ITAT Allows 115BAB Tax Benefit Claim And Remands Eligibility Verification to AO:

Super Antico Solutions Private Limited filed its return for AY 2023-24 declaring total income of Rs 1,36,86,620 and computed tax by opting for the special tax regime under Section 115BAB of the Income Tax Act. However, while processing the return under Section 143(1), the CPC did not consider the option and calculated tax at the normal rate of 30%, resulting in a demand. The assessee later filed a rectification application under Section 154, but the CPC continued to deny the benefit of Section 115BAB. The assessee's appeal before the CIT(A) was also dismissed.

The assessee submitted that it had exercised the Section 115BAB option by furnishing Form No. 10-ID and that, under Section 115BAB(7), once the option is validly exercised, it applies to subsequent assessment years and cannot subsequently be withdrawn. The Tribunal noted that the assessee had exercised the option under Section 115BAB by furnishing Form No. 10-ID and that the Revenue had not disputed the filing of the prescribed form. Section 115BAB(7) specifically provides that once the option is exercised in the prescribed manner, it applies to subsequent assessment years and cannot subsequently be withdrawn.

The Tribunal held that the mere fact that no income was disclosed or no tax was ultimately computed under Section 115BAB in the first year could not, by itself, amount to withdrawal or cancellation of an option validly exercised in accordance with the statutory requirements.  under Section 115BAB in the first year. At the same time, the Tribunal made an important distinction: exercise of the option under Section 115BAB(7) does not automatically confer entitlement to the concessional tax rate under Section 115BAB(1). 

Since the material before the Tribunal did not establish that the AO had examined fulfilment of all conditions under Section 115BAB(2), the Tribunal restored the issue to the jurisdictional AO for fresh examination. Accordingly, the assessee's appeal was allowed for statistical purposes.