SHIVSHAMBHO CONSTRUCTIONS PVT. LTD.,HOOGHLY V. I.T.O., WARD - 11(1), KOLKATA

ITA 1227/KOL/2025

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Shivshambho Construction Private Limited filed an appeal against the order of the ld.Addl./JCIT(A)-2, Noida, which had dismissed their earlier appeal regarding the disallowance of a concessional tax rate claim under Section 115BAA of the Income Tax Act due to the belated filing of Form 10-IC. The Income Tax Appellate Tribunal (ITAT) in Kolkata, after considering the submissions and the precedents set by the Hon'ble Kolkata High Court, decided to restore the matter to the Assessing Officer for a fresh assessment, emphasizing that procedural compliance, such as the timely filing of Form 10-IC, should not negate the substantive rights of the assessee when the intention to opt for the concessional tax regime is clear.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 772215 (ITAT-KOLKATA)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-08-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Assessment Year: 2023-2024
• Other Referred Cases: Principal Commissioner of Income Tax, Central-2, Kolkata v. Fastner Commodeal Pvt. Ltd.
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S.B.CHAKARABORTHY
• Assessee Lawyers: MIRAJ D SHAH
• Keywords: Condonation of delay; Set aside; Principle of natural justice

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH, KOLKATA BEFORE SHRI RAJESH KUMAR, ACCOUNTANT MEMBER AND SHRI PRADIP KUMAR CHOUBEY, JUDICIAL MEMBER आयकर अपील सं/ITA No.1227/KOL/2025 (निर्धारण वर्ा / Assessment Year : 2023-2024) Shivshambho Construction Private Limited, 20&22B, GT Road, Mouza-Pearapur, JL-07, Pearapur Gram Panchayat, PS-Sreerampore, Piarapur, West Bengal-712223 Vs ITO Ward-11 (1), Kolkata PAN No. :ABECS 1854 N (अपीलधर्थी /Appellant) .. (प्रत्यर्थी / Respondent) निर्धाररती की ओर से /Assessee by : Shri Miraj D Shah, AR रधजस्व की ओर से /Revenue by : Shri S.B.Chakaraborthy, Sr. DR सुनवाई की तारीख / Date of Hearing : 14/08/2025 घोषणा की तारीख/Date of Pronouncement : 28/08/2025 आदेश / O R D E R Per Pradip Kumar Choubey, JM : The assessee has filed the instant appeal against the order dated 30.03.2025, passed by the ld.Addl./JCIT(A)-2, Noida for the assessment year 2023-2024. 2. The appeal of the assessee is delayed by 04 days. In this regard, the assessee has filed an application along with affidavit for condonation of delay stating sufficient reasons for condonation of delay, to which ld.Sr. DR did not object. Considering the submissions of the ld.AR and looking to the facts of the case, we condone the delay of 04 days and appeal of the assessee is admitted for hearing. 3. Facts of the present case of the assessee are that the assessee filed its return of income declaring total income at Rs.8,71,90,991/- by opting the concessional rate of tax u/s.115BAA of the Act, however, the Printed from counselvise.com ITA No.1227/KOL/2025 2 CPC, Bangalore disallowed the claim of the assessee u/s.115BAA of the Act on account of belated filing of Form 10-IC of the Act. Aggrieved by the said order, the assessee preferred appeal before the ld.CIT(A), wherein also the appeal of the assessee had been dismissed thereby observing that the assessee ought to have to approach the appropriate authority for condonation, which it has failed to do. Being aggrieved and dissatisfied with the order of the CPC, the assessee preferred the present appeal by taking the following grounds :- 1) For that the Ld. CIT(A) has erred in upholding that the CPC action without considering that the summary processing u/s 143(1) of the Income Tax Act, 1961 should be subject to the principles of natural justice when it results in substantial additional tax liability due to rejection of a valid claim. That the denial of opportunity to explain the circumstances leading to the delayed filing and the bona fide nature of the option exercised amounts to violation of principles of natural justice. 2) For that the Ld. CIT(A) has failed to appreciate that the delay in filing was inadvertent and not deliberate, and the appellant had consistently computed its tax liability u/s 115BAA of the Income Tax Act, 1961 in its books of accounts and return of income. That there is no evidence on record to suggest that the appellant was attempting to game the system or that the revenue has suffered any prejudice due to the delayed filing of Form 10-IC. Hence, the impugned order dated 30.03.2025 passed by the Ld. Additional Commissioner of Income Tax (Appeals)-2, NOIDA be set aside. 3) For that the Ld. CIT(A) has erred in ignoring that filing of ITR showing income computed u/s 115BAA of the Income Tax Act, 1961 along with Form 10-IC on the same date clearly establishes the appellant's consistent intention to opt for the concessional regime. The Ld. CIT(A) has failed to consider that the purpose of Form 10-IC is to inform the department about the option exercised, and this purpose is served even if filed with a delay, especially when filed along with the return of income. Hence, the Assessing Officer be directed to accept the appellant's option u/s 115BAA and compute the tax liability at the concessional rate of 22% instead of the normal rate of 30%. 4. Ld.AR in the course of argument did not press the ground No.1 and submitted his submission on the ground No.2 to 6, thereby submitting that Printed from counselvise.com ITA No.1227/KOL/2025 3 mere delay in filing the return cannot by itself is a ground for denying the benefit of Section 115BAA of the Act, when the option has been exercised in the return. Ld.AR submitted that filing of ITR showing the income computed u/s.115BAA of the Act along with Form 10-IC of the Act on the same date establishes the assessee’s consistent intention to opt for the concessional regime but the ld.CIT(A) has failed to consider that the purpose of filing 10-IC is to inform the department about the option exercised, and this purpose is served even if filed with a delay, especially when filed along with the return of income. The prayer of the ld.AR is that the AO be directed to accept the assessee’s option u/s.115BAA of the Act and to compute the tax liability at the concessional rate of 22% instead of the normal rate of 30%. 5. On the other hand, ld. Sr. DR supported the orders of the authorities below. 6. Upon hearing the submissions of the counsel of the respective parties, we have perused the order of the ld.CIT(A) and found that the ld. CIT(A) has rejected/dismissed the appeal of the assessee thereby observing that the assessee admittedly filed its ITR in Form 10-IC after the due date and according to him the condonation authority in such matters does not lie with the Additional CIT(A). It is pertinent to mention here that the assessee had filed Form 10-IC on 18.12.2023 along with the return and the concessional rate u/s.115BAA of the Act was duly opted in the return itself. The return for A.Y.2023-2024 was subsequently assessed wherein the AO accepted assessee’s claim u/s.115BAA. Printed from counselvise.com ITA No.1227/KOL/2025 4 We have gone through the decision of the Hon’ble Kolkata High Court in the case of Principal Commissioner of Income Tax, Central-2, Kolkata v. Fastner Commodeal Pvt. Ltd. passed in ITAT/267/2024, dated 10th January, 2025), wherein the Hon’ble Calcutta High Court dealt with the procedural compliance of filing Form 10IC for availing the benefit of the concessional tax regime under Section 115BAA of the Income Tax Act, 1961 and has clearly been held that filing of such form is procedural in nature. The operative portion of the decision of the Hon’ble Calcutta High Court reads as under :- Be that as it may, it is not in dispute that the assessee has filed the return of income for the assessment year 2020-21 on or before the due dates specified under Section 139(1) of the Act. Equally, it is not in dispute that the assessee company has opted for taxation under Section 115BAA of the Act. This option was available to the assessee by opting the option given in filing status in Part A- GE of the form by return of income in ITR6. This conduct of the assessee will undoubtedly go to show that the assessee intended to opt to pay tax under the simplified tax regime as also accepted in the Circular issued by the Central Board. Furthermore, during the relevant period there was Covid pandemic which also led to certain other difficulties for the assessee to upload the form along with the return within the extended time thereof. That apart, the assessee has specifically stated that they had certain difficulties in uploading the form in the Income tax portal. One more aspect which the assessee pointed out is that in case of a HUF opting under the new taxation scheme under Section 115BAC, the portal requires management number of 10IE while filing the income tax return as this being a mandatory column and the assessee continue process of filing ITR without filling the same and if there was non- compliance in filing Form 10IE, the assessee would be aware of that and will submit the same but such facilities is not provided when returns are filed by companies. The peculiar facts and circumstances would show that the error was an inadvertent procedural error and the conduct of the assessee will clearly show that they had opted for taxation under Section 115BAA of the Act. Thus, taking note of the facts and circumstances of the case on hand, which we consider to be very peculiar, we are not inclined to interfere with the order passed by the learned Tribunal. Printed from counselvise.com ITA No.1227/KOL/2025 5 Accordingly, the appeal is disposed of and the matter stands restored back to the file of the Assessing Officer to permit the assessee to file the report in Form 10IC and the Assessing Officer shall consider as to what relief the assessee would be entitled to subject to the conditions that the assessee fulfils all other requisite conditions as per law. In the result, the appeal stands disposed of with the above direction. The substantial questions of law are left open. 7. Going over the facts of the case and the decision of the Hon’ble Calcutta High Court in the above case, the instant appeal of the assessee is allowed for statistical purposes and matter is restored to the file of ld.AO to consider the case of the assessee and pass a fresh order by considering the reason as to whether the assessee is entitled to claim the relief u/s.115BAA of the Act and further whether the assessee fulfills all other conditions as per law. 8. In the result, appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on 28/08/2025 Sd/- (RAJESH KUMAR) Sd/- (PRADIP KUMAR CHOUBEY) लेखा सदस्य/ ACCOUNTANT MEMBER न्यधनयक सदस्य / JUDICIAL MEMBER कोलकाता Kolkata; ददनाांक Dated 28/08/2025 Prakash Kumar Mishra, Sr.P.S. आदेश की प्रनतललपप अग्रेपर्त/Copy of the Order forwarded to : आदेशधिुसधर/ BY ORDER, (Assistant Registrar) Income Tax Appellate Tribunal, Kolkata 1. अपीलार्थी / The Appellant- 2. प्रत्यर्थी / The Respondent- 3. आयकर आयुक्त(अपील) / The CIT(A), 4. आयकर आयुक्त / CIT 5. विभागीय प्रविविवि, आयकर अपीलीय अविकरण, कोलकाता / DR, ITAT, Kolkata 6. गार्ड फाईल / Guard file. सत्यापपत प्रतत //True Copy// Printed from counselvise.com "