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TMI Blog2025 (1) TMI 1402X X X X Extracts X X X X X X X X Extracts X X X X ..... claiming deductions as contemplated u/s 115BAA of the Act. Authorities below failed to appreciate that 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 u/s 115BAA would cause genuine hardship to the assessee. Rejection of the petition u/s 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 CBDT's Circulars extending the due dates for filing such forms in earlier years indicate a recognition of such procedural difficulties. Thus, ground of appeal raised by the assessee is restored back to the file of AO with a direction to take on record the Form 10IC and consider the same in consonance with the CBDT Circular and the return of income filed by the assessee and after verifying the same, he will adjudicate the issue whether the assessee is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 13.11.2022 wherein the CPC calculated the tax liability without applying provisions of section 115BAA.The CPC calculated tax u/s 115JB (instead of section 115BAA) and has not given the benefit of the provisions of section 115BAA as form 10IC was filed late by the assessee. 4. Section 115BAA of the Income Tax Act, 1961 offers a reduced tax rate for domestic companies. Rule 21AE (1) of the Income Tax Rules allows a domestic company to benefit from lower tax rates by filing Form 10IC. By doing so the company will be charged a 22% tax rate under the Income Tax Act 1961 and will receive all benefits under Section 115BAA. Form 10IC must be submitted by the 'due date' for filing the company's return for the previous year. 5. Before us, while the ld.DR has relied on the orders of authorities below, the ld.AR of the assessee has made oral arguments and also made written submission in support of the grounds of appeal. It is contented that while filing the return of income of income for the AY 2021-22, one of the members of the accounts department selected the option of paying taxes as per the provisions of section 115BAA, however inadvertently failed to file form 101C in time. Non sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No. 19/2023 dated 23rd October 2023 has condoned delay in filing of Form. No. 10-IC as per Rule 21AE of the Rules for previous year relevant to A.Y. 2021- 22 where certain conditions are satisfied. Assessee's case is covered by the circular as assessee has satisfied all the conditions specified in the above circular as under - The return of income for AY 2021-22 has been filed on 11.03.2022 i.e. before the due date specified under section 139(1) of the Act. The assessee company has opted for taxation u/s 115BAA of the Act while filing the return and has calculated and paid the tax u/s 115BAA. 6. We have duly considered all the relevant facts of the case. The issue involved in the above appeal pertains to denial of option u/s 115BAA on the ground that Form 10IC was not submitted before the prescribed time i.e. due date u/s 139(1). From the facts of the case and the contentions made, we find that the assessee had acted in bonafide manner in claiming the option of discharging tax under Section 115BAA of the Act, in as much as while filing the return, it made clear that option to pay tax under Section 115BAA was exercised. Importantly, tax has also been paid at 22% in accordance w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e fact of the petitioner to file Form 10-IC within the period stipulated under Section 115BAA would cause genuine hardship to the assessee. 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 CBDT's Circulars extending the due dates for filing such forms in earlier years indicate a recognition of such procedural difficulties. These Circulars indicate a degree of administrative flexibility and a recognition that procedural lapses should not necessarily lead to the denial of substantive benefits. Moreover, denying the benefit based solely on this lapse would be against the principles of equity and justice, especially when there is no dispute regarding the assessee's eligibility for the lower tax rate. Considering the principle of beneficial interpretation, the procedural requirements should not override substantive benefits. The Courts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ply with the rules. Once the assessee filed the Form 10IC, the Jurisdictional AO is directed to revise the tax computation of the assessee in compliance with the provisions of section 115BAA of the Act." 6.4 The co-ordinate bench of ITAT,Kolkata has taken also considered the issue in hand as below in the case of Fastner Commodeal Private Limited vs Adit (Cpc), Bengaluru on 7 March, 2024 ITA No.1010/Kol/2023: "9. We after hearing the rival submission of the parties and perused the material available on record find that the assessee is a domestic company and eligible to avail the benefit of tax u/s 115BAA of the Act, provided the assessee fulfilled the requisite condition for availing such benefit. The point of dispute in the appeal is only in relation to lower authorities are that assessee has not filed Form No. 10IC electronically before due date for filing return of income u/s 139(1) of the Act. The case of the assessee is that Form 10IC could not be uploaded on ITBA portal due to technical glitch and it was the first year of availing such benefit. The only question for our consideration is whether non-filing of Form No. 10IC on ITBA portal is fatal to the assessee or not in av ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d due to the fault on the part of the System as mentioned by the assessee, it would have happened that the assessee has not filed the Form alongwith the return of income. It is not the case of the Revenue that the assessee is not entitled for the tax rate under Section 115BAA of the Act. If the assessee had filed Form 10IC within the prescribed time alongwith return of income, as held by various Hon'ble High Courts including the jurisdictional High Court, the CIT(A) has co-terminus power as that of the Assessing Officer. The CIT(A) is required to consider the report in Form 10IC and, therefore, it will be appropriate to take on record the Form 10IC and consider the same in consonance with the return of income filed by the assessee and after verifying the same, the Assessing Officer will adjudicate the issue whether the assessee is entitled for tax rate as per Section 115BAA of the Act in Assessment Year 2020-21 or not. Needless to say, the assessee be given opportunity of hearing by following the principals of natural justice." 6.6 The ld.AR has placed on record a copy of the letter addressed to NFAC, New Delhi dated 23.09.2024 as per page 3 of the paper book dated 15.01.2025 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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