2025 (3) TMI 305 - HC - Income Tax

Condonation of delay in filing Form 10-IC as required to avail the concessional tax rate prescribed u/s 115BAA - HELD THAT - This Court after carefully considering the submissions and examining the scope purport and object of Section 119 (2) (b) finds that identical submissions were made before this Court and the same was rejected in 2024 (11) TMI 1434 - MADRAS HIGH COURT as held Respondent Authority/Board has completely mis-directed itself in not examining if the failure to consider the claim of option to discharge tax under Section 115BAA on the ground of failure on the fact of the petitioner to file Form 10-IC within the period stipulated under Section 115BAA would cause genuine hardship to the petitioner/assessee and thus it is desirable as expedient to permit the petitioner to file Form 10-IC in support of its option under Section 115BAA and deal with the same on merit. The facts narrated supra leaves no room for doubt that the rejection of the petition under Section 119 (2) (b) to permit the petitioner to file Form 10-IC in support of its exercise of option under Section 115BAA of the Act would cause genuine hardship and it is desirable and expedient to permit the petitioner to file Form 10-IC in support of its claim / option under Section 115BAA of the Act and deal with such claim on merits in accordance with law. The impugned order is set-aside the respondent shall keep the portal open to enable the petitioner to upload the Form 10-IC and the petitioner shall file the Form 10-IC within a period of four weeks from the date of receipt of a copy of this order.

Summary

The issues presented and considered in the judgment are as follows:1. Whether the petitioner's application under Section 119 (2) (b) of the Income Tax Act, seeking condonation of delay in filing Form 10-IC to avail the concessional tax rate under Section 115BAA of the Act, was unjustly rejected.2. Whether the rejection of the application under Section 119 (2) (b) would cause genuine hardship to the petitioner.3. Whether the Respondent Authority/Board misdirected itself in not examining the failure to consider the claim of option to discharge tax under Section 115BAA due to the petitioner's failure to file Form 10-IC within the stipulated period.The court analyzed the relevant legal framework and precedents, the interpretation and reasoning, key evidence and findings, application of law to facts, treatment of competing arguments, and reached the following significant holdings:The court found that the petitioner had foregone deductions as required under Section 115BAA of the Act but failed to file Form 10-IC within the prescribed period. The petitioner argued that the rejection of the application would cause genuine hardship and that the discretion under Section 119 (2) (b) should be exercised liberally. The court referred to previous judgments emphasizing the need to avoid genuine hardship and held that the power under Section 119 (2) (b) is coupled with a duty to advance the purpose of the provision.The court noted that there was substantial compliance with the requirements of Section 115BAA as the petitioner had declared the option to pay taxes under that section and had paid taxes at the prescribed rate. Citing the Doctrine of Substantial Compliance, the court held that the Respondent Authority misdirected itself in not considering the genuine hardship the petitioner would face if the claim under Section 115BAA was rejected due to the late filing of Form 10-IC. The court set aside the impugned order and directed the respondents to allow the petitioner to file Form 10-IC within a specified period for the claim to be dealt with on merit.In conclusion, the court disposed of the writ petition by setting aside the order under Section 119 (2) (b) and directing the respondents to enable the petitioner to upload Form 10-IC within a specified timeframe for the claim under Section 115BAA to be considered on its merits.