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Delhi Tribunal affirms filing of Form 10-IC only in the first year of claiming a concessional tax regime under S.115BAA
In the case of Concentrix Daksh Services India Pvt. Ltd.[1] (Taxpayer), the issue before the Delhi Tribunal was whether Form 10-IC [2] is required to be filed afresh for every year of claim made for availing the benefit of concessional tax regime (CTR) of 22%[3] under Section (S.)115BAA of the Indian Tax Laws. The Taxpayer had claimed the CTR benefit for the tax year 2019-20, being the first year, by filing Form 10-IC. In the subsequent tax year, i.e., 2020-21, it filed its return of income claiming CTR benefit, however the benefit was denied by the tax authority on the ground of non-filing of fresh Form 10-IC. This was upheld by the first appellate authority as well.
On appeal, the Tribunal directed the tax authority to allow the CTR benefit by holding that Form 10-IC is required to be filed only once in the initial year of claiming CTR benefit and not in subsequent years on the basis of the following reasons:
S.115BAA clearly provides that the option exercised to claim CTR benefit cannot subsequently be withdrawn. The Central Board of Direct Taxes (CBDT) has clarified this aspect in the FAQs issued on CTR.
The CBDT instructions for filing ITR 6[4] specifically provide that Form 10-IC shall be filed only in the first year of opting for the CTR.
[1] TS-548-ITAT-2023(DEL) [2] A form in which a taxpayer is required to make a declaration that the taxpayer is opting for a CTR [3] Effectively ~25% tax rate after adding surcharge and cess [4] Income tax return to be filed by companies