NEON PROPERTIES PRIVATE LIMITED ,MUMBAI V. INCOME TAX OFFICER 13(1)(1), MUMBAI

ITA 2329/MUM/2025

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Neon Properties Pvt. Ltd. appealed against the decision of the CIT(A) which upheld the Centralised Processing Centre's (CPC) computation of tax under the regular provisions of the Income Tax Act, 1961, instead of under section 115BAA as opted by the appellant. The appellant argued that due to a clerical error, Form 10-IB was filed instead of the required Form 10-IC, leading to the denial of the concessional tax regime under section 115BAA. The CIT(A) dismissed the appeal without considering the appellant's written submissions, which led to the filing of an appeal with the ITAT. The ITAT found merit in the appellant's arguments and directed the CIT(A) to reconsider the case.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 711725 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-07-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: 2024-2025
• Other Referred Cases: Sonakshi Sinha vs CIT(A) [197 ITD 263]
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: APPELLANT OPTING TAX REGIME US; LEYAQAT ALI AAFAQUI
• Assessee Lawyers: A. N. SHAH
• Keywords: Procedural lapse
• Section: 115JB

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL Mumbai “B” Bench, Mumbai. Before Shri Narender Kumar Choudhry (JM) & Shri Omkareshwar Chidara (AM) ITA No. 2329/MUM/2025 (Assessment Year : 2024-25) Neon Properties Pvt. Ltd. 501, Krystal, 206, Waterfield Road Bandra West Mumbai-400 050. Vs. ITO 13(1)(1) Aayakar Bhavan M.K. Road Mumbai-400 020. PAN : AAACN4266E Appellant Respondent Assessee by : Shri A.N. Shah Revenue by : Shri Leyaqat Ali Aafaqui Date of Hearing : 07/07/2025 Date of pronouncement : 25/07/2025 O R D E R Per Omkareshwar Chidara (AM) :- The appellant, in this case filed very detailed grounds of appeal before the ITAT. The crux of the grievance of appellant is that it was not provided with an opportunity to explain its case and the benefit claimed under section 115BAA of the I.T. Act was rejected summarily. The grounds of appeal filed by the appellant are reproduced below for clarity :- 1. On the facts and circumstances of the case and in law, the learned Addl/JCIT (A) erred in upholding the Centralised Processing Centre's computation of tax vide intimation u/s 143(1) dated 22nd January, 2025 under regular provisions of the Act and not u/s 115BAA of the Act for Return of Income filed for AY 2024-25 on 30th October, 2024 on the grounds that the Appellant failed to upload Form 10-IC before due date of filing of return. In actuality, through oversight, Form 10-IB was filed as against Form 10-IC which was required to be filed as per section 115BAA(5) read with rule 21AE. It appears that the assistant committed mistake in selecting the incorrect form. 2. On the facts and circumstances of the case and in law, the learned Addl/JCIT(A) as well as Centralised Processing Centre erred in not appreciating the fact that the Appellant has satisfied the conditions specified in sub-section (2) of 115BAA of the income Tax Act, 1961 by and hence it is entitled to be taxed as per provisions of section 115BAA of the Act as adopted in the Income Tax Return filed for AY 2024-25. Printed from counselvise.com Neon Properties Pvt. Ltd. 2 3. On the facts and circumstances of the case and in law, the learned Addl/JCIT(A) erred in ignoring the intention of the Appellant to opt for a concessional tax regime under section 115BAA of the Act by specifically selecting the same in the ITR Form - 6 [Snapshot attached below] which was denied to the Appellant merely because of an error in filing the incorrect Form No. due to a clerical error which occurred on account of bona fide circumstances, without any mala fide mens rea. 4. On the facts and circumstances of the case and in law, the Appellant was incorrectly charged with Taxes under MAT provisions u/s 115JB when the same is not applicable for Appellant opting for tax regime u/s 115BAA as per section 115IB(5A) of the Act. 5. On the fact and Circumstances of the case and in law, the learned Addl/JCIT(A) erred in upholding the Centralised Processing Centre's computation of tax under regular provisions of the Act and NOT u/s 115BAA of the Act as opted by the Appellant in the Return of Income without issuing any intimation as mandated under the first proviso to Sec 143(1) (a) of the Act. 6. On the facts and circumstances of the case and in law, the Appellant ought to be given the benefit of the concessional tax regime u/s 115BAA of the Act more so when the appellant had uploaded the correct Form 10-1C on 23rd January, 2025 i.e. immediately after notification of the error so made and the which was accepted vide Acknowledgement No. 836394390230125 [Snapshot attached below). The Appellant should not be penalised for mere procedural lapse which is squarely covered in the case of Sonakshi Sinha vs CIT(A) [197 ITD 263] wherein it was held that \"while laying down a particular procedure, if no negative or adverse consequences are contemplated for non-adherence to such procedure, the relevant provision is normally not taken to be mandatory and is considered to be purely directory\". 2. From the above, it can be seen that the CPC and Ld. CIT(A) denied the benefit of section 115BAA of the Act which deals with concessional rate of tax. The Ld. CIT(A) dismissed appellant’s appeal and held as follows:- “It is pertinent to mention here that if a domestic company chooses to pay tax at concessional rate of 22% under Section 115BAA, it is required to file From 10-IC on or before due date of furnishing return of income u/s 139(1). As discussed above, the appellant had admittedly not furnished the mandatory Form 10-IC within stipulated time and hence the AO, CPC had rightly denied benefit of concessional rate of 22% under Section 115BAA to the appellant. Thus, I find no merit in the grounds of appeal Printed from counselvise.com Neon Properties Pvt. Ltd. 3 taken by the appellant. Hence the grounds of appeal taken by the appellant are hereby dismissed.” 3. Aggrieved by the order of Ld. CIT(A), the appellant filed an appeal before the ITAT with the grounds of appeal as mentioned in page No. 1 of this order. 4. The Ld. AR of the appellant company has argued extensively and filed written submissions and the synopsis of the same is as follows :- a) Due to oversight and clerical error, Form 10IB (i.e., the Form to opt for tax regime under section 115BAA of the Act) was filed instead of correct Form 10IC. b) The return of income and Form 10IB were filed before the due dates. c) The CPC has calculated the taxes as per regular provisions of ITAT and accordingly charged tax as MAT regime @ 15% of the book profit. d) The CPC has not given an opportunity to rectify the mistake. e) The Ld. CIT(A) has not given opportunity to explain its case through video conference, despite making request before passing an order against it. f) The written submission explaining its case was uploaded on 17.3.2025 was not considered by Ld. CIT(A) and the order was passed against it. 6. The Ld. Dr relied on the order of Ld. CIT(A). 7. Heard both sides. There is considerable force in the arguments made and submissions filed by Ld. AR of the appellant before the Bench. Neither the CPC nor the Ld. CIT(A) have given proper opportunity to the appellant to explain its case. The submissions uploaded by the appellant company dated 17.3.2025 were not taken into consideration, probably because the appeal order was passed on the same day. In these circumstances, the Bench decided to afford one more effective opportunity to the appellant to substantiate its case before the first appellate authority. Hence, the Ld. CIT(A) is directed to give an opportunity, take all Printed from counselvise.com Neon Properties Pvt. Ltd. 4 its submissions including the written submissions filed on 17.3.2025 on record and decide the appeal afresh. The issue is remitted to the file of Ld. CIT(A). 8. The appeal of appellant is allowed for statistical purposes. Order pronounced in the open Court on 25/07/2025. Sd/- Sd/- (NARENDER KUMAR CHOUDHRY) (OMKARESHWAR CHIDARA) JUDICIAL MEMBER ACCOUNTANT MEMBER Copy of the Order forwarded to : 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. BY ORDER, //True Copy// (Assistant Registrar) ITAT, Mumbai PS Printed from counselvise.com "