Section 115BAA of Income Tax Act, 1961 was inserted by The Taxation Laws (Amendment) Act, 2019 w.e.f. April 01, 2020. By virtue of aforesaid section, the tax rate for domestic Companies has been reduced to 25.168 percent from the earlier 27.82 percent.
As per subsection (5) of section 115BAA of the Act read with Rule 21AE of the Income-tax Rules, 1962 (the Rules), the assessee company is required to submit Form 10-IC electronically on or before the due date of filing of return of income u/s 139(1) of the Act and such option once exercised shall apply to subsequent assessment years.
While filing the return under the new tax regime, many assesses were not able to furnish Form 10-IC while filing of Income Tax Return due to some technical glitches on the portal whereby the assesses were served with an Assessment Orders under section 143(1) raising the demand as per the old tax regime as the Form 10-IC was not furnished.
In furtherance of the captioned concern, 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. In order dated 10.01.2022, it is directed that the period from 15.03.2020 till 28.02.2022 shall stand excluded for the purposes of limitation as may be prescribed under any general or special laws in respect of all judicial or quasi-judicial proceedings.
Further, Honourable High Court of Gujrat at Ahmedabad vide their order in R/Special Civil Application No. 1085 of 2022 had ordered by reserving the liberty for the assessee to file an appropriate application addressed to the Chief Commissioner Income Tax under Section 119 (2) (b) of the Act referred to above with a request to permit him to file the Form 10 IC electronically. If any such application is filed then the Chief Commissioner shall look into it expeditiously and may exercise his discretion in accordance with law more particularly keeping in mind the object behind Section 119(2)(b) of the Act. The Chief Commissioner/ Commissioner shall also consider the hardships that the writ-applicant may have to face in the event if he is not permitted to file the Form 10 IC electronically.
In the light of all the representations/petitions made to the Board, a Income Tax circular No. 6/2022 dated 17.03.2022 has been issued stating that Form 10-IC could not be filed along with the return of income for AY 2020-21, which was the first year of filing of this form. It has been requested that the delay in filing of Form 10-IC may be condoned. On consideration of the matter, with a view to avoid genuine hardship of the domestic companies to exercise the new tax regime, the Central Board of Direct Taxes, in exercise of the powers conferred under section 119 (2)(b) of the Act, directs that:-
The delay in filing of Form 10-IC as per Rule 21AE of the Rules for the previous year relevant to A.Y 2020-21 is condoned in cases where the following conditions are satisfied:
- The return of income for AY 2020-21 has been filed on or before the due date specified under section 139(1) of the Act;
- The assessee company has opted for taxation u/s 115BAA of the Act in (e) of “Filing Status” in “Part A-GEN” of the Form of Return of Income ITR-6 and
- Form 10-IC is filed electronically on or before June 30, 2022 or 3 months from the end of the month in which this Circular is issued, whichever is later.
The issuance of the circular by the Board is remarkable and have eliminated undue hardship faced by the assesses. Ease in procedural doings encourage the taxable person to follow the rules in letter and in spirit.
Also Read: Condonation of delay or waiver for filling of Form 10-IC under new tax regime
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