Vashishtha Luxury Fashion Limited Vs Deputy Director of Income Tax/ITO (ITAT Mumbai)
Belated Return Does Not Defeat Section 115BAA Benefit — ITAT Allows Concessional Tax Regime
The Mumbai Bench of the Income Tax Appellate Tribunal allowed the assessee company’s appeal for AY 2023-24 and held that the benefit of the concessional tax regime under section 115BAA cannot be denied merely because the return of income was filed belatedly under section 139(4), when Form 10-IC was filed within the prescribed due date.
The assessee had opted for taxation under section 115BAA and filed Form 10-IC within the due date specified under section 139(1), evidencing a clear intention to exercise the option. However, CPC processed the return under normal provisions, and the CIT(A) upheld denial of the concessional rate by relying on a CBDT circular dated 18.11.2024 relating to condonation of delay in filing Form 10-IC.
The Tribunal held that the CBDT circular was inapplicable, as it deals only with cases where Form 10-IC itself was filed belatedly, whereas in the present case, the form was filed on time. Interpreting section 115BAA, the ITAT observed that while the option must be exercised before the due date by filing Form 10-IC, there is no express statutory bar denying the concessional rate merely because the return was filed under section 139(4).
Relying on coordinate bench decisions, including Aprameya Engineering Ltd., the Tribunal emphasized that procedural lapses should not override substantive rights, particularly when the assessee’s intention to opt for section 115BAA was evident from contemporaneous records. Accordingly, the assessee was held entitled to tax at 22% (plus applicable surcharge) under section 115BAA.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
