Procedural lapse in filing Form 10-IC with original return does not bar concessional tax under section 115BAA if filed before rectified return processing, intent clear, and minimal delay condonable on medical grounds.

ORDER

Per: Anikesh Banerjee (JM):

The instant appeal of the assessee preferred against the order of the Ld. Commissioner of Income Tax Appeal ADDL/JCIT-(A), Bhubaneswar [for brevity ‘the Ld. CIT(A)’], order passed under section 250 of the Income Tax Act 1961 (for brevity ‘the Act’) for assessment year 2024-25, date of order 30.05.2025. The impugned order emanated from the order of the CPC Bengaluru (for brevity the ‘Ld. AO’) order passed under section 143(1) of the Act date of order 22.01.2025.

2. The brief facts of the case are that the assessee is a company incorporated under Companies Act 1956, owns 11 flats and earn rental income by letting the flats to “Advance Power Display System Limited”. The assessee filed the return by declaring loss Rs.11,46,283/-. The Ld. AO computed the taxable income of the assessee amount of Rs.2,02,89,906/- being book profit u/sec. 115JB of the Act. The CPC issued the notice u/sec 139(9) of the Act for defective return related to difference in amount reflected in Form No.26AS and turnover declared by the assessee. The assessee response the notice and rectified the defect by submitting the revise return u/sec. 139(5) of the Act, but before filing the return the assessee filed Form No.10IC under Rule 21AE of the Income Tax Rules, 1962 (hereinafter referred the ‘Rules’). Accordingly the assessee had fulfiled the necessary condition for claiming the simplified tax scheme u/sec. 115BAA of the Act. The return for process u/sec. 143(1) of the Act by the CPC. The CPC rejected the assessee’s claim for allowing the benefit in simplified tax scheme u/sec. 115BAA of the Act and the demand was raised 32,99,240/-. The aggrieved assessee filed an appeal before the Ld. CIT(A). The Ld. CIT(A) rejected the assessee’s appeal. Being aggrieved assessee filed an appeal before us.

3. The Learned Authorised Representative (Ld. AR) submitted that a paper book comprising pages 1 to 218 has been filed and placed on record. The Ld. AR contended that although the assessee had not initially claimed the benefit of the simplified tax regime under section 115BAA of the Act in the original return of income, the said return was not accepted by the revenue during the processing stage. Consequently, a notice for a defective return was issued under section 139(9) of the Act. In response, the assessee filed a revised return under section 139(5) of the Act. Prior to filing the revised return, the assessee had already submitted Form No. 10IC before the CPC. The Ld. AR further submitted that during the processing of the revised return, the said Form No. 10IC was duly available on the record of the CPC.

4. After the first round of hearing, the Bench fixed the matter for clarification on the issue as to whether the claim of benefit under section 115BAA made through the revised return was legally admissible. During the subsequent hearing, the Ld. AR placed on record a list of dates and events, which is reproduced below:

“FACTS

PROPOSITIONS:

1. The impugned intimation issued by the Learned Centralised Processing Centre ["the CPC" for short] is invalid for the most primary reason that it is passed without issuing any prior intimation or adjustment memoto the Assessee giving a notice to him as regards the adverse adjustment to be made in the intimation u/s 143(1) of the Income Tax Act, 1961 ["the Act" for short] vis-à-vis the Return. The validity of the said intimation is challenged vide ground 1.5 & 1.6. Therefore the said intimation u/s 143(1) must be set aside.

2.