Section 115BAA Benefit Allowable Despite Late Filing of Form 10-IC: ITAT Mumbai in Vinmar India Private Limited Vs ITO
Overview of the Case
The Income Tax Appellate Tribunal, Mumbai, delivered a significant ruling in Vinmar India Private Limited Vs ITO (ITAT Mumbai) concerning the denial of the concessional corporate tax rate under Section 115BAA of the Income Tax Act, 1961 for Assessment Year 2020–21. The central question before the Tribunal was whether the failure to file Form 10-IC within the prescribed deadline would be sufficient grounds to deny an assessee the benefit of the reduced tax rate, even where the option had been clearly exercised in the return of income itself.
The Tribunal ruled in favour of the assessee, holding that the delayed filing of Form 10-IC is a procedural lapse and cannot defeat a substantive statutory right where all eligibility conditions under Section 115BAA are duly satisfied.
Background and Facts of the Case
The assessee, a domestic company, filed its return of income for AY 2020–21 on 06.12.2020, which was within the extended due date applicable for that year. While filing the return, the assessee:
- Selected the appropriate option for the concessional tax regime under
Section 115BAAin the ITR-6 form - Computed its total income and tax liability in accordance with the provisions of
Section 115BAA - Satisfied all the substantive conditions stipulated under the section
However, the assessee failed to separately file Form 10-IC — the prescribed form for intimating the exercise of option — within the due date. This omission, as explained by the assessee, was entirely inadvertent and occurred due to the severe operational disruptions caused by the COVID-19 pandemic, including lockdowns, staff shortages, and logistical challenges during the financial year 2019–20.
Processing by CPC and Initial Denial
The Central Processing Centre (CPC), Bengaluru processed the return under Section 143(1) of the Income Tax Act, 1961 and denied the benefit of the lower tax rate under Section 115BAA. Notably, this adjustment was carried out without issuing any prior notice to the assessee as envisaged under Section 143(1)(a) of the Act, thereby raising a concern regarding violation of the principles of natural justice.
Upon receiving the intimation, the assessee:
- Filed submissions on the e-filing portal confirming its intention to be taxed under
Section 115BAA - Approached the Assessing Officer seeking clarification on the demand
- Subsequently discovered the procedural omission regarding Form 10-IC
- Filed Form 10-IC with the Assessing Officer — albeit after the prescribed deadline had already lapsed
The assessee also filed a condonation application before the competent authority. However, the Ld. CCIT, Mumbai-2 rejected this application vide order dated 30.06.2025, observing that the application was filed on 06.01.2025, which was beyond the stipulated timeframe, and that no reasonable cause beyond the assessee's control had been demonstrated.
The Commissioner of Income Tax (Appeals) upheld the CPC's action, which led to the present appeal before the ITAT Mumbai.