Bengaluru ITAT Upholds Continuity of Section 115BAB Concessional Tax Regime Once Option Is Properly Opted

Background of the Dispute

The case of Jamewaar Apparels Private Limited Vs DCIT (ITAT Bangalore) concerns the assessee’s claim to be taxed at the concessional rate of 15% under Section 115BAB for Assessment Year (AY) 2023-24.

The Centralized Processing Centre (CPC), while issuing intimation under Section 143(1) dated 22 December 2023, denied the benefit of Section 115BAB and instead applied the higher tax rate under Section 115BAA. This treatment was later upheld by the JCIT(A) vide order dated 16 January 2026.

The assessee carried the matter in appeal to the Bengaluru Income Tax Appellate Tribunal (ITAT), contending that it had validly exercised the option under Section 115BAB in the first year (AY 2021-22) by filing Form No. 10-ID within the extended due date and that such option could not be ignored in a later year.

The central legal issue before the Tribunal was:

Whether the assessee, having already opted for the concessional regime under Section 115BAB in AY 2021-22 by filing Form No. 10-ID within time, could be denied the 15% tax rate for AY 2023-24 by treating Form No. 10-ID as first filed only in AY 2023-24.

Grounds Raised by the Assessee

The assessee challenged both the CPC’s intimation and the appellate order on multiple fronts. In essence, the main planks of the appeal were:

  • The intimation under Section 143(1) dated 22.12.2023, and the order of the JCIT(A) dated 16.01.2026, were contrary to the scheme of the Income Tax Act 1961 and therefore deserved to be set aside.
  • The authorities erred in disregarding Form No. 10-ID that had been filed for AY 2021-22 on 21.02.2022 (the first eligible year), within the extended due date notified via Circular No. 01/2022 dated 11.01.2022.
  • The appellate authority treated the form filed in connection with AY 2023-24 as if it were the first and only form for Section 115BAB, ignoring the earlier valid form for AY 2021-22.
  • The appeal was wrongly treated as suffering from a delay of 130 days instead of a much shorter delay, since the assessee was simultaneously seeking rectification and the last rectified intimation under Section 143(1) was passed only on 08.04.2024.
  • The returns for other years, where the assessee had opted for Section 115BAB, had already been accepted under Section 143(1) without any adverse adjustment, and therefore, there was no basis for a different stand for AY 2023-24 in the absence of changed facts or law.
  • The conditions of Section 115BAB(7) stood fully complied with from the very first year i.e., AY 2021-22, and consequently there was no legal basis to deny the concessional rate for AY 2023-24.
  • Interest under Section 234B and enhanced interest under Section 234C had been wrongly levied due to the denial of the concessional rate.

Factual Matrix Presented Before the Tribunal

Nature of Business and Option under Section 115BAB

  • The assessee is a private limited company engaged in manufacturing readymade garments.
  • It claimed eligibility for the concessional 15% tax rate under Section 115BAB as a new manufacturing company.

Filing for AY 2021-22 (First Year)