CBDT Simplifies Delay Condonation for Filing Forms 10-IC and 10-ID

CBDT has issued Circular No. 17/2024, which provides relief to taxpayers who suffered hardship due to delayed filing of their Form 10-IC and Form 10-ID. These forms, eligible for condonation under Section 119(2)(b) of the Income Tax Act, 1961, pertain to Assessment Years (AYs) 2020-21, 2021-22, and 2022-23. The circular acknowledges cases of genuine hardship while ensuring compliance with tax regulations.

Key Provisions of the Circular

1. Delegation of Authority:

• Applications involving delays up to 365 days will be processed by the Principal Commissioners of Income Tax (Pr. CIT) and Commissioners of Income Tax (CIT).
• Delays exceeding 365 days will be considered by the Principal Chief Commissioners of Income Tax (Pr. CCIT), Chief Commissioners of Income Tax (CCIT), or Directors General of Income Tax (DGIT).

2. Eligibility to Apply for Condonation:

Condonation applications will only be considered if the following conditions are met:

• The taxpayer has filed their return of income for the relevant AY on or before the due date prescribed under Section 139(1) of the Income Tax Act.
• The taxpayer has opted for taxation under Section 115BAA (Form 10-IC) or Section 115BAB (Form 10-ID) and correctly selected the option under “Filing Status” in Part A-GEN of Form ITR-6.
• The delay must be due to a reasonable cause, and the case should establish genuine hardship to the taxpayer.

3. Time Limit for Filing Applications:

• Applications for condonation of delay must be filed within three years from the end of the relevant AY. This period applies to applications made on or after the date of this circular.
• Such applications must be resolved within six months from the date of their receipt by the authority concerned.

The circular clarifies that no application for condonation will be entertained if it is filed more than three years after the end of the relevant AY. Pending applications under Section 119(2)(b) of the Income Tax Act will now be addressed under the provisions of this circular.

Authorities deciding condonation cases must ensure that an applicant’s case aligns with the existing provisions of the law. Applications will be evaluated based on three main conditions:

• Filing of returns within the due date.
• Correct selection of the mode of filing.
• Valid and sufficient cause for the delay.

Purpose and Implications

This initiative by the CBDT supports taxpayers who face challenges in meeting deadlines due to circumstances beyond their control. By balancing leniency with accountability, the circular ensures a taxpayer-friendly approach while maintaining the integrity of the filing process.

The measure is expected to simplify procedures, provide relief to affected taxpayers, and strengthen adherence to tax laws in the long term.