Domestic Companies availing benefit of 22% tax can filed Form 10-IC for AY 21-22 by 31st January 2024

[Vivek Jalan]

Procedurally, Form 10-IC is required to be filed if a Domestic Company chooses to pay tax at concessional rate of 22% under Section 115BAA of the Income Tax Act. However, effective tax rate including cess and surcharge is 25.17%. Those companies that have not filed the Form 10-IC would have to pay as per I-T notices issued for 30% with Minimum Alternate Tax (MAT).

Many taxpayers over the years could not file the form and hence the benefit of the reduced rates was denied during assessments. They were thus running to appeals and hence for AY 2020-21 vide Circular No. 6/2022, issued on March 17, 2022 and now for AY 21-22 the CBDT by Circular No. 19/2023 dated Oct 23rd 2023 condoned the delay in filing of Form No. 10-IC as per Rule 21AE of the Income-tax Rules.

However, to condone a procedural delay, the CBDT has required the pre-compliance of other procedural conditions as follows –

i. The return of income for AY 21-22 should have been filed on or before the due date specified under section 139(1) of the Act;

ii. The assessee company should have opted for taxation u/s 115BAA of the Act in item (e) of “Filing Status” in “Part A-GEN” of the Form of Return of Income ITR-6;

In case the above conditions are satisfied, then Form No. 10-IC may be filed electronically on or before 31.01.2024 or 3 months from the end of the month in which this Circular is issued, whichever is later. It’s important for eligible companies to take advantage of this extension and ensure their filings are in order.

However, for companies who have not complied with the above 2 conditions, still the contest in courts will continue on the basis of the trite that a substantive right cannot be denied merely on the ground of procedural lapse. Procedure is merely a handmaid of justice. Laws and procedure are meant to regulate effectively, assist and aid the object of doing substantial and real justice. A plethora of verdicts are already available in the matter as per the case of M/S. REFAC CORPORATION REP. BY ITS PROPRIETOR MR. DEVENDRA NAHATA. AND M/S. J AND J AIRCON, REP. BY ITS PROPRIETOR MR. VINAY NAHATA VERSUS THE NODAL OFFICER AND FOUR OTHERS - 2021 (12) TMI 1041 - TELANGANA HIGH COURT ; VIMAL ENTERPRISE VERSUS UNION OF INDIA - 2005 (7) TMI 111 - GUJARAT HIGH COURT;