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Judgment
Per Raj Kumar Chauhan, Judicial Member:
The appeal is directed against the order dated 07.10.2025 of Learned Commissioner of Income T ax (Appeals), Indore (hereinafter referred to as the “CIT(A)”), passed u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) wherein minimum alternative tax (MAT) u/s 115JB @15 % plus Cess @ 4% by way of adjustment u/s 143(1) for not filing the Form 10(1C) despite op ting section 115BAA of the Act by the assessee was co nfirmed.
The brief facts as culled out from the authorities are that the assessee co mpany filed its return for A.Y. 2024-25 on 04.09.2024 which is before the due date of filing of return prescribed u/s 139 of the Act. In the Inco me tax return for m at page no 1 in "Part A-Gen" it duly opted to be taxed under the provisions of section 115 BAA. T he company had a book profit of Rs.37,83,532/- whereas to tal income w as Nil due to brought forward losse s. As provision of section 115JAA is not applicable on companies opting to be taxed under the provisions of section 115BAA, no MAT u/ s 115JA was paid on the book profits. The assessee company w as under bonafide impression that For m 10-IC has been filed on 06.10.2022 vide acknowledgement number 619257181061022 and this fact w as duly mentioned in the re turn Form. Accordingly no Form 10-IC was filed in the relevant assessment year. The company on receipt of intimation u/ s 143(1) noted that benefit of section 115BAA has no t been given and tax u/s 115 JAA @ 15% on the book profits o f the co mpany along with ce ss @ 4% and interest has been charge d and a total demand of Rs. 5 ,2 9,720/- (after adjusting TDS and advance tax) has been raised. The appellant company thereafter checked its earlier records and found that Form 10-IC has been inadvertently left to be filed and the date of filing and acknowledgement number does not relate to the appellant co mpany. It thereafter filed 10IC on 15.02.2025 and filed an application u/ s 154 for rectification as option to be taxed u/s 115BAA was duly opte d in the retur n filed for the relevant asse ssment year. However, CPC did not grant the benefit of section 115BAA w hile passing the order u/s 154 on 04.03.2025.
Aggrieved by the said action of CPC in not granting benefit of section 115BAA, the appellant preferred an appeal before the ld. C IT(A). However, the learned CIT(A) also failed to appreciate the factual and legal position and has upheld the action of CPC b y not granting the benefit of taxatio n under Section 115BAA thereby sustaining the tax charged u/s 115J AA.
Aggrieved by the impugned ord er, the assessee is in appeal before us and r aised the follow ing grounds:
“1.That on the facts and in the circumstanc es of t he case, and i n law, t he lear ned Commissioner of Inco me Tax (Appeals), Indore , has grossly erred i n c onfirming the acti on of t he CPC, Be ngal uru, in denyi ng the benefit of t he concessional tax regime under secti on 115BAA of the Inc ome Tax Act, 1961, mer ely on the technical ground that Form No. 10-IC was filed after t he due date prescribed under sectio n 139(1), without appr eci ati ng tha t the assess ee had duly opted for secti on 115BAA in the re turn of i nc ome and the delay in fi ling of For m 10 -IC was a bona fide and procedur al laps e.
1.1That the learned C IT(A ) has err ed in not appr eciati ng that the benefit unde r sec tion 115BAA is a subst antive right conferr ed by statute and cannot be deni ed m erely for delay i n filing a prescribed form , particularly when the intent of the assessee to o pt for the said provision was duly evident from the return of income filed and the t axes were computed accor di ngl y.
1.2That the l earned CIT(A) failed to appreciate that the provisi ons of section 115BAA (5) are pr oced ur al in nat ure and therefore the delay i n filing of F orm No. 10 -IC ought to have be en c ondone d followi ng the pri nciples l aid down by various judicial pronounce ments i ncl uding the decisi on of H on’ble Supreme C ourt in t he case of Collec tor Land Acquisitio n v. Mst. Katiji & Ot hers [167ITR 471 (SC)] and the CBDT Circ ular No. 9/2015 dated 09.06.2015 whic h emphasizes a liberal approach in condonati on matters.
1.3That the l earned CIT(A) failed to appreciate that deni al of t he benefit of section 115BAA leads to taxation at hi gher rat es and imposes an unintended har dship on the assess ee for a purely proc edural default, cont rary to the i ntent a nd purpos e of the concessi onal tax re gi me intr oduced by the Fi nance Act, 2019.”
We have heard the ld. AR and the ld. DR and perused the material on record. The ld . AR at the very outset submitted that the case o f the assessee is covered by the order of Delhi Tribunal in the case of KN Support Services Pvt. Ltd. Vs. DCIT, ITA No. 5774/Del/2024 order dated 29 .08.2025. He has also relied the case of Mumbai Tribunal in Getinge Medical India Pvt. Ltd. Vs. DCIT , ITA No. 4872/Mum/2024 13.03.2026 especially para 6.11 where similar issue has been decided in favour of the assessee.
In support of his argument, the ld. AR has also filed written submissions w herein it is submitted that the assessee is a domestic company and eligible to avail the benefit of tax u/s 115 BAA of the Act as it fulfill all substantive conditions for availing such benefit. It is clarified that the o nly fault of the assessee co mpany was that it did not file Form 10-1C before the due date of filing of the retur n because it was under bonafide impression that it had filed Form 10-1C in the earlier year on 06.10 .2 022. It is further submitted that the non-filing of the Form 10-1C came to its knowledge at the time of rece ipt of intimation u/ s 143(1) and immediately filed the Form 10-1C on 15.02 .2025 vide acknowledgement placed at page 6 of the paper book. It is further argued that filing of Form 10-1C beyond due date is no t fatal to the assessee company for availing the benefit of section 115BAA as it is a mere procedural lapse and the substantial right of the assessee cannot be denied. It is further argued that the CBDT circular No. 17/2024 dated 18.11.2024 authorizes CIT/CCIT to condone the delay in filing the form 10-1C for A.Ys. 2020-21, 2021-22 and 2022-23 on fulfilling cer tain conditio ns w hich assessee had already fulfilled. It is argued that though the said circular which pertains to A.Ys. 2020-21 to 2022-23 is not applicable for the relevant year but the spirit of circular should extend to other years as well because the assessee company satisfied all the conditio ns listed in the said circular as it has filed the return o n 04.09.2024 much earlie r from the ex tended due date i.e. 15.11 .2024. It is therefore submitted that the case of assessee is covered by the order of Delhi Tribunal in the case of KN Support Services Pvt. Ltd. Vs. DCIT (supra) and Mumbai Tribunal in Getinge Medical India Pvt. Ltd . Vs. DC IT (supra). It is therefore prayed that the impugned order needs to be set aside and the adjustme nt made in the CPC needs to be dele ted.
The ld. DR o n the other hand, r elied upon the o rders of the lower authorities and prayed for dismissal o f the appeal.
We have considered the rival submissions and perused the material available on record. The relevant portion of the order of the Delhi Tribunal in ITA No . 5774/Del/2024 has held as under:
“12.The C o-ordi nat e B enc h o f Ahm edabad Tribunal in t he case of Aprameya Engi neer ing Ltd. vs. ITO [TS -4 11-ITAT-2024(A hd)) (refer Page No. 7 -17 of C LC ) wherei n it was held that c onsideri ng the principl e of benefi cial inte rpretation, the pr oce dur al r equireme nts shoul d not override s ubs tantive benefits. H ence, delay in filing of Form 10-IC, being a proc edural requirement, sho uld no t invalidate the ass essee's ri ght to claim the benefit of Secti on 115BAA of the Act. It was furt her held that CB DT circulars extending due dat es for fi ling of suc h forms in the earli er years indicate a degr ee of administrat ive flexibil ity and recogni tion that proc edur al lapses sho uld not lead to deni al of substantive benefits. The releva nt extract of the j udgeme nt is reproduced as und er:
8.1.. . “In the insta nt c as e, the Ld. A.O. as well as t he Ld.CIT(A) has denied benefit of concessi onal tax rat e u/s 115BAA of the Act on acc ount of an i nadverte nt err or on the part of the assess ee i n not e-fili ng For m 10 IC bef ore due dat e prescribed. We are, therefore , of the vi ew that t here is sufficient complianc e if the Form 10 IC has been filed duri ng the c ours e of assessment pr oceedi ng, si nce there is no mate rial obj ec ti ve to be achieved by the assesse e in not e-filing the s ame, once the i ntent was very well declared in Form 3CD.
8.2.Considering the pri nciple of beneficial inte rpretation, the pr oc edural requi rements should not override substanti ve benefits. The Courts have taken a lenient vi ew o n procedur al lapses when s ubs tantive benefits are i nvolved. SC ruling in t he case of CIT v. G.M. K nitting Indus tr ies (P.) Ltd. reported in (2015) 376 ITR 456 emphasized that the m aking of a claim of deduction is mandatory, but timi ng is directory. Even if the claim is made duri ng the ass essme nt proc eedi ngs, s uch a claim is to be allowed.
8.3.Af ter consideri ng the submissions, the judicial precedents cited a nd s pecific f act s of the case, we are of the opini on the delay i n fil ing Form 10-IC , though a proc edur al requirement, sho ul d not i nvalidate t he assessee's substantive ri ght to the benefit of section 115BAA of the Act.
8.4.The CBDT's Circula rs extending the due dates f or filing such forms in earlier years indicate a recogniti on of such proc edural diffic ulties . Thes e Circulars indicat e a d egree of administrative fl exibility and a recogni ti on tha t procedural lapses should not nec essari ly lead to the denial of subs tantive benefits. Moreover , denyi ng the bene fit based sol ely on this lapse woul d be agai ns t the pri ncipl es of equi ty and justice, especially when there i s no dispute regardi ng t he as sessee's eli gibility for the lower tax r at e.
8.5.In light of the abov e, the Ground Number is allowed. Ground Number 2 is an alte rnative ground and, t herefore, not a djudicated. Ground Numbers 3 and 4 are gener al in nat ure, which are also not adj udicated. ”
13.The Co-ordi nate Be nch of Pune Tribunal i n the case of A kshay (A kshay D evendra Biruri vs . DC IT, CPC [TS -402-ITAT-2024(PUN)] (refer Page No. 18-21 of CLC) wherei n t he Hon'bl e Tri bunal held that in or der to claim the benefit of the new tax re gime, filing of Form 1 01E under R ule 21AG of the Rules, is not a mandatory requirement but it is rather direc tory i n nat ure. The Ho n'bl e Tribunal direc ted the Revenue t o allow t he benefit o f the new tax regi me by taking into consideratio n t he Form 101 E as the same was available with the R evenue at the time of processi ng the return of income. The r elevant para graph of the said r uling is reproduc ed herewi th for y our Honour 's ready ref erence:
7.“We heard the Id. Sr. DR a nd perused the rel eva nt mat erial on record. The solitar y issue that ari ses f or our consideration in the present appeal is whet her t he CPC was j ustifi ed in denying the benefit of New Tax Regime. A dmit tedl y, the appellant had failed to submi t the prescribed Form No.101E in order to clai m the benefit o f Ne w Tax R egime be for e the due date for filing the r etur n of income. H oweve r, the appellant had fi le d t he said form on 10.01.2024 on whic h dat e the CPC had process ed the re turn of inco me u/s, 143(1)(a) denyi ng t he benefit of New Tax R egime. In any event, it is not a mandatory requir eme nt for fili ng of Form No.101E but direct ory i n natur e. The Form No .101E was very m uch availabl e with t he CPC and t he CPC ought to hav e considered the same allowi ng t he benefit of New Tax Regi me. The refore, we direc t t he CPC to amend the i ntimati on by taki ng into consideratio n the Form N o.101E, as the same was availabl e with t he CPC at t he ti me of processi ng the ret urn of i ncome. We order acc ordi ngl y.”
14.The Co-ordinat e Bench of Mumbai Tribunal i n t he case of Krishna Gopal Di wvedi HUF [TS-140-ITAT-2025(Mum)] wherei n the Hon'ble Mumbai Tr ib unal held as under:
7.9.“C oming to t he i nst ant cas e, we observe that till the dat e of pr ocessi ng the return filed by the Assess ee for the A.Y. 202223, Form No. 101E for exercising t he option for availing the benefits of new tax regim e filed on 10-01-2022 for the A Y 2021-22 was neit her withdrawn nor rej ect ed or made i nvalid but the same was still available or effective before the A O duri ng the ass essme nt proc eedi ngs or passi ng t he Assessment order and t heref ore in our consi dered view, the ret urn fi led by the Assessee sho ul d ha ve bee n considered, unde r the new tax regime p rovisions. Thus, the Ass essee is e ntitl ed f or the benefit of new tax re gime a nd c onsequently the addition is del eted. Res ultantly, the appeal 1.e. ITA no. 3482/M/2024 filed by the Assessee is allowed."
15.In previo us years , the CB DT extende d the due dates for filing such forms indi cat e a recognition of suc h proc edur al difficul ties. These Cir cul ars i ndicate a degree of admi nistrative flexibil ity a nd a recognition that proc edur al lapses should not necessarily lead to the deni al of subs tantive benefits. Moreover, denyi ng the benefit based sol ely on this lapse woul d be against the pri nciples of equity and j ustic e, especially when there is no dispute re garding the assesse e's eli gibility f or t he lower ta x ra te. C onsideri ng t he pr inciple of bene fi cial inte rpretation, the pr oce dur al r equireme nts shoul d not override substantive benefits. The Cour ts have take n a lenient vi ew on procedural lapses when substantive benefits are i nvolved. Supr eme Court r ulings al ways emphasiz ed t hat the ma ki ng of a claim of deduc tion is mandatory, but ti ming/f ormat is directory.
16.In vi ew of t he above facts and by respectfully followi ng j udicial pr onounc ements cited above, in our considered o pi nion assessee should not be deprived from the conc essional rat e of tax available i n t he s tatut e mer ely for t he procedur al laps e. Accordi ngly, we direct the AO to c ompute the tax at the concessional rat e as per Section 115BAA of t he Act. The ground of appeal Nos. 1 to 4 taken by assess ee are al lowed.”
We further relied upon the order of the Mumbai Tribunal in ITA No . 4872/Mum/2024 (supra). The relevant portion o f the order at para 6.11 has held as under:
“6 .11. In view of the for egoi ng di scussion, thi sTribunal holds that, the delay in filing Form 10-IC is purely proc edur al a nd does not i nvalidate the substant ive exerci se of opti on unde r secti on 115BAA, which was clearly made i n the ret urn of inc ome and acted upon by the assesse e while computi ng its total incom e. Having regard to the fact that all the c onditi ons prescri bed under section 115BAA stand duly complied with and there being no prej udice caus ed t o the R evenue, the delay in filing Form 10-IC is co ndoned. T he Ld.AO is accor dingly directed to acce pt the ass essee ’s option under s ection 115BAA and recompute t he tax liability at the concessional rat e in accordanc e wit h law.
Accordi ngly, t he ground No.3 raised by the assessee stands allowed.”
In view o f the above discussion, we have noticed that the issue before us is also identical and similar as d ecided by the Delhi Tribunal in ITA No. 5774/Del/2025 (supra) and Mumbai Tribunal in IT A No. 4872/Mum/2024 (supra). Therefore, respectfully following the judgment of the Delhi Tribunal and Mumbai Tribunal, we are o f the considered opinion that ld. Lower authorities has wrongfully denied the benefit of section 115BAA to the asse ssee because late filing of the Form 10-1C/non-filing of the Form 10-1C at appropriate time was a mere procedural irregularity and the procedural non-compliance of procedure cannot deprive the asse ssee o f its substantive right when all o ther conditio ns are fulfilled in the case of the assessee for claiming the benefit of u/s 115BAA of the Act. In the given facts and circumstances, we condo ne the delay in filing the Form 10-1C by the assessee. We direct the AO to grant the benefit to the assessee u/s 115BAA of the Act and compute the to tal income accordingly. The grounds raised in the appeal are accordingly allowed.
In the result, the appeal of the assessee is allowed.