Technical Glitch In Delay Filing Form 10-IC Entitles Domestic

Technical Glitch In Delay Filing Form 10-IC Entitles Domestic Company To Concessional Tax Rate Under Section 115BAA

Issue

Whether a domestic company is entitled to the concessional rate of tax under Section 115BAA when Form 10-IC and the return of income were filed after the due date due to technical glitches on the e-filing portal, by extending the rationale of CBDT Circular No. 6/2022.

Facts

Taxpayer & Assessment Year: The assessee is a domestic company claiming the concessional tax regime for Assessment Year 2022-23.
Filing Timeline: The due date for filing the return of income and Form 10-IC was November 7, 2022. The assessee filed its return along with Form 10-IC on November 19, 2022.
Rejection by CPC: The Central Processing Centre (CPC) denied the benefit of Section 115BAA on the ground that Form 10-IC and the return were filed belatedly.
Rectification Dismissed: The assessee filed a rectification application under Section 154, which was subsequently dismissed by the department.
Technical Glitch Evidence: The assessee demonstrated genuine efforts to file Form 10-IC on or before the due date, but was prevented from doing so due to technical glitches on the official portal, with supporting evidence placed on record.

Decision

Applicability of CBDT Principles: In favor of Assessee. The principles and relief of CBDT Circular No. 6/2022 (dated 17-03-2022) issued for condoning delay in filing Form 10-IC for preceding years can be extended to Assessment Year 2022-23, given the bona fide attempts to file within time.
Concessional Tax Benefit Granted: In favor of Assessee. The denial of benefit was set aside, and the Assessing Officer was directed to assess the company under Section 115BAA and grant all consequential tax reliefs.

Key Takeaways

Bona Fide Technical Delay Condoned: Procedural delays in submitting statutory forms like Form 10-IC caused by verified technical issues on the income tax portal should not penalize taxpayers who acted in good faith.
Extension of CBDT Circular Rationale: Beneficial CBDT circulars providing relief against technical defaults can be applied to subsequent assessment years where identical hardship and technical constraints are established.
Substantive Benefit Over Procedural Lapse: The statutory right to elect a concessional tax regime under Section 115BAA cannot be denied purely on hyper-technical grounds when the taxpayer demonstrates compliance capability hampered by portal errors.

IN THE ITAT DELHI BENCH ‘E’

Mysim Therapeutics (P.) Ltd.

Income-tax Officer

Mahavir Singh, Vice President
and KRINWANT SAHAY, Accountant Member

IT Appeal No. 2939 (Delhi) of 2026
[Assessment year 2022-23]

AUGUST 11, 2026

Divyanshu Agrawal and Anubhav Rastogi, Advs. for the Appellant. Tarun Sharda, Sr. DR for the Respondent.

ORDER

Mahavir Singh, Vice-President. – This appeal by the assessee is arising out of the order of Addl/JCIT(A)-2, Hyderabad in Appeal No. NFAC/2021-22/10378224, order dated 23^rd January, 2026. The rectification order under Section 154 of the Act was passed on 20^th April, 2024 for the assessment year 2022-23 by the Deputy Director of Income-tax, CPC, Bengaluru.

2. The only issue in this appeal of the assessee is as regards the order of the JCIT(A) confirming the action of the Assessing Officer in dismissing the rectification application filed by the assessee in confirming the denial of benefit under Section 115BAA of the Incometax Act, 1961 (hereinafter referred to as ‘the Act’).

3. Brief facts are that the assessee is a private limited company who filed its return of income on 19^th November, 2022 whereas the due date of filing of return under Section 139(1) of the Act was 7^th November, 2022. Since Form 10-IC and subsequent ITR was filed after the due date, the CPC denied the claim of the assessee to be taxed under Section 115BBA of the Act. The assessee, against the denial of claim of assessment under Section 115BAA of the Act, moved rectification application dated 20^th April, 2024 stating that the income tax levied by the Assessing Officer at 30% while processing the return under Section 139(1) of the Act by the CPC, Bengaluru as against the rate applicable for domestic companies having turnover of less than 400 crores, as in the present case, at 25%. The assessee has been denied to be taxed under Section 115BAA and hence, moved rectification application stating the reason that the assessee filed return of income on 19^th November, 2022 whereas the due date for filing the ITR was 7^th November, 2022. The assessee explained that it tried to file Form 10-IC on 7^th November, 2022 in order to avail the lower tax rate as prescribed under Section 115BAA of the Act before filing of the ITR within the due date but somehow could not file due to technical glitch, whether with the income tax portal or with the computer system of the assessee. This action of the assessee trying to file Form 10-IC on 7^th November, 2022 was proved by the fact that Form 10-IC is showing date as 7^th November, 2022 in the income tax portal itself as the date on which the said form was created and saved. Subsequently, after filing Form 10-IC, the ITR was filed claiming the tax rate under Section 115BAA. But, this claim was denied by the CPC. Learned Counsel for the assessee now before us contended that the CBDT issued Circular No.6/2022 dated 17^th March, 2022 for the preceding assessment year wherein delay in filing of Form 10-IC was condoned. Taking help of this Circular, the assessee stated that since this was the first year of business of the assessee, it was not able to ascertain the interpretation of provisions of Section 115BAA of the Act but, the assessee has tried its best to file Form 10-IC on 7^th November, 2022 and that information is available on record.

4. Learned Counsel for the assessee now before us contended that this is a case of genuine hardship and assessee has tried to file Form 10-IC on 7^th November, 2022 in order to avail lower rate of tax under Section 115BAA of the Act. When these facts were confronted to the learned Senior DR, he could not controvert the above facts.

5. After hearing the arguments of both the sides and perusing the material placed before us, we are of the view that the assessee has made all efforts to file Form 10-IC and that evidence is available on record. In view of the CBDT Circular No.6/2022 dated 17^th March, 2022 which is for the preceding year, we apply in this year also for the reason that the assessee has genuinely tried to file Form 10-IC on the due date which was not done due to technical glitch, whether with the income tax portal or with the computer system of the assessee. This action of the assessee trying to file Form 10-IC has been proved by the learned Counsel for the assessee before us by showing the date on the income tax portal i.e., 7^th November, 2022. In view of these facts, we allow the claim of the assessee and direct the Assessing Officer to assess the assessee under Section 115BBA of the Act and allow consequential relief.

6. In the result, the appeal of the assessee is allowed.