Electronfab Engineering Pvt Ltd. Vs CPT/ITO (ITAT Mumbai)
Section 115BAA Benefit Cannot Be Denied for Procedural Lapse – Form 10IC Filed Later Valid, Matter Restored
The assessee company filed its original return without opting for concessional tax regime u/s 115BAA, but later:
- Filed Form 10IC before filing corrected return u/s 139(9)
- Rectified defective return and expressed clear intent to opt for 115BAA
However, CPC denied the benefit during processing u/s 143(1) and raised demand. CIT(A) upheld the denial.
Before ITAT, key points were:
- Form 10IC was on record before processing
- Delay was due to genuine reason (medical emergency)
- Intent to opt for concessional regime was clearly demonstrated
- Issue cannot be decided in 143(1) processing (requires examination)
The Tribunal held:
- Procedural lapse cannot defeat substantive right
- Filing of Form 10IC + rectified return shows clear intention to opt u/s 115BAA
- Case law supports that timing/procedure is directory, not mandatory
- Delhi HC ruling in Sarla Holdings is distinguishable (conscious non-option there)
Accordingly:
- Order of CIT(A) set aside
- AO directed to verify Form 10IC and allow 115BAA benefit if conditions satisfied
FULL TEXT OF THE ORDER OF ITAT MUMBAI
The instant appeal of the assessee preferred against the order of the Ld. Commissioner of Income Tax Appeal ADDL/JCIT-(A), Bhubaneswar [for brevity ‘the Ld. CIT(A)’], order passed under section 250 of the Income Tax Act 1961 (for brevity ‘the Act’) for assessment year 2024-25, date of order 30.05.2025. The impugned order emanated from the order of the CPC Bengaluru (for brevity the ‘Ld. AO’) order passed under section 143(1) of the Act date of order 22.01.2025.
