Concessional Tax Rate u/s 115BAA denied due to Non-Filing of Form 10-IC: ITAT direct AO to Re-consider Claim Conditionally [Read Order]
In the interest of justice, the Tribunal directed the AO to allow the assessee to file Form 10-IC afresh, accompanied by a condonation petition under Section 119 before CBDT.
Form - 10 -1c - Taxscan
Form - 10 -1c - Taxscan
The Hyderabad Bench of the Income Tax Appellate Tribunal ( ITAT ) has directed the Assessing Officer (AO) to reconsider its claim for the concessional corporate tax regime under Section 115BAA of the Income-tax Act, 1961, which had been denied solely due to non-filing of Form 10-IC.
The company, Finecab Wires & Cables Private Ltd had filed its return of income for AY 2020-21 on 31 December 2020, declaring income of ₹2.64 crore and opting for the reduced 22% corporate tax rate under Section 115BAA.
However, the Centralized Processing Centre (CPC) processed the return under Section 143(1) and denied the concessional rate because Form 10-IC, a mandatory declaration, was not filed electronically within the prescribed time.
On appeal, the CIT(A) upheld CPC’s action, noting that the assessee had neither filed Form 10-IC for AY 2020-21 nor produced a copy of the ITR before the appellate authority. Aggrieved, the assessee approached the Tribunal, arguing that it had substantively opted for Section 115BAA in its return, filed within due time, and that the failure to file Form 10-IC was a procedural lapse.
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The assessee also pointed out that it filed Form 10-IC in the subsequent year AY 2021-22 on 14 March 2022, and relied upon rulings including the Gujarat High Court decision in Surat Smart City Development Ltd. v. PCIT and coordinate ITAT decisions in Tainwala Personal Care Products Pvt. Ltd. and KCreate Konnect E Solutions Pvt. Ltd.
The Revenue countered that unlike in those cases, Finecab had not filed any condonation petition under Section 119 before CBDT, nor had its tax audit report (Form 3CD) indicated opting for Section 115BAA. It argued that filing Form 10-IC for AY 2021–22 could not cure the defect for the same.
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After hearing both sides, the bench of Ravish Sood (JM) and Madhusudan Sawdia (AM) observed that while the assessee indeed failed to file Form 10-IC, it had clearly opted for the concessional regime in the ITR filed within Section 139(1) deadline.
The tribunal cited the ruling of the Gujarat High Court in Surat Smart City, held that substantive compliance should not be defeated by a procedural lapse.
In the interest of justice, the Tribunal directed the AO to allow the assessee to file Form 10-IC afresh, accompanied by a condonation petition under Section 119 before CBDT.
The AO was instructed to grant the benefit of Section 115BAA only upon CBDT’s approval of such condonation.
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