Brahmos Realty Private Limited Vs ITO (ITAT Mumbai)
Form 10-IC Error does not bind assessee to New Tax Regime – ITAT Mumbai restores MAT Credit Claim
Mumbai ITAT delivered relief to Assessee-company holding that the inadvertent filing of Form 10-IC does not irrevocably bind a company to the concessional tax regime u/s 115BAA, particularly when the return of income & tax audit report clearly indicate adoption of the old regime.
Assessee filed its return of income on 04.11.2024, declaring taxable income of ₹47.53 lakh under the old regime at 25% & claimed set-off of MAT credit amounting to ₹2.53 lakh. However, prior to filing the return, Form 10-IC had been mistakenly uploaded opting for 115BAA. While processing the return u/s 143(1), CPC treated Form 10-IC as valid, ignored the computation under old regime & consequently denied MAT credit, resulting in enhanced tax liability of ₹2.48 lakh. CIT(A) upheld this position, reasoning that once Form 10-IC is filed, the option under 115BAA cannot be withdrawn.
Before Tribunal, Assessee contended that Form 10-IC was erroneously filed by staff, whereas both the tax audit report in Form 3CA & the ITR-6 explicitly opted “No” to the new regime. It was further argued that exercising the option u/s 115BAA requires not only filing Form 10-IC but also corresponding disclosure in the return. Since the return adopted the old regime & claimed MAT credit, the conditions of sec 115BAA(2) stood violated, thereby rendering the option invalid. Reliance was placed on multiple judicial precedents, including JSW Minerals Trading P. Ltd., Siddhi Vinayak Construction, Kumar Medicare Pvt. Ltd., Fastner Commodeal Pvt. Ltd., Mahalaxmi Asphalt Pvt. Ltd. & the Supreme Court decision in CIT v. G.M. Knitting Industries Pvt. Ltd., to emphasise that substance prevails over form & procedural lapses cannot deny substantive rights.
