Income Tax Circulars

Condonation of Delay in Filing Form No. 10-IC by CBDT

In the rapidly changing world of finance and taxation, it’s paramount for the regulatory bodies to remain compassionate and responsive to the practical challenges faced by the stakeholders. This commitment was once again reaffirmed by the Central Board of Direct Taxes (CBDT) through its Circular No. I-12023 dated 23rd October 2023.

The Critical Role of CBDT in Financial Governance

The backdrop: The role of CBDT in shaping the financial health of our country is pivotal. As a part of the Ministry of Finance, its decisions impact a wide range of sectors. And every once in a while, amidst the strict mandates of the tax code, CBDT showcases flexibility ensuring that genuine hardships don’t deprive entities of their rights.

The Issue of Delay in Filing Form 10-IC

The Heart of the Matter: The core issue revolved around the delay in filing Form No. 10-IC for the Assessment Year 2021-22. To provide a context, this form is pivotal for those domestic companies that opt for the concessional tax regime under section 115BAA of the Income-tax Act, 1961 (‘the Act’). As per Rule 21AE of the Income-tax Rules, 1962 (‘the Rules’), there’s a stipulated timeline to submit this form.

Previous Relief and Continued Challenges

Earlier, acknowledging the challenges faced during A.Y. 2020-21, CBDT, through its Circular No. 6/2022 dated 17.03.2022, already extended an olive branch by condoning the delay for the previous year. The conditions specified were clear-cut, ensuring that the relief reaches its genuine claimants.

However, as with all things finance and taxation, there were certain inevitable circumstances that resulted in a delay for the A.Y. 2021-22. It’s heartening to see that the stakeholders approached CBDT, not with an intent to bypass the law but with genuine concerns and practical difficulties.

CBDT’s Compassionate Response

The response of CBDT was swift and understanding. Recognizing the genuine hardships, especially for domestic companies trying to navigate the maze of tax obligations while optimizing their tax liabilities, the CBDT decided to condone the delay. But, as always, with conditions that promote accountability:

1. Timely Filing of Returns: The return of income for the relevant assessment year should have been filed timely, adhering to the due date specified under section 139(1) of the Act.
2. Option for Concessional Tax Regime: The company in question should have clearly expressed its choice for the concessional tax regime under section 115BAA in the “Filing Status” part of ITR-6.
3. Deadline for Filing Form 10-IC: The much-discussed Form No. 10-IC should be electronically filed either before 31.01.2024 or within three months from the end of the month when this circular was issued – a clear, well-thought-out deadline that provides adequate time for compliance.

One can’t help but appreciate the precision and clarity in these conditions. They reflect the essence of governance that is firm, yet understanding; strict, yet accommodating.

Widespread Communication and Transparency

The Echo: Following the issuance of this circular, a clear directive was sent across to the significant pillars of the finance and taxation ecosystem. This ranged from the offices of the Finance Minister and Revenue Secretary to the Chairman of the CBDT, and even further down to the Joint Secretaries and the Commissioners of Income-tax. It’s a testament to the importance and urgency attached to this decision.

Furthermore, the directive to upload the circular on the official departmental website and the IRS officers’ portal shows transparency and the intent to disseminate this relief measure widely.

Conclusion

In Conclusion: While on the surface, it might seem like a simple delay condonation, the underpinnings reflect the philosophy of the Indian tax regime – a blend of strict compliance and human understanding. Amidst the vast corridors of tax codes, forms, and rules, there lies the heart of governance that resonates with genuine concerns and responds with empathy. It’s these moments that reaffirm faith in the system, making the journey of financial compliance less daunting and more collaborative.

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