I opted for the 22 per cent rate in my return but missed filing Form 10-IC by the due date. The Commissioner refused to condone the delay. Can the High Court help?
Yes. The Allahabad High Court quashed the Principal Commissioner's order refusing condonation under section 119(2)(b) and directed him to condone the delay, accept Form 10-IC for assessment year 2020-21 and recompute the tax liability under section 115BAA. Filing Form 10-IC before the return is not mandatory; where genuine hardship is shown the delay may be condoned, and section 119(2)(b) is to be read as beneficial legislation. The Commissioner had taken an excessively strict view, ignored his own Assessing Officer's favourable report, and exercised his discretion arbitrarily.
Decided by the High Court (High Court of Judicature at Allahabad, Division Bench — Praveen Kumar Giri J (author) and Shekhar B. Saraf J) on 2025-07-17, reported as Neutral Citation No. 2025:AHC:115418-DB; Writ Tax No. 278 of 2024 (Allahabad High Court). It bears on section 115BAA, section 119(2)(b), section 139(1), section 143(1) of the Income Tax Act 1961, in Assessment & Scrutiny and How Tax Law Is Read matters.
Section 115BAA cases turn almost entirely on Form 10-IC, and the Department's standard answer is that the option is lost for good if the form misses the section 139(1) due date. This judgment holds otherwise: the requirement is procedural, the intention to opt is judged from the return and the tax audit report, and section 119(2)(b) exists precisely to relieve against a technical lapse. It is also useful on how a condonation order must be made — the Commissioner cannot brush aside a favourable report from the Assessing Officer without cogent reasons, and cannot treat CBDT Circular 6/2022 as an outer wall when the circular's own window has closed. The Court's reading of 'genuine hardship' follows B.M. Malani and the liberal line in the Bombay, Gujarat and Madras High Courts, including the proposition that having to pay more tax for want of the benefit is itself genuine hardship.
Binding within that High Court's jurisdiction. Persuasive elsewhere.
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The petitioner company filed its return for assessment year 2020-21 on 25 November 2020 declaring income of Rs 38,91,260 and opting for the concessional 22 per cent rate under section 115BAA, which had just been introduced and which also takes the company out of MAT. The option under section 115BAA(5) has to be exercised in the prescribed manner, in Form 10-IC, on or before the due date under section 139(1). The form was not filed. The company said the form had been prepared but could not be submitted because of technical glitches on the portal, and that the person in charge of its tax matters, Anupam Sharma, and his family were affected during the COVID period; an affidavit set out the personal circumstances. The lapse produced a demand of Rs 45,89,490. On 29 December 2023 the company applied under section 119(2)(b) for condonation of the delay. The Assessing Officer reported that the claim appeared correct and genuine and recommended acceptance. The Range Head disagreed, pointing to the outer date in CBDT Circular 6/2022 and the absence of evidence of the portal problem. By order dated 30 January 2024 the Principal Commissioner, Ghaziabad, held there was no genuine hardship and rejected the application. The company filed this writ petition.
The writ petition was allowed. The order dated 30 January 2024 of the Principal Commissioner of Income Tax, Ghaziabad was quashed. The respondent authority was directed to condone the delay in filing Form 10-IC and to accept the form, and to provide consequential relief by recomputing the petitioner's tax liability on the return already filed, taking Form 10-IC into account. The Court held that filing Form 10-IC before filing the return is not mandatory, and that where genuine hardship is shown the delay may be condoned, section 119(2)(b) being a beneficial piece of legislation. The Principal Commissioner had fallen into error by adopting an excessively precise and stringent approach; dismissing a well-substantiated cause negated the remedial intent of the provision and amounted to an arbitrary exercise of discretion, particularly as the intention to avail section 115BAA was evident from the original return and the audit report.
The Court read section 119(2)(b) by its purpose. The provision confers a discretion on the tax authorities to admit a claim after the prescribed period in order to avoid genuine hardship, so its essence is remedial and it must be construed as beneficial legislation. On the meaning of genuine hardship the Court applied B.M. Malani, where the Supreme Court required a purposive construction and equated genuine hardship with genuine difficulty, and the liberal line in the High Courts: Gujarat Electric, K.S. Bilawala and Sitaldas Motwani, holding that the power to condone exists to do substantial justice and that refusing it can defeat the interest of justice; Deepak Pragjibhai Gondaliya, that filing forms to claim a benefit is procedural and no assessee gains by filing late; and Pankaj Kailash Agarwal, followed in MRF Ltd, that an assessee who would pay more tax without the benefit suffers genuine hardship. Where substantial justice and technical considerations are ranged against each other, substantial justice prevails and the authority's approach must be justice-oriented and on merits. Applied here, the non-filing was an unintended procedural oversight and not evasion; the intention to opt appeared from the return and Form 3CD; the demand of Rs 45,89,490 flowed from a technical lapse alone; and the Commissioner had ignored his own Assessing Officer's finding that the claim was correct and genuine without giving cogent reasons for departing from it.
filing of Form 10-IC prior to filing of return is not mandatory and if "genuine hardship" is shown then delay may be condoned
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Handle my notice → Ask a CA on WhatsAppYes. The Allahabad High Court quashed the Principal Commissioner's order refusing condonation under section 119(2)(b) and directed him to condone the delay, accept Form 10-IC for assessment year 2020-21 and recompute the tax liability under section 115BAA. Filing Form 10-IC before the return is not mandatory; where genuine hardship is shown the delay may be condoned, and section 119(2)(b) is to be read as beneficial legislation. The Commissioner had taken an excessively strict view, ignored his own Assessing Officer's favourable report, and exercised his discretion arbitrarily. This was decided by the High Court (High Court of Judicature at Allahabad, Division Bench — Praveen Kumar Giri J (author) and Shekhar B. Saraf J) and bears on section 115BAA, section 119(2)(b), section 139(1), section 143(1) of the Income Tax Act 1961. It is reported as Neutral Citation No. 2025:AHC:115418-DB; Writ Tax No. 278 of 2024 (Allahabad High Court). Section 115BAA cases turn almost entirely on Form 10-IC, and the Department's standard answer is that the option is lost for good if the form misses the section 139(1) due date. This judgment holds otherwise: the requirement is procedural, the intention to opt is judged from the return and the tax audit report, and section 119(2)(b) exists precisely to relieve against a technical lapse. It is also useful on how a condonation order must be made — the Commissioner cannot brush aside a favourable report from the Assessing Officer without cogent reasons, and cannot treat CBDT Circular 6/2022 as an outer wall when the circular's own window has closed. The Court's reading of 'genuine hardship' follows B.M. Malani and the liberal line in the Bombay, Gujarat and Madras High Courts, including the proposition that having to pay more tax for want of the benefit is itself genuine hardship. If it applies to you, the first step is this: File the section 119(2)(b) application with an affidavit setting out precisely what prevented timely filing, with dates and supporting documents; a bare assertion of portal glitches will not do.
The petitioner company filed its return for assessment year 2020-21 on 25 November 2020 declaring income of Rs 38,91,260 and opting for the concessional 22 per cent rate under section 115BAA, which had just been introduced and which also takes the company out of MAT. The option under section 115BAA(5) has to be exercised in the prescribed manner, in Form 10-IC, on or before the due date under section 139(1). The form was not filed. The company said the form had been prepared but could not be submitted because of technical glitches on the portal, and that the person in charge of its tax matters, Anupam Sharma, and his family were affected during the COVID period; an affidavit set out the personal circumstances. The lapse produced a demand of Rs 45,89,490. On 29 December 2023 the company applied under section 119(2)(b) for condonation of the delay. The Assessing Officer reported that the claim appeared correct and genuine and recommended acceptance. The Range Head disagreed, pointing to the outer date in CBDT Circular 6/2022 and the absence of evidence of the portal problem. By order dated 30 January 2024 the Principal Commissioner, Ghaziabad, held there was no genuine hardship and rejected the application. The company filed this writ petition. The matter was decided on 2025-07-17 by the High Court (High Court of Judicature at Allahabad, Division Bench — Praveen Kumar Giri J (author) and Shekhar B. Saraf J). On those facts the High Court held as follows. The writ petition was allowed. The order dated 30 January 2024 of the Principal Commissioner of Income Tax, Ghaziabad was quashed. The respondent authority was directed to condone the delay in filing Form 10-IC and to accept the form, and to provide consequential relief by recomputing the petitioner's tax liability on the return already filed, taking Form 10-IC into account. The Court held that filing Form 10-IC before filing the return is not mandatory, and that where genuine hardship is shown the delay may be condoned, section 119(2)(b) being a beneficial piece of legislation. The Principal Commissioner had fallen into error by adopting an excessively precise and stringent approach; dismissing a well-substantiated cause negated the remedial intent of the provision and amounted to an arbitrary exercise of discretion, particularly as the intention to avail section 115BAA was evident from the original return and the audit report.
The Court read section 119(2)(b) by its purpose. The provision confers a discretion on the tax authorities to admit a claim after the prescribed period in order to avoid genuine hardship, so its essence is remedial and it must be construed as beneficial legislation. On the meaning of genuine hardship the Court applied B.M. Malani, where the Supreme Court required a purposive construction and equated genuine hardship with genuine difficulty, and the liberal line in the High Courts: Gujarat Electric, K.S. Bilawala and Sitaldas Motwani, holding that the power to condone exists to do substantial justice and that refusing it can defeat the interest of justice; Deepak Pragjibhai Gondaliya, that filing forms to claim a benefit is procedural and no assessee gains by filing late; and Pankaj Kailash Agarwal, followed in MRF Ltd, that an assessee who would pay more tax without the benefit suffers genuine hardship. Where substantial justice and technical considerations are ranged against each other, substantial justice prevails and the authority's approach must be justice-oriented and on merits. Applied here, the non-filing was an unintended procedural oversight and not evasion; the intention to opt appeared from the return and Form 3CD; the demand of Rs 45,89,490 flowed from a technical lapse alone; and the Commissioner had ignored his own Assessing Officer's finding that the claim was correct and genuine without giving cogent reasons for departing from it. In the words reproduced by the source cited on this page: "filing of Form 10-IC prior to filing of return is not mandatory and if "genuine hardship" is shown then delay may be condoned"
It was decided by the High Court on 2025-07-17 and is reported as Neutral Citation No. 2025:AHC:115418-DB; Writ Tax No. 278 of 2024 (Allahabad High Court). Binding within that High Court's jurisdiction. Persuasive elsewhere. A High Court decision binds the assessing officer, the Commissioner (Appeals) and the Income Tax Appellate Tribunal within that state, and is persuasive elsewhere. If your assessment is in a different jurisdiction, check whether your own High Court has taken the same view before relying on it. On section 115BAA, section 119(2)(b), section 139(1), section 143(1), the practical question is whether the facts of your own notice match the facts of this case closely enough for the same rule to apply.
It helps the taxpayer. The writ petition was allowed. The order dated 30 January 2024 of the Principal Commissioner of Income Tax, Ghaziabad was quashed. The respondent authority was directed to condone the delay in filing Form 10-IC and to accept the form, and to provide consequential relief by recomputing the petitioner's tax liability on the return already filed, taking Form 10-IC into account. The Court held that filing Form 10-IC before filing the return is not mandatory, and that where genuine hardship is shown the delay may be condoned, section 119(2)(b) being a beneficial piece of legislation. The Principal Commissioner had fallen into error by adopting an excessively precise and stringent approach; dismissing a well-substantiated cause negated the remedial intent of the provision and amounted to an arbitrary exercise of discretion, particularly as the intention to avail section 115BAA was evident from the original return and the audit report. It arises in Assessment & Scrutiny and How Tax Law Is Read matters, on section 115BAA, section 119(2)(b), section 139(1), section 143(1) of the Income Tax Act 1961, and was decided by High Court of Judicature at Allahabad, Division Bench — Praveen Kumar Giri J (author) and Shekhar B. Saraf J. Before relying on it, read the source linked on this page and check whether it has since been distinguished, overruled or overtaken by an amendment to the Income Tax Act. In practice the steps that follow from it are these. Point to the return and the tax audit report to show the option under section 115BAA was exercised in substance, and that the form is only the manner of exercising it. Quantify the hardship: put the resulting demand on record and rely on the line of cases holding that paying more tax for want of the benefit is itself genuine hardship. If the Commissioner rejects the application despite a favourable report from the Assessing Officer, take that inconsistency as the ground of challenge in a writ petition.
Still good law. A Division Bench decision of July 2025; no later authority was available to check it against, and whether the Department has taken it further is not known. No source could be cited for that finding. Checking whether an authority still stands matters as much as knowing what it held: a decision may be overruled on one point and survive on another, or the provision it interprets may have been amended since. Read the source and the editor's note on this page before relying on it in a reply to an Assessing Officer or in an appeal.
The harvested page is clipped: about 26,548 characters from the middle are missing, covering most of the precedents the petitioner cited and the Revenue's submissions as recorded by the Court. The facts, the impugned order, the statutory provisions, the Court's own analysis and the operative directions were read in full. The batch line dates the case to 2024, which is the year of the writ petition; the judgment was delivered on 17 July 2025 and decided_on follows the judgment. The batch line lists Rule 21AE, which does not appear in the part of the judgment that was read. No reporter citation is printed on the source page, so the neutral citation and case number are given instead. The judgment records the hardship in two ways — COVID-affected illness in the Assessing Officer's report and successive family deaths in the Court's own paragraph — and the discrepancy is in the source. This library shows the verification state of every entry openly. This entry has not yet been read in full by a chartered accountant. The summary reflects the sources listed on this page. Read the source before you rely on it in a reply to an Assessing Officer or in an appeal before the Commissioner (Appeals) or the Income Tax Appellate Tribunal.
The writ petition was allowed. The order dated 30 January 2024 of the Principal Commissioner of Income Tax, Ghaziabad was quashed. The respondent authority was directed to condone the delay in filing Form 10-IC and to accept the form, and to provide consequential relief by recomputing the petitioner's tax liability on the return already filed, taking Form 10-IC into account. The Court held that filing Form 10-IC before filing the return is not mandatory, and that where genuine hardship is shown the delay may be condoned, section 119(2)(b) being a beneficial piece of legislation. The Principal Commissioner had fallen into error by adopting an excessively precise and stringent approach; dismissing a well-substantiated cause negated the remedial intent of the provision and amounted to an arbitrary exercise of discretion, particularly as the intention to avail section 115BAA was evident from the original return and the audit report.
TaxSphere, “Cell Com Teleservices Private Limited v Union of India”, https://taxnotice.vittsphere.com/caselaw/case/cell-com-teleservices-p-ltd-v-union-of-india/ (validity last checked 2026-08-29)
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I opted for s.115BAA in my return but filed Form 10-IC late, and my return itself was belated. CBDT has refused to condone the delay because Circular No. 6/2022 requires the return to have been filed within the s.139(1) due date. Is that a good reason?
My start-up's Inter-Ministerial Board certificate for s.80-IAC was refused, so I switched to s.115BAA and filed Form 10-IC 53 days late for AY 2022-23. There is no blanket circular for that year. Can the delay be condoned?
The Commissioner rejected my Form 10-IC condonation application as time-barred under Circular 17/2024, counting from the date of my application and ignoring that I had actually filed the Form years earlier. Is that right?
I filed my return in time and ticked s.115BAA in the ITR-6, but Form 10-IC went in late and the CPC has already processed the return and raised a demand. Can the delay still be condoned?
