Option once exercised by filing of Form 10IC, it remains valid for subsequent assessment years: No need to file it every year: ITAT Delhi
ITAT Delhi in the case of Indo British Garments Pvt. Ltd. v. DCIT (ITA No 2400/Del/2024) was concerned with the denial of benefits under section 115BAA. The primary issue was the denial of the concessional tax rate benefit under section 115BAA of the Income-tax Act, 1961, due to the alleged non-filing of Form 10IC for AY 2021-22.
Before, ITAT, Assessee’s argument was as under:
1. The assessee argued that it had opted for the concessional tax rate under Section 115BAA from AY 2020-21 onwards and had filed Form 10IC on December 31, 2020, for AY 2020-21.
2. The assessee contended that as per the Frequently Asked Questions (FAQs) issued by the Income Tax Department, once Form 10IC is filed, it remains applicable for subsequent assessment years and does not need to be filed every year.
Revenue’s argument:
The Revenue argued that the assessee failed to file Form 10IC for AY 2021-22 within the prescribed time limit, justifying the denial of the concessional tax rate.
ITAT Observation:
1. The Tribunal noted that Section 115BAA allows domestic companies to opt for a concessional tax rate of 22% provided they do not avail specified deductions and incentives.
2. The Tribunal emphasized that once the option for the concessional tax rate is exercised, it applies to subsequent assessment years and cannot be withdrawn.
3. The Tribunal referred to the FAQs issued by the Income Tax Department, which support the assessee’s claim that Form 10IC, once filed, remains applicable for subsequent years.
4. The Tribunal concluded that the requirement to file Form 10IC in subsequent years is irrelevant once the option is exercised and accepted by the Income Tax Department.
The copy of the order is as under:
