Steelmint Industries P. Ltd. vs Deputy Commissioner of Income Tax

PER VIKAS AWASTHY, JM:

This appeal by the assessee is directed against the order of Additional/Joint Commissioner of Income Tax (Appeals)-2, Hyderabad [in short ‘the CIT(A)’] dated 13.02.2026, for Assessment Year 2024-25.

Shri Saubhagya Aggarwal, appearing on behalf of the assessee submits that the assessee is engaged in the business of manufacturing of steel. The assessee started manufacturing in FY 2021-22, relevant to Assessment Year 2022-23. The first year in which the assessee generated revenue was A.Y. 2023-24. The assessee while filing return of Income for AY 2023-24 had also furnished Audit Report in Form 10ID within the due date u/s 139(1) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’), wherein the assessee had opted for taxation u/s 115BAB of the Act. The same was not accepted by the CPC in proceedings u/s 143(1) of the Act. The assessee carried the issue in appeal before the CIT(A). The CIT(A), vide order dated 19.02.2025, accepted the assessee’s contention and allowed the benefit of lower tax rate @15% u/s 115BAB of the Act. Again, in the impugned assessment year, the CPC disallowed assessee’s claim of lower tax rate @15% u/s 115BAB of the Act. The assessee carried the issue in appeal before the CIT(A). The CIT(A) without considering findings of the CIT(A) in the immediately preceding assessment year referred to assessment order for assessment year 2021-22 to contend that the assessee had not opted for taxation u/s 115BAB of the Act. The ld. Counsel submits that in A.Y. 2021-22, production had not started and there was no tax implication. Therefore, the assessee did not prefer appeal against the assessment order for A.Y. 2021-22. The assessee had opted for taxation u/s 115BAB of the Act, the assessee was found eligible by the CIT(A), hence, the same was allowed in the preceding assessment year. He thus prayed for reversing findings of the CIT(A) and granting benefit of section 115BAB of the Act.

Per contra, Shri Manoj Kumar representing the Department vehemently defending the impugned order prayed for dismissing appeal of the assessee.

Both sides heard, orders of the authorities below examined. Perusal of the CIT(A) order for A.Y. 2023-24 dated 19.02.2025 reveals that the benefit of section 115BAB of the Act was allowed to the assessee. A.Y. 2023-24 was the first assessment year wherein the assessee earned revenue from manufacturing operations and the benefit of section 115BAB of the Act was allowed as the assessee was found eligible for the same. I see no reason in the impugned assessment year to deny benefit u/s 115BAB of the Act to the assessee, if the assessee is eligible for same.

In light of the above findings, the impugned order is set aside and appeal of the assessee is allowed.