Granules CZRO Private Limited Vs ITO (ITAT Hyderabad)
ITAT Hyderabad held that benefit of section 115BAB of the Income Tax Act granted even if Form 10ID filed prior to commencement of manufacturing activity, if assessee proves the commencement of manufacturing for the subsequent assessment year.
Facts- The assessee company was set up on 16/01/2023 and after setting up on 16/01/2023, the assessee has filed its return of income for the year ending upto 31/03/2023 in accordance with law and along with the return of income, the assessee had filed Form 10ID on 21/10/2023. CPC had processed the return filed by the assessee and had denied the claim of the assessee u/s 115BAB of the Income tax Act, 1961 for the reason that the assessee had not commenced its production.
The assessee filed rectification application before the CPC, however, the same was rejected. CIT(A) also dismissed the appeal. Being aggrieved, the present appeal is filed.
Conclusion- Held that the assessee has failed to fulfil the condition as laid down u/s 115BAB of the Act for the present assessment year, therefore, assessee’s appeal is required to be dismissed, however the fact remains that the Revenue is under obligation to take into account the commencement of the manufacturing activity for the subsequent assessment year and should not act upon the earlier Form 10ID. In view of the above, we deem it appropriate to consider the commencement of the manufacturing activities for the subsequent year and grant relief as the assessee may be entitled to. We are conscious of the fact that the issue before us is for the assessment year 2023-24, however, the said observations of ours are essential as the assessment is a continuous process and the denial of the benefit in the present year will definitely effect the subsequent year as no fresh Form 10ID can be filed by the assessee. In view of the above, we are of the opinion that if the assessee is able to prove the commencement of manufacturing for the subsequent assessment year, the insistence of the fulfilment solely on the basis of the Form filed for the present assessment year should not be insisted upon and in a holistic and pragmatic view, the Assessing Officer to consider and grant the applicability of lower tax regime for the assessee for the subsequent assessment years.
