I filed Form 10-ID and my first return under s.115BAB after the s.139(1) due date but within the s.139(4) time. The CPC has now denied me the 15 per cent rate in a later year. Is the option gone for good?
Not on these facts. The Delhi Tribunal held that where the substantive conditions of s.115BAB are undisputedly satisfied, the failure to file Form 10-ID on or before the s.139(1) due date is a procedural lapse and is not a fatal flaw, and allowed the appeal for AY 2023-24. The Form there had been filed in the very first year, along with a first return that was belated but within the s.139(4) window.
Decided by the ITAT (Sh. Satbeer Singh Godara (Judicial Member) and Sh. Naveen Chandra (Accountant Member)) on 2026-04-28, reported as ITA No. 252/Del/2026 (ITAT Delhi, Bench 'C'); Assessment Year 2023-24. It bears on section 115BAB, section 115BAB(2), section 115BAB(7), section 139(1), section 139(4), section 143(1), section 143(1)(a), section 154, section 250 of the Income Tax Act 1961, in Assessment & Scrutiny and How Tax Law Is Read matters.
The s.115BAB option is exercised once, for the first year, and if it fails then it fails for every later year — which is why a defect in the first year surfaces as a demand three years later, as it did here. The distinction the Tribunal drew is the one to plead: a Form 10-ID filed in the first year but a few days late is not the same as a Form filed years after the first return, and the Tribunal expressly distinguished a Raipur Bench decision on the latter footing. The order is also a compact checklist of the s.115BAB(2) conditions as the Tribunal accepted them: set up and registered on or after 1 October 2019; manufacture or production commenced on or before 31 March 2024; no business other than manufacture or production and research in relation to, or distribution of, what it makes; total income computed without the excluded deductions; and not formed by splitting up or reconstruction and not using previously used machinery, subject to the twenty per cent allowance. Note the administrative oddity the Tribunal recorded: the same company's returns for AY 2022-23, 2024-25 and 2025-26 were all processed at 15 per cent while AY 2023-24 was not.
Binding on the AO and CIT(A) within the Tribunal's jurisdiction. Persuasive elsewhere.
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The assessee, a private domestic company manufacturing e-vehicles, was incorporated on 6 June 2020 and commenced manufacturing on 1 January 2021. It opted for the concessional rate of 15 per cent under s.115BAB from AY 2021-22 by Form 10-ID filed on 23 March 2022; its return for AY 2021-22 was filed on 25 March 2022, after the extended due date of 15 March 2022 but within the time allowed for a belated return under s.139(4). For AY 2023-24 it filed its return on 30 October 2023 at the concessional rate declaring total income of Rs. 2,59,45,160. The CPC issued an intimation under s.143(1) on 27 May 2024 accepting the returned income but denying the s.115BAB benefit without reasons and without the opportunity contemplated by s.143(1)(a). A rectification application under s.154 was rejected on 5 August 2024 by a non-speaking order. The Commissioner (Appeals) dismissed the appeal on 8 December 2025, holding that filing Form 10-ID on or before the due date of the first return is a substantive and mandatory requirement, that the first return having been filed after the extended deadline the option became invalid for that year and all subsequent years. The returns for AY 2022-23, AY 2024-25 and AY 2025-26 had all been processed at 15 per cent under s.115BAB.
The appeal was allowed. The procedural lapse of not filing Form 10-ID within the due date under s.139(1) was held not to be a fatal flaw for eligibility under s.115BAB, and grounds 3 and 6 were allowed.
The Tribunal recorded as uncontroverted that the assessee had fulfilled all the statutory conditions for the benefit of s.115BAB (para 10). It found that Form 10-ID and the first return for AY 2021-22 had been filed after the s.139(1) due date but within the time allowed for a belated return under s.139(4), so that although there was admittedly a procedural lapse the assessee had undisputedly met the substantive conditions, and that it has been consistently held that such a lapse is a mere procedural formality where the substantive conditions are satisfied (para 10). It distinguished the Raipur Bench decision in Vivrn Foods Private Limited relied on by the Revenue on the ground that there Form 10-ID had been filed years after the first return whereas here it was filed in the very first year of the return itself, and followed the Delhi Bench decision in Cosmo Specialty Chemicals Private Limited v. ITO, which held that the benefit cannot be denied solely because Form 10-ID was filed after the s.139(1) deadline (para 11).
Thus though admittedly there is a procedural lapse, the assessee has undisputedly met the substantive conditions of the provisions under section 115BAB.
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Handle my notice → Ask a CA on WhatsAppNot on these facts. The Delhi Tribunal held that where the substantive conditions of s.115BAB are undisputedly satisfied, the failure to file Form 10-ID on or before the s.139(1) due date is a procedural lapse and is not a fatal flaw, and allowed the appeal for AY 2023-24. The Form there had been filed in the very first year, along with a first return that was belated but within the s.139(4) window. This was decided by the ITAT (Sh. Satbeer Singh Godara (Judicial Member) and Sh. Naveen Chandra (Accountant Member)) and bears on section 115BAB, section 115BAB(2), section 115BAB(7), section 139(1), section 139(4), section 143(1), section 143(1)(a), section 154, section 250 of the Income Tax Act 1961. It is reported as ITA No. 252/Del/2026 (ITAT Delhi, Bench 'C'); Assessment Year 2023-24. The s.115BAB option is exercised once, for the first year, and if it fails then it fails for every later year — which is why a defect in the first year surfaces as a demand three years later, as it did here. The distinction the Tribunal drew is the one to plead: a Form 10-ID filed in the first year but a few days late is not the same as a Form filed years after the first return, and the Tribunal expressly distinguished a Raipur Bench decision on the latter footing. The order is also a compact checklist of the s.115BAB(2) conditions as the Tribunal accepted them: set up and registered on or after 1 October 2019; manufacture or production commenced on or before 31 March 2024; no business other than manufacture or production and research in relation to, or distribution of, what it makes; total income computed without the excluded deductions; and not formed by splitting up or reconstruction and not using previously used machinery, subject to the twenty per cent allowance. Note the administrative oddity the Tribunal recorded: the same company's returns for AY 2022-23, 2024-25 and 2025-26 were all processed at 15 per cent while AY 2023-24 was not. If it applies to you, the first step is this: Reconstruct the first year: the date the first return was filed, the date Form 10-ID was filed, and the s.139(1) due date for that year. That is where the case is won or lost, not in the year under appeal.
The assessee, a private domestic company manufacturing e-vehicles, was incorporated on 6 June 2020 and commenced manufacturing on 1 January 2021. It opted for the concessional rate of 15 per cent under s.115BAB from AY 2021-22 by Form 10-ID filed on 23 March 2022; its return for AY 2021-22 was filed on 25 March 2022, after the extended due date of 15 March 2022 but within the time allowed for a belated return under s.139(4). For AY 2023-24 it filed its return on 30 October 2023 at the concessional rate declaring total income of Rs. 2,59,45,160. The CPC issued an intimation under s.143(1) on 27 May 2024 accepting the returned income but denying the s.115BAB benefit without reasons and without the opportunity contemplated by s.143(1)(a). A rectification application under s.154 was rejected on 5 August 2024 by a non-speaking order. The Commissioner (Appeals) dismissed the appeal on 8 December 2025, holding that filing Form 10-ID on or before the due date of the first return is a substantive and mandatory requirement, that the first return having been filed after the extended deadline the option became invalid for that year and all subsequent years. The returns for AY 2022-23, AY 2024-25 and AY 2025-26 had all been processed at 15 per cent under s.115BAB. The matter was decided on 2026-04-28 by the ITAT (Sh. Satbeer Singh Godara (Judicial Member) and Sh. Naveen Chandra (Accountant Member)). On those facts the ITAT held as follows. The appeal was allowed. The procedural lapse of not filing Form 10-ID within the due date under s.139(1) was held not to be a fatal flaw for eligibility under s.115BAB, and grounds 3 and 6 were allowed.
The Tribunal recorded as uncontroverted that the assessee had fulfilled all the statutory conditions for the benefit of s.115BAB (para 10). It found that Form 10-ID and the first return for AY 2021-22 had been filed after the s.139(1) due date but within the time allowed for a belated return under s.139(4), so that although there was admittedly a procedural lapse the assessee had undisputedly met the substantive conditions, and that it has been consistently held that such a lapse is a mere procedural formality where the substantive conditions are satisfied (para 10). It distinguished the Raipur Bench decision in Vivrn Foods Private Limited relied on by the Revenue on the ground that there Form 10-ID had been filed years after the first return whereas here it was filed in the very first year of the return itself, and followed the Delhi Bench decision in Cosmo Specialty Chemicals Private Limited v. ITO, which held that the benefit cannot be denied solely because Form 10-ID was filed after the s.139(1) deadline (para 11). In the words reproduced by the source cited on this page: "Thus though admittedly there is a procedural lapse, the assessee has undisputedly met the substantive conditions of the provisions under section 115BAB." The decision followed or applied Cosmo Specialty Chemicals Private Limited v. ITO (ITA No. 809/DEL/2024) (ITAT Delhi) — followed; Vivrn Foods Private Limited (ITAT Raipur) — distinguished on the ground that Form 10-ID there was filed years after the first return.
It was decided by the ITAT on 2026-04-28 and is reported as ITA No. 252/Del/2026 (ITAT Delhi, Bench 'C'); Assessment Year 2023-24. Binding on the AO and CIT(A) within the Tribunal's jurisdiction. Persuasive elsewhere. A Tribunal decision binds the assessing officer and the Commissioner (Appeals) within that Tribunal's jurisdiction, and is persuasive before other benches. It is not binding on a High Court, and a contrary co-ordinate bench decision will be argued against you, so check whether the point has been taken the other way before you build a reply around it. On section 115BAB, section 115BAB(2), section 115BAB(7), section 139(1), section 139(4), section 143(1), section 143(1)(a), section 154, section 250, 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 appeal was allowed. The procedural lapse of not filing Form 10-ID within the due date under s.139(1) was held not to be a fatal flaw for eligibility under s.115BAB, and grounds 3 and 6 were allowed. It arises in Assessment & Scrutiny and How Tax Law Is Read matters, on section 115BAB, section 115BAB(2), section 115BAB(7), section 139(1), section 139(4), section 143(1), section 143(1)(a), section 154, section 250 of the Income Tax Act 1961, and was decided by Sh. Satbeer Singh Godara (Judicial Member) and Sh. Naveen Chandra (Accountant Member). 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. Show that the Form went in during the first year, not years afterwards; that was the express basis for distinguishing the contrary decision. Set out each condition of s.115BAB(2) against the facts in the grounds, as counsel did here, rather than arguing the procedural point alone. Where the CPC has allowed 15 per cent in adjoining years, put the processing history on record; inconsistency in the department's own treatment is worth pleading. Take the s.143(1)(a) point separately where the adjustment was made without the prior intimation the first proviso requires — it was raised as ground 7 here.
Searched for later treatment; none was found. That is not the same as a source affirming it. The citator search (doc 116948409, confirmed as 'Khalsae-Vehicles Private ... vs Deputy Commissioner Of Income Tax ...' of 28 April, 2026) returns nothing. A second probe on the exact company name returned only the order itself (a broader probe on 'Khalsae' was discarded as the search engine matched the unrelated word 'Khalsa' across thousands of documents). The holding on s.115BAB and Form 10-ID filed with a belated first return has attracted no later Tribunal or High Court treatment. Nothing overruling, doubting or distinguishing it was found, and no appeal to a High Court against it is disclosed on the record searched. 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 report is garbled in places. Para 3 reads 'is a private domestic company engaged in the manufacturing of e-vehicles, incorporated Manufacturing operations commenced on January 1, 2021' — the date of incorporation has dropped out of the sentence and is given later, at para 7, as 6 June 2020. Ground 6 as reproduced refers to 'Form 10D' where Form 10-ID is meant. Ground 1 as reproduced denies liability 'at total income of Rs.2,59,45,160/- as against the returned income of Rs.2,59,45,160/-', the same figure twice. The two decisions the Tribunal relies on and distinguishes — Cosmo Specialty Chemicals Private Limited v. ITO (ITA No. 809/DEL/2024) and Vivrn Foods Private Limited (Raipur Bench) — were not retrieved and nothing is stated about either beyond what this order records. 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 appeal was allowed. The procedural lapse of not filing Form 10-ID within the due date under s.139(1) was held not to be a fatal flaw for eligibility under s.115BAB, and grounds 3 and 6 were allowed.
TaxSphere, “Khalsae-Vehicles Pvt. Ltd. v DCIT, Circle-3(1)(1)”, https://taxnotice.vittsphere.com/caselaw/case/khalsae-vehicles-v-dcit-115bab-form-10-id-with-belated-first-return/ (validity last checked 2026-09-08)
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