The Chennai Bench of Income Tax Appellate Tribunal ( ITAT ) allowed the concessional tax rate under Section 115BAA of Income Tax Act,1961 for the assessee, on account of the timely submission of Form 10IC and the Centralized Processing Centre’s ( CPC ) acknowledgment of the election for the reduced rate
Chola Business Services Ltd,the appellant-assessee,was incorporated on December 9, 2004, and operated in the manpower services sector. The assessee electronically filed its return of income for the assessment year(AY) 2021-22 on March 2, 2022, reporting a total income of ₹55,49,770 and seeking a refund of ₹4,25,390.
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The CPC in Bengaluru calculated the tax at a rate of 30%, contrary to the 22% rate claimed by the assessee. The assessee argued that it had submitted Form 10IC on December 15, 2020, electing for the concessional tax rate under Section 115BAA of the Act. Despite acknowledging this option in its intimation, the CPC still applied the higher tax rate.
In reviewing the case, the Commissioner of Income Tax (Appeals) (CIT(A)) noted that the assessee had filed Form 10IC within the stipulated time and submitted its return of income under Section 139. Nevertheless, the CIT(A) concluded that the assessee had not effectively opted for taxation under Section 115BAA of the Act.
The assessee’s Authorized Representative (AR) argued that the intimation notice clearly indicated the assessee’s selection of the concessional tax rate under Section 115BAA of the Act, as highlighted in the notice.
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The tribunal reviewed the submissions and the available records, noting that the assessee filed Form 10IC on December 15, 2020, opting for the concessional tax rate under Section 115BAA. The intimation notice under Section 143(1) for the AY 2021-22 confirmed this choice.
The two member bench comprising Aby.T.Varkey(Judicial Member) and Jagadish(Accountant) determined that the CIT(A) was incorrect in stating that the assessee had not opted for the concessional rate and directed the Assessing Officer(AO) to compute the tax accordingly.
In conclusion,the appeal was allowed.
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