Substantive compliance with provisions should prevail over procedural lapses, especially when the taxpayer's intent is clearly documented.

आदेश/ORDER

PER MAKARAND V.MAHADEOKAR, AM:

This appeal by the assessee is directed against the order passed by the Commissioner of Income Tax (Appeals) – 5, Chennai [hereinafter referred to as “CIT(A)”] dated 18.09.2024, pertaining to the assessment year 2020– 21, whereby the appeal filed by the assessee against the intimation issued under section 143(1) of the Income-tax Act, 1961 [hereinafter referred to as “the Act”] dated 18.12.2021 was dismissed.

2. Facts of the Case

2.1 The assessee is a private limited company engaged in the business of supplying support services like store management to e-commerce stores and brands. For A.Y. 2020–21, it filed its return of income on 04.11.2020 declaring total income of Rs.52,58,790/-, after opting for the concessional tax regime under section 115BAA of the Act. The assessee exercised such option by selecting the appropriate field in Part A–GEN of ITR-6, and the computation was made accordingly. The said return was processed by the Centralized Processing Centre (CPC), Bengaluru, under section 143(1) of the Act vide intimation dated 18.12.2021, wherein the CPC computed tax at the normal corporate tax rate of 30% plus cess, instead of 22% under section 115BAA, thereby raising a demand of Rs. 4,01,560/-. The reason for such demand was the non-filing of Form No. 10-IC electronically within the time prescribed under Rule 21AE r.w.s. 115BAA(5).

2.2 Aggrieved by the said intimation, the assessee filed an appeal before the CIT(A), contending that the benefit under section 115BAA could not be denied solely for not filing Form 10-IC, particularly when the intention to opt for the concessional regime was declared in the ITR itself and the return was filed within the extended due date under section 139(1). It was also contended that the assessee had filed Form 10-IC for A.Y. 2021–22 and that the default was inadvertent and procedural in nature. The CIT(A), however, dismissed the appeal by holding that the assessee had not fulfilled the third condition of the CBDT Circular (i.e., filing of Form 10-IC on or before 30.06.2022 for A.Y. 2020–21), as the Form was admittedly not filed for the correct assessment year. The CIT(A) held that the filing of Form 10-IC is mandatory and its absence disentitles the assessee from availing concessional tax rate under section 115BAA. Further, the assessee had raised an alternate plea before the CIT(A) seeking the benefit of concessional tax rate of 25% under the proviso to section 115BA, on the ground that its turnover during the relevant previous year was below Rs. 400 crore; however, the CIT(A) failed to adjudicate this alternate contention, and confirmed the tax computed by CPC at the maximum rate of 30%.

3. Aggrieved by the order of CIT(A), the assessee preferred the present appeal before us raising following grounds:

1. On the facts and in the circumstances of the case and in law, the Id. Commissioner of Income Tax, Appeal (ADDL/ICIT (A)-5 CHENNAI) has grossly erred in dismissing the appeal & confirming the Intimation order u/s. 143(1) of the Act without considering the facts that the appellant should not be deprived of the benefit of concessional tax regime u/s. 115BAA of the Act as filing form 10IC is mere a procedural aspect to avail the benefit of concessional tax regime u/s. 115BAA of the Act. the Id. Commissioner of Income Tax, Appeal (ADDL/ICIT (A)- 5 CHENNAI) has also has grossly erred in considering the facts that the appellant has filed Form 10IC for AY. 2021-22 on or before 30.06.2022, in accordance with the Circular No.6/2022 dated 17.03.2022 in F.No.173/32/2022- ITA -1.

2. On the facts and in the circumstances of the case and in law,