2023 (10) TMI 331 - HC - Income Tax

Imposition of higher rate of tax - petitioner/assessee failed to file Form 10-IC electronically - Assessee submitted that the petitioner/assessee has been taxed at a higher rate of tax for a mere procedural lapse and therefore, seeks the indulgence of this Court to allow the petitioner/assessee to complete the requirements prescribed under Section 115BAA(5) and Rule 21AE(2) and avail the benefit of a lower rate of tax - HELD THAT - As revenue, says that he would have no objection if this court were to direct the petitioner to move an appropriate application before the Central Board of Direct Taxes (CBDT) for giving leave to file Form 10-IC, pursuant to powers conferred on it by section 119(2)(b) of the Act. The writ petition is thus disposed of, with liberty to the petitioner/assessee to approach the CBDT. In case the petitioner approaches the CBDT within four (4) weeks from the date of receipt of a copy of the order passed today, it will consider the request of the petitioner/assessee, and pass an appropriate order. Also see Rajkamal Healds and Reeds Pvt. Ltd 2022 (3) TMI 531 - GUJARAT HIGH COURT .

Summary

Issues involved:
The writ petition involves challenging an assessment order for Assessment Year (AY) 2021-22, specifically regarding the imposition of a higher tax rate due to a procedural lapse in filing Form 10-IC as required under Section 115BAA of the Income Tax Act, 1961.

Details of the Judgment:

Issue 1: Challenge to Assessment Order
The petitioner sought to challenge the assessment order dated 13.11.2022, which imposed a higher tax rate due to non-compliance with the conditions stipulated under Section 115BAA of the Income Tax Act, 1961. The petitioner argued that failure to file Form 10-IC electronically led to the imposition of the higher tax rate of 30% instead of the lower rate of 22% as provided under Section 115BAA.

Issue 2: Relief Sought by Petitioner
The petitioner sought the Court's indulgence to complete the requirements prescribed under Section 115BAA(5) and Rule 21AE(2) to avail the benefit of the lower tax rate. The petitioner relied on a judgment of the Gujarat High Court, emphasizing the need to file an appropriate application to permit electronic filing of Form 10-IC after condoning any delay.

Court's Decision and Directions
The Court allowed the petitioner to approach the Central Board of Direct Taxes (CBDT) for permission to file Form 10-IC electronically, pursuant to the powers conferred under section 119(2)(b) of the Act. The petitioner was granted four weeks to make the necessary application to the CBDT, which would then consider the request and pass an appropriate order. The parties were instructed to act based on the digitally signed copy of the order.

This judgment highlights the importance of procedural compliance in tax matters and provides a pathway for the petitioner to rectify the error and potentially benefit from the lower tax rate as intended under Section 115BAA of the Income Tax Act, 1961.