I claimed the 15 per cent rate under s.115BAB in my return but the portal would not accept Form 10-ID before the due date. My s.119(2)(b) application was rejected before Circular No. 17/2024 came out, so the Department says it can do nothing. Where does that leave me?
The Gujarat High Court set the rejection aside and directed the authorities to accept the Form 10-ID filed on 12 September 2022 as legal and valid. Once the benefit is claimed in the return, the filing of the separate form is merely procedural and should not be denied where the assessee shows sufficient cause; and the very fact that the Board had to issue Circulars 6/2022, 19/2023 and 17/2024 established that assessees had faced a real problem in filing Forms 10-IC and 10-ID in time.
Decided by the High Court (Bhargav D. Karia J and D.N. Ray J) on 2025-03-11, reported as R/Special Civil Application No. 14786 of 2024 (Gujarat High Court), Assessment Year 2021-22. It bears on section 115BAB, section 115BAA, section 119(2)(b), section 139(1), section 143(1) of the Income Tax Act 1961, in Deductions & Disallowances, Appeals and How Tax Law Is Read matters.
Three things make this judgment worth carrying. First, it is a s.115BAB and Form 10-ID case, not a s.115BAA and Form 10-IC case — the reasoning that has grown up around Form 10-IC is applied to the new manufacturing regime, where the stakes are higher because the rate is 15 per cent. Second, the judgment reproduces CBDT Circular No. 17/2024 dated 18 November 2024 in full, and that circular is the operative administrative framework now: it authorises Principal Commissioners and Commissioners to deal with condonation applications for Form 10-IC or Form 10-ID for assessment years 2020-21, 2021-22 and 2022-23 where the delay is up to 365 days and Principal Chief Commissioners, Chief Commissioners and Directors General where it exceeds 365 days; it imposes three conditions (return filed by the s.139(1) due date, the option shown in the 'Filing Status' field in Part A-GEN of ITR-6, and reasonable cause and genuine hardship); and it imposes a hard outer limit — no application shall be entertained beyond three years from the end of the assessment year to which it relates, with disposal to be attempted within six months. Third, the Court gave relief notwithstanding para 6 of that circular, which confines its delegation to applications pending on the date of issue: it held that had the application not been dismissed and had it remained pending on 18 November 2024, the case would have been squarely covered, and used Article 226 to reach the same result. Note the closed window behind all of this: s.115BAB is confined to a company that commenced manufacture or production by 31 March 2024, so the regime is no longer open to new entrants and the live disputes are historical compliance disputes of exactly this kind.
Binding within that High Court's jurisdiction. Persuasive elsewhere.
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The petitioner manufactures LED contour linear solutions. It filed its return for assessment year 2021-22 under s.139(1) on 28 October 2021 availing the concessional rate under s.115BAB read with Rule 21AF, and claimed the special rate in the return itself. It made repeated attempts to file Form 10-ID but could not do so within the s.139(1) time; its consultant posted publicly on 7 November 2021 that the income tax portal was not working and that he was unable to file Form 10-ID for companies. CPC, while processing the return, recorded that the petitioner had opted for s.115BAB. The Board, noticing that assessees were facing difficulty in filing such forms, issued Circular No. 6/2022 dated 17 March 2022. The petitioner was eventually able to file Form 10-ID online on 12 September 2022. For assessment year 2022-23 there was no taxable income so the point did not bite, but for assessment year 2023-24 the intimation under s.143(1) dated 22 December 2023 denied the s.115BAB benefit. On 12 January 2024 the petitioner applied under s.119(2)(b) to condone the delay in filing Form 10-ID for assessment year 2021-22. After calling for the reports of the Jurisdictional Assessing Officer and the Range Head, the Chief Commissioner rejected the application by order dated 26 June 2024. Before the High Court, counsel for the Revenue fairly drew attention to Circular No. 17/2024 dated 18 November 2024, but submitted that by para 6 it applied only to applications pending on the date of its issue, and the petitioner's application having been dismissed on 26 June 2024 the authorities were powerless.
The petition succeeded. The order dated 26 June 2024 under s.119(2)(b) was quashed and set aside and the respondent authorities were directed to accept the Form 10-ID filed under s.115BAB read with Rule 21AF on 12 September 2022 as legal and valid. Rule was made absolute to that extent with no order as to costs (para 9). The Court held that once a benefit is claimed in the return of income, the filing of a separate form pursuant to that claim is merely procedural and should not be denied, particularly where the assessee shows sufficient cause; that the very issue of Circulars 6/2022, 19/2023 and 17/2024 showed that a large number of assessees had faced problems in filing Forms 10-IC and 10-ID in time, so that sufficient cause was made out; and that had the application not been dismissed and had it instead remained pending on 18 November 2024, the case would have been squarely covered by Circular No. 17/2024 and the delay would have been condoned automatically — which made it appropriate to exercise the Article 226 jurisdiction to reach the same result.
The Court worked from a line of its own decisions treating a prescribed form as the procedural vehicle for a substantive claim rather than the source of the entitlement: V.M. Procon Pvt. Ltd., where it had held that a petitioner who had in substance exercised the s.115BAA option, as the computation of income and the tax figure in ITR-6 showed, could not be deprived of the lower rate and the delay in Form 10-IC ought to have been condoned; Xavier Kelavani Mandal and Bissesswarlal, on the acceptance of a Form 10B audit report filed after the return; and Surat Smart City Development Ltd., set out at length. It dealt with the Revenue's reliance on the Supreme Court's decision in Wipro Limited by adopting the distinction drawn in its own decision in CIT v. Gujarat Energy Development Agency: s.10B(8) requires a declaration whose significance is co-terminus with the return because the accountant's report under s.10B(5) verifies the claim at that point, whereas s.115BAA operates to grant relief to companies to enable them to pay tax at 22 per cent on exercising the option, so the mandatory-declaration reasoning of Wipro does not carry across. It also cited R. Seshammal for the proposition that s.119 vests ample power in the Board to render justice and that hypertechnical pleas should not be taken against a citizen who has tried to comply. On the para 6 obstacle in Circular No. 17/2024 the Court did not construe the circular against its terms; it accepted the limitation and instead used Article 226 to place the petitioner where it would have stood but for the premature dismissal of its application.
Several decisions referred to hereinabove categorically go to show that once a benefit is claimed in the return of income, the filing of a separate Form pursuant to the claim of the said benefit is merely procedural in nature and should not be denied particularly if the Assessee has been able to show sufficient cause for the lapse.
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Handle my notice → Ask a CA on WhatsAppThe Gujarat High Court set the rejection aside and directed the authorities to accept the Form 10-ID filed on 12 September 2022 as legal and valid. Once the benefit is claimed in the return, the filing of the separate form is merely procedural and should not be denied where the assessee shows sufficient cause; and the very fact that the Board had to issue Circulars 6/2022, 19/2023 and 17/2024 established that assessees had faced a real problem in filing Forms 10-IC and 10-ID in time. This was decided by the High Court (Bhargav D. Karia J and D.N. Ray J) and bears on section 115BAB, section 115BAA, section 119(2)(b), section 139(1), section 143(1) of the Income Tax Act 1961. It is reported as R/Special Civil Application No. 14786 of 2024 (Gujarat High Court), Assessment Year 2021-22. Three things make this judgment worth carrying. First, it is a s.115BAB and Form 10-ID case, not a s.115BAA and Form 10-IC case — the reasoning that has grown up around Form 10-IC is applied to the new manufacturing regime, where the stakes are higher because the rate is 15 per cent. Second, the judgment reproduces CBDT Circular No. 17/2024 dated 18 November 2024 in full, and that circular is the operative administrative framework now: it authorises Principal Commissioners and Commissioners to deal with condonation applications for Form 10-IC or Form 10-ID for assessment years 2020-21, 2021-22 and 2022-23 where the delay is up to 365 days and Principal Chief Commissioners, Chief Commissioners and Directors General where it exceeds 365 days; it imposes three conditions (return filed by the s.139(1) due date, the option shown in the 'Filing Status' field in Part A-GEN of ITR-6, and reasonable cause and genuine hardship); and it imposes a hard outer limit — no application shall be entertained beyond three years from the end of the assessment year to which it relates, with disposal to be attempted within six months. Third, the Court gave relief notwithstanding para 6 of that circular, which confines its delegation to applications pending on the date of issue: it held that had the application not been dismissed and had it remained pending on 18 November 2024, the case would have been squarely covered, and used Article 226 to reach the same result. Note the closed window behind all of this: s.115BAB is confined to a company that commenced manufacture or production by 31 March 2024, so the regime is no longer open to new entrants and the live disputes are historical compliance disputes of exactly this kind. If it applies to you, the first step is this: Check the three-year outer limit in para 5 of Circular No. 17/2024 first. For assessment year 2022-23 that expired on 31 March 2026; if the window has gone, the s.119(2)(b) route is closed and only a writ remains.
The petitioner manufactures LED contour linear solutions. It filed its return for assessment year 2021-22 under s.139(1) on 28 October 2021 availing the concessional rate under s.115BAB read with Rule 21AF, and claimed the special rate in the return itself. It made repeated attempts to file Form 10-ID but could not do so within the s.139(1) time; its consultant posted publicly on 7 November 2021 that the income tax portal was not working and that he was unable to file Form 10-ID for companies. CPC, while processing the return, recorded that the petitioner had opted for s.115BAB. The Board, noticing that assessees were facing difficulty in filing such forms, issued Circular No. 6/2022 dated 17 March 2022. The petitioner was eventually able to file Form 10-ID online on 12 September 2022. For assessment year 2022-23 there was no taxable income so the point did not bite, but for assessment year 2023-24 the intimation under s.143(1) dated 22 December 2023 denied the s.115BAB benefit. On 12 January 2024 the petitioner applied under s.119(2)(b) to condone the delay in filing Form 10-ID for assessment year 2021-22. After calling for the reports of the Jurisdictional Assessing Officer and the Range Head, the Chief Commissioner rejected the application by order dated 26 June 2024. Before the High Court, counsel for the Revenue fairly drew attention to Circular No. 17/2024 dated 18 November 2024, but submitted that by para 6 it applied only to applications pending on the date of its issue, and the petitioner's application having been dismissed on 26 June 2024 the authorities were powerless. The matter was decided on 2025-03-11 by the High Court (Bhargav D. Karia J and D.N. Ray J). On those facts the High Court held as follows. The petition succeeded. The order dated 26 June 2024 under s.119(2)(b) was quashed and set aside and the respondent authorities were directed to accept the Form 10-ID filed under s.115BAB read with Rule 21AF on 12 September 2022 as legal and valid. Rule was made absolute to that extent with no order as to costs (para 9). The Court held that once a benefit is claimed in the return of income, the filing of a separate form pursuant to that claim is merely procedural and should not be denied, particularly where the assessee shows sufficient cause; that the very issue of Circulars 6/2022, 19/2023 and 17/2024 showed that a large number of assessees had faced problems in filing Forms 10-IC and 10-ID in time, so that sufficient cause was made out; and that had the application not been dismissed and had it instead remained pending on 18 November 2024, the case would have been squarely covered by Circular No. 17/2024 and the delay would have been condoned automatically — which made it appropriate to exercise the Article 226 jurisdiction to reach the same result.
The Court worked from a line of its own decisions treating a prescribed form as the procedural vehicle for a substantive claim rather than the source of the entitlement: V.M. Procon Pvt. Ltd., where it had held that a petitioner who had in substance exercised the s.115BAA option, as the computation of income and the tax figure in ITR-6 showed, could not be deprived of the lower rate and the delay in Form 10-IC ought to have been condoned; Xavier Kelavani Mandal and Bissesswarlal, on the acceptance of a Form 10B audit report filed after the return; and Surat Smart City Development Ltd., set out at length. It dealt with the Revenue's reliance on the Supreme Court's decision in Wipro Limited by adopting the distinction drawn in its own decision in CIT v. Gujarat Energy Development Agency: s.10B(8) requires a declaration whose significance is co-terminus with the return because the accountant's report under s.10B(5) verifies the claim at that point, whereas s.115BAA operates to grant relief to companies to enable them to pay tax at 22 per cent on exercising the option, so the mandatory-declaration reasoning of Wipro does not carry across. It also cited R. Seshammal for the proposition that s.119 vests ample power in the Board to render justice and that hypertechnical pleas should not be taken against a citizen who has tried to comply. On the para 6 obstacle in Circular No. 17/2024 the Court did not construe the circular against its terms; it accepted the limitation and instead used Article 226 to place the petitioner where it would have stood but for the premature dismissal of its application. In the words reproduced by the source cited on this page: "Several decisions referred to hereinabove categorically go to show that once a benefit is claimed in the return of income, the filing of a separate Form pursuant to the claim of the said benefit is merely procedural in nature and should not be denied particularly if the Assessee has been able to show sufficient cause for the lapse." The decision followed or applied V.M. Procon Pvt. Ltd. v. ADIT, Special Civil Application No. 9707 of 2024 (Gujarat) — followed and quoted; Surat Smart City Development Ltd. v. PCIT, Special Civil Application No. 10397 of 2024 (Gujarat) — followed and set out at length; CIT v. Xavier Kelavani Mandal (P) Ltd. (Gujarat) — relied on; CIT v. Rai Bahadur Bissesswarlal Motilal Malwasie Trust (Calcutta) — relied on; CIT v. Gujarat Energy Development Agency (Gujarat) — applied, to distinguish PCIT v. Wipro Limited (SC); R. Seshammal (Madras) — quoted on the scope of s.119.
It was decided by the High Court on 2025-03-11 and is reported as R/Special Civil Application No. 14786 of 2024 (Gujarat High Court), Assessment Year 2021-22. 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 115BAB, 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 petition succeeded. The order dated 26 June 2024 under s.119(2)(b) was quashed and set aside and the respondent authorities were directed to accept the Form 10-ID filed under s.115BAB read with Rule 21AF on 12 September 2022 as legal and valid. Rule was made absolute to that extent with no order as to costs (para 9). The Court held that once a benefit is claimed in the return of income, the filing of a separate form pursuant to that claim is merely procedural and should not be denied, particularly where the assessee shows sufficient cause; that the very issue of Circulars 6/2022, 19/2023 and 17/2024 showed that a large number of assessees had faced problems in filing Forms 10-IC and 10-ID in time, so that sufficient cause was made out; and that had the application not been dismissed and had it instead remained pending on 18 November 2024, the case would have been squarely covered by Circular No. 17/2024 and the delay would have been condoned automatically — which made it appropriate to exercise the Article 226 jurisdiction to reach the same result. It arises in Deductions & Disallowances, Appeals and How Tax Law Is Read matters, on section 115BAB, section 115BAA, section 119(2)(b), section 139(1), section 143(1) of the Income Tax Act 1961, and was decided by Bhargav D. Karia J and D.N. Ray 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. Address the application to the right authority under para 3 of the circular — Pr.CIT or CIT for delay up to 365 days, Pr.CCIT, CCIT or DGIT beyond that. Assemble contemporaneous evidence of the technical failure. Here it was the consultant's dated public post about the portal on the very day the form was due, which the Court treated as corroboration. Show that the benefit was claimed in the return itself — the tax computed at the concessional rate and the option shown in Part A-GEN of ITR-6. That is what turns the form into a procedural step. If the application was rejected before 18 November 2024 and so falls outside para 6 of the circular, take the Article 226 route on this judgment's reasoning rather than filing a fresh application the authority will say it has no power to entertain. For s.115BAB specifically, satisfy yourself before advising that the company in fact commenced manufacture or production of an article or thing on or before 31 March 2024, and that it is not formed by splitting up or reconstruction of a business already in existence — the concessional rate stands or falls on those substantive conditions and no amount of condonation reaches them.
Still good law. citedby:140841002 returns nothing, but a content search for "Royal LED Equipments" returns 10 documents and shows the judgment, reported at [2025] 174 taxmann, being taken up by the Gujarat and Delhi High Courts and by the Chennai, Mumbai, Pune, Jaipur, Ahmedabad and Kolkata Tribunal benches. The application is confirmed in Shri Parul Mahila Pragati Mandal v ITO (Exemption) (Gujarat High Court, 30 April 2025), where the Court treated it as one of its own recent decisions governing s.119(2)(b) condonation and quashed the impugned orders on that reasoning. Nothing overruling or doubting it was found and no Supreme Court matter surfaced. 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.
This report is dangerous to read quickly and the danger should be stated plainly. Paragraphs numbered 16 to 19 in the middle of the text, including the words 'the petition succeeds and accordingly allowed', are NOT this Court's own paragraphs — they are part of the quotation from Surat Smart City Development Ltd. v. PCIT set out under the Court's para 8.4, and the indentation is lost in the transcription. The Gujarat High Court's own conclusion in this case is at its para 9, the last paragraph of the judgment. Second, the reproduction of Circular No. 17/2024 inside the judgment carries OCR damage: the date line reads 'New Delhi, the 18 November, 2014' for 2024, the earlier circular is cited as 'Circular No. 6/2002' for 6/2022, and the words 'Candonation', 'condenmed', 'fling', 'Income-in Act' and 'Income-in' appear for 'Condonation', 'conferred', 'filing' and 'Income-tax Act'; the sub-clauses of para 4 are lettered '(1)', '(ii)', '(iii)'. The substance is legible but the circular should be read in its own text before it is quoted to an authority. Third, the judgment refers to Rule '23AF' at para 3.2 and to Rule '21AF' at para 9; Rule 21AF is the rule prescribing Form 10-ID and 23AF appears to be a slip. Fourth, para 3.5 records both that Form 10-ID was filed on 12 September 2022 and that the returns for 2022-23 and 2023-24 were filed on the same date, which is unlikely; and para 8.4's quoted material refers to 'Assessment Year 2021' where 2020-21 appears to be meant. Read once from the indiankanoon print view, which returned the neutral-citation report with the Gujarat High Court's page furniture; pages 2, 3, 5, 7, 9, 10 and 12 to 16 of the seventeen-page report were not separately visible in the transcription, so the reproduction may be abridged at those breaks. 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 petition succeeded. The order dated 26 June 2024 under s.119(2)(b) was quashed and set aside and the respondent authorities were directed to accept the Form 10-ID filed under s.115BAB read with Rule 21AF on 12 September 2022 as legal and valid. Rule was made absolute to that extent with no order as to costs (para 9). The Court held that once a benefit is claimed in the return of income, the filing of a separate form pursuant to that claim is merely procedural and should not be denied, particularly where the assessee shows sufficient cause; that the very issue of Circulars 6/2022, 19/2023 and 17/2024 showed that a large number of assessees had faced problems in filing Forms 10-IC and 10-ID in time, so that sufficient cause was made out; and that had the application not been dismissed and had it instead remained pending on 18 November 2024, the case would have been squarely covered by Circular No. 17/2024 and the delay would have been condoned automatically — which made it appropriate to exercise the Article 226 jurisdiction to reach the same result.
TaxSphere, “Royal LED Equipments Pvt. Ltd. v CCIT”, https://taxnotice.vittsphere.com/caselaw/case/royal-led-equipments-v-ccit-form-10-id-115bab-condonation-circular-17-2024/ (validity last checked 2026-09-07)
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