2024 (7) TMI 825 - AT - Income Tax

Reduced rate of tax provided u/s 115BBA - Claim denied on non-submission of Form No.10-IC - income of the assessee has been taxed @ 30% instead of @ 22% Technical issue preventing access for filing Form 10IC - delay in filing Form 10IC has been condoned by the ld. Pr. CIT - HELD THAT - Delay in filing Form 10IC has been condoned and, therefore, the assessee deserves benefit of reduced rate of taxation i.e., 22% in place of 30% levied. We also notice that Form 10IC was not filed by the assessee on account of technical problem faced on the income tax portal and vide CBDT Circular No. 6/2022 F.No.173/32/2022 ITA -1 dated 17/03/2022, the time limit to file the form was extended to 30/06/2022. Further, even if the delay in filing Form 10IC is condoned but as claimed by the assessee, it is still no having the access for filing the Form 10IC. This being a technical aspect, needs to be taken care of by the revenue authorities and the income of the assessee needs to be taxed @ 22% as against 30% levied by the CPC. Accordingly, Ground Nos. 1, 2, 3, 4 5 raised by the assessee are hereby allowed.

Summary

Issues:
- Appeal against order of National Faceless Appeal Centre regarding reduced rate of tax under section 115BBA of the Income Tax Act, 1961 for Assessment Year 2020-21.
- Delay in filing Form 10IC leading to denial of reduced tax rate.
- Condonation of delay by Principal Commissioner of Income Tax.
- Technical issue preventing access for filing Form 10IC.
- Decision on appeal grounds raised by the assessee.

Analysis:
The appeal was filed by the revenue against the order of the National Faceless Appeal Centre concerning the denial of the reduced rate of tax under section 115BBA of the Income Tax Act, 1961 for the Assessment Year 2020-21. The assessee's grievance was that the claim for a reduced tax rate was rejected due to non-submission of Form 10-IC, resulting in the income being taxed at 30% instead of 22%.

During the hearing, the assessee explained that the delay in filing Form 10IC was due to technical issues faced on the income tax portal. Subsequently, the Principal Commissioner of Income Tax condoned the delay in filing Form 10IC, allowing the assessee to claim the benefit of the reduced tax rate of 22% instead of 30%. The Tribunal noted that even though the delay was condoned, the assessee still faced technical difficulties in accessing the portal to file Form 10IC.

Considering the condonation of delay and the technical issues faced by the assessee, the Tribunal allowed the appeal raised by the assessee. Grounds 1 to 5 of the appeal were allowed, granting the benefit of the reduced tax rate. However, Ground No. 6, which raised an alternative argument regarding the normal tax rate applicable for companies, was not addressed as it became academic in nature after allowing the earlier grounds.

In conclusion, the Tribunal allowed the appeal of the assessee, directing that the income be taxed at the reduced rate of 22% instead of the initially levied 30%. The decision was made based on the condonation of the delay in filing Form 10IC and the technical challenges faced by the assessee in accessing the portal for submission.