Neelkanth Realtors Limited Vs ITO (ITAT Mumbai)
Form 10-IC Once Validly Filed Continues for Subsequent Years: Mumbai ITAT Allows 22% Tax Rate Under Section 115BAA
The assessee-company had validly exercised the option under Section 115BAA by filing Form 10-IC on 28 May 2021. While processing its return for AY 2024-25, however, the CPC denied the concessional tax rate of 22% and computed tax at the normal rate of 30% on total income of ₹25.44 crore.
The CIT(A) upheld the denial because supporting documentary evidence regarding Form 10-IC was not produced before it.
The Mumbai ITAT observed that Section 115BAA(5) expressly provides that an option once validly exercised applies to subsequent assessment years. Therefore, the assessee was not required to file a fresh Form 10-IC every year. The same option had also been accepted by the CPC for AY 2022-23.
The Tribunal held that processing the return at 30% could not extinguish an option already validly exercised and continuing under the statute. A substantive benefit cannot be denied merely due to a procedural lapse when compliance with the statutory conditions is established.
The AO was accordingly directed to apply the concessional tax rate of 22% under Section 115BAA and recompute the tax liability.
