[Income Tax] Filing Of Form 10-IC Prior To Filing Of Return Not Mandatory, Delay May Be Condoned In “Genuine Hardship”: Allahabad High Court

The Allahabad High Court has held that filing of Form 10-IC prior to filing of income tax return is not mandatory and the delay in filing the Form may be condoned in cases where “genuine hardship” is shown to exist. Form 10-IC, under the Income Tax Act, is required to filed only if a Domestic Company chooses to pay tax at concessional rate of 22% under Section 115BAA of the Income Tax Act,1961. Section 115BAA provides that subject to the provisions of Chapter XII of the Income Tax Act, a domestic company may choose to compute its income tax at 22% for any previous year relevant to the assessment year beginning on or after the 1st day of April, 2020 provided the conditions mentioned in Section 115BAA(2) are fulfilled. The bench of Justice Shekhar B. Saraf and Justice Praveen Kumar Giri held “filing of Form 10-IC prior to filing of return is not mandatory and if “genuine hardship” is shown then delay may be condoned and in this respect the provision of law shall be taken as a beneficial piece of legislation.” Petitioner filed his return for the assessment year 2020-21 by claiming benefit under Section 115BAA and filed Form 3CD (audit report) with it but failed for file Form 10-IC. An order was issued by the Centralized Processing Centre under Section 143(1) of the Act, raising a demand of Rs. 45,89,490/-. Though the date for filing Form-10-IC was extended, the person handling income tax for the petitioner was unable to file it in time due to severe health issues and eventual death of his mother and elder daughter. Thereafter, he filed an application for condonation of delay, in which it was stated that the factum of the Form-10-IC not being filed came to his knowledge when the demand was raised under Section 143(1). The Principal Commissioner of Income Tax, Ghaziabad whereby petitioner's application for condonation of delay in filing Form 10-IC was rejected. Petitioner approached the High Court against the rejection order. Section 119(2)(b) empowers the Board to direct the authority, not being a Joint Commissioner (Appeals) but can be a Commissioner, (Appeals), to admit an application or claim for any exemption, deduction, refund or any other relief under the Income Tax Act after expiry of limitation in case of genuine hardship to the assesee. Holding that the discretion is granted to ease the genuine hardship faced by the assesee, the Court held dismissing petitioner's application with genuine claims regarding the employee's personal difficulties was arbitrary. “To dismiss such a well-substantiated cause as insufficient for condonation not only negates the remedial intent of Section 119(2)(b) but also constitutes an arbitrary exercise of discretion, particularly when the petitioner's intent to avail the beneficial provisions of Section 115BAA was evident from its original return and audit report.” The Court held that when substantial justice and technical considerations are pitted against each other, then substantial justice must take precedence and the authorities must be justice-oriented. “The clear and repeated position of law is that even if a procedural delay occurs due to “genuine hardship”, it should not prevent an assessee from receiving a rightful tax benefit.” Accordingly, the impugned order was quashed with a direction to the authority to condone the delay in filing Form 10-IC and accept the said form. Case Title: CELL COM TELESERVICES PRIVATE LIMITED v. UNION OF INDIA AND OTHERS [WRIT TAX NO. 278 OF 2024] Click Here To Read/Download The Order

[Income Tax] Filing Of Form 10-IC Prior To Filing Of Return Not Mandatory, Delay May Be Condoned In “Genuine Hardship”: Allahabad High Court

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