GFCL EV Products Ltd Vs ACIT (ITAT Ahmedabad)
Assessee, a new manufacturing company, filed return for A.Y. 2023-24 opting for concessional 22% tax rate u/s 115BAB, as it had already exercised the option by filing Form 10ID for A.Y. 2022-23. However, CPC while processing u/s 143(1) computed tax at 30%, stating that Assessee had not opted for 115BAB. CIT(A) upheld CPC’s action holding that manufacturing had not commenced in F.Y. 2022-23, hence the condition of s.115BAB(2)(a) was not met, & that no prior intimation was required since there was no variation in total income.
Before Tribunal, Assessee argued that once the option u/s 115BAB is exercised, it continues for all subsequent years, & CPC’s adjustment without prior intimation violated the proviso to s.143(1)(a) & natural justice. It also contended that commencement of manufacturing was only required before 31.03.2024, not necessarily in F.Y. 2022-23.
ITAT noted that the 115BAB option filed for earlier year remained valid, & the question of actual commencement of production was debatable, not a “mistake apparent” permissible for adjustment u/s 143(1). Since CPC changed the tax rate without notice, the action violated natural justice. Tribunal also observed that in the preceding year, the Department itself accepted the 115BAB claim.
