Maharishi Education Corporation P. Ltd. vs Income Tax Officer, Ward-16(1)

PER VIKAS AWASTHY, JM:

This appeal by the assessee is directed against the order of Additional/Joint Commissioner of Income Tax (Appeals)-1, Nashik [in short ‘the CIT(A)’] dated 07.03.2025, for Assessment Year 2021-22.

The solitary issue raised by the assessee in appeal is rate of tax applied by the Assessing Officer (AO) u/s. 115BAA of the Income Tax Act,1961(hereinafter referred to as ‘the Act’). As per the assessee, the rate of tax applicable is 20% as prescribed u/s. 112 of the Act, whereas, the AO has held that the tax on Long Term Capital Gain as per section 115BAA of the Act is @22%.

The assessee is a domestic company. The assessee exercised an option u/s. 115BAA of the Act by filing Form 10IC for Financial Year 2019-20 and subsequent years. The assessee filed its return of income for the impugned assessment year declaring income of Rs.14,98,150/- consisting of loss of Rs.20,263/- and Long Term Capital Gain of Rs.15,18,414/- on sale of land. The assessee calculated tax @20% as per the provisions of section 112 of the Act and paid the tax accordingly. The return of the assessee was processed u/s. 143(1)of the Act on 30.12.2023 and an additional demand of Rs.59,973/- was raised after re-computation of tax @22% on the returned income. The assessee filed appeal before the CIT(A) assailing rate of tax @22%. The short contention of the assessee is that on Long Term Capital Gain, the rate of tax should be 20% as provided u/s. 112 of the Act.

Both sides heard. The solitary dispute in the instant appeal is the rate of tax applicable. According to the Revenue, since, the assessee has opted for taxation u/s. 115BAA of the Act, the rate of tax applicable for the impugned assessment year is 22%. Whereas, according to the assessee the rate of tax applicable on Long Term Capital Gain should be 20%. Admittedly, the assessee has opted for taxation u/s. 115BAA of the Act, hence, the rate of tax applicable in respect of total income of the assessee company is 22%. Hence, I find no reason to interfere with order of the CIT(A). Consequently, the same is upheld.

In the result, appeal of the assessee is dismissed.