ITAT Delhi: Filing Form 10-IC Once Before Due Date Makes Company Eligible for Section 115BAA Concessional Tax Rate

Osttra India Services Pvt. Ltd. filed its income tax return for A.Y. 2023-24 on 23 November 2023, declaring income under the concessional corporate tax regime of Section 115BAA at 22%. The Centralized Processing Centre (CPC), Bengaluru, processed the return and raised a demand of Rs. 3.28 crore, contending that Form 10-IC, required for availing Section 115BAA benefits, was filed after the due date.

CIT(A) Says: The assessee’s appeal before the CIT(A) was dismissed on the ground that Form 10-IC for A.Y. 2022–23 had been filed late, making the assessee ineligible for concessional rates in the later year. Aggrieved, the assessee approached the ITAT, arguing that Form 10-IC had indeed been filed within time and that the due date for return filing was 30 November 2023 as per Explanation 2 to Section 139.

Issue Before ITAT: Whether the assessee was eligible to claim the concessional tax rate under Section 115BAA when Form 10-IC was filed before the due date, and whether CPC was justified in denying the benefit based on an error in the computation of filing deadlines.

Tribunal’s Order: The tribunal observed that Section 115BAA(5) requires Form 10-IC to be filed “on or before the due date specified under Section 139(1) and that once exercised, the option continues to apply for later assessment years. The Tribunal found that the assessee had filed Form 10-IC within the valid period, and even if there had been a delay in an earlier year, the option could not be denied for A.Y. 2023–24, since the return and Form 10-IC were both filed before the due date of 30 November 2023.

Hence, the ITAT directed deletion of the Rs. 3.28 crore demand raised by the CPC and allowed the assessee’s appeal. It reaffirmed that the concessional tax regime under Section 115BAA, once opted through valid filing of Form 10-IC, remains effective for coming years unless the assessee infringes prescribed conditions.

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