HYDRAGUARD INTERNATIONAL PVT. LTD.,CHENNAI V. ITO, CORP. WARD.2(3), CHENNAI

ITA 2103/CHNY/2024

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The case involves Hydraguard International Pvt. Ltd., which appealed against the tax rate applied by the Central Processing Centre (CPC) for the Assessment Year 2020-21. The CPC initially applied a tax rate of 30% due to the non-filing of Form 10-IC, which is required for opting into a lower tax rate under section 115BAA. The company argued that it should be taxed at 25%, citing that its turnover in the previous year 2016-17 was less than Rs. 250 Crores, qualifying it for a reduced tax rate under the Finance Act, 2019. The Commissioner of Income Tax (Appeals) upheld the CPC's decision, leading to the company's further appeal to the Tribunal.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 29413 (ITAT-CHENNAI)
• Duration Of Justice: 3 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-11-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 07-11-2024
• Assessment Year: 2020-2021
• Appeal Filed On: 07-08-2024
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V.SREENIVASAN LD.
• Assessee Lawyers: S.M. KHAJA MUYEENUDDEEN LD

Judgement Text

" आयकर अपीलीय अिधकरण “ए” \u000eा यपीठ चे\u0013ई म\u0016। IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, CHENNAI मा ननीय \u0019ी मनोज क ुमा र अ\u001dवा ल ,लेखा सद# एवं मा ननीय \u0019ी मनु क ुमा र िग&र, \u000eा ियक सद# क े सम'। BEFORE HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM AND HON’BLE SHRI MANU KUMAR GIRI, JM आयकरअपील सं ./ ITA No.2103/Chny/2024 (िनधा (रणवष( / Assessment Year: 2020-21) Hydraguard International Pvt. Ltd. #86, Polyhose Towers, 8th floor, Western Ring, Mount Road, Guindy, Chennai-600 032. बना म/ Vs. ITO Corporate Ward-2(3) Chennai. \u0001थायीलेखासं./जीआइआरसं./PAN/GIR No. AADCP-7219-C (अपीलाथ\u001c/Appellant) : (\u001f थ\u001c / Respondent) अपीलाथ\u001cकीओरसे/ Appellant by : Shri S.M. Khaja Muyeenuddeen (CA)– Ld.AR \u001f थ\u001cकीओरसे/Respondent by : Shri AR.V. Sreenivasan(Addl.CIT)-Ld. Sr.DR सुनवाईकीतारीख/Date of Hearing : 07-11-2024 घोषणाकीतारीख /Date of Pronouncement : 07-11-2024 आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. In this appeal, the assessee seeks application of correct rate of tax. The impugned order has been passed by learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [CIT(A)] on 07-06-2024 in the matter of an intimation issued by CPC u/s 143(1) on 18-12-2021. 2. Upon perusal of impugned order, it could be seen that in its return of income for Assessment Year (AY) 2020-21, the assessee opted for taxation in terms of Sec.115BAA @22%. The assessee declared income 2 of Rs.130.23 Lacs on turnover of Rs.12.20 Crores. However, the assessee missed to file the requisite form 10-IC in support of the same. Accordingly, CPC computed tax @30% and raised demand against the assessee. Aggrieved, the assessee preferred further appeal. 3. During first appeal, the assessee, in the alternative, stated that tax rate should be applied @25% since the turnover of the assessee for previous year 2017-18 was less than 400 Crores. The CPC should have allowed the benefit of reduced rates of tax @25% as applicable to such domestic companies. The Ld. CIT(A) held that since the assessee did not file mandatory Form No.10-IC, the concessional rate was rightly denied to the assessee. On the alternative claim, it was held that if the assessee wants to claim the benefit of Sec.115BA, then it has to fulfill specific conditions and opt for this rate by filing Form 10-IB. In the absence of such compliance, the concessional rate could not be granted to the assessee. Accordingly the appeal was dismissed against which the assessee is in further appeal before us. 4. The Ld. AR has stated that the assessee has not fulfilled the conditions of Sec.115BAA. However, the alternative claim as made by the assessee is not u/s 115BA but the assessee merely seek application of correct general rate of tax as applicable to all domestic companies whose turnover in previous year (PY) 2016-17 was less than Rs.250 Crores. For the same, Ld. AR has drawn our attention to tax rates prescribed by Finance Act, 2019. The Ld. AR has stated that since the turnover in PY 2016-17 was Rs.2.07 Crores, the applicable rate would be 25%. This rate is applicable irrespective of applicability of Sec.115BA / 115BAA or any other section. The concessional rate of tax as prescribed by Finance Act, 2019 is applicable to domestic company 3 based on the turnover threshold without having to fulfill any other conditions whatsoever. In support of turnover for PY 2016-17, Ld. AR has placed on record relevant financial statements. 5. We find substance in the alternative claim of the assessee. The general rate of tax for domestic companies having turnover of less than Rs.250 Crores in PY 2016-17 is 25%. No other condition has been prescribed. Undisputedly, the assessee’s turnover in PY 2016-17 is less than the prescribed threshold limit. Therefore, we direct Ld. AO to apply concessional rate of 25% and applicable surcharge & cess and revise the demand as raised against the assessee. 6. The appeal stand allowed. Order pronounced on 07th November, 2024. Sd/- (MANU KUMAR GIRI) \u000eा ियक सद# / JUDICIAL MEMBER Sd/- (MANOJ KUMAR AGGARWAL) लेखा सद# / ACCOUNTANT MEMBER चे3ई Chennai; िदनांक Dated :07-11-2024 DS आदेशकीGितिलिपअ\u001dेिषत/Copy of the Order forwarded to : 1. अपीलाथ\u001c/Appellant 2. \u001f थ\u001c/Respondent 3. आयकरआयु