2024 (12) TMI 254 - HC - Income Tax

Condonation of delay u/s 119 (2) (b) - Delay in filing Form 10IC - whether petitioner has no case of genuine hardship? - petitioner had adopted the option for taxation u/s 115BAA of the Act which is further fortified from the intimation issued u/s 143 - as per revenue petitioner is not entitled to file Form 10IC belatedly after the filing of the return under Section 139 (1) - HELD THAT - As relying on Wipro Limited 2022 (7) TMI 560 - SUPREME COURT it is also apparent that the Hon ble Apex Court has considered the significance of filing declaration under Section 10B(8) of the Act considering the provisions of Section 10B (5) of the Act being a check to verify the correctness of the claim of deduction at the time of filing of return so that if an assessee claims an exemption under the Act by virtue of Section 10B of the Act then the correctness of the claim has already been verified under Sub-section (5) of Section 10B and therefore if the claim is withdrawn post the date of filing of return the report of the Accountant filed under Section 10B (5) of the Act would become falsified and would stand to be nullified. However the provisions of Section 115BAA of the Act are in a way granting relief to the assessee-Companies to enable them to pay the reduced rate of tax at rate of 22% on exercise of the option on the various conditions mentioned therein. Respondent No. 1 was required to consider the facts of the case by permitting the petitioner to file a fresh Form 10IC and condoning the delay in filing such Form by moulding the prayer made by the petitioner to treat the Form 10IC filed by the petitioner for Assessment Year 2021-2022 to be treated as that of for Assessment Year 2021. The provisions of Section 119 (2) (b) of the Act are meant for redressal of the grievance and hardships caused to the petitioner. The petition succeeds and accordingly allowed. The petitioner is permitted to obtain Form 10IC for Assessment Year 2021 in the facts of the case and after obtaining such Form the petitioner shall make a fresh Application .

Issues Involved:

1. Rejection of the application to condone the delay in filing Form 10IC.
2. Interpretation and application of Section 115BAA of the Income Tax Act, 1961.
3. Consideration of genuine hardship under Section 119(2)(b) of the Income Tax Act.
4. Applicability of CBDT Circular No. 6 of 2022.
5. Comparison with precedents and judicial interpretation.

Detailed Analysis:

1. Rejection of the application to condone the delay in filing Form 10IC:

The petitioner, a public limited company, challenged the order dated 6th October 2023, passed by the Principal Commissioner of Income Tax, Surat-1, which rejected the application to condone the delay in filing Form 10IC for the Assessment Year 2020-2021. The petitioner argued that the delay was due to technical issues with the Income Tax Website and that the return was processed under Section 143(1) of the Act. The Central Processing Centre (CPC) later issued a Rectification Order under Section 154, raising a demand due to non-filing of Form 10IC. Despite raising grievances, no resolution was provided.

2. Interpretation and application of Section 115BAA of the Income Tax Act, 1961:

The petitioner opted for a reduced tax rate under Section 115BAA, which requires filing Form 10IC in the prescribed manner. The petitioner argued that the form was filed for the wrong assessment year due to a bona fide mistake. Section 115BAA allows domestic companies to pay tax at a reduced rate of 22% if certain conditions are met, including filing the form by the due date specified under Section 139(1). The court noted that the petitioner had exercised the option for reduced tax but failed to file Form 10IC for the correct assessment year.

3. Consideration of genuine hardship under Section 119(2)(b) of the Income Tax Act:

The petitioner contended that the rejection of the application was due to a hyper-technical approach by the respondent authority. The court reviewed the concept of "genuine hardship" and emphasized a liberal interpretation, as established in previous judgments. The court highlighted that Section 119(2)(b) is designed to address genuine hardships and that the petitioner demonstrated such hardship due to technical issues and confusion regarding the filing requirements.

4. Applicability of CBDT Circular No. 6 of 2022:

The CBDT issued Circular No. 6 of 2022 to condone delays in filing Form 10IC for the Assessment Year 2020-2021, subject to certain conditions. The petitioner met all conditions except filing the form by the specified date due to prior filing for a subsequent assessment year. The court recognized the intent of the circular to alleviate genuine hardships and noted that the petitioner was entitled to relief under the circular, given the circumstances.

5. Comparison with precedents and judicial interpretation:

The petitioner relied on precedents where courts allowed flexibility in similar situations, emphasizing the need for equitable and judicious consideration. The court distinguished the present case from the Supreme Court's decision in Wipro Limited, which involved different statutory provisions. The court underscored that the provisions of Section 115BAA are intended to provide relief to taxpayers by enabling them to pay reduced tax rates, and procedural lapses should not hinder this objective.

Conclusion:

The court allowed the petition, directing the petitioner to obtain Form 10IC for the correct assessment year and file a fresh application for condonation of delay. The respondent authority was instructed to consider the application in light of the court's observations within twelve weeks. The decision emphasized the importance of addressing genuine hardships and ensuring that procedural technicalities do not impede substantive tax relief intended by the legislature.

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