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TMI BlogRecent circular for delegation of power to condone delay in filing of Form 10 IC and 10 ID- a critical study.X X X X Extracts X X X X X X X X Extracts X X X X ..... Recent circular for delegation of power to condone delay in filing of Form 10 IC and 10 ID- a critical study. - By: - DEVKUMAR KOTHARI - Income Tax - Dated:- 21-12-2024 - Earlier articles: S.115BAA and Form 10- IC relaxation to file Form 10-IC recent circular must apply to all years and not only AY 2021-22 in fact it can be said that the filing of Form 10 IC is superficial because ITR form itself provide for exercise of option and that option creates a substantive right. Request for issue of directions to condone delay in filing of Form 10-IC u/s 115BAA for all years. And to apply Circular no. 19/2023 dt. 23.10.2023 to all years including first year i.e. AY 2020-21 In the earlier articles, learned author had expressed view that filing of F ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orm 10 IC can be dispensed with because a claim/ option in ITR, filed within time allowed u.s. 139(1) is precondition. Unless there is claim / option in ITR form mere filing of form 10 IE will not entitle benefit of lower rate of tax. This can also apply to other forms also. Request was also made to apply relaxation to all years including first or initial year of particular relaxation provision. The request was made with a view to reduce burden on assesses of procedural requirement and lapses which were mainly due to technical snag in the new Portal of Income Tax Department. Recent Circular: In recent Circular dated 18.11.2024 relaxation has been made for all affected years, but not in a manner really required to provide procedural relief t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o assesses. Rather it can be said that another authority has been authorized to apply his discretion while considering application for extension. This is likely to cause harassment of assesses and litigation. It appears that the Circular also suffers in many aspects and has been issued in halfheartedly manner and not in a mood to provide real relief and make work of compliance easy. Rather the Circular provide a tool in hands of concerned authority to apply discretion, which can be in unreasonable way just to avoid responsibility of authority also. This is likely to create multiple proceedings including litigation before Courts. For an analysis, the operating part of the Circular is reproduced below with highlights added by author and obser ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vations mentioned: Circular No. 17/2024 F.No.173/32/2022-ITA-I dt. 18 th November, 2024 Sub: Condonation of delay under section 119(2)(b) of the Income-tax Act, 1961 in filing of Form No. 10-IC or Form No. 10-ID for Assessment Years 2020-21, 2021-22 and 2022-23-Reg. In exercise of the powers conferred under section 119(2)(b) of the Income-tax Act, 1961 ('the Act'), the Central Board of Direct Taxes ('CBDT') by Circular No. 6/2022 dated 17.03.2022 and Circular No. 19/2023 dated 23.10.2023 condoned the delay in filing of Form No. 10-IC as per Rule 21AE of the Income-tax Rules, 1962 ('the Rules') for Assessment Years 2020-21 and 2021-22 in cases where the conditions mentioned in the said Circulars are satisfied. 2. Repr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esentations have been received by the CBDT stating that Form No. 10-IC or Form No. 10-ID could not be filed for various assessment years on or before the due date or extended due date, as the case may be . It has been requested that the delay in filing of these Forms for respective assessment years may be condoned. 3. With a view to avoid genuine hardship to the assessees in exercising the option, under section 115BAA of the Act read with Rule 21AE of the Rules or under section 115BAB of the Act read with Rule 21AF of the Rules, the CBDT in exercise of the powers conferred under section 119(2)(b) of the Act, hereby authorizes: - a) the Pr. Commissioners of Income Tax ('Pr. CsIT')/ Commissioners of Income Tax ('CsIT') to admi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t and deal with the applications for condonation of delay in filing of Form No. 10-IC or Form No. 10-ID for Assessment Years 2020-21, 2021-22 and 2022-23 where there is a delay of upto 365 days. b) the Pr. Chief Commissioners of Income Tax ('Pr. CCsIT')/ Chief Commissioners of Income Tax ('CCsIT')/ Directors General of Income Tax ('DsGIT') to admit and deal with the applications for condonation of delay in filing of Form No. 10-IC or Form No. 10-ID for Assessment Years 2020-21, 2021-22 and 2022-23 where there is a delay of more than 365 days. 4. The Pr. CCsIT/ CCsIT/ DsGIT/ Pr. CsIT/ CsIT while deciding such applications for condonation of delay in furnishing of Form No. 10-IC or Form No. 10-ID to exercise the option ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , under section 115BAA of the Act read with Rule 21AE of the Rules or under section 115BAB of the Act read with Rule 21AF of the Rules, shall satisfy themselves that the applicant's case is a fit case for condonation under the existing provisions of the Act. The Pr. CCsIT/ CCsIT/ DsGIT/ Pr. CsIT/ CSIT shall ensure that the following conditions are satisfied, while deciding such applications:- (i) The return of income for relevant assessment year has been filed on or before the due date specified under section 139(1) of the Act; (ii ) The assessee has opted for taxation, u/s 115BAA of the Act in case condonation of delay is for Form No. 10-IC and u/s 115BAB of the Act in case condonation of delay is for Form No. 10-ID , in Filing Status ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in Part A-GEN of the Form of Return of Income ITR-6 ; and (iii) The assessee was prevented by reasonable cause from filing such Form before the expiry of the time allowed and the case is of genuine hardship on merits. 5. No application for condonation of delay in filing of Form No. 10-IC or Form No. 10-ID shall be entertained beyond three years from the end of the assessment year for which such application is made . The time limit for filing of such application within three years from the end of the assessment year will be applicable for application filed on or after the date of issue of this Circular. A condonation application should be disposed of, as far as possible, within six months from the end of the month in which such application i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s received by the Competent Authority. 6. The delegation of powers, as per para 3 of this Circular shall cover all such applications for condonation of delay under section 119(2)(b) of the Act which are pending as on date of issue of this Circular. 7. Hindi Version to follow. On reading of the circular it appears that: There seems no time limit prescribed within which an assesse can make an application. There is no clarity about new applications, which can be made. As per first part of paragraph 5 n o application for condonation of delay in filing of Form No. 10-IC or Form No. 10-ID shall be entertained beyond three years from the end of the assessment year for which such application is made . Observations- For assessment year 2020-21 three ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... years have already lapsed on 31.03.2024, therefore, an application cannot be made for AY 2020-21- the first year. This need to be clarified and relaxation to be extended. As per second part of paragraph 5 The time limit for filing of such application within three years from the end of the assessment year will be applicable for application filed on or after the date of issue of this Circular. Observations- This means an application can be made after date of Circular , however, for AY 2020-21 application cannot be made due to three years limitation. Third part of paragraph 5 say a condonation application should be disposed of, as far as possible, within six months from the end of the month in which such application is received by the Compete ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt Authority. Observations- As per this part of paragraph it appears that an application can be made even after issue of this circular that is 18.11.2024. Though no time limit is prescribed for making application, but in interest of assessee application should be made as soon as possible and should not wait for end of three years from the end of assessment year. Therefore, there are ambiguities which need clarification. As per paragraph 6 the delegation of power is only to cover all such applications which are pending on 18.11.2024. Observation - this means any new application cannot be entertained by designated authority as per the delegation conferred by the Circular. This need to be clarified, otherwise the relaxations provided or intend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to be provided will not work fully as per intention. Applications before other authorities: There are cases in which Form was filed before AO/ CPC/ CIT(A) belatedly with COD petition. How these will be considered is not addressed. It appears that only cases where COD petition was filed before CIT will be considered. If the application has already been dismissed, then what will happen? There is no answer as to whether assessee can make an application for COD again or an application to reconsider the earlier order/ decision/ communication denying extension. The assesse has to make out a case that he was prevented by reasonable cause in filing form within time allowed or time extended. It is really difficult to satisfy delay of each day or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... some periods. The authority has to examine reasons before granting application. A general and simple way to extend the time is required. This is because relaxation can be availed only when in ITR filed within time allowed u.s. 139 (1) option has been exercised. Author still feel that such cases are fit cases where requirement to file prescribed form can be dispensed with to reduce procedural requirements, lapses, and litigation. Therefore, the CBDT is requested to issue instructions to allow particular concession, which has been opted in the ITR for filed within time allowed u.s. 139.1 and dispense with requirement of filing prescribed forms. In future, in ITR form itself suitable declaration or statement can also be inserted to the effect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the assessee is eligible for such concession. - Scholarly articles for knowledge sharing authors experts professionals Tax Management India - taxmanagementindia - taxmanagement - taxmanagementindia.com - TMI - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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