The court ruled that genuine hardship in tax procedures should be prioritized over strict compliance with technical rules, allowing delayed filings under equitable considerations.

JUDGMENT :

PRANAV TRIVEDI, J.

1. Heard learned advocate Mr. Krutarth Desai for the petitioner and learned Senior Standing Counsel Mr.Karan Sanghani 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 12.7.2023 passed by the Principal Commissioner of Income Tax, Vadodara-1 while exercising jurisdiciton under Section 119(2)(b) of the Income Tax Act, 1961 (for short ‘the Act’) rejecting the application dated 16.10.2022 filed by the petitioner to condone the delay in filing Form 10-IC along with the return of income by considering the Form 10-IC filed within due date for Assessment Year 2020-2021.

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

5. The brief facts of the case are that the petitioner is a Private Limited Company incorporated under the provisions of Companies Act, 1956 and filed its return of income under the provisions of Section 139(1) on 4.11.2020 declaring total income of Rs.1,16,230/- for the Assessment Year 2020-2021.

5.1. 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.

5.2. It is the case of the petitioner that the requirement of filing of Form 10-IC is on or before filing due date of Return under section 139(1) of the Income Tax Act 1961. However, the Central Board of Direct Tax, vide its circular dated 06/2022 dated 17.03.2022 has condoned the delay in filing the Form 10- IC till 30.06.2022 or from the end of month in which the circular is issued. The conditions stated in the circular are stated as under:

- The return of Income for the Assessment Year 2020-21-has been filed on or before the due date specified under section 139(1) of the Act.

- The assessee company has opted for taxation u/s 115BAA of the Act in (e) of "Filing Status" in "Part-AGEN" of the Form of Return of Income ITR-6 and

- Form 10-IC is filed electronically on or before June 30, 2022 or 3 months from the end of the month in which this Circular is issued, whichever is later.

5.3 It is the case of the petitioner that the Chartered Accountant of the petitioner had made compliance of all the requirements as stated in Circular No. 6/2022 dated 17.3.2022. The petitioner company has inadvertently failed to electronically file Form 10-IC along with the return of income under the provisions of Section 139(1) of the Act. It was bonafide belief of the Chartered Accountant being statutory auditor of the petitioner Company that he had already filed form 10-IC. However, after having realised the fact of its non- filing, the Chartered Accountant had filed filed Form 10-IC on 15.9.2022 i.e. after two and half months of specified dated 30.6.2022.

5.4 It is also the case of the petitioner that they realised the fact that benefit of concessional rate of tax of 22% has not been given due to non-filing of Form 10-IC. Therefore, the petitioner made an application before the Office of respondents under the provisions of Section 119(2)(b) of the Act. However, the respondent rejected the application under Section 119(2)(b) of the Act on the ground that he was not empowered to condone delay in view of the Circular No. 6/22 and therefore the same cannot be considered and, therefore, the application was rejected. This has led to filing of the present petition under Article 226 of the Constitution of India.

6. Learned advocate Mr. Krutarth Desai for t