of additional depreciation, on the grounds that the appellant had opted for the concessional tax regime under section 115BAA of the Act. (ii) On the facts and circumstances of the case, the CPC has erred both in fact and in law while issuing the Intimation order under Section 143(1) of the Income Tax Act, 1961, raising a demand of Rs. 49,57,800/- which is wholly unjustified and arises from an erroneous and flawed assessment. (iii) That the CPC has erroneously processed the appellant's return of income under the special provisions of Section 115BAA of the Income Tax Act, 1961, despite the appellant not opting fo....
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....ejudice to the appellant due to a procedural error. 7) The appellant craves leave to add, amend or alter any of the grounds of appeal." 5. Before us, ld. Counsel for the assessee stated the intimation u/s 143(1) by CPC is based on the erroneous invocation of the concessional tax regime under Section 115BAA of the Act. The assessee had timely provided clarification to CPC that it had not opted for taxation under Section 115BAA and yet the CPC proceeded to process the return by erroneously treating the assessee as having opted for the concessional tax regime under Section 115BAA. 6. The ld AR relied on judicial pronouncements which lay down that any adjustment involving interpretation of law or examination of factual claims suc....
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.... 115BAA. (1) Notwithstanding anything contained in this Act but subject to the provisions of this Chapter, other than those mentioned under section 115BA and section 115BAB, the income-tax payable in respect of the total income of a person, being a domestic company, for any previous year relevant to the assessment year beginning on or after the 1st day of April, 2020, shall, at the option of such person, be computed at the rate of twenty-two per cent, if the conditions contained in sub-section (2) are satisfied: Provided 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....
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....t 25% corporate rate, not at the concessional 22% prescribed by Section 115BAA and claimed MAT credit under Section 115JAA. It did not make any adjustments in the income computation to forego deductions barred under Section 115BAA(2). The CPC and CIT(A) took the view that Form 10-IC filing created an irrevocable and binding commitment, regardless of the return's substantive treatment. The Tribunal set aside the CIT(A)'s order and held that the option becomes invalid where the conditions of Section 115BAA(2) are not fulfilled, notwithstanding the filing of Form 10-IC as follows: "In the present case, according to the proviso to section 115BAA, though the assessee does not have any entitlement to opt out from option once exer....
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....ing foregone and tax is computed at normal rate applicable under the old regime, not at the concessional 22% rate prescribed by Section 115BAA. The Form 3CD (Tax Audit Report) filed by the assessee contains no reference to Section 115BAA or to the concessional regime. This means that though the assessee filed Form 10-IC, it did not exercise the option available in section 115BAA(1), by not adhering to the conditions prescribed in section 115BAA(2). Once the assessee fails to satisfy the conditions, according to proviso of section 115BAA, the option "shall" become invalid in respect to the said assessment year. In the instant case, the substantive noncompliance with mandatory conditions of Section 115BAA(2), has rendered the option invalid. ....