In a significant ruling, the Gujarat High Court in the case of Sampoorna Sugars Pvt. Ltd. v. PCIT [2025] 176 taxmann.com 742 has held that a genuine mistake by a Chartered Accountant in not filing Form 10-IC within the prescribed time should not deprive an assessee-company of the benefit of the concessional tax rate under section 115BAA. The Court directed the Principal Commissioner of Income Tax to reconsider and condone the delay under section 119(2)(b), emphasizing that procedural lapses should not override substantive tax benefits when genuine hardship is demonstrated.
Case Title:
Sampoorna Sugars Pvt. Ltd. v. Principal Commissioner of Income Tax
Court: Gujarat High Court
Date of Judgment: 15 July 2025
Citation: [2025] 176 taxmann.com 742 (Guj.)
Background:
- The assessee, Sampoorna Sugars Pvt. Ltd., opted for concessional taxation under Section 115BAA (reduced tax rate of 22% for domestic companies).
- To avail this benefit, Form 10-IC must be filed electronically on or before the due date of filing the return under section 139(1).
- The assessee, relying on its Chartered Accountant (CA), inadvertently failed to file Form 10-IC electronically within the due date for AY 2021–22.
- Instead, the assessee later filed the form belatedly and simultaneously filed an application before the PCIT under section 119(2)(b), requesting condonation of delay.
PCIT’s Action:
- The Principal Commissioner of Income Tax (PCIT) rejected the application solely on technical grounds—stating that Form 10-IC was not filed within time and hence benefit under section 115BAA could not be granted.
High Court Ruling:
- The Gujarat High Court observed that:
- Section 115BAA is a beneficial provision introduced to allow eligible domestic companies to opt for lower tax rates.
- The assessee’s failure to file Form 10-IC within the due date was due to a bonafide mistake by the CA and not deliberate.
- The CBDT has powers under section 119(2)(b) to condone such delays when genuine hardship is demonstrated.
- Refusal to condone a genuine and explainable delay defeats the beneficial intent of the provision.
Final Direction:
- The Court directed the PCIT to re-consider the assessee’s application on merits.
- PCIT was instructed to condone the delay, permit the assessee to file a fresh Form 10-IC, and process the claim in accordance with law.
Legal Takeaway:
This ruling affirms that technical lapses, particularly when caused by genuine human errors, should not defeat substantive tax benefits provided under law. Relief under section 119(2)(b) is available where bonafide hardship is shown.