ITAT grants benefit of TOLA to avail Section 115BAA

Case Details: Suminter India Organics (P.) Ltd. v. DCIT - [2022] 140 taxmann.com 591 (Mumbai-Trib.)

Judiciary and Counsel Details

• • Pramod Kumar, Vice-President & Pavan Kumar Gadale, Judicial Member
  • V. Sridharan, Sr. Adv., Ravi Sawana and Neha Sharma for the Appellant.
  • Ketaki Desai for the Respondent.

Facts of the Case

The assessee was a private limited company engaged in the business of trading, sourcing & supplying organic and natural produce from India to buyers internationally. The assessee had opted for the taxation under the concessional scheme of taxation under section 115BAA for the Assessment Year 2020-21.

However, the Income-tax Dept. denied the benefit of section 115BAA because the assessee opted for Section 115BAA while the furnished belated return of income on 31-03-2021. The assessee failed to file Form 10-IC within the time prescribed under section 139(1), i.e., 15-02-2021 (as extended by Taxation and Other Laws (Relaxations and Amendments of Certain Provisions) Act 2020 [TOLA]).

ITAT Held

The Tribunal held that section 115BAA unambiguously provides that “nothing contained in this section shall apply unless the option is exercised by the person in a prescribed manner on or before the due date specified under section 139(1) for furnishing the returns of income.

However, this scheme was diluted under the scheme of TOLA when different treatment was accorded to “furnishing of return under section 139” and “filing of any appeal, reply, application or furnishing of any report document, return or statement or such other record.

When a relaxation provision, as the TOLA is, visualizes separate parameters of relaxation for the income tax returns vis-à-vis other documents, it cannot be open to the revenue to negate the same on the ground that the scheme of the Income Tax Act 1961 treats the filing obligations in respect of the same at par.

The filing of the ITR and the exercise of an option for the concessional regime of taxation under section 115BAA are two distinct obligations. When the overriding provisions of TOLA provide separate relaxations for the purpose of the legal obligations with respect to the filing of return vis-à-vis filing of other documents, to that extent, specific relaxation provisions under the TOLA must make way for rather general provisions with respect to various statutory obligations.

Accordingly, the time permitted for filing of form 10-IC, by virtue of section 3(1)(b) of TOLA, must be treated as 31-03-2021, even as the time permitted for filing of the income tax return under the section, in the light of the third proviso to Section 3(1) and read with subsequent notification, was only up to 15-02-2021.