Narayani Laxmi Viniyog Pvt. Ltd. Vs ITO (ITAT Kolkata)
In the case of Narayani Laxmi Viniyog Pvt. Ltd. Vs ITO (ITAT Kolkata), the assessee, a private limited company, contested the tax rate applied to its income for the assessment year (AY) 2023-24. The company had filed its return on time and calculated its tax liability at a lower rate of 22%, as provided under Section 115BAA of the Income Tax Act, 1961. However, the Centralized Processing Centre (CPC) assessed the tax at 40%, citing that the company had not opted for the reduced tax rate by filing the requisite Form 10IC. Upon appeal, the Commissioner of Income Tax (Appeals) upheld the CPC’s decision, stating that the necessary form for AY 2023-24 had not been submitted.
The Income Tax Appellate Tribunal (ITAT) overturned the ruling, pointing out that the company had already exercised its option for the lower tax rate in AY 2020-21 by filing Form 10IC, and this option remains valid for subsequent years unless revoked. ITAT concluded that the assessee was entitled to the 22% tax rate for AY 2023-24, as there was no violation of the conditions under Section 115BAA. Thus, the ITAT directed the assessing officer to calculate the tax liability at the reduced rate of 22%. The appeal was decided in favor of Narayani Laxmi Viniyog Pvt. Ltd., allowing the company to benefit from the lower tax regime under Section 115BAA.
