2024 (7) TMI 92 - HC - Income Tax

Concessional rate of tax u/s 115BAA - Requirement of filing Form 10-IC electronically for availing concessional rate of tax - assessee was taxed as per section 115JB for the reason that it had not filed Form No.10-IC, on or before the due date of filing of return of income - CIT (Appeal) confirmed the order of AO on the ground that filing of Form No.10-IC electronically, on or before the due date of filing of return is the mandatory requirement as per sub-section (5) of section 115BAA read with Rule 21AE of the Income-Tax Rules,1962 - HELD THAT - From the findings recorded by the Tribunal, it is noticed that the assessee while filing return of income opted to be taxed as per provisions of Section 115BBA of the Act. However, it could not upload Form No.10-IC on account of technical problem on ITBA portal at the relevant time. During relevant period, the time to file Form 10IC was extended up to 30.06.2022. The assessee filed such Form before AO on 29.06.2022. The copy of such form was placed before CIT(A). It is also not in dispute that this is the first year, in which, the assessee was to avail such benefits. Form 10-IC was furnished by the assessee on 29.01.2022 and therefore, we are of the opinion that since the assessee could not upload Form No.10-IC, on ITBA portal on account of technical error, there being no fault of the assessee, it could not be deprived of benefit particularly when this being the first year for availing such benefits. Therefore, in our opinion, there is no error of fact and Law in the order of the ITAT

Summary

Issues:
1. Interpretation of Section 115BAA of the Income Tax Act, 1961.
2. Requirement of filing Form 10-IC electronically for availing concessional rate of tax.
3. Technical error in uploading Form 10-IC on ITBA portal.
4. Applicability of benefits under Section 115BAA for the first year of availing such benefits.

Analysis:

Issue 1: Interpretation of Section 115BAA of the Income Tax Act, 1961
The appellant appealed against the order of the Income Tax Appellate Tribunal (ITAT) regarding the interpretation of Section 115BAA of the Income Tax Act, 1961. Section 115BAA allows for the computation of income tax at a concessional rate of twenty-two percent for domestic companies, subject to certain conditions. The appellant argued that the ITAT failed to appreciate the meaning and applicability of this section.

Issue 2: Requirement of filing Form 10-IC electronically for availing concessional rate of tax
The key contention revolved around the mandatory requirement of filing Form 10-IC electronically on or before the due date of filing the return of income under Section 139(1) of the Act. Failure to submit this form results in denial of the concessional rate of tax. The Assessing Officer and the Ld.CIT (Appeal) upheld this requirement, emphasizing the importance of complying with Rule 21AE of the Income-Tax Rules, 1962.

Issue 3: Technical error in uploading Form 10-IC on ITBA portal
The ITAT considered the case where the assessee faced a technical problem while uploading Form 10-IC on the ITBA portal within the stipulated time frame. The assessee successfully submitted the form to the Assessing Officer before the extended deadline of 30.06.2022. The ITAT acknowledged that the technical error was not the fault of the assessee and that the form was submitted in good faith, allowing the benefit of doubt in favor of the assessee.

Issue 4: Applicability of benefits under Section 115BAA for the first year of availing such benefits
The ITAT recognized that this was the first year the assessee was availing the benefits under Section 115BAA. Considering the unique circumstances and the timely submission of Form 10-IC to the Assessing Officer, the ITAT concluded that the assessee should not be deprived of the benefits, especially when there was no fault on the part of the assessee. The ITAT found no error of fact or law in its order and dismissed the appeal, stating that no substantial questions of law were involved in the case.