ITAT: Filing 10–IC Form is Mandatory for Claiming Tax Reduction

A Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) has ruled that domestic companies must file form 10-IC within the prescribed timeframe if they wish to claim a deduction under section 115BAA of the Income Tax Act.

The appellant was represented by Counsel Nihar A. Mehta, and the department was represented by Chetan M. Kacha.

The Assessee company name is Bholanath Precision Engineering Pvt Ltd and it comes under a domestic company. The assessee filed its income return on 15/01/2021 reporting a total income of Rs. 20, 71,870. According to the intimation issued by the Assessing Officer under section 143(1) of the Act, the assessee’s total income was 23,01,890 after certain adjustments. A further 30% tax liability was calculated by the AO. According to section 115BAA of the Act, the assessee challenged the calculation of tax liability at 30% rather than 22%.

According to the assessee’s counsel, due to covid reasons, the assessee was unable to file Form 10–IC. A request for condonation of the assessee’s delay in filing Form 10–IC under section 115BAA of the Act was made to CBDT in order to claim the beneficial rate. A lower authority’s order was relied upon by the department’s counsel.

The division bench of the ITAT, consisting of Sri Shri Sandeep Singh Karhail (Judicial Member) and Shri Om Prakash Kant (Accountant Member), dismissed the appeal based on the above argument.

In addition, the bench noted that section 115BAA was inserted into the Act with effect from 01/04/2020 by the Taxation Laws (Amendment) Act, 2019. To get a reduction in corporate tax, domestic companies need to file Form 10-IC. Consequently, the assessee filed his return of income on 15/01/2021, which was due on 15/02/2021.

Accordingly, since Form 10–IC was not filed before the due date for filing the return of income, the assessee will not be entitled to benefits in accordance with section 115BAA.