Allahabad High Court Judgment dated 17 July 2025 in Cell Com Teleservices Private Limited v. Union of India and Others (Writ Tax No. 278 of 2024; Citation: 2025:AHC:115418):

Issue :-Whether delay in filing Form 10-IC, which is a mandatory condition for availing the concessional tax rate under Section 115BAA of the Income Tax Act, 1961, can be condoned under Section 119(2)(b) on grounds of genuine hardship, even if the form was not filed before or along with the income tax return?

Brief Facts:- The petitioner filed its ITR for A.Y. 2020–21 on 25.11.2020, opting for the 22% concessional tax rate under Section 115BAA, and disclosed such option in the ITR and Form 3CD.
• However, it failed to file Form 10-IC, which was required to be submitted electronically on or before the due date under Section 139(1).
• Due to tragic personal circumstances (death of key employee’s mother and daughter + COVID-19 related hardships), the form could not be filed even by the extended deadline of 30.06.2022 (granted by CBDT Circular No. 6/2022).
• A demand of ₹45,89,490 was raised under Section 143(1) on account of non-acceptance of the concessional rate.
• The assessee moved a condonation petition u/s 119(2)(b) on 29.12.2023, which was rejected by the Pr. CIT Ghaziabad on 30.01.2024 on procedural and technical grounds.

Petitioner’s Grounds
• Form 10-IC had been prepared but could not be uploaded due to personal and technical reasons.
• The hardship was genuine, substantiated by affidavits and supporting documents.
• The declaration of opting for Section 115BAA was made clearly in the ITR and Form 3CD.
• Rejection of condonation amounted to arbitrary and mechanical exercise of discretion.

Court’s Observations
1. “Genuine hardship” under Section 119(2)(b) should be interpreted liberally and purposefully, not mechanically.
2. The intent to opt for Section 115BAA was clear from the return and audit report.
3. The case was factually verified by the Assessing Officer who found the hardship claim to be genuine.
4. The Principal Commissioner’s rejection was based solely on procedural lapses and ignored the underlying principles of substantial justice.
5. Multiple precedents support a liberal interpretation of procedural compliance when genuine hardship is demonstrated:
• B.M. Malani v. CIT [(2008) 10 SCC 617]
• Gujarat Electric Co. Ltd. v. CIT [255 ITR 396 (Guj)]
• K.S. Bilawala v. PCIT (Bom HC)
• Sitaldas K Motwani v. DIT (Bom HC)
• Deepak Pragjibhai Gondaliya v. PCIT [Gujarat HC, 2025]
• Pankaj Kailash Agarwal v. ACIT [Bom HC, 2024]

Key Legal Principles
• Filing of Form 10-IC is a procedural requirement, not a substantive condition, for availing the benefit under Section 115BAA.
• Section 119(2)(b) is a beneficial provision, intended to relieve hardship, not penalize technical lapses.
• Where intention is clear and hardship is proved, authorities must condone procedural delays to promote equity and justice.

Decision
• The order dated 30.01.2024 rejecting condonation is quashed.
• The delay in filing Form 10-IC is condoned.
• Respondents directed to accept Form 10-IC and recompute tax liability in accordance with Section 115BAA.