Delay in filing of Form No. 10IC for concessional tax regime u/s 115BAA: A welcome move by CBDT
1. Section 115BAA of the Income-tax ,1961 allows domestic companies to opt to be governed by concessional Tax regime (Tax rate of 22% plus surcharge and Cess) provided it does not claim certain exemption/ deduction listed therein.
2. Section 115BAA(5) of the Act read with Rule 21AE of income-tax Rules, 1962 requires filing of Form 10-IC on or before due date of filing original tax return.
3 There are various assessee have missed out to file form 10-IC for AY 2020-21, being the first year of its applicability. Resultantly, tax has been assessed under normal provisions of the Act by CPC while processing return and issuing 143(1).
4. It may be noted that Section 119 of the Act provides that CBDT can condon delay in making any claim for deduction, exemption or refund or any other other relief under the Act, vide special or general order, in order to avoid genuine hardship to the assessee.
5. It is well settled proposition of law that procedural requirements needs to be interpreted liberally if substantial requirements have been complied with. Further, while dealing with similar requirements, it was held by courts that requirement to file form/certificate was mere directory in nature and not mandatory and if the same is complied with before completion of assessment, it is considered a valid compliance.
6. CBDT has vide circular No. 6 of 2022 dated 17 March, 2022 passed an order condoning delay in furnishing Form 10-IC for AY 2020-21 provided following conditions are satisfied.
a] Assessee has opted to be governed by section 115BAA by choosing appropriate option in return of income ,
b] Return is filed within due date specified in u/s 139(1) and
c] Form 10-IC is subsequently filed electronically on or before 30 June, 2022.
As a result, DGIT(system) now needs to enable the system on portal to enable filing of form 10-IC for AY 2020-21 at the earliest.
Further, the department should make changes in the portal to automatically remove demand which were generated merely on account of non-submission of Form 10-IC as per requirement of section 115BAA of the Act read with Rule 21AE.
There are various cases wherein there is a delay in filing of form No. 10, 10B, 10IE, Form NO. 68, etc etc by the taxpayers or the auditors which has also resulted in heavy demand on the assessee. It would be really apprecaible if the CBDT comes out for a condonation in all such cases.
Circular No. 6 2022
Government of India
Ministry of Finance
Department of Revenue Central Board of Direct Taxes
New Delhi, the 17 March, 2022
Sub: Condonation of delay under section 119(2)(b) of the Income tax Act, 1961 in filing of Form 10-1C for Assessment Year 2020-21- Reg.
Section 115BAA of the Income-tax Act, 1961 (the Act) was inserted by the Taxation Laws (Amendment) Act, 2019 w.e.f. 01.04.2020. As per the Section, the income-tax payable in respect of the total income of a person, being a domestic company, for any previous year relevant to the assessment year beginning on or after the 1st day of April, 2020, shall, at the option of such person be computed at the rate of twenty-two per cent subject to satisfaction of conditions contained in sub-section(2) of the Section.
1.2 As per subsection (5) of section 115 BAA 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.
1.3 Failure to furnish such option in the prescribed form on or before the due date specified u/s 139(1) of the Act results in denial of concessional rate of tax of twenty-two per
cent to such person.
2. Representations have been received by the Board 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 10-1C may be condoned.
3. On consideration of the matter, with a view to avoid genuine hardship to the domestic companies in exercising the option u/s 115BAA of the Act, the Central Board of Direct Taxes, in exercise of the powers conferred under section 119(2)(b) of the Act, hereby 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: i) 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; ii) 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 iii) Form 10-IC is filed electronically on or before 30.06.2022 or 3 months from the end of the month in which this Circular is issued, whichever is later.
Under Secretary (ITA-1)
PS to FM/OSD to FM/PS to MoS (R)/OSD to MoS (R)
PPS to Secretary(Revenue)
The Chairman, CBDT & All Members, CBDT
All Pr. Chief Commissioners Of Income-tax/Pr. Director General of Income-tax.
Pr. Chief Controller of Accounts, New Delhi
All Joint Secretaries/CsIT, CBDT
CIT(M&TP), CBDT and Official spokesperson of CBDT.
The Additional Director General (PR & PP), New Delhi.
Addl. CIT, Data-Base Cell – for placing it on www.irsofficersonline.gov.in
1 Web Manager, O/o Pr.DGIT(Systems) with request to upload on the departmental website.
The Guard File.