Assessee Spared Penalty Due To Technical Glitch In Compliance With Section 115BAA, IT Act, 1961: Gujarat HC Allows Concessional Tax Benefit
The Gujarat High Court upheld the decision of the Income Tax Appellate Tribunal (ITAT) holding that the assessee, a textile business, had genuinely attempted to comply with the requirement of filing Form 10-IC electronically. Due to technical issues, the form could not be uploaded on the ITBA portal before the due date. The Revenue had filed an appeal under section 260A of the Income Tax Act, 1961 against the order passed by the ITAT.
A Division Bench of Justice Biren Vaishnav and Justice Mauna M. Bhatt held, “It is also not in dispute that this is the first year, in which, the assessee was to avail such benefits. Further, Form 10-IC was furnished by the assessee on 29.01.2022 and therefore, we are of the opinion that since the assessee could not upload Form No.10-IC, on ITBA portal on account of technical error, there being no fault of the assessee, it could not be deprived of benefit particularly when this being the first year for availing such benefits.”
Senior Advocate Nikunt Raval appeared for the Appellant.
The assessee, engaged in the textile business, filed its return of income for the A.Y.2020-21 on 15.01.2021, declaring income as NIL and opted to be taxed as per provisions of Section 115BAA of the Income Tax Act, 1961. However, the Central Processing Centre, Bengaluru (CPC) processed the return on 20.12.2021, taxing the assessee as per Section 115JB of the Act, as the Form No.10-IC was not filed before the due date. The assessee appealed to the CIT (Appeal), who upheld the order of the Assessing Officer, stating that filing Form No.10-IC electronically before the due date is a mandatory requirement as per Section 115BAA of the Act. Subsequently, the assessee appealed to the ITAT, which allowed the appeal, noting that the failure to upload Form 10-IC on the ITBA portal was due to technical issues, and the form was filed before the Assessing Officer within the extended deadline.
The Revenue contested the ITAT's decision, arguing that the failure to furnish Form 10-IC before the due date specified under section 139(1) of the Act results in denial of the concessional rate of tax of twenty-two percent.
The Court noted that ITAT, in its order, emphasized that the assessee, in good faith, attempted to comply with the requirement of filing Form 10-IC electronically but faced technical issues. The Court further noted, “there is no error of fact and Law in the order of the ITAT. No substantial questions of law are involved in the present appeal; hence, the present appeal is dismissed.”
As a result, the Court dismissed the Revenue's appeal.
Cause Title: Principal Commissioner Of Income Tax 1 v. KGY Glass Industries (P) Ltd
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