IN THE INCOME-TAX APPELLATE TRIBUNAL “E” BENCH, MUMBAI BEFORE SHRI NARENDER KUMAR CHOUDHRY, JUDICIAL MEMBER &

SHRI PRABHASH SHANKAR, ACCOUNTANT MEMBER ITA 369/MUM/2025 (A.Y. 20 21-22)

Tai nwala Personal Care v/s. Deputy Commissioner of Products Pvt Ltd, Plot No. 118 बनाम Income Tax Circle – Tainwala House Road No. 18, 3(3)(1), Aayakar Bhawan, MIDC Andheri East, Mumbai - Mumbai - 400020, 400 093, Maharashtra Maharashtra स्थायी लेखा सं./जीआइआर सं./PAN/GIR No: AAACT1967C Appellant/अपीलार्थी Respondent/प्रतिवादी

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Appellant by : Shri Haridas Bhatt Respondent by : Shri Hemanshu Joshi (Sr. DR)

Date of Hearing 24.04.2025 Date of Pronouncement 06.05.2025 आदेश / O R D E R PER PRABHASH SHANKAR [A.M.] :-

The present appeal is filed by the assessee against the appellate order passed by the Learned Commissioner of Income-tax, Appeal/ADDL/JCIT(A)-5, Delhi[hereinafter referred to as “CIT(A)”] pertaining to the intimation order passed u/s. 143(1) of the Income-tax Act, 1961 [hereinafter referred to as “Act”] dated 14.12.2022 as passed by the Assessing Officer, CPC, Bangalore for the Assessment Year [A.Y.]

2021-22.

2. The grounds of appeal are as under:-

1. On the facts and circumstances of the case, and in Law, the Asst. Director of Income Tax, CPC Bengaluru erred in rejecting the option of Section 115BAA for the procedural lapse in not filing Form 10IC.

2. On the facts and circumstances of the case and in law the AO failed to appreciate that:

a. The Assessee has opted for Section 115BAA and filed the return and tax audit accordingly.

b. The mere fact that form 10IC is not filed cannot be sole reason to deny the Assessee of the beneficial provision.

c. The Section 115BAA is a beneficial provision which cannot be denied due to procedural lapse.

3. The appellant, therefore, prays that the Assessee's return please be processed with the benefit U/s 115BAA and the demand deleted.

3. The appeal concerns the denial of the concessional tax rate under Section 115BAA of the Act due to the non-filing of Form 10IC, which is a mandatory procedural requirement under Rule 21AE of the Income Tax Rules, 1962.

4. The ld.CIT(A) has elaborately discussed the whole issue stating that the assessee filed its Income Tax Return (ITR) on 13.03.2022, declaring a total income of Rs. 8,49,58,240/- and opting for the beneficial provisions of Section 115BAA. Along with the ITR, it also submitted its tax audit report in Form 3CD, reflecting its intention to avail of the concessional tax regime. However, while processing the return under Section 143(1) of the Act, the claim under Section 115BAA was disallowed due to the omission to file Form 10IC, and the income was assessed under Section 115JB based on book profits, resulting in a gross tax liability of Rs 92,69,260/-.Before him, it was contented that procedural lapse of not filing Form 10IC should not override the substantive benefit conferred by Section 115BAA.The intention to opt for Section 115BAA was bona fide and evident from the tax audit report filed within the statutory timelines. The omission to file Form 10IC was a genuine clerical error and not a deliberate act. The assessee further submitted that denial of the benefit solely on procedural grounds would defeat the very purpose of introducing Section 115BAA, which aims to incentivize businesses through reduced tax rates.

4.1 The ld.CIT(A) though admitted that assessee's intention to avail of the concessional tax regime under section 115BAA was bona fide and substantiated by the tax audit report filed within the prescribed timelines, however, the provisions of Section 115BAA(5) explicitly require the filing of Form 10IC on or before the due date specified under Section 139(1).Referring to the Central Board of Direct Taxes (CBDT), through Circular No. 17 of 2024 dated 18.11.2024, it is stated that the Circular recognized the challenges faced by taxpayers in complying with procedural requirements and provided a mechanism to condone such lapses. The Circular allows taxpayers to fil