Jamewaar Apparels Private Limited Vs DCIT (ITAT Bangalore)
Bengaluru ITAT Grants Section 115BAB Concessional Tax Rate; Form 10-ID Filed in First Year Cannot Be Ignored in Subsequent Years
The Bengaluru ITAT held that the assessee-company was entitled to the concessional 15% tax rate under section 115BAB for AY 2023-24, as it had validly exercised the option by filing Form No. 10-ID for AY 2021-22 within the extended due date prescribed under CBDT Circular No. 01/2022. The Tribunal found that the Revenue had erroneously assumed that Form No. 10-ID was first filed on 29.10.2023, whereas the assessee had produced evidence showing that the form had been filed on 21.02.2022 along with the revised return for AY 2021-22, which was processed under section 143(1) accepting the concessional tax rate. The return for AY 2022-23 had also been accepted on the same basis. Holding that the assessee had fully complied with the requirements of section 115BAB(7), the Tribunal observed that the Revenue could not deny the benefit in a subsequent year by ignoring the accepted position in earlier years. It further noted that, once the appellate authority had examined the issue on merits, dismissal of the appeal on the ground of delay served no useful purpose. Accordingly, the Tribunal directed the CPC to rectify the intimation under section 143(1) and grant the concessional tax rate under section 115BAB for AY 2023-24.
FULL TEXT OF THE ORDER OF ITAT BANGALORE
1. This appeal is filed by Jamewaar Apparels Private Limited (“the assessee”/“the appellant”) for Assessment Year 2023-24 against the appellate order dated 16 January 2026 passed by the learned Commissioner of Income-tax (Appeals), Raipur [“the learned CIT(A)”]. The assessee has challenged the intimation issued under section 143(1) of the Income-tax Act, 1961 dated 22 December 2023, whereby the Centralized Processing Centre denied the benefit of section 115BAB of the Act and computed tax at the rate applicable under section 115BAA. The learned CIT(A) confirmed the action of the Centralized Processing Centre. Aggrieved, the assessee is in appeal before us. The sole issue in this appeal is whether the assessee is entitled to the concessional rate of tax under section 115BAB of the Act.
2. The assessee has raised the following grounds of appeal:
1. That the order passed by the Ld. Joint Commissioner of Income-tax (Appeals) [“JCIT(A)”] dated 16.01.2026 and the intimation issued by the Centralized Processing Centre (“CPC”) dated 22.12.2023 are contrary to the provisions of the Income-tax Act, 1961 (“Act”) and liable to be set-aside.
2. That the order passed by the Ld. JCIT(A) dated 16.01.2026 is perverse, in as much as the Form 10-ID validly filed by the Appellant for the first year i.e. AY 2021-22 within the extended due date has been ignored, and the said form filed for AY 2023-24 has been considered to be a form filed for AY 2021-22, without any basis.
3. The Ld. JCIT(A) has erred in dismissing the appeal in limine on the ground of delay without appreciating that the Appellant was pursuing rectification remedies in parallel, and that the last of the reprocessed intimation under Section 143(1) rejecting the rectification came to be passed only on 08.04.2024.
4. That the Ld. JCIT(A) ought to have appreciated that the appeal was filed on 04.06.2024 i.e. within a period of 56 days from the reprocessed intimation under Section 143(1) dated 08.04.2024, thereby resulting in a delay of only 26 days and not 130 days, as erroneously computed in the impugned JCIT(A)’s order.
5. That the Ld. JCIT(A) has erred on facts and in law in denying the benefit of concessional tax rate u/s 115BAB of the Act for AY 2023-24, despite the Appellant having filed Form No.10-ID dated 21.02.2022 for the first year i.e. AY 2021-22, within the extended due date provided vide Circular No. 01/2022 (F. No. 225/49/2021/ITA-II) dated 11.01.2022 and the Appellant’s ROI for the said AY having been accepted vide intimation issued by CPC dated 29.06.2022.
6. Without prejudice to the above, the Ld. JCIT(A) failed to appreciate that the returns of income filed by the Appellant for the preceding as well as the subsequent assessment years, wherein the concessional rate of tax under Section 115BAB was opted, have been duly processed and accepted without any adverse variation. In the absence of any change in material facts or in law, there was no justification for the Revenue authorities to deviate from the consistent position adopted in other years.
7. That the Ld. JCIT(A) ought to have appreciated that the Appellant has fulfilled the conditions prescribed under Section 115BAB including that of sub-section (7) thereto for all the AYs, including the first year i.e. AY 2021- 22 and the year under consideration i.e. AY 2023-24.
8. That the CPC erred in denying the concessional rate of tax under Section 115BAB and processing the return by levying higher rate of tax under Section 115BAA vide intimation under Section 143(1) dated 22.12.2023 and subsequent rectification orders dated 30.01.2024 and 08.04.2024.
9. That the CPC erred in levying interest under Section 234B and enhancing interest under Section 234C of the Act.
3. The assessee is a private limited company engaged in the business of manufacturing readymade garments. It claims to be eligible for taxation at the concessional rate of 15% under section 115BAB of the Income-tax Act, 1961. The assessee filed its revised return of income for Assessment Year 2021-22 on 21 February 2022, within the extended due date prescribed for filing the return of income for the relevant assessment year, as notified by Circular No. 01/2022 dated 11 January 2022. The corresponding Form No. 10-ID was also filed on the same date. The revised return for Assessment Year 2021-22 was thereafter processed under section 143(1) of the Act on 29 June 2022, accepting the returned income as well as the applicability of the concessional tax rate of 15%. Subsequently, for Assessment Year 2022-23 also, the return of income filed by the assessee opting for the concessional rate under section 115BAB was accepted vide intimation under section 143(1) dated 4 November 2022. For the year under consideration, namely Assessment Year 2023-24, the assessee filed its return of income on 29 October 2023 within the due date prescribed under section 139(1) of the Act, declaring a total income of ₹18,03,590 and determining its tax liability in terms of section 115BAB. The corresponding Form No. 10-ID was also filed on the same date. However, the said return was processed by the Centralized Processing Centre under section 143(1) on 22 December 2023 by denying the concessional rate available under section 115BAB and instead computing tax liability at the rate of 22%. The assessee preferred an appeal before the learned JCIT(A), which was dismissed in limine on the ground of delay, the appeal having been treated as delayed by 56 days. The assessee is, therefore, in appeal before us.
4. The learned authorised representative submitted that the assessee is entitled to the concessional rate of tax, as the requisite application had already been made before the authorities below. It was pointed out that the return of income for the year under consideration, filed on 29 October 2023 and placed at pages 9 to 109 of the paper book, was accompanied by Form No. 10-ID filed on the same date and placed at pages 110 to 111 of the paper book. It was therefore contended that the intimation issued by the Centralized Processing Centre ought to have allowed the assessee the benefit of the concessional rate. It was further submitted that the assessee had filed an application for condonation of delay before the learned Joint Commissioner of Income-tax (Appeals) on 4 September 2024 and had also filed written submissions on the same date. The learned JCIT(A), however, dismissed the appeal without condoning the delay. The learned authorised representative further submitted that, on a perusal of paragraph 3.7 of the order of the learned JCIT(A), it is evident that the issue was also considered on merits; therefore, the finding regarding non-condonation of delay does not survive independently.
5. The learned authorised representative further submitted that the learned JCIT(A) invoked sub-section (7) of section 115BAB of the Act on the premise that the assessee was incorporated on 15 July 2020 and that the date of commencement of manufacturing was also 15 July 2020. According to the learned JCIT(A), the first assessment year was Financial Year 2020-21, relevant to Assessment Year 2021-22, and the assessee was therefore required to file Form No. 10-ID on or before the due date prescribed for filing the return of income for Assessment Year 2021-22. The learned JCIT(A) held that Form No. 10-ID was filed only on 29 October 2023 during the proceedings for Assessment Year 2023-24 and, on that basis, concluded that the assessee was not entitled to the concessional rate of
5. The learned authorised representative further submitted that the learned JCIT(A) invoked sub-section (7) of section 115BAB of the Act on the premise that the assessee was incorporated on 15 July 2020 and that the date of commencement of manufacturing was also 15 July 2020. According to the learned JCIT(A), the first assessment year was Financial Year 2020-21, relevant to Assessment Year 2021-22, and the assessee was therefore required to file Form No. 10-ID on or before the due date prescribed for filing the return of income for Assessment
Year 2021-22. The learned JCIT(A) held that Form No. 10-ID was filed only on 29 October 2023 during the proceedings for Assessment Year 2023-24 and, on that basis, concluded that the assessee was not entitled to the concessional rate of taxation prescribed under section 115BAB. The order of the Centralized Processing Centre was accordingly upheld.
6. It was further submitted that the assessee had filed written submissions before the learned Joint Commissioner of Income-tax (Appeals) on 4 September 2025, running from pages 173 to 190 of the paper book placed before us. Since the order of the learned JCIT(A) was passed on 16 January 2026, it was contended that the written submissions were available on record but were not considered. The learned authorised representative therefore submitted that the learned JCIT(A) erred in observing that there was no compliance on the part of the assessee and, if the appeal was to be decided on merits, the submissions filed by the assessee ought to have been considered
7. The learned Departmental Representative vehemently supported the orders of the lower authorities. He submitted that the assessee had failed to satisfy the mandatory requirement prescribed under section 115BAB(7) of the Act and, therefore, was not entitled to the concessional rate of tax. According to him, there was no infirmity either in the intimation issued by the Centralized Processing Centre or in the order passed by the learned JCIT(A), and the appeal of the assessee deserved to be dismissed.
8. The assessee also filed a paper book containing 194 pages, demonstrating that Form No. 10-ID for Assessment Year 2021-22 was filed on 21 February 2022.
9. We have heard the rival submissions and perused the material placed on record. The controversy before us is narrow. The assessee claims that it had exercised the option under section 115BAB by filing Form No. 10-ID for Assessment Year 2021-22 within the extended due date, and that the return for that year was processed accepting the concessional rate. The Revenue, on the other hand, has proceeded on the premise that the relevant Form No. 10-ID was filed only on 29 October 2023 and, therefore, the statutory condition under section 115BAB(7) was not complied with. From the material referred to before us, it is evident that the assessee had filed Form No. 10-ID on 21 February 2022 along with the revised return for Assessment Year 2021-22, within the extended time notified by CBDT Circular No. 01/2022 dated 11 January 2022. The said return was processed under section 143(1) on 29 June 2022 accepting the claim of concessional rate under section 115BAB. The subsequent return for Assessment Year 2022-23 was also processed on the same basis. In these circumstances, the denial of the same benefit for the year under consideration merely on the premise that Form No. 10-ID was first filed on 29 October 2023 is factually unsustainable. Further, when the issue was otherwise examined on merits by the learned JCIT(A), the dismissal of the appeal in limine on the ground of delay does not advance the case of the Revenue.
10. On merits, the Revenue proceeded on the basis that the assessee was required to file its first return for Assessment Year 2021-22 and, to claim the benefit of section 115BAB, was statutorily required to file Form No. 10-ID on or before the due date for filing that return. The Revenue treated the form as having been filed only on 29 October 2023 during the proceedings for Assessment Year 2023-24. However, the assessee has placed before us evidence showing that Form No. 10-ID for Assessment Year 2021-22 was filed on 21 February 2022. It is also not in dispute that the due date for that year stood extended up to 15 March 2022 and that the return for Assessment Year 2021-22 was processed under section 143(1) without any variation, accepting the concessional rate of tax under section 115BAB. We therefore find that the assessee duly complied with the requirement of sub-section (7) of section 115BAB.
11. We therefore hold that the assessee is entitled to the concessional rate of tax under section 115BAB for Assessment Year 2023-24. The intimation under section 143(1), to the extent it denies such benefit, is directed to be rectified accordingly. The grounds raised by the assessee are allowed.
Order pronounced in the open court on 27.07.2026
