CBDT has vide circular no. 06/2022 Dt. 17.03.2022 allowed condonation in filing of Form 10-IC which a company needs to file if they wish to opt for lower tax rate under section 115BAA.
Assessment year 2020-21 being the first year of such provision many people had opted for taking benefit of section 115BAA in their Income tax return but had forget to file Form 10-IC before filing return of income.
Also, in AY 2020-21 there was no requirement in Income tax return to mention acknowledgement number and date of filing of Form 10-IC and hence many people forgot to file such form and because of which while processing the Income tax return rejected the benefits available under section 115BAA and calculated tax for such companies at the rate of 30% and raised a demand.
As per the circular the companies can file condonation request for Form 10-IC electronically on or before 30.06.2022 or 3 months from the end of the month in which this Circular is issued, whichever is later.
Hence, the extended due date for filing Form 10-IC is 30.06.2022, however it is important to note that as of now on new e-filing website there is no facility to file Form 10-IC and it is expected to be available is few days as the Infosys needs to make necessary changes in website to facilitate in filing such condonation request.
Further, it is advisable that after filing Form 10-IC, assessee should file for rectification request with CPC so that the demand can be removed. Although it should be an automatic step which CPC should take to automatically remove demand but it is still advisable that assessee should themselves file a rectification.
Relevant extract of the circular are as under:
Section 115BAA of the Income-tax Act, 1961 (the Act) was inserted by the Taxation Laws (Amendment) Act, 201 9 w.e.f. 01.04.2020. As per the Section, the income-tax payable in respect o f the total income of a person, being a domestic company, for any previous year relevant to the assessment year beginning on or after the 1st day of April, 2020, shall, at the option of such person be computed at the rate of twenty-two per cent subject to satisfaction of conditions contained in sub-section(2) of the Section.
1.2 As per sub section (5) of section 115BAA of the Act read with Rule 2 1AE, of the Income-tax Rules, 1962 (the Rules), the assessee company is required to submit Form 10-IC electronically on or before the due date of filing of return of income u/s 139(1) of the Act and such option once exercised shall apply to subsequent assessment years.
1.3 Failure to furnish such option In the prescribed form on or before the due date specified u/s 139(1) of the Act results in denial of concessional rate of tax of twenty-two per cent to such person.
2. Representations have been received by the Board stating that Form 10-IC could not be filed along with the return of income for A Y 2020-21, which was the first year of filing of this form. It has been requested that the delay in filing of Form 10-IC may he condoned.
3. On consideration of the matter, with a view to avoid genuine hardship to the domestic companies in exercising the option u/s 115BAA of the Act, the Central Board of Direct Taxes, in exercise of the powers conferred under section 119(2)(b) of the Act, hereby directs that:-
The delay in filing of Form 10-IC as per Rule 21AE of the Rules for the previous year relevant to A. Y 2020-21 is condoned in cases where the following conditions are satisfied:
i) The return of income for A Y 2020-21 has been filed on or before the due date specified under section 139( I) of the Act;
ii) The assessee company has opted for taxation u/s 115BAA of the Act in (e) of “Filing Status” in “Part A-GEN” of the Form of Return of Income ITR-6 and
iii) Form 10-IC is filed electronically on or before 30.06.2022 or 3 month s from the end of the month in which this Circular is issued, whichever is later.
To download the full circular CLICK HERE
It is important to note that all conditions mentioned above should also be fulfilled to be eligible to claim benefit of above condonation.
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