Section 115BAA was introduced in Income Tax Act, 1961 through Taxation Laws Amendment Act 2019, in order to simplify tax laws, according to which companies were given option to pay tax at lower rates. As per sec 115 BAA (5), the option once exercised shall apply to subsequent assessment years.

The company is required to submit Form 10-IC before filing of income tax return, expressing its intention to opt to pay tax under Simplified Tax Regime for all times to come.

 There is also a row in ITR 6 asking company whether the assesse has opted for taxation u/s 115BA/115BAA/115AB.

It has been noticed that many companies have either not submitted Form 10-IC or submitted after filing of their ITRs. In both cases, there is a non-compliance of provisions, which may force company to pay tax as per normal rates, causing lot of hardships.

Many companies are receiving intimation u/s 143(1) of Income Tax Act, 1961 who have failed to file the form requiring them to pay tax as per normal rates.

Non Submission of Form 10IC prior to filing of ITR-6 by Companies opting 115BAA

We hereby request the tax authorities u/s 119 of ITA to allow companies to do away with/ condone late filing of Form 10-IC.

The justification of the same is as under:

  • Opting of Section 115BAA (5) in row in ITR6 by company is a complete expression of interest by company that it is opting to pay tax under Simplified Tax Regime.
  • It was an era of COVID pandemic due to which there was communication gaps among team members.
  • As per concept of ease of doing business, submission of number of forms should be minimised and forms should be comprehensive instead of multiple forms.
  • In ITR 6, there was no column asking date of submission of Form 10-IC, which could reduce the possibility of such mistakes.
  • In Case Of Individual/HUF opting for new taxation scheme under Section 115 BAC: Portal is asking for Acknowledgement No. Of 10-IE while filing the Income Tax Return being a mandatory column , the assessee cannot continue the process of filling Of ITR without filling the same ,so if there would be non-compliance in filing of Form 10-IE.,the assessee would become aware of that and will submit the same.
  • If the portal would had asked us for the same in the Assessment year  2020-2021 in case of Company  for filing of Form 10-IC, there would had been no chances of Non -Filing Of The Form 10-Ic , causing a lot of trouble to revenue and companies.
  • Form 10-IC could have been required to be submitted at the time of filing of return for companies opting for Simplified Tax Regime, by a pop. No Acknowledgement No Of 10-IC Is still  being asked which will cause many companies opting for Section 115 BAA for the first time in A.Y 2021-2022  causing a lot of chances to Non-Filing Of Form 10-IC, which will ultimately causing a lot problems to revenue and companies.
  • Non submission of 10-IC is a procedural mistake on part of company, without any loss to revenue.
  • Income Tax Portal is not accepting submission of 10-IC for A.Y 20-21, so companies cannot submit it as late filing. Many companies would have made such mistake.

Some of the relevant Case laws for the matter are as follows:

  • Honourable Supreme Court vide their order in suo-moto writ petition (c) no. 3/2020 dated 23-03-2020 had ordered that a period of limitation in all such proceedings, irrespective of the limitation prescribed under the general law or Special laws whether condonable or not shall extended w.e.f 15 March 2020 till further order/s.
  • Hon’ble Supreme Court in the case of Ramlal, Motilal and Chhotelal v. Rewa Coalfield Ltd AIR 1962 SC 361, held that the state authorities should not raise technical pleas if the citizens have a lawful right, which is being denied to them merely on technical grounds
  • In the case of Smt. Sneh Lata Jain v. CIT [2004] 140 Taxman 156, Hon’ble J&K High Court held that “when the substantive law confers a benefit on the assessee under a statute, it cannot be taken away by the adjudicatory authority on mere technicalities.
  • Mumbai Bench of ITAT in Chicago Pneumatic (India) Ltd. v. Dy. CIT [2007] 15 SOT 252, had observed that assessing authorities are bound to compute the correct income, and merely for a procedural lapse on technicalities, the assessee should not be compelled to pay more taxes than what is due from him.

We hereby request the tax authorities u/s 119 of ITA to allow companies to do away with/ condone late filing of Form 10-IC.

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24 Comments

  1. Sutti C Jothy says:

    With regard to Non filing of Form 10IC for A.Y.2020-21 and Intimation u/s.143(1) received with demand computing tax @30%, whether any representation is made to CBDT to file Form 10IC now for A Y 2020-21? If so please share Sir

  2. CA Kiran Kanani says:

    Somewhere in October/November 21 a news item was there in TOI regarding non filing of some similar form 10 by one of the Tata company and the honorable ITAT Bombay allowed the claim of the said company..Can any one help in this matter..It will help resolving the above issue…

  3. CA Mahaganapathi V says:

    Further the online confirmation email sent by cpc did not find the mistake, error as it use to send for other forms like 3CA, 3CB, 3CD. Many of the assessee filed well before the due date for filing return. In the absence of no email from the department and since the option is already mentioned in the ITR which is signed digitally by authorised person filing of the form 10ic is just an additional compliance only.

    1. Pradeep Tayal says:

      CPC is sending the orders u/s 143(1) and the tax rate charged is 30%, merely because of non -filing of 10-IC. So, non -receipt of mail from CPC is not relevant.
      For Assesses who have submitted 10-IC before due date, it is a non-issue.
      It is correct that non- submission of Form 10-IC is a procedural lapse and that is why, we need to write this article.

        1. PRADEEP TAYAL says:

          We propose to create a Google group for communication among all those members who are affected by non -submission/ late submission of 10-IC. If interested please share your E-mail address. 

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