Belated Form 10-IC Valid for Subsequent Years Under Section 115BAA: ITAT Hyderabad

ACIT Vs Sandor Medicaids Private Limited (ITAT Hyderabad)

Summary: ITAT Hyderabad held that Sandor Medicaids Private Limited was entitled to the concessional tax regime under Section 115BAA for AY 2022-23 notwithstanding that Form 10-IC relating to AY 2021-22 had been filed on 29.03.2022 after the stated due date of 15.03.2022. The Tribunal observed that Section 115BAA(5) expressly provides that an option once exercised applies to subsequent assessment years and cannot thereafter be withdrawn. Reading Section 115BAA(5), Rule 21AE and Form 10-IC together, it held that even if the Revenue could deny the concessional rate for AY 2021-22 on account of the delayed filing, the option already exercised could not be ignored for AY 2022-23 and subsequent years.

The Tribunal also noted CBDT clarifications that Form 10-IC is required only in the first year in which the taxpayer exercises the option. The assessee had relied upon the Supreme Court’s order in Cognizance for Extension of Limitation, whereas the Revenue contended that the COVID limitation extension did not govern filing of the return or Form 10-IC. The Tribunal ultimately held the assessee eligible for Section 115BAA benefit for AY 2022-23 and dismissed the Revenue’s grounds. The assessee’s cross-objection consequently became infructuous and was also dismissed.