ITAT Hyderabad: Section 115BAA Benefit Cannot Be Denied on Technicalities; MAT Not Applicable Once Option Validly Exercised

Wingtech Mobile Communication (India) Private Limited Vs DCIT (ITAT Hyderabad)

ITAT Hyderabad: Section 115BAA Benefit Cannot Be Denied on Technicalities; MAT Not Applicable Once Option Validly Exercised

In this case, the assessee company opted for the concessional tax regime under section 115BAA by filing Form 10-IC on 30.11.2022. However, CPC/AO treated the form as belated by considering an earlier due date (07.11.2022) based on the assessee’s incorrect selection in the ITR that transfer pricing provisions were not applicable, and accordingly computed tax under MAT provisions u/s 115JB. The CIT(A) upheld this view, treating compliance with timelines as mandatory.

The ITAT rejected the approach of the CIT(A) and AO, holding that the due date under section 139(1) depends on the class of assessee and not on whether audit reports (like Form 3CEB) were actually filed. Since the assessee had international transactions, it fell within the category where the due date was 30.11.2022, irrespective of filing lapses.

The Tribunal further held that an inadvertent error in the ITR (marking 92E as not applicable) cannot override substantive facts, especially when related party transactions were evident from financial statements. Non-filing or delayed filing of audit reports may attract penal consequences but cannot alter the statutory due date or deny substantive benefits.

Emphasizing that section 115BAA is a beneficial provision, the ITAT ruled that once the option is exercised within the correct due date, the benefit cannot be denied on technical or procedural grounds. It also clarified that once section 115BAA is opted, MAT provisions u/s 115JB do not apply.

Accordingly, the Tribunal set aside the CIT(A)’s order and directed the AO to compute tax under section 115BAA, allowing the appeal in favour of the assessee.

FULL TEXT OF THE ORDER OF ITAT HYDERABAD

This appeal filed by the assessee is directed against the order of the learned Commissioner of Income Tax (Appeals), Visakhapatnam – 3, dated 21.11.2025, pertaining to the assessment year 2022-23. The grounds raised by the assessee read as under :

“1. That the Hon’ble CIT(A) has erred on facts, in circumstances of the case and in law in upholding the assessment order u/s 143(3) of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) with tax liability of Rs. 23,74,19,543, which is bad in law, arbitrary and contrary to the provisions of law and settled legal position.

2. That the Hon’ble CIT(A) has erred on facts, in circumstances of the case and in law by upholding computation as per old tax regime and computing tax liability under MAT, though MAT provisions are not applicable to companies which have opted for new tax regime u/s 115BAA of the Act, which is in teeth of the mandate of Article 265 of the Constitution of India.

3. That the Hon’ble CIT(A) has erred on facts, in circumstances of the case and in law by ignoring that for AY 2022-23, the statutory due date for filing ITR was 30th November 2022, for all assesses on which Transfer Pricing provisions were applicable, which was independent of timing and manner of compliances undertaken by the Appellant.

4. That the Hon’ble CIT(A) has erred on facts, in circumstances of the case and in law by considering that there was delay in filing Form 10-IC, without appreciating that the said form was duly filed within timelines, after satisfaction of conditions as prescribed in section 115BAA(5) r.ws. 139(1) and Income Tax Rule 21AE.

5. That the Hon’ble CIT(A) has erred on facts, in circumstances of the case and in law in disregarding Appellant’s right to be assessed u/s 115BAA of the Act, ignoring that the Appellant acted in a bonafide manner by completing all the applicable compliances, in accordance with the law in force.

6. That the Hon’ble CIT(A) has erred on facts, in circumstances of the case and in law by disregarding settled judicial precedents that declaration of intention of the Assessee for availing new tax regime u/s 115BAA of the Act is relevant, irrespective of any procedural lapses.

7. That the Hon’ble CIT(A) has erred on facts, in circumstances of the case and in law by passing a non-speaking order, without considering procedural lapses, without disposing-off applications/ objections raised by the Appellant and without providing opportunity of being, which is clearly in violation of the principles of natural justice.

8. That the Hon’ble CIT(A) has erred on facts, in circumstances of the case and in law, in confirming the initiation of penalty proceedings under section 271B of the Act.

9. That the Hon’ble CIT(A) has erred on facts, in circumstances of the case and in law, in confirming the assessment order whereby interest was charged u/s 234A, 234B and 234C of the Act.

10. That the assessment order in question is based on whims, surmises, conjectures and without any basis, accordingly, the same is not sustainable either on facts or in law.

11. That all the appeal grounds raised hereinabove are independent grounds and without prejudice to each other That the Appellant craves leave to add, alter and/or amend all or any of the foregoing grounds of appeal.”

2. The brief facts of the case are that, the assessee company, M/s. Wingtech Mobile Communications (India) Private Limited, is engaged in the business of manufacturing and trading of mobile phones, mobile hotspot devices and other electronic components. The assessee filed its return of income for the assessment year 2022-23 on 30.12.2022 declaring total income at Rs. NIL. During the course of assessment proceedings, the return of income filed by the assessee was selected for complete scrutiny under CASS to verify various issues including large increase in unsecured loans, high creditors/liabilities, mismatch in import purchases, investment in tangible assets and claim of depreciation, refund claim, high interest expenditure and investment in immovable property. Accordingly, notice under Section 143(2) of the Income-Tax Act, 1961 was issued, followed by notices under Section 142(1) of the Act, calling for details. In response, the assessee furnished partial information. Subsequently, the case was transferred to Central Circle, Tirupati under Section 127 of the Act, and further notices under Section 142(1) of the Act, were issued. In response to the notices, the assessee furnished details from time to time and also submitted replies to show-cause notices issued during the course of assessment proceedings. After considering the information furnished by the assessee, the A.O. completed the assessment under Section 143(3) of the Act, by accepting the return of income filed by the assessee and determined total income at Rs. NIL.

3. Aggrieved by the assessment order, the assessee preferred an appeal before the Ld. CIT(A). Before the Ld. CIT(A), the assessee has challenged the assessment order and the consequential computation of tax liability on the ground that while processing the return of income under Section 143(1) of the Act, the CPC has wrongly invoked the provisions of Section 115JB of the Act and computed tax liability under MAT, by treating Form 10-IC as belated, even though the assessee had opted for taxation under Section 115BAA of the Act. The assessee has contended that it had filed its return of income for the assessment year 2022-23 on 30.12.2022 declaring total income at Rs. NIL and had exercised option for concessional tax regime under Section 115BAA of the Act. It was further contended that since the assessee was subject to transfer pricing provisions, the due date for filing return of income under Section 139(1) of the Act was 30.11.2022, and therefore, the filing of Form 10-IC was within the permissible time in terms of Section 115BAA(5) r.w.s. Section 139(1) of the Act and Rule 21AE of the Income Tax Rules, 1962. The assessee has further contended that the CPC, while processing the return, has erroneously considered an earlier date and treated Form 10-IC as belated, thereby denying the benefit of Section 115BAA and computing tax liability under MAT provisions, which are not applicable once the option under Section 115BAA is exercised. The assessee has also submitted that the delay, if any, in filing Form 10-IC was only procedural in nature and does not defeat the substantive claim of the assessee for concessional taxation under Section 115BAA of the Act. It was further contended that the assessee has acted in a bona fide manner by fulfilling all the conditions prescribed under the Act and the Rules and that denial of such benefit on technical grounds is not justified. The assessee has also raised objections against levy of interest under Sections 234A, 234B and 234C of the Act and initiation of penalty proceedings, and has further contended that the order passed is in violation of principles of natural justice.

4. The Ld. CIT(A) after considering the submissions of the assessee and examining the material available on record, observed that although the assessee has claimed to have exercised option under Section 115BAA of the Act, the Form 10-IC required for exercising such option was not filed within the prescribed due date as contemplated under Section 139(1) of the Act. The Ld. CIT(A) further observed that the CPC has processed the return of income by considering the date of filing of Form 10-IC and treated the same as belated, and consequently denied the benefit of concessional tax regime under Section 115BAA of the Act. The Ld. CIT(A) also observed that the provisions of Section 115BAA are conditional and the assessee is required to strictly comply with the statutory conditions including timely filing of Form 10-IC, and in the absence of such compliance, the assessee cannot claim benefit under the said provision. The Ld. CIT(A) further held that the CPC was justified in computing tax liability under Section 115JB of the Act in the absence of valid exercise of option under Section 115BAA, and accordingly upheld the computation of tax under MAT provisions. The Ld. CIT(A) also rejected the contentions of the assessee that the delay in filing Form 10-IC is procedural and observed that the requirement of filing the form within due date is mandatory in nature. The Ld. CIT(A) further confirmed the levy of interest under Sections 234A, 234B and 234C of the Act as consequential in nature and also upheld initiation of penalty proceedings. Thus, the Ld. CIT(A) dismissed the appeal of the assessee. The relevant portion of order of Ld. CIT(A) is reproduced as under :

“6.1. I have carefully examined the assessment order dated 30.03.2024 passed under section 143(3) of the Act, Form 35, the grounds of appeal, the statement of facts and the detailed written submissions filed by the appellant, including the letters dated 15.11.2025, 20.11.2025 and 21.11.2025 together with all annexures. During the appellate proceedings, Ms. Ruchika Gupta, Chartered Accountant, appeared on and addressed Authorised Representative of the appellant-company on 22.11.2025 and advanced elaborate arguments in support of the appeal, placing reliance on a number of judicial precedents, all of which have been examined in the context of the present case.

6.2 The appellant is a company registered under the Companies Act, 2013 and is engaged in the business of manufacturing and trading of mobile phones, mobile hotspot devices and other electronic components. For A.Y. 2022-23 the financial statements were audited on 14.12.2022. The due date for furnishing the tax-audit report, where applicable, the report in Form 3CEB was 31.10.2022 (extended to 07.11.2022). The due date for filing the return of income in cases covered by section 92E was 30.11.2022, whereas for other audit cases it was 31.10.2022 (extended to 07.11.2022). The appellant filed its return of income on 30.12.2022 declaring Nil total income after set-off of brought-forward losses. In the return it was claimed that the company had opted for the new tax regime under section 115BAA and that Form 10IC had been filed on 30.11.2022. However, in Part A – General of the ITR, at Column (d) of “Audit Information”, the appellant clearly selected “No” against the query whether it was required to furnish a report under section 92E of the Act. Based on this declaration, the Centralised Processing Centre (CPC) treated the appellant as not covered by section 92E, adopted 07.11.2022 as the due date under section 139(1), treated Form 10IC filed on 30.11.2022 as belated and consequently computed tax liability under the MAT provisions. Subsequently, scrutiny assessment was completed under section 143(3) on 30.03.2024 accepting the returned income but confirming the tax, interest and fee as determined on the basis of MAT, resulting in a demand of Rs. 18,34,19,875 as per the assessment order.

6.3 In the letter dated 15.11.2025 and in oral arguments, the learned AR has, in substance, contended that (i) for the year under consideration the appellant was subject to the provisions of section 92E on account of “international transactions” and tax audit under section 44AB and therefore the due date for filing the return and exercising the option under section 115BAA was 30.11.2022; (ii) the answer “No” in the ITR column relating to section 92E was an inadvertent clerical error arising out of attrition and lack of coordination in the Finance and Accounts team and should not be used to deny the extended due date; (iii) the appellant had filed Form 10IC on 30.11.2022 and the particulars of Form 10IC had been duly reflected in the return of income; (iv) the option under section 115BAA should be treated as validly exercised; (v) Form 3CEB was subsequently filed on 08.06.2023 and, although the related-party transactions disclosed therein differed from those in the ITR, this shows that the appellant was always bona fide in treating international transactions as applicable; and (vi) the A.O., while passing the order under section 143(3) without making any addition to income, merely followed the CPC’s view without independent application of mind, without rectification by filing appeal against the intimation under section 143(1), filing rectification applications under section 154, attempting online rectification and lodging grievances on the CPGRAMS, and therefore the error in the ITR should be ignored. In this connection the learned AR specifically drew attention to (a) the reply dated 31.08.2023 filed in the e-proceedings against notice under section 143(2), and (b) the rectification application dated 05.09.2023 filed under section 154 before the DCIT, Tirupati, both of which, according to her, demonstrate that the very same grievance regarding the due date, exercise of option under section 115BAA and non-applicability of MAT had been raised during the assessment proceedings and even prior to passing of the order under section 143(3). On these grounds the learned AR of the appellant urged that the MAT demand be deleted and the income be assessed only under the normal provisions after allowing the benefit of section 115BAA.

6.4 I have carefully considered these submissions. It is noted that the ITR, which is a statutory form verified and digitally signed by the authorised person of the company, contains an unambiguous declaration that the assessee is not required to furnish a report under section 92E. The question in Column (d) of “Audit Information” is simple, specific and material for determining the due date. It is answered on the basis of the assessee’s own knowledge of whether it has entered into international transactions attracting the provisions of Chapter X. This is a direct “Yes/No” declaration. Once such a declaration is made, the CPC proceeds for processing on that basis. A later plea of simple or clerical error has to be examined with great caution, particularly when accepting such a plea would have the effect of altering the due date under section 139(1) and thereby changing the basic condition for availing the benefit of section 115BAA.

6.5 The plea that the answer “No” was inadvertent due to staff attrition or lack of coordination is not supported by contemporaneous conduct. Form 3CEB was admittedly not filed on or before 30.11.2022. In fact, even the statutory financial statements were signed and audited only on 14.12.2022, i.e., after both 07.11.2022 and 30.11.2022, which makes it evident that neither the tax-audit report under section 44AB nor the transfer-pricing report under section 92E could have been furnished by the prescribed dates; consequently, the basic pre-condition for claiming the extended due date for a section-92E case itself remained unfulfilled. Further, from the CPC intimation under section 143(1) dated 20.02.2023 (filed by the appellant as Annexure 6), it is evident that, as on the date of such processing, no report under section 92E in Form 3CEB had been filed or recognised by the system. The intimation proceeds on the basis of due date 07.11.2022 and records tax liability under MAT without any reference to section 92E or Form 3CEB. Thus, for several months after filing the return on 30.12.2022, the appellant did not act as if it were a case covered by section 92E. Form 3CEB was ultimately filed only on 08.06.2023, and that too after issue of notice under section 143(2) on 01.06.2023. This is inconsistent with the pleading of a simple ticking mistake.

6.6 The further explanation that there were unforeseen circumstances and attrition in the Finance and Accounts team is also of no assistance. These are internal administrative matters of the company and cannot extend or relax the statutory time-limits laid down in section 139(1) or the mandatory condition in section 115BAA(5) that the option must be exercised on or before the due date.

Reliance on the disclosures of related-party transactions in the audited financial statements and tax-audit report is also misplaced. Such disclosures are mandated under the Companies Act and applicable accounting standards and cover a wider category of transactions as well as cross-border related-party dealings. All related-party transactions are not “international transactions” or “specified domestic transactions” for the purposes of Chapter X. Whether a particular arrangement falls within the definition in section 92B is itself a matter of legal characterisation. Therefore, the mere existence of related-party disclosures in the audited financial statements cannot, by itself, lead to the conclusion that section 92E necessarily applied, especially when the assessee has affirmatively declared otherwise in the ITR and has not filed Form 3CEB within the prescribed date. The contention that the Department should have accepted eligibility of section 92E only from those disclosures is therefore not acceptable.

6.7 The appellant has stressed that Form 10IC was filed on 30.11.2022 and that this should be treated as within time on the footing that the case falls under section 92E. This argument overlooks that the statutory due date is determined by the objective criteria in section 139(1) read with the requirement of furnishing a report under section 92E, and not by the assessee’s later characterisation of its status. On the relevant dates, the appellant had neither furnished a report under section 92E nor indicated in the return that it was obliged to do so. In these circumstances, the CPC and the Assessing Officer were fully justified in treating the appellant as a non-section 92E case and in applying 31.10.2022 (extended to 07.11.2022) as the due date. On that basis, Form 10IC filed on 30.11.2022 is beyond the validly prescribed date for the option under section 115BAA and cannot be regarded as validly exercised for this assessment year.

6.8 The learned AR has argued that no addition has been made to the returned income in the order under section 143(3) and that the assessment should therefore result in a higher demand. This contention ignores that the computation of tax liability is governed by the charging and machinery provisions of the Act, including sections 115BAA and 115JB, where the conditions for availing the concessional regime under section 115BAA are not fulfilled, the Assessing Officer has no option but to apply the normal provisions, including the MAT provisions, even if the returned income is accepted. Liability arising from the applicable rate or method of computation cannot be treated as an “addition” to income and does not render the assessment order bad in law.

6.9 The appellant has relied on subsequent steps—filing of appeal against the intimation under section 143(1), filing of rectification applications under section 154 before the Assessing Officer, attempts at online rectification and multiple grievances on the CPGRAMS—as evidence of bona fides. These actions, however, are post-processing events and cannot alter the factual position as on the relevant statutory dates. Particular emphasis has been placed on the reply dated 31.08.2023 in response to notice under section 143(2), wherein a petition was enclosed explaining the error and requesting deletion of the MAT demand, and on the rectification petition dated 05.09.2023 filed under section 154 before the DCIT, Tirupati, which, according to the learned AR, remained pending even before the assessment order was passed and therefore shows that the issue was squarely raised at the assessment stage itself.

These actions only show that, after CPC processing and after initiation of scrutiny proceedings, the appellant sought to change the consequences of its earlier declaration and to have the computation under section 115BAA substituted for the MAT computation. They do not alter the factual position that, on the statutory due dates, (a) the financial statements themselves were not yet audited, (b) Form 3CEB had not been filed, and (c) the ITR, duly verified by the authorised signatory, clearly stated that section 92E was not applicable. The pendency of a rectification petition or of representations before the NFAC cannot retrospectively cure these substantive lapses or override the mandatory scheme of sections 115BAA and 115JB. More importantly, once a regular assessment under section 143(3) has been completed after issue of notice under sections 143(2) and 142(1), the earlier intimation under section 143(1) stands merged in the regular assessment. The present appeal lies against the order under section 143(3); any grievance about non-disposal of rectification applications or alleged portal-related technical issues cannot empower this appellate authority to rewrite the return of income, to deem an unaudited-accounts case as a section-92E case, or to relax the mandatory statutory conditions attached to section 115BAA.

6.10 The learned AR has also placed reliance on many case laws including the following judicial precedents in support of the plea that delay or lapses in filing Form 10IC are only procedural and should not deprive an assessee of the concessional rate under section 115BAA:

(a) Cell Com Teleservices (P.) Ltd. v. Union of India [2025] 176 com712 (Allahabad), where the Hon’ble Allahabad High Court, exercising writ jurisdiction, held that filing of Form 10IC prior to filing of return is not mandatory and that delay in filling the form can be condoned under section 119(2)(b) where “genuine hardship” is established, and accordingly directed condonation of delay in that case.

(b) KN Support Services (P.) Ltd. v. DCIT [2025] 178 com368 (Delhi Trib.), where the Delhi Bench of the Hon’ble ITAT treated delay in filing Form 10IC as a procedural lapse and, noting that the assessee had clearly opted for section 115BAA in the return and paid tax at 22 per cent, directed that the concessional tax rate be allowed despite the form having been filed after the due date under section 139(1).

(c) ACIT v. Magik Kraft (P.) Ltd. [2025] 179 com632 (Mumbai Trib.), where the Mumbai Bench of the Hon’ble ITAT held that inadvertent filing of Form 10-IB instead of Form 10IC, when all substantive conditions of section 115BAA were otherwise fulfilled and the correct form was later filed electronically and manually, was a curable technical lapse and did not disentitle the assessee from the concessional rate.

I have carefully considered the above decisions relied upon by the appellant And that they do not assist the appellant on the peculiar facts of the present case. Cell Com Teleservices (P.) Ltd. (supra), the assessee had approached the Principal Commissioner of Income-tax with a specific application under section 119(2)(b) seeking condonation of delay in filing Form 10IC and had placed on record exceptional and tragic circumstances family of the person handling tax matters severe illness and successive deaths in the constitute clear “genuine hardship”. The Court’s interference was directed at the which the Hon’ble High Court found to manner in which the Principal Commissioner had exercised the statutory power of condonation and it ultimately directed the authority to condone the delay. In the present appeal, by contrast, there is no order under section 119(2)(b) before me, nor does this appellate authority possess any such power of condonation. The reasons cited by the appellant internal attrition, lack of coordination and portal-related technical issues even if assumed to be correct, stand on a very different footing from the extraordinary personal hardship in Cell Com. More importantly, the jurisdiction invoked before the Hon’ble Allahabad High Court was to examine the legality of an order passed under section 119(2)(b), whereas I am called upon only to test the correctness of an assessment order under section 143(3). The ratio of Cell Com cannot therefore be extended to authorise this appellate authority to treat a statutorily time-barred Form 10IC as valid,

The decisions of the Hon’ble ITAT in KN Support Services (P.) Ltd. and Magik Kraft (P.) Ltd. (supra), even though non-jurisdictional, are also clearly distinguishable on facts. In KN Support Services, the assessee had, while filing the return, unambiguously stated that it was exercising the option under section 115BAA, paid tax at 22 per cent and subsequently e-filed Form 10IC, though after the due date under section 139(1). The Tribunal treated this as a case of substantial compliance where the intention to opt for the new regime was clear from the beginning and there was no contradictory declaration in the return. In Magik Kraft (P.) Ltd., the assessee had in fact exercised the option under section 115BAA in time but had mistakenly filed Form 10-IB instead of Form 10IC; the Tribunal, treating filing of the correct form as a procedural requirement, granted an opportunity to cure this defect and thereafter allowed the benefit. In the present case, however, the defect goes to the root of eligibility itself: the appellant, in a verified ITR, has categorically stated that it is not required to furnish a report under section 92E; Form 3CEB was not filed by the statutory due date and was filed only on 08.06.2023, after the issue of notice under section 143(2); and the CPC intimation under section 143(1) dated 20.02.2023 also clearly proceeds on the basis that the applicable due date is 07.11.2022 with no reference to section 92E or Form 3CEB. In such a situation, the doctrine of “substantial compliance” applied in the above ITAT decisions cannot be mechanically imported to rewrite the assessee’s own categorical declaration and to alter the statutorily prescribed due date for exercising the option under section 115BAA.

Further the reliance of the learned AR of the appellant on the judgments in Principal Commissioner of Income-tax v. Fastner Commodel (P.) Ltd. [2025] 172 taxmann.com 573 (Calcutta) and Arrow Electronics India (P.) Ltd. v. Deputy Commissioner of Income-tax [2025] 179 taxmann.com 518 (Bangalore Trib.) are factually distinguishable. In those cases, the assessees had filed their returns within the prescribed/extended time, had clearly exercised the option under section 115BAA and satisfied all substantive conditions; only a procedural lapse in timely filing of Form 10IC was condoned. In the present case, financials were not audited by the due date, Form 3CEB was filed belatedly and section 92E was expressly shown as “No” in the retum, indicating non-fulfilment of basic statutory pre-conditions, not a mere procedural defect.

On the other hand, guidance is available from binding decisions of the Hon’ble Supreme Court on the manner in which exemption or concessional-rate provisions are to be interpreted. In Commissioner of Customs (Import) v. Dilip Kumar & Co. (2018) 9 SCC 1: [2018] 95 taxmann.com 327 (SC) (Constitution Bench), the Court authoritatively held that an exemption provision or notification must be interpreted strictly, the burden lies upon the assessee to show that it squarely falls within the terms of the provision; and in case of ambiguity in an exemption provision, the benefit must go to the revenue, unlike in the case of ordinary charging provisions. Likewise, in Pr. CIT v. Wipro Ltd. [2022] 140 taxmann.com 223 (SC), dealing with exemption under section 10B, the Hon’ble Supreme Court held that the twin statutory conditions of furnishing declaration to Assessing Officer in writing and to file same before due date of filing original return of income under section 139(1), are mandatory, and that non-compliance disentitles the assessee from the benefit notwithstanding equitable considerations. Although these decisions pertain to other provisions, they lay down general principles that conditions attached to a tax Incentive or concessional regime must be strictly complied with, and neither the assessee nor the appellate authorities can dilute the time and manner prescribed by the statute.

6.11 In view of the above discussion, I hold that the Assessing Officer’s computation was correct in treating the option under section 115BAA as not validly exercised within the time prescribed under section 139(1) read with Rule 21AE, in applying the old tax regime and in computing tax liability under section 115JB on MAT basis as reflected in the assessment order. Grounds of Appeal Nos. 2 to 6, which challenge the adoption of the due date, the treatment of Form 10IC as belated and the consequential MAT liability, are therefore rejected. Ground Nos. 1 and 9 are general in nature and do not call for specific adjudication, Ground Nos 7-and 7 and 8, relating to initiation of penalty under section 271B and levy of interest under sections 234A, 234B and 234C, are consequential in nature and follow from the determination of tax liability as upheld above; no separate interference is called for.

6.12 In the result, the appeal is dismissed.”

5. Aggrieved by the order of the Ld. CIT(A), the assessee is in appeal before the Tribunal.

6. The learned counsel for the assessee Ms. Ruchika Gupta, C.A. submitted that, the learned CIT(A) erred in upholding tax computed by the A.O. in terms of Section 115BAA of the Income Tax Act, 1961, even though the assessee has exercised option to pay tax as per Section 115BAA of the Act, from the assessment year 2022-23 by filing relevant Form 10-IC on 30.11.2022, which is on or before the due date provided under Section 139(1) of the Income Tax Act, 1961. The learned counsel for the assessee, referring to dates and events, submitted that, the assessee company was engaged in the business of manufacturing and trading of mobile phones, etc., is subjected to tax audit under Section 44AB of the Income Tax Act and Transfer Pricing Audit under Section 92E of the Act, because the assessee company is having cross border transactions with it’s A.E., and related parties. Further, the required audit report under Section 44AB of the Act, has been filed along with return of income on 30.12.2022. The learned counsel for the assessee further submitted that, the assessee company has also furnished audit report in Form 3CEB on 08.06.2023 along with the Transfer Pricing Study details in order to comply with the provisions of Section 92E of the Act. Although the assessee has complied by filing relevant statutory forms by exercising option under Section 115BAA of the Act, on or before the due date provided under Section 139(1) read with Rule 21AE of the Income-Tax Rules, 1962 (for short “I.T. Rules, 1962”), but the A.O./CPC had considered the due date for furnishing return of income by the assessee company under Section 139(1) of the Act, as 30.10.2022 and extended up to 07.11.2022 only on the ground that, the assessee company has not submitted relevant audit report in Form No.3CEB along with return of income and further in the ITR filed for the year under consideration, the assessee company has stated that the audit report in Form No.3CEB is not applicable.

7. The learned counsel for the assessee further submitted that, the due date for filing return of income provided under Section 139(1) of the Act, is for class of assessees and not for any single assessee and the date of filing of return of income and if an assessee falls in the class of the assessees, whether it files relevant statutory reports or not, but the due date provided for filing return of income under Section 139(1) of the Act, is not changed. If at all any assessee has not followed or not filed relevant reports on or before the due date, then other penal provisions are attracted. However, the due date for filing return of income cannot be preponed or postponed just because the assessee has not furnished the statutory forms. The learned counsel for the assessee further, referring to various documents submitted that, including the application filed before Ministry of Corporate Affairs for extension of Annual General Meeting and the extension granted by the Ministry of Corporate Affairs for conducting Annual General Meeting (for short “AGM”) dated 03.10.2022, submitted that, the assessee has sought extension for holding AGM on the ground that due to involvement of foreign companies, there is a delay in audit and for the said reason, they were unable to conduct AGM within the stipulated time. The Ministry of Corporate Affairs, after considering the relevant applications filed by the assessee, has extended the due date for holding Annual General Meeting by three months, i.e., up to 31.12.2022. The assessee company thereafter finalized the accounts and also obtained Audit Report under the Companies Act, 2013 and also Tax Audit Report under Section 44AB of the Act, and filed return of income on 30.12.2022, well within the extended time limit for holding Annual General Meeting. Therefore, the allegation of the A.O. and learned CIT(A) that the assessee has not finalized its books of accounts and also not filed audit report on or before the due date is incorrect and for this reason, the option exercised by the assessee for paying tax as per new regime in terms of Section 115BAA of the Act, cannot be denied.

8. The learned counsel for the assessee further, referring to financial statements and tax audit report, submitted that the assessee company is having financial transactions with its related parties and the same has been reported in financial statements and audit report. However, there is a delay in submission of audit report in Form 3CEB due to various reasons, including due to high attrition of employees, and the same has been finally filed on 08.06.2023. Therefore, the allegation of the learned CIT(A) that the assessee company has filed audit report in Form No. 3CEB only after issuance of notice under Section 143(2) of the Act, is misleading and cannot be accepted. Therefore, she submitted that, the assessee has rightly opted for paying tax as per Section 115BAA of the Act, and also filed relevant form 10-IC on or before the said date in terms of Rule 21AE of the Income Tax Rules, 1962. The learned CIT(A), without appreciating the relevant facts, simply upheld the tax computed under normal provisions of book profit. In this regard, she relied upon the following judicial precedents :

(a) Cell Com Teleservices (P.) Ltd. v. Union of India [2025] 176 com712 (Allahabad).

(b) KN Support Services (P.) Ltd. v. DCIT [2025] 178 com368 (Delhi Trib.).

(c) ACIT v. Magik Kraft (P.) Ltd. [2025] 179 com632 (Mumbai Trib.), where the Mumbai Bench of the Hon’ble ITAT held that inadvertent filing of

9. The learned CIT-DR, Ms. U. Mini Chandran, on the other hand, supporting the order of learned CIT(A), submitted that although the assessee has filed Form No. 10-IC on 30.11.2022 and claimed that, it has exercised option to pay tax under Section 115BAA of the Act, but going by the return of income filed by the assessee on 30.12.2022 and the relevant audit reports obtained for the year under consideration, it is very clear that the due date for filing return of income for the assessment year under consideration is 31.10.2022 and extended up to 07.11.2022. Therefore, the claim of the assessee that it had furnished Form No. 10-IC on or before the due date for filing return of income under Section 139(1) of the Act, is incorrect. The learned CIT-DR further submitted that in the return of income, the assessee has claimed that transfer pricing audit is not applicable for the year under consideration, which is evident from the relevant form filed by the assessee where the column applicable for filing Form 3CEB has been chosen as not applicable. Although the assessee claims that it is only an inadvertent error while filing return of income, but going by the other evidences like filing return of income on 30.12.2022, obtaining audit report under Section 44AB of the Income Tax Act, 1961 on 14.12.2022, clearly shows that the books of accounts of the assessee were not ready and the assessee shall furnish return of income as per the due date provided under Section 139(1) of the Act, to the cases where the audit report under Section 92E of the Act, is not applicable. The submission of the counsel for the assessee in light of extension of AGM by the Ministry of Corporate Affairs in light of staff attrition and lack of coordination and also the delay in filing the accounts is also not supported the case of the assessee, because these are internal matters of the assessee and nothing to do with filing relevant form No.10-IC within the due date provided under the Act. Since the assessee has not complied with the provisions of Section 115BAA of the Act, by filing Form No. 10-IC within the due date, the A.O. has rightly computed tax by applying provisions of Section 115JB of the Act, in accordance with normal provisions. The learned CIT(A), after considering relevant facts, has rightly upheld the tax computation under normal provisions of the Act. Therefore, she submitted that there is no merit in the arguments of the learned counsel for the assessee and the same should be rejected.

10. The Ld. CIT-DR Further, referring to the decision of Hon’ble Supreme Court in the case of Commissioner of Customs (Import) Vs. Dilip Kumar and Co., (2018) 9 SCC 1 and Pr.CIT Vs. Wipro Limited, (2022) 140 taxmann.com223 (SC), submitted that in order to claim deductions/exemption under the Act, it is mandatory for the assessee to file relevant statutory forms on or before the due date provided under the Act. Since the assessee has not furnished relevant Form No. 10-IC on or before the due date, the learned CIT(A) has rightly rejected the arguments of the assessee and upheld the reasons given by the A.O. to levy tax as per the provisions of Section 115JB of the Income Tax Act, 1961.

11. We have heard both parties, perused the material available on record, and had gone through the orders of the authorities below. We have also carefully considered the relevant provisions of Section 115BAA of the Act read with Rule 21AE of the Income-tax Rules, 1962. We have also considered the relevant case laws referred to by the learned counsel for the assessee in support of its arguments and the case laws referred to by the learned CIT-DR in support of the department. There is no dispute with regard to the fact that the assessee company is in the business of manufacturing and trading of mobile hotspot devices and other electrical components, filed return of income for A.Y. 2022-23 on 30.12.2022. It is also not in dispute that the assessee company had furnished Form 10-IC on 30.11.2022 and exercised option to pay tax for A.Y. 2022-23 and subsequent assessment years as per the provisions of Section 115BAA of the Income-tax Act, 1961. Therefore, it is necessary for us to decide the dispute with regard to levy of tax on the book profit computed in terms of Section 115JB of the Income-tax Act, 1961, even though the assessee claims to have exercised option to pay tax under Section 115BAA of the Act, by filing Form No.10-IC on 30.11.2022.

12. The A.O./CPC computed tax on book profit by applying normal rate of income tax applicable for A.Y. 2022-23. It was the claim of the assessee before the A.O. and the CIT(A) that it has exercised option under Section 115BAA of the Act, for payment of tax and filed relevant Form No. 10-IC in terms of Rule 21AE of the Income-tax Rules, 1962 on or before the due date provided under Section 139(1) of the Act, for filing return of income. According to the learned counsel for the assessee, the due date for filing return of income for A.Y. 2022-23 is 30.11.2022, because the assessee is covered under the class of assessees for whom the due date for filing return of income was up to 30.11.2022. The learned CIT(A) rejected the explanation of the assessee on the ground that when the A.O./CPC processed the return of income on 20.02.2023, the assessee company has not submitted audit report in Form No. 3CEB and further, the assessee has selected the columns in the ITR filed for the assessment year under consideration, which are applicable to cases where the due date was up to 31.10.2022 and was finally extended up to 07.11.2022. There is no dispute on these aspects. In fact, in the ITR filed for the year under consideration, the assessee company has chosen the “not applicable” column for filing the audit report under Section 92E of the Act. However, it was argued by the counsel for the assessee that choosing the said column in the ITR form is only an inadvertent clerical error arising out of his attrition and lack of coordination between Finance and Accounts department and should not be used to deny the benefit of the extended due date.

13. We have given our thoughtful consideration to the reasons given by the learned CIT(A) to uphold the action of the A.O., in computing tax under normal provisions of the Act, on income computed under Section 115JB of the Act, in light of various arguments of the learned counsel for the assessee and we ourselves do not subscribe to the reasons given by the Ld. CIT(A) for the simple reason that, the provisions of Section 115BAA of the Act, deal with payment of tax at a concessional rate of 22% at the discretion of the taxpayer, subject to certain conditions. As per the provisions of Section 115BAA(2) of the Act, notwithstanding anything contained in this Act, but subject to the provisions of this Chapter, the income-tax payable in respect of the total income of a person, being a domestic company, for any previous year relevant to the assessment year beginning on or after 01.04.2020 shall, at the option of such person, be computed at the rate of 22%, if the conditions contained in sub-section (2) are satisfied. Sub-section (2) of the Act, talks about certain conditions, including not claiming deductions under certain exemptions/deduction provisions and set off of loss carried forward or depreciation for any other assessment years which is not attributable to specified deductions/exemptions. Sub-section (5) of Section 115BAA, deals with the method and manner in which options can be exercised and the due date for filing relevant statutory forms. As per Section 115BAA(5) of the Act, in order to exercise the option to pay tax under Section 115BAA of the Act, the assessee shall furnish a declaration in Form No. 10-IC on or before the due date specified under Section 139(1) of the Act for furnishing the return of income for any previous year relevant to the assessment year commencing on or after 01.04.2020.

14. In the present case, there is no dispute with regard to the fact that the assessee had furnished Form No. 10-IC on 30.11.2022 and exercised option under Section 115BAA of the Act, for payment of tax. In fact, the A.O. has not disputed the fact that the assessee had filed Form No. 10-IC on 30.11.2022, but the only dispute between the assessee company and the A.O. is as to what is the due date provided under Section 139(1) of the Act for the assessment year under consideration for filing the return of income. The A.O. claims that the due date for the assessee for filing the return of income under Section 139(1) of the Act, is 07.11.2022, whereas the assessee claims that the due date for filing return of income was up to 30.11.2022. The A.O. and the learned CIT(A) considered the due date for filing return of income under Section 139(1) of the Act upto 07.11.2022 for two reasons i.e., (i) non-furnishing of return of income on or before the due date of 30.11.2022 and (ii) non-submission of audit report as required under Section 92E of the Act in Form No. 3CEB on or before the due date under Section 139(1) of the Act. The assessee has explained the reasons for the delay in filing of the return of income. We find that, the assessee company has obtained permission from the Ministry of Corporate Affairs for holding Annual General Meeting on or before 31.12.2022. The Ministry of Corporate Affairs, after considering the relevant reasons given by the assessee company, has extended the due date for holding AGM up to 31.12.2022. The assessee company has conducted Annual General Meeting on 30.12.2022 and also filed its return of income along with the audit report under Section 44AB of the Income Tax Act on 30.12.2022. Since the assessee had filed the return of income after conducting the Annual General Meeting on 30.12.2022, in our considered view, the observations of the learned CIT(A) in light of the audit report obtained under Section 44AB of the Act on 14.12.2022, i.e., after the due date of 07.11.2022 as per the A.O./CIT(A) and 30.11.2022 as per the assessee, which makes the assessee not eligible for claiming the benefit of the provisions of Section 115BAA of the Act, is incorrect.

15. Coming back to another observation of the learned CIT(A). The learned CIT(A) took support from the audit report and observed that, the assessee has selected Column (di) of “Audit Information”, which means the assessee company is not required to file audit report under Section 92E of the Act, and consequently, the due date for filing of return of income for the assessment year under consideration is only up to 31.10.2022 and finally extended up to 07.11.2022 and not up to 30.11.2022, as claimed by the assessee. Once again, the assessee has explained the reasons for filing an incorrect or mistaken ITR form for the year under consideration. The assessee claims that due to high attrition of staff and lack of coordination between Finance and Accounts Departments, there was an inadvertent clerical error arising while filing the ITR for the year under consideration; otherwise, the assessee is falling under the class of assessees where the audit report under Section 92E of the Act, is required to be filed, which is evident from the relevant financial statements filed along with the return of income, where the assessee has disclosed the relevant transactions, including the transactions with its A.E. Therefore, once there are related party transactions with its AE, then filing of audit report under Section 92E is mandatory. The learned CIT(A) rejected the explanation of the assessee on the ground that the claim of the assessee is not proved with contemporaneous data. In our considered view, the observation of the learned CIT(A) on this issue is totally incorrect going by the facts available on record. Admittedly, the assessee company is having related party transactions, including with its AE and the same has been disclosed in the financial statements for the year under consideration. Once there are related party transactions, it is mandatory for the assessee company to file audit report in Form No. 3CEB if such financial transactions exceed the threshold limit. Further, whether the assessee has furnished relevant audit report or not is not relevant to decide the due date for filing return of income. Once the assessee company falls under the category of cases where audit report is required to be filed under Section 92E of the Income Tax Act, even if such audit report is not filed then the due date for filing return of income under Section 139(1) of the Act, is not changed depending upon filing or not filing of audit report by the assessee. In case, any of the assessee is not complying with the filing of audit report, then there are other provisions for penalising the assessee. Therefore, for not furnishing Form No. 3CEB, the A.O. cannot prepone or postpone the due date for filing return of income. Further, the arguments of the counsel for the assessee are also fortified by the fact that the assessee company has furnished relevant audit report in Form No. 3CEB on 08.06.2023, even though belatedly, but before the A.O. completed the assessment under Section 143(3) of the Act. Since the entire data which relates to related party transactions is available with the A.O., including Form No. 3CEB, in our considered view, the A.O. ought to have considered the case of the assessee in light of relevant facts while deciding the due date for filing return of income under Section 139(1) of the Act. The learned CIT(A) on flimsy grounds rejected the explanation of the assessee by holding that these are internal matters of the assessee and nothing to do with exercising option under Section 115BAA of the Act, even though the assessee has explained the reasons for not filing audit report in Form No. 3CEB along with return of income. Therefore, in our considered view, once the case of the assessee falls in the class of assessees for which the due date was provided under Section 139(1) of the Act, was up to 30.11.2022, then for the assessee also, the same due date should be considered for the purpose of computing tax liability, including applicability of the provisions of Section 115BAA of the Act. Therefore, from the facts available on record, it is very clear that, the due date for the assessee company to file its return of income for the assessment year under consideration is 30.11.2022 as claimed by the assessee, but not 31.10.2022 and extended upto 07.11.2022 as claimed by the A.O. Once the assessee falls under the class of assessees or whom a specific due date is applicable as per Section 139(1) of the Act, such due date must be followed, irrespective of whether the assessee has complied with the requirement of filing the relevant audit report on or before the due date. If an assessee has not complied with any of the provisions, then the other provisions of the Act, will take care and the A.O. is bound to go ahead with other provisions if applicable, but he cannot change the due date provided for filing return of income just because the assessee has not complied with in filing of Audit Report etc. Therefore, in our considered view, once the assessee has exercised the option by filing Form No. 10-IC on 30.11.2022 then the A.O. ought not to have denied the option exercised by the assessee on these grounds.

16. Coming back to the issue on hand. Admittedly, in the present case, the assessee has exercised option to pay tax as per the provisions of Section 115BAA for filing relevant declaration in Form No. 10-IC on or before the due date provided under Section 139(1) of the Act. The provisions of Section 115BAA of the Act, have been inserted to the Statute to encourage taxpayers to opt for payment of tax at concessional rates, if they forego to claim exemptions/ deductions provided under the Act. If we go by the Memorandum explaining the provisions of the Finance Bill for introduction of provisions of Section 115BAA of the Act, it is a beneficial provision for the taxpayer to opt for payment of taxes at concessional rate, in case, if they forego to claim exemptions/ deductions provided under the Act. Therefore, once any provision has been inserted, which is beneficial to the taxpayer then the purpose of the said provision cannot be doubted by bringing into any technical issues, including non-filing of relevant statutory forms on or before the due date, if an assessee explains reasons for not filing relevant forms within the due date provided under the Act. In the present case, the assessee has filed relevant form with the due date provided under the Act, and opted to pay tax as per concessional rate of tax in terms of Section 115BAA of the Act, and therefore, in our considered view, by interpreting the provisions in a different manner which is convenient to the A.O., the purpose of said provisions cannot be denied. Since the assessee has opted to pay tax as per Section 115BAA of the Act, in our considered view, the A.O. ought not to have denied the benefit by misinterpreting the provisions of the Act, and taking advantage of certain due dates provided under the Act. In our considered view, once the assessee has exercised the option under Section 115BAA of the Act, then tax should be computed as per the provisions of Section 115BAA of the Act, itself because once the option has been exercised under Section 115BAA, then the provisions of Section 115JB of the Act, are not applicable, which is evident from Section 115JB of the Income Tax Act, 1961, where it has been clearly specified that the provisions of this section shall not apply where the assessee has exercised the option referred to under Section 115BAA or Section 115BAB of the Act.

17. Coming back to the case laws relied upon by the Ld. CIT-DR for the Revenue. The Ld. CIT-DR relied upon the decisions of Hon’ble Supreme Court in the case of Commissioner of Customs (Import) Vs. Dilip Kumar and Co., (supra) and Principal CIT Vs. Wipro Limited (supra) and argued that an exemption provision or notification must be interpreted strictly. Further, the burden lies upon the assessee to show that it squarely falls within the terms of the provision; and in case of any ambiguity in an exemption provision, the benefit must go to the Revenue. We have gone through the relevant case laws relied upon by the Ld. CIT-DR and we find that, both the cases relied upon by the Ld. CIT-DR deals with exemption provision and not with reference to exercising of option under Section 115BAA of the Act. Further, assuming for a moment that the assessee needs to file statutory forms on or before the due date provided under the Act, for availing any kind of benefit, even then, in the present case, the assessee has satisfied the ratio laid down by the Hon’ble Supreme Court in the above two cases, because as per the provisions of Section 115BAA of the Act, for exercising the option to pay tax under new regime, the assessee must file Form No. 10-IC on or before the due date for filing return of income under Section 139(1) of the Act. In the present case, the assessee has filed Form No. 10-IC on 30.11.2022, which is on or before the due date for filing return of income under Section 139(1) of the Act. Therefore, the arguments of the learned CIT-DR in light of the decisions of Hon’ble Supreme Court in the cases of Commissioner of Customs (Import) Vs. Dilip Kumar and Co., (supra) and Pr.CIT Vs. Wipro Limited, (supra) are devoid of merit and deserve to be rejected.

18. In this view of the matter and considering the facts and circumstances of the case, we are of the considered view that, the A.O. has erred in computing tax at normal rates on the total income computed under Section 115JB of the Act, even though the assessee has exercised the option to pay tax under Section 115BAA of the Act, by filing relevant declaration in Form No. 10-IC, as required under Rule 21AE of I.T. Rules, 1962. Further, once the assessee has opted to pay tax as per new regime in terms of Section 115BAA of the Act, then the provisions of Section 115JB of the Act, are not applicable, which is evident from sub-section (5) of Section 115JB of the Income Tax Act, 1961. Since the assessee has exercised the option to pay tax under the said provisions, in our considered view, the A.O. ought not to have computed tax at normal rates. The learned CIT(A), without appreciating the relevant facts, simply upheld the reasons given by the A.O. for computing tax liability on book profits by ignoring the option exercised by the assessee under Section 115BAA of the Act. Thus, we set aside the order of the learned CIT(A) and direct the A.O. to compute the tax liability of the assessee in terms of Section 115BAA of the Income Tax Act, 1961.

19. In the result, the appeal filed by the assessee is allowed.

Order pronounced in the Open Court on 22nd April, 2026.