In the case before Ahmedabad Tribunal, Aprameya Engineering Ltd.[1] (Taxpayer) filed a belated return with Form 10-IC opting for concessional tax rate of 22% under the Income Tax Act (ITA). However, the centralised processing centre (CPC), while processing the return, denied this claim on account of belated filing of both the tax return and Form 10-IC, resulting in taxation at the standard rate of 30%[2]. The first appellate authority upheld CPC’s action by asserting strict and literal adherence to beneficial provisions for which it placed reliance on the Supreme Court ruling in the case of Wipro Ltd [3]. In this case, the SC held that a revised return cannot be filed to withdraw incentive deduction claimed in original return.
Being aggrieved, Taxpayer filed appeal before “B” Bench of Income Tax Appellate Tribunal (Tribunal). The Tribunal distinguished the SC ruling in the case of Wipro on facts and referred to Ahmedabad Tribunal ruling in the case of Croygas Equipments (P) Ltd.[4] wherein the Ahmedabad Tribunal held that that the ratio of Wipro Ltd. cannot be uniformly applied to all cases.
The Ahmedabad Tribunal ruled in favor of the Taxpayer, placing reliance on the SC ruling in case of G.M. Knitting Industries[5] and ruled that a delay in submitting Form 10-IC, being a procedural step, should not negate a taxpayer's right to concessional tax rate under the ITA. The Ahmedabad Tribunal noted that the circulars issued in the past by the Central Board of Direct Taxes, which extended deadlines for such filings, acknowledged the procedural challenges and implied that such lapses should not result in the loss of substantive rights. Furthermore, the Tribunal also emphasized that denying substantive tax benefit solely due to the delay in filing Form 10IC would be against principles of equity and justice, particularly when the taxpayer's qualification for the concessional tax rate on substantive merits is otherwise undisputed.
