The court ruled that genuine hardship under Section 119(2)(b) of the Income Tax Act should be interpreted liberally, allowing the petitioner to file Form 10IC for AY 2021 despite prior technical issues.

JUDGMENT :

BHARGAV D. KARIA, J.

1. Heard learned advocate Mr.Manish J. Shah for the petitioner and learned Senior Standing Counsel Mr.Karan Sanghani for learned advocate Mrs.Kalpana K. Raval for the respondents.

2. Rule, returnable forthwith. Learned Senior Standing Counsel Mr.Karan Sanghani waives service of notice of rule for and on behalf of the respondents.

3. By way of this petition, the petitioner has challenged the order dated 6th October, 2023 passed by the Principal Commissioner of Income Tax, Surat-1 while exercising jurisdiction under Section 119(2)(b) of the Income Tax Act, 1961 (for short ‘the Act’) rejecting the application dated 17th March, 2023 filed by the petitioner to condone the delay in filing the Form 10-IC along with the return of income by considering the Form 10-IC filed within due date for Assessment Year 2021-2022.

4. Considering the controversy in narrow compass, the matter is heard finally with the consent of the learned Advocates of the parties.

5.1. The brief facts of the case are that the petitioner is a Public Limited Company and filed its return of income on 31.12.2020 declaring total income of Rs.11,38,14,110/- for the Assessment Year 2020-2021.

5.2. The petitioner exercised the option under Section 115BAA of the Act while filing the return of income to pay the reduced rate of tax at 22% excluding the surcharge and education cess.

5.3. It is the case of the petitioner that while filing the return of income, ITR-6, the petitoner selected the 11th column appearing in the Form of return for opting the concessional tax as per the provisions of Section 115BAA of the Act and computed the tax payable accordingly as per the statement of computation of income.

5.4. It is the case of the petitioner that due to technical issues with the Income Tax Website, Form 10IC as per the provisions of Section 115BAA(5) read with Rule 21AE of the Income Tax Rules, 1962 could not be filed at the time of filing of return of income, however, the return of income filed by the petitioner was processed under Section 143(1) of the Act with refund of Rs.8,43,840/- including the amount of interest under Section 244A of Act on 29.03.2021.

5.5. However, the Central Processing Centre (for short ‘the CPC’) issued a Rectification Order under Section 154 of the Act by reprocessing the return of income as the Form 10IC was not filed by the petitioner along with the return of income by raising a demand of Rs.1,21,46,360/-.

5.6. The petitioner therefore raised grievance on 08.11.2021 on the Portal, however, no effective resolution was provided and the grievance was closed by the CPC on 12.11.2021. The petitioner raised another grievance on 30.11.2021 which was also closed by the e-filing Department on the same date without providing any resolution.

5.7. It is the case of the petitioner that till the end of January, 2022, non-availability of the reference of the Rectification Order persisted and return for the Assessment Year 2021-2022 was due for filing and petitioner filed Form 10IC along with the return for Assessment Year 2021-2022 whereas, as per the provisions of the Act, the petitioner was required to opt for the option to avail the concessional rate of tax only once which would be available in all subsequent Assessment Years. The petitioner was accordingly required to file the Form 10IC for the Assessment Year 2020-2021 and not for the Assessment Year 2021-2022.

5.8. The CBDT thereafter issued the Circular No.6 of 2022 on 17.03.2022 by exercising powers conferred under Section 119(2)(b) of the Act wherein, it was directed that the delay in filing Form 10IC for the Assessment year 2021-2022 is to be condoned on fulfilling the following conditions :

“(i) The return of income for A.Y. 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 us. 115BAA of the Act in (e) of "Filing Status" in "Part 1-GEN" of the Form of Return of Income ITR-6 and

(iii) Form 10-IC