ITAT Raipur: Assessee Cannot Be Denied Section 115BAB Benefit Due to Department’s Internal Allocation of Appeal Between JCIT(A) and CIT(A)

PRA Panels Private Limited Vs ITO (ITAT Raipur)

ITAT Raipur: Assessee Cannot Be Denied Section 115BAB Benefit Due to Department’s Internal Allocation of Appeal Between JCIT(A) and CIT(A)

The Raipur Bench of the ITAT held that an assessee cannot be deprived of appellate adjudication merely because, under the faceless appeal mechanism, the appeal against a section 154 rectification order was allocated to a JCIT(A) instead of a CIT(A)/NFAC. The Tribunal observed that any internal administrative allocation by the Department cannot prejudice the statutory appellate rights of the assessee.

In the present case, the assessee-company had filed its return declaring nil income and claimed the 15% concessional tax rate under section 115BAB after duly filing Form 10-ID. Although there was no dispute that the prescribed form had been correctly furnished, the CPC denied the concessional rate while processing the return under section 143(1)(a). The assessee’s subsequent rectification applications under section 154 were also rejected. When the assessee challenged the second rectification order, the Addl./JCIT(A) declined to entertain the appeal on the ground that an order under section 154 was not appealable before him under section 246.

The Tribunal held that, from the assessee’s perspective, a rectification order is appealable under section 246A, and the assessee cannot be made to suffer because of the Department’s internal allocation of appeals under the faceless scheme. Accordingly, the ITAT set aside the order of the Addl./JCIT(A) and restored the matter for de novo adjudication on merits to examine the assessee’s eligibility for the concessional tax rate under section 115BAB, after complying with the principles of natural justice. The appeal was allowed for statistical purposes. The Tribunal also followed its own earlier decision in the assessee’s case for the preceding assessment year on identical facts

FULL TEXT OF THE ORDER OF ITAT RAIPUR

The present appeal preferred by the assessee emanates from the order of the Ld.ADDL/JCIT(A)-2, Vadodara dated 27.03.2026 for the assessment year 2024-25 as per the grounds of appeal on record.

2. The brief facts in this case are that the assessee had filed its original return of income for A.Y.2024-25 on 21.10.2024 declaring total income at Nil a/w. claiming tax rate of 15% u/s. 115BAB of the Act after duly filling Form 10-ID as mandated by the Section 115BAB of the Act for claiming such lower tax rate. However, the said claim was denied by the CPC.

3. The DCIT/CPC, Bengaluru disposed of the application i.e. the second application u/s.154 of the Act filed by the assessee without making any changes to the intimation u/s.143(1)(a) of the Act and without disturbing statis-quo as was there also in the previous rectification order u/s.154 of the Act, dated 21.12.2024. The fact of the matter, is therefore, that the assessee had duly filled Form as required for claiming tax rate of 15% u/s.115BAB of the Act. There is no dispute regarding correctness of applying the said tax rate before the Department which is in appropriate format. However, against the second rectification order u/s. 154 of the Act, when the appeal was filed before the First Appellate Authority through faceless scheme, the matter went before the JCIT, Vadodara and he applied provision of Section 246 of the Act stating that the order u/s. 154 of the Act is not appealable in terms with Section 246 of the Act before the said authority. The point is that once faceless regime has started, the matter on certain verification as per the decision of the Department is being allotted to the Ld. CIT(Appeals)/NFAC as well as JCIT. However, so far as the assessee is concerned, he understands that rectification order u/s. 154 of the Act is appealable to the higher authority which is the Ld. CIT(Appeals)/NFAC and in terms with Section 246A of the Act, such order is appealable. Therefore, the assessee should not be prejudiced with the internal functioning of the Department, whether his case is allotted to Ld. CIT(Appeals)/NFAC or whether his case is allotted to Ld. JCIT since for the assessee in terms with Section 246A of the Act the matter is appealable before the higher authority and the assessee, therefore, cannot be denied benefit of adjudication on such matter.

4. Be that as it may, whether the assessee shall be entitled to the benefit of tax rate of 15% u/s. 115BAB of the Act, such adjudication has to be made by the First Appellate Authority in terms with relevant provisions/sections on merits. In view thereof, we set-aside the order of the Ld.ADDL/JCIT(A)-2, Vadodara and restore the matter to its file for denovo adjudication on merits regarding claim of the assessee u/s. 115BAB of the Act while complying with the principles of natural justice.

5. We find that similar view has been taken by this Bench in assessee’s own case in ITA No.337/RPR/2026, dated 13.07.2026, wherein it was held and observed as follows:

“2. The brief facts in this case are that the assessee had filed rectification application u/s.154 of the Income Tax Act, 1961 (for short ‘the Act’) dated 30.01.2025 challenging the validity of the intimation u/s. 143(1) of the Act, dated 24.11.2023 and there is also previous rectification order u/s.154 of the Act, dated 12.11.2024. The assessee contends that the assessee had filed its original return of income for A.Y.2023-24 on 30.10.2023 declaring total income at Nil a/w. claiming tax rate of 15% u/s. 115BAB of the Act after duly filling Form 10-ID as mandated by the Section 115BAB of the Act for claiming such lower tax rate. However, the said claim was denied by the CPC.

3. The DCIT/CPC, Bengaluru disposed of the application i.e. the second application u/s.154 of the Act filed by the assessee without making any changes to the intimation u/s.143(1)(a) of the Act and without disturbing statis-quo as was there also in the previous rectification order u/s.154 of the Act, dated 12.11.2024. The fact of the matter, is therefore, that the assessee had duly filled Form as required for claiming tax rate of 15% u/s.115BAB of the Act. There is no dispute regarding correctness of applying the said tax rate before the Department which is in appropriate format. However, against the second rectification order u/s. 154 of the Act, when the appeal was filed before the First Appellate Authority through faceless scheme, the matter went before the JCIT, Vadodara and he applied provision of Section 246 of the Act stating that the order u/s. 154 of the Act is not appealable in terms with Section 246 of the Act before the said authority. The point is that once faceless regime has started, the matter on certain verification as per the decision of the Department is being allotted to the Ld. CIT(Appeals)/NFAC as well as JCIT. However, so far as the assessee is concerned, he understands that rectification order u/s. 154 of the Act is appealable to the higher authority which is the Ld. CIT(Appeals)/NFAC and in terms with Section 246A of the Act, such order is appealable. Therefore, the assessee should not be prejudiced with the internal functioning of the Department, whether his case is allotted to Ld. CIT(Appeals)/NFAC or whether his case is allotted to Ld. JCIT since for the assessee in terms with Section 246A of the Act the matter is appealable before the higher authority and the assessee, therefore, cannot be denied benefit of adjudication on such matter.

4. Be that as it may, whether the assessee shall be entitled to the benefit of tax rate of 15% u/s. 115BAB of the Act, such adjudication has to be made by the First Appellate Authority in terms with relevant provisions/sections on merits. In view thereof, we set-aside the order of the Ld.ADDL/JCIT(A)-2, Vadodara and restore the matter to its file for denovo adjudication on merits regarding claim of the assessee u/s. 115BAB of the Act while complying with the principles of natural justice.

5. In the result, appeal of the assessee is allowed for statistical purposes.”

6. Respectfully following the aforesaid decision, on the same parity of reasoning, the appeal of the assessee is allowed for statistical purposes.

7. In the result, appeal of the assessee is allowed for statistical purposes.

Order pronounced in the open court on 15th July, 2026.