Facts of the Case

The petitioner, Jasper Associates Private Limited, filed a writ petition challenging the assessment order dated 13.11.2022 for Assessment Year 2021–22. The grievance arose because the petitioner was subjected to a higher tax rate of 30% instead of the concessional 22% rate under Section 115BAA of the Income Tax Act, 1961.

The higher tax rate was imposed due to the petitioner’s failure to file Form 10-IC electronically, which is a mandatory procedural requirement under the Act and Rules.

 Issues Involved

  1. Whether failure to file Form 10-IC electronically can deny the benefit of concessional tax under Section 115BAA.
  2. Whether such procedural lapse can be condoned to allow the assessee to avail the lower tax rate.
  3. Whether relief can be granted by directing the assessee to approach CBDT under Section 119(2)(b).

Petitioner’s Arguments

  • The petitioner contended that it was eligible for the concessional tax rate of 22% under Section 115BAA, but due to a procedural lapse (non-filing of Form 10-IC electronically), it was taxed at 30%.
  • It argued that this was merely a technical/procedural defect, and substantive benefit should not be denied.
  • The petitioner relied on the judgment of Rajkamal Healds and Reeds Pvt. Ltd. vs Assistant Director of Income Tax (Gujarat High Court), where similar relief was considered.

Respondent’s Arguments

  • The Revenue submitted that it had no objection if the Court directs the petitioner to approach the Central Board of Direct Taxes (CBDT) for relief.
  • It accepted that the appropriate remedy lies under Section 119(2)(b) of the Income Tax Act.

Court’s Findings / Order

  • The Delhi High Court did not directly grant relief but disposed of the writ petition with liberty to the petitioner.
  • The Court allowed the petitioner to approach CBDT under Section 119(2)(b) for condonation of delay and permission to file Form 10-IC.
  • It directed that:
    • If such an application is filed within 4 weeks,
    • CBDT shall consider the request and pass an appropriate order in accordance with law.

Important Clarification

  • The Court emphasized that procedural lapses may be addressed through statutory remedies under Section 119(2)(b).
  • Relief is not automatic; it depends on CBDT’s discretion, particularly in cases involving genuine hardship.
  • The judgment reinforces that writ jurisdiction may be limited where alternate statutory remedies exist.

Sections & Rules Involved

  • Section 115BAA, Income Tax Act, 1961 (Concessional Tax Rate for Domestic Companies)
  • Section 119(2)(b), Income Tax Act, 1961 (Power to condone delay to avoid hardship)
  • Section 143(1), Income Tax Act, 1961 (Processing of returns)
  • Rule 21AE(2), Income Tax Rules, 1962 (Filing of Form 10-IC electronically)

 Link to download the order -  https://delhihighcourt.nic.in/app/showFileJudgment/RAS22092023CW125792023_180518.pdf

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