ITAT Delhi Quashes Rs. 3.76 Crore Demand; Upholds Concessional Tax Regime Under Section 115BAA

ITAT Delhi Quashes Rs. 3.76 Crore Demand; Upholds Concessional Tax Regime Under Section 115BAA

The appeal has been filed by a company named Marelli (India) Private Limited in the ITAT Delhi against the Deputy Commissioner of Income Tax, Circle 16(1) CR Building, Delhi. The final decision on the matter was announced on November 19, 2025. The assessee challenged an order dated December 23, 2024, passed by the Commissioner of Income Tax Appeal Addl./JCIT(A)-5 Chennai, for the assessment year 2020-21.

On January 12, 2021, the assessee filed its income tax return (ITR) for the assessment year 2020-21, declaring its total income of Rs. 26.70 crore. The assessee deposited the advance tax of Rs. 4.85 crore and deducted the tax at source of Rs. 2.25 crore. The assessee claimed a refund of Rs. 38.28 lakh. The CPC processed the return of the assessee under section 143(1) of the Act and raised a demand of Rs. 2.95 crore on the assessee. The aggrieved assessee thereafter filed an appeal before the National Faceless Appeal Centre (NFAC). On February 01, 2024, the NFAC partially allowed the appeal. After this, the Assessing Officer passed a fresh assessment order to give effect to the NFAC’s directions, but this new order increased the demand to Rs. 3.76 crore.

Dissatisfied with the increased demand, the assessee then filed another appeal before the CIT(A). Through an order dated December 23, 2024, the CIT(A) partially allowed the appeal of the assessee. The assessee then filed an appeal before the tribunal.

The authorised representative before the tribunal noted that the company chose to be taxed under the concessional rate of tax under section 115BAA of the Act and also furnished the Form 10-IC within the statutory extended deadline. Additionally, it was submitted that the Central Board of Direct Taxes (CBDT) has condoned the delay in filing Form 10-IC for the assessment year 2020-21, under Section 119(2). The CBDT had extended the last date to June 30, 2022, or three months from the end of the month in which the circular was issued, whichever was later.

Form 10-IC was updated by the assessee on May 06, 2022, which was within the extended due date by the CBDT. Hence, whatever was done by the assessee was in accordance with the CBDT Circular No. 6/2022 dated March 17, 2022.

The tribunal noted that the last date for filing Form No. 10-IC was June 30, 2022, and the form was updated on May 06, 2022, which is in time. Since Form 10-IC was furnished by the assessee within the due date, the assessee is eligible for the concessional tax regime, and the department was wrong to raise the demand on the assessee. Therefore, the tribunal directed the assessing officer (AO) to delete the demand raised by the CPC.