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TMI Blog2025 (2) TMI 698X X X X Extracts X X X X X X X X Extracts X X X X ..... has filed the return of income for A.Y. 2022-23. However, the CPC, Bangalore, has rejected the claim of the assessee to opt for the regime u/s 115BAA of the Act on the pretext that the same was filed belatedly for the earlier year. Law is fairly settled when the language used in the statute is clear and simple, then literal meaning is required to be given to the words used in the Statute while interpreting the Statute. In the present case, sub-section (5) of Section 115BAA of the Act has not restricted the application for one year alone, even if it has filed belatedly, however, it has been extended and applicable for the subsequent assessment years. If the application has been filed belatedly for the earlier year, as canvassed by the Revenue, on 29.03.2022 i.e., after the due date of filing of return of income on 15.03.2022, then the Revenue can withhold or deny the benefit of Section 115BAA for A.Y. 2021-22. But for the purpose of giving benefit for A.Y. 2022-23, the Revenue cannot raise this issue of filing of Form 10-IC belatedly for A.Y. 2022-23. Needless to say the Frm 10-IC on 29.03.2022 for A.Y. 2021-22, will also be treated as filed for A.Y. 2022-23 and subsequent year ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0-IC for the first time and for one time only, making the subsequent filing an acceptance that the previous form was invalid." 3. Facts of the case, in brief, are that the assessee is a private limited Company, fled its return of income for AY 2022-23 on 01.11.2022 by declaring a total income of Rs11,02,37,300/-. In the said return of income, the assessee has opted for provisions of section 115BAA details of which was provided by the assessee in the return of income under Sr. No (e) of Part A- GEN. The assessee has also fled Form 10IC on 29.03.2022 wherein the assessee has given a declaration that it will exercise the option referred to in subsection (5) of section 115BAA of the Income-tax Act, 1961 for previous year 2020-21 and subsequent financial years i.e. FY 2021-22 onwards. The assessee has received a proposal for adjustment u/s 143(1)(a) on 14.12.2022 for Rs 15,11,380/- with regard to disallowance u/s 36(1)(va) of the Act due to mismatch in disallowance made by the assessee in the return of income vis-a-vis Form 3CD. Finally, the said return was processed u/s 143(1) of the Act by determining a total income of Rs11,02,37,300/- by making a addition of Rs 15,11,380/- u/s 36(1) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Income Tax Act for filing return of income was 31.10.2021 which was extended to 15.03.2022 by CBDT. As the original due date i.e. 31.10.2021 falls in between the period "15.03.2020 to 28.02.2022", the extended due date as per order of Hon'ble Supreme Court will be 30.05.2022. In the appellant's case for AY 2021-22 the assessee has filed return of income and Form 10IC on 29.03.2022 i.e. before 30.05.2022 which is within the due date as directed by Hon'ble Supreme Court. Therefore, the Form 10-IC was filed within the due date for AY 2021-22 and the appellant is entitled to get the benefit of provisions of section 115BAA. Accordingly, the Assessing Officer is directed to recompute tax liability as per new taxation regime. This ground of appeal is allowed." 5. Feeling aggrieved with the order of ld.CIT(A), Revenue filed appeal before us and on the other hand, assessee filed Cross-Objections before us. 6. Before us, the CIT-DR submitted that the LD.CIT(A) has granted the benefit of low tax regime despite the failure of the assessee to file form 10-IC within the time provided for filing the return of income under Section 139(1) of the Act. It was submitted by the CIT-DR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AR has drawn our attention to page 1 of the paper book, whereby the Board has mentioned the application for seeking the applicability of the low tax rate as per Section 115BAA(5) of the Act. Further, it was submitted that the Board has not provided a specific time for filing the return of income, but only for the filing of the application for exercising of the option under sub-section (5) of Section 115BAA of the Income Tax Act, 1961, which pertains to seeking the low tax rate. Lastly, ld.AR has submitted that the reliance on the Board Circular issued in this regard, is of no use, as the power to condone the delay in filing Form 10-IC was initially conferred to the Board, but now the same power has been conferred to the Principal Commissioner of Income Tax. 9. The ld.AR in support of his Cross-Objection, has submitted that it is not within the power of CPC, Bangalore u/s 143(1) of the Act, to vary the adjustments and apply the normal provision of tax. For the above said purposes, he has drawn our attention to page 6 of the paper book, wherein the Revenue authority has acknowledged the receipt of Form 10-IC in accordance with law. Page 6 of the paper book is reproduced hereinbelow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e option of the assessee, be computed under the provisions of this section: Provided further that nothing contained in this section shall apply unless the option is exercised in accordance with the provisions of this sub-section." 12.1 Rule 21AE of the Income Tax Rules, 1962 provides as under : Rule 21AE - Form for exercising option under sub-section (5) of section 115BAA (1) The option to be exercised under sub-section (5) of section 115BAA by a person, being a domestic company, shall be in Form No. 10-IC. (2) The Form No. 10-IC shall be furnished electronically either under digital signature or through electronic verification code. (3) The option in Form No. 10-IC shall be furnished on or before the due date specified under sub-section (1) of section 139 for furnishing the return of income for the assessment year relevant to the previous year in which the option is exercised." 12.2. Form 10-IC as filed by the applicant for claiming the lower tax rate under Section 115BAA(5) is as under : -left intentionally- 13. From the conjoint reading of Sub-Section (5) of Section 115BAA, Rule 21AE of the Income Tax Rules, 1962 and Form 10-IC, it is abundantly clear that the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sue which fell for consideration before us is whether the assessee having filed a belated form 10-IC i.e., on 29.03.2022 for the previous year 2021-22, can continue to avail the benefit of Section 115BAA of the Act in the assessment year 2022-23 or not. In our considered opinion, sub-section (5) of Section 115BAA of the Act clearly mentions that the option, once exercised, will be applicable for the subsequent assessment years. 14.1. If we examine the facts and law, as argued before us, it is clear that the provisions of Section 115BAA of the Act are beneficial legislation, aiming to extend certain benefits to domestic companies with a reduced rate of taxation. This essential provision was designed to boost the industries and reduce unnecessary litigation, and it should not be denied on account of some technical reasons. 15. In the present case, admittedly, the assessee has exercised his option for the previous year 2020-21 and thereafter, based on the same declaration, the assessee has filed the return of income for A.Y. 2022-23. However, the CPC, Bangalore, has rejected the claim of the assessee to opt for the regime under Section 115BAA of the Act on the pretext that the same ..... X X X X Extracts X X X X X X X X Extracts X X X X
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