SALASAR HANUMAN AGROTECH FOODS PVT LTD,HYDERABAD V. INCOME TAX OFFICER, WARD-3(1), HYDERABAD

ITA 224/HYD/2025

AI Insights

The case involves M/s. Salasar Hanuman Agrotech Foods Pvt. Ltd., which appealed against the order of the First Appellate Authority that upheld the denial of concessional tax rate under Section 115BAA of the Income Tax Act due to non-filing of Form No. 10-IC with the income tax return. The assessee argued that the return was filed within the extended due date and that Form No. 10-IC was subsequently filed within the prescribed time, albeit after the return was processed. The Tribunal considered the substantive compliance with the conditions of the CBDT Circular and the intent of the assessee, leading to the decision to allow the appeal.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 711243 (ITAT-HYDERABAD)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-07-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: 2021-2022
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUMITHA PARMATA
• Assessee Lawyers: S. SANDHYA
• Keywords: Condonation of delay; Depreciation; Unabsorbed depreciation
• Section: 115JB

Judgement Text

" आयकर अपीलीय अधिकरण, हैदराबाद पीठ IN THE INCOME TAX APPELLATE TRIBUNAL Hyderabad ‘B’ Bench, Hyderabad श्री विजय पाल राि, उपाध् यक्ष एिं श्री मिुसूदन सािडिया, लेखा सदस् य क े समक्ष । BEFORE SHRI VIJAY PAL RAO, VICE PRESIDENT AND SHRI MADHUSUDAN SAWDIA, ACCOUNTANT MEMBER आ.अपी.सं /ITA No.224/Hyd/2025 (निर्धारण वर्ा/Assessment Year:2021-22) M/s. Salasar Hanuman Agrotech Foods Pvt. Ltd., Hyderabad. PAN:AAHCS5897F Vs. Income Tax Officer, Ward 3(1), Hyderabad. (Appellant) (Respondent) निर्धाररती द्वधरध/Assessee by: Smt. S. Sandhya, Advocate. रधजस् व द्वधरध/Revenue by: Sumitha Parmata, SR-DR सुिवधई की तधरीख/Date of hearing: 22/07/2025 घोर्णध की तधरीख/Pronouncement: 25/07/2025 आदेश/ORDER PER MADHUSUDAN SAWDIA, A.M. : This appeal is filed by M/s. Salasar Hanuman Agrotech Foods Pvt. Ltd. (“the assessee”), feeling aggrieved by the order passed by the ADDL/JCIT(A)-8, Mumbai (“Ld. First Appellate Authority”), dated 03.01.2025 for the A.Y. 2021-22. 2. The assessee has raised the following grounds of appeal: Printed from counselvise.com ITA No.224/Hyd/2025 2 “ 1. The order of the Ld. First Appellate Authority is erroneous both on facts and in law. 2. The Ld. CIT(A) erred in confirming the action of the Assessing Officer in holding that the provision of section 115JB are applicable particularly when applicant filed Form 10IC with in the extended period and applied for application for provision of sectin 115BAA of the I.T. Act. 3. The Ld. CIT(A) ought to have considered the detailed statement of facts and also the grounds of appeal subvmitted along with the circular issued by the CBDT No.19/2023 dated 23.10.2023 and allowed the appeal. 4. Any other ground / grounds that may be urged at the time of hearing.” 3. The brief facts of the case are that, the assessee is a company engaged in the business of real estate and leasing services. The assessee filed its return of income for Assessment Year 2021–22 on 28.02.2022, within the extended due date for filing return under Section 139(1) of the Income Tax Act, 1961 (“the Act”). In the said return, the assessee opted for taxation under the concessional tax regime provided under Section 115BAA of the Act. However, the assessee inadvertently failed to file Form No. 10-IC along with the return of income. Consequently, the Centralized Processing Centre (“CPC”) processed the return under Section 143(1) of the Act on 07.07.2022 and denied the benefit of concessional rate under Section Printed from counselvise.com ITA No.224/Hyd/2025 3 115BAA of the Act, due to non-filing of Form 10-IC. Accordingly, the CPC raised a demand of Rs.6,72,650/- on the assessee. 4. Aggrieved with the intimation of CPC, the assessee filed appeal before the Ld. First Appellate Authority. Before filing an appeal before the Ld. First Appellate Authority, the assessee submitted Form No. 10-IC on 08.07.2022. However, the Ld. First Appellate Authority dismissed the appeal on the ground that the assessee had marked “N.A.” in item (e) of “Filing Status” in “Part A – Gen” of ITR-6 instead of specifically opting for Section 115BAA of the Act, and therefore did not fulfill condition no. (ii) of para no.3 of CBDT Circular No. 19/2023 dated 23.10.2023. 5. Aggrieved with the order of Ld. First Appellate Authority, the assessee is in appeal before the Tribunal. The Learned Authorised Representative (“Ld. AR”) submitted that the CBDT, vide Circular No. 19/2023 dated 23.10.2023, had granted condonation of delay in filing Form 10-IC for AY 2021–22, subject to the fulfillment of three conditions enumerated in para 3 of the circular i.e. (a) that the return of income was filed on or before the due date under Section 139(1) of Printed from counselvise.com ITA No.224/Hyd/2025 4 the Act, (b) that the assessee had opted for Section 115BAA in item (e) of “Filing Status” in “Part A – Gen” of ITR-6 and (c) that Form No. 10-IC was filed electronically on or before 31.01.2024 or within 3 months from the end of the month in which CBDT circular was issued, whichever is later. It was submitted that the assessee had filed its return of income on 28.02.2022, which was within the extended due date under Section 139(1) for AY 2021–22, thereby satisfying condition (i). Further, Form No. 10-IC was filed electronically on 08.07.2022, i.e., well before the deadline prescribed under condition (iii). As regards condition (ii), the Ld. AR candidly submitted that in item (e) of “Filing Status” in “Part A – Gen” of ITR-6, the assessee had inadvertently mentioned “N.A.” instead of selecting Section 115BAA. However, the same was a clerical and unintentional error. The Ld. AR pleaded that since the assessee had otherwise satisfied all statutory and circular conditions, a liberal view may be taken in this case. 6. The assessee had also raised an alternate ground regarding incorrect computation under Section 115JB by CPC in denying set-off of brought forward business loss and unabsorbed depreciation. Printed from counselvise.com ITA No.224/Hyd/2025 5 However, the Ld. AR submitted that since the assessee’s primary claim under Section 115BAA is being pursued, the alternate ground need not be adjudicated if the primary issue is allowed. 7. Per contra, the Learned Departmental Representative (“Ld. DR”) supported the order of the Ld. First Appellate Authority and submitted that the assessee had not opted for Section 115BAA in the designated field of ITR-6. Since Condition (ii) of the CBDT Circular (supra) was not fulfilled, the action of CPC and the Ld. First Appellate Authority in denying concessional tax rate was justified. The Ld. DR submitted that CBDT Circular (supra) laid down specific eligibility conditions, and as the assessee has not strictly complied with all three conditions, the benefit of section 115BAA of the Act cannot be extended to the assessee. 8. We have considered the rival submissions and gone through the record, including the CBDT Circular (supra) dated 23.10.2023. The issue under consideration is whether the assessee is entitled to the benefit of Section 115BAA for AY 2021–22, despite not marking the specific option in item (e) of “Filing Status” in “Part A – Gen” of Printed from counselvise.com ITA No.224/Hyd/2025 6 ITR-6. It is undisputed that the return of income was filed on 28.02.2022, within the extended due date under Section 139(1) of the Act satisfying condition (i) of the CBDT circular (supra) and Form No. 10-IC was filed electronically on 08.07.2022 satisfying condition (iii) of the CBDT circular (supra). However, there was a bona fide clerical omission qua Condition (ii) of CBDT circular (supra) i.e., the ITR did not reflect the Section 115BAA option in the designated field. In our considered view, the omission in ticking the specific option in item (e) of “Filing Status” in “Part A – Gen” of ITR-6 is a curable clerical error, especially when the assessee has made it unequivocally clear in Form 10-IC filed well within extended time that it has opted for Section 115BAA. We find merit in the submission of the Ld. AR that the CBDT Circular (supra) is intended to provide substantive relief and should be interpreted liberally. The purpose of the circular is not defeated merely because of a technical defect, especially when the intent of the assessee is clearly demonstrated and all other material conditions are satisfied. Accordingly, we hold that the assessee has fulfilled the conditions of Section 115BAA and the CBDT Circular (supra) in substance. The Printed from counselvise.com ITA No.224/Hyd/2025 7 disallowance of concessional tax rate under Section 115BAA is therefore not sustainable. We direct the Learned Assessing Officer to allow the benefit of concessional tax rate under Section 115BAA of the Act to the assessee. 9. Since the appeal of the assessee is allowed on the principal issue, we are not adjudicating on the alternate ground regarding set- off under Section 115JB. 10. In the result, the appeal of the assessee is allowed. Order pronounced in the open Court on 25th July, 2025. Sd/- Sd/- (VIJAY PAL RAO) (MADHUSUDAN SAWDIA) VICE PRESIDENT ACCOUNTANT MEMBER Hyderabad. Dated: 25.07.2025. * Reddy gp Copy of the Order forwarded to : 1. M/s. Salasar Hanuman Agrotech Foods Pvt. Ltd., 8-2-630 to 636, Flat No.401, RMK Plaza Road No.12, Banjara Hills, Hyderabad-500 034 2. The ITO, Ward 3(1), Hyderabad. 3. Pr.CIT, Hyderabad. 4. DR, ITAT, Hyderabad. 5. Guard file. BY ORDER, Printed from counselvise.com "