2023 (5) TMI 734 - AT - Income Tax

MAT - Income to be taxed u/s 115BAA or u/s 115JB - assessee has not uploaded Form 10-IC electronically before or at the time of filing of return of income within time period prescribed u/s 139(1) - case of assessee is that Form 10-IC could not be uploaded on ITBA Portal due to technical error and it was the first year of availing such benefit - whether non-filing of Form 10-IC on ITBA Portal is fatal to the assessee or not in availing the benefit of section 115BAA? HELD THAT - Hon ble Delhi High Court in CIT Vs Web Commerce (India) (P) Ltd. ( 2008 (12) TMI 13 - HIGH DELHI COURT held that once audit report is filed before framing of assessment the provisions of Section 80-IA (7) would be complied as furnishing of such report at the time of filing of return is directory in nature and not mandatory. Considering the similar principle that the assessee furnished Form 10-IC before the order of ld. CIT(A). It is settled principles under law that appeal is a continuation of assessment proceedings and the ld. CIT(A) has co-terminus power as of AO therefore the ld. CIT(A) was required to consider the report in Form 10-IC. In view of the above factual and legal discussion the ground of appeal raised by the assessee is restored back to the file of assessing officer to consider the report in Form-10IC and allow relief to the assessee if the assessee fulfil all other requisite condition as per law. Appeal of assessee is allowed for statistical purpose.

Summary

Issues involved:
The issues involved in the judgment are related to the taxation treatment under Section 115BAA of the Income Tax Act, 1961 for a domestic company engaged in the textile business. The main contention revolves around the non-filing of Form 10-IC electronically before the due date for filing the return of income.

Comprehensive Details:

Issue 1: Taxation Treatment under Section 115BAA
The appellant contested the order passed under Section 143(1) of the Act, seeking to be taxed under Section 115BAA instead of Section 115JB. The appellant's return of income for A.Y. 2020-21 was initially processed by the CPC under Section 115JB due to the non-filing of Form 10-IC. The appellant later submitted the form physically to the Assessing Officer, leading to the appeal before the ld. CIT(A).

Issue 2: Submission and Decision of ld. CIT(A)
The ld. CIT(A) upheld the CPC's decision, stating that the appellant's failure to file Form 10-IC electronically rendered them ineligible for the benefit of the CBDT Circular extending the deadline. The ld. CIT(A) emphasized that the form was not available for processing by the CPC as it was filed physically. Consequently, the appellant appealed before the Tribunal against the ld. CIT(A)'s order.

Issue 3: Arguments and Rulings
The appellant's representative argued that despite technical issues preventing the online upload of Form 10-IC, the appellant fulfilled all conditions for taxation under Section 115BAA. Citing precedents, the appellant contended that procedural lapses should not disqualify them from availing relevant provisions of the Act. Conversely, the ld. CIT-DR asserted that the appellant failed to meet the prescribed conditions, including timely filing of Form 10-IC.

Issue 4: Tribunal's Decision
After considering submissions and legal precedents, the Tribunal referred to cases where delayed submission of required documents did not preclude eligibility for deductions. Drawing parallels, the Tribunal directed the assessing officer to reconsider the appellant's case in light of the furnished Form 10-IC. Consequently, the Tribunal allowed the appeal for statistical purposes, emphasizing the importance of procedural fairness and adherence to legal principles.

This judgment highlights the significance of procedural compliance and equitable application of tax laws, ensuring that technical errors do not unduly prejudice taxpayers seeking legitimate benefits under the Income Tax Act.