I did not tick s.115BAA in the return and filed Form 10-IC late. Can I still get the concessional rate?
No, if the return itself did not opt. Section 115BAA(5) requires the option to be exercised in the prescribed manner on or before the s.139(1) due date, and Circular 6/2022 condones only a late Form 10-IC where the option was in fact exercised in the return. A company that marked 'None of the above' cannot claim the benefit later, and s.115JB applies.
Decided by the Supreme Court (Pamidighantam Sri Narasimha J and Atul S. Chandurkar J (Supreme Court, dismissing the special leave petition); below, Vibhu Bakhru J and Tejas Karia J (Delhi High Court)) on 2025-09-26, reported as [2025] 180 taxmann.com 161 (SC); [2025] 307 Taxman 446 (SC); [2026] 487 ITR 235 (SC); SLP Appeal (C) No. 26539 of 2025, dismissing the special leave petition against Sarla Holdings (P.) Ltd. v. Pr. CIT [2025] 179 taxmann.com 83 (Delhi) / [2026] 487 ITR 225 (Delhi), W.P.(C) No. 325 of 2024, 28 May 2025. It bears on section 115BAA, section 115BAA(2), section 115BAA(5), section 115JB, section 139(1), section 143(3), section 144B, section 264, section 119(2)(b) of the Income Tax Act 1961, in Deductions & Disallowances and How Tax Law Is Read matters.
This favours the revenue and the Supreme Court dismissed the special leave petition, so the Delhi High Court view is final between the parties and will be cited against every late-opt claim. The distinction it draws is the one to work with: a late Form 10-IC where the return shows the option is a procedural default the Board has chosen to condone, while an affirmative election not to be taxed under the concessional regime is a substantive choice no s.119 circular can undo. The pandemic-hardship plea failed because the return was filed on time and the relevant field deliberately completed.
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Sarla Holdings filed its return for assessment year 2020-21 on 13 February 2021, within the due date under s.139(1) as extended to 15 February 2021 because of Covid-19, declaring total income of Rs 60,93,780 after setting off Rs 5,10,04,486, and reflecting book profits of Rs 3,14,41,630. Against the entry asking whether it had opted for taxation under s.115BA, 115BAA or 115BAB it answered 'none of above'. It said its chartered accountant and finance officer were both ill with Covid-19 when the return was filed, that this was the first year the s.115BAA benefit was available, and that there was confusion about how to claim it. On the finance officer's recovery it filed a revised return on 26 March 2021, also surrendering depreciation on goodwill. It did not file Form 10-IC with the return; it filed that form on 26 April 2022, relying on CBDT Circular 6/2022 of 17 March 2022 condoning delay in filing Form 10-IC for that year. The assessment order of 21 September 2022 under s.143(3) read with s.144B determined income at Rs 3,14,41,630 under s.115JB, a demand of Rs 62,17,050 was raised under s.156, and penalty proceedings under s.270A were initiated. The revision petition was rejected by the Principal Commissioner on 29 November 2023, and the Delhi High Court dismissed the writ petition on 28 May 2025 (High Court judgment, paras 1 to 7, 11, 12).
The Supreme Court's order runs to three sentences: it heard senior counsel for the petitioner, said it was not inclined to interfere with the impugned judgment and order of the High Court, and dismissed the special leave petition (Supreme Court order, paras 1 to 3). It gave no reasons, so it decides nothing beyond leaving the High Court's judgment undisturbed between the parties. The reasoning is the Delhi High Court's. That court held that there is no ambiguity in s.115BAA(5): the section does not apply unless an option is exercised in the prescribed manner and before the due date under s.139(1) (para 10). The company had filed within time but had expressly indicated that it was not opting; the contention that the return contained no box for the option was clearly erroneous, the entry having been answered 'none of above' (paras 11, 12). The contention that it had in fact opted but inadvertently failed to say so was unpersuasive (para 13). Reliance on Circular 6/2022 was misplaced: the Board extended time for filing Form 10-IC but did not relax the requirement of exercising the option affirmatively before the s.139(1) due date, and clause (ii) of paragraph 3 of the circular condones delay only where the company has opted for s.115BAA in Part A-GEN of the return, a condition this company did not satisfy (paras 14 to 16). The writ petition was dismissed (para 17).
The Delhi High Court set out s.115BAA in full and read sub-section (5) as imposing two cumulative requirements - exercise of the option in the prescribed manner, and exercise on or before the due date under s.139(1) - with no ambiguity in the language (paras 9, 10). It then reproduced the filing status extract from the return, which showed the answer 'none of above' against the s.115BA/115BAA/115BAB entry, and rejected as clearly erroneous the submission that there had been no box in which to record the option (paras 11, 12). The submission that the option had in fact been made and merely not indicated was held unpersuasive; the court noted that the company's depreciation computation was not strictly in accordance with s.115BAA(2), but treated that as of little relevance given the express negative answer in the return (para 13). On the circular, the court read paragraph 3 clause by clause: condonation of delay in filing Form 10-IC is available only where the return was filed within the s.139(1) due date, the company had opted for s.115BAA in Part A-GEN of ITR-6, and Form 10-IC was filed by the extended date. The Board had extended time for the form but had not relaxed the requirement of an affirmative option before the return due date, and the second condition was not met (paras 14 to 16). The consequence was that the general provisions, including s.115JB, continued to apply.
There is no ambiguity in the language of Sub-section (5) of Section 115BAA of the Act. It clearly provides that the section would not be applicable unless (a) an option is exercised by the person in the prescribed manner; and (b) before the due date specified under Section 139(1) of the Act for furnishing the return of income.
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Handle my notice → Ask a CA on WhatsAppNo, if the return itself did not opt. Section 115BAA(5) requires the option to be exercised in the prescribed manner on or before the s.139(1) due date, and Circular 6/2022 condones only a late Form 10-IC where the option was in fact exercised in the return. A company that marked 'None of the above' cannot claim the benefit later, and s.115JB applies. This was decided by the Supreme Court (Pamidighantam Sri Narasimha J and Atul S. Chandurkar J (Supreme Court, dismissing the special leave petition); below, Vibhu Bakhru J and Tejas Karia J (Delhi High Court)) and bears on section 115BAA, section 115BAA(2), section 115BAA(5), section 115JB, section 139(1), section 143(3), section 144B, section 264, section 119(2)(b) of the Income Tax Act 1961. It is reported as [2025] 180 taxmann.com 161 (SC); [2025] 307 Taxman 446 (SC); [2026] 487 ITR 235 (SC); SLP Appeal (C) No. 26539 of 2025, dismissing the special leave petition against Sarla Holdings (P.) Ltd. v. Pr. CIT [2025] 179 taxmann.com 83 (Delhi) / [2026] 487 ITR 225 (Delhi), W.P.(C) No. 325 of 2024, 28 May 2025. This favours the revenue and the Supreme Court dismissed the special leave petition, so the Delhi High Court view is final between the parties and will be cited against every late-opt claim. The distinction it draws is the one to work with: a late Form 10-IC where the return shows the option is a procedural default the Board has chosen to condone, while an affirmative election not to be taxed under the concessional regime is a substantive choice no s.119 circular can undo. The pandemic-hardship plea failed because the return was filed on time and the relevant field deliberately completed. If it applies to you, the first step is this: Pull the filed return and look at the regime field before advising anything — if the client actually opted for s.115BAA and only Form 10-IC was late, this decision is against you and the condonation route applies (Circular 6/2022 for AY 2020-21, Circular 19/2023 for AY 2021-22).
Sarla Holdings filed its return for assessment year 2020-21 on 13 February 2021, within the due date under s.139(1) as extended to 15 February 2021 because of Covid-19, declaring total income of Rs 60,93,780 after setting off Rs 5,10,04,486, and reflecting book profits of Rs 3,14,41,630. Against the entry asking whether it had opted for taxation under s.115BA, 115BAA or 115BAB it answered 'none of above'. It said its chartered accountant and finance officer were both ill with Covid-19 when the return was filed, that this was the first year the s.115BAA benefit was available, and that there was confusion about how to claim it. On the finance officer's recovery it filed a revised return on 26 March 2021, also surrendering depreciation on goodwill. It did not file Form 10-IC with the return; it filed that form on 26 April 2022, relying on CBDT Circular 6/2022 of 17 March 2022 condoning delay in filing Form 10-IC for that year. The assessment order of 21 September 2022 under s.143(3) read with s.144B determined income at Rs 3,14,41,630 under s.115JB, a demand of Rs 62,17,050 was raised under s.156, and penalty proceedings under s.270A were initiated. The revision petition was rejected by the Principal Commissioner on 29 November 2023, and the Delhi High Court dismissed the writ petition on 28 May 2025 (High Court judgment, paras 1 to 7, 11, 12). The matter was decided on 2025-09-26 by the Supreme Court (Pamidighantam Sri Narasimha J and Atul S. Chandurkar J (Supreme Court, dismissing the special leave petition); below, Vibhu Bakhru J and Tejas Karia J (Delhi High Court)). On those facts the Supreme Court held as follows. The Supreme Court's order runs to three sentences: it heard senior counsel for the petitioner, said it was not inclined to interfere with the impugned judgment and order of the High Court, and dismissed the special leave petition (Supreme Court order, paras 1 to 3). It gave no reasons, so it decides nothing beyond leaving the High Court's judgment undisturbed between the parties. The reasoning is the Delhi High Court's. That court held that there is no ambiguity in s.115BAA(5): the section does not apply unless an option is exercised in the prescribed manner and before the due date under s.139(1) (para 10). The company had filed within time but had expressly indicated that it was not opting; the contention that the return contained no box for the option was clearly erroneous, the entry having been answered 'none of above' (paras 11, 12). The contention that it had in fact opted but inadvertently failed to say so was unpersuasive (para 13). Reliance on Circular 6/2022 was misplaced: the Board extended time for filing Form 10-IC but did not relax the requirement of exercising the option affirmatively before the s.139(1) due date, and clause (ii) of paragraph 3 of the circular condones delay only where the company has opted for s.115BAA in Part A-GEN of the return, a condition this company did not satisfy (paras 14 to 16). The writ petition was dismissed (para 17).
The Delhi High Court set out s.115BAA in full and read sub-section (5) as imposing two cumulative requirements - exercise of the option in the prescribed manner, and exercise on or before the due date under s.139(1) - with no ambiguity in the language (paras 9, 10). It then reproduced the filing status extract from the return, which showed the answer 'none of above' against the s.115BA/115BAA/115BAB entry, and rejected as clearly erroneous the submission that there had been no box in which to record the option (paras 11, 12). The submission that the option had in fact been made and merely not indicated was held unpersuasive; the court noted that the company's depreciation computation was not strictly in accordance with s.115BAA(2), but treated that as of little relevance given the express negative answer in the return (para 13). On the circular, the court read paragraph 3 clause by clause: condonation of delay in filing Form 10-IC is available only where the return was filed within the s.139(1) due date, the company had opted for s.115BAA in Part A-GEN of ITR-6, and Form 10-IC was filed by the extended date. The Board had extended time for the form but had not relaxed the requirement of an affirmative option before the return due date, and the second condition was not met (paras 14 to 16). The consequence was that the general provisions, including s.115JB, continued to apply. In the words reproduced by the source cited on this page: "There is no ambiguity in the language of Sub-section (5) of Section 115BAA of the Act. It clearly provides that the section would not be applicable unless (a) an option is exercised by the person in the prescribed manner; and (b) before the due date specified under Section 139(1) of the Act for furnishing the return of income."
It was decided by the Supreme Court on 2025-09-26 and is reported as [2025] 180 taxmann.com 161 (SC); [2025] 307 Taxman 446 (SC); [2026] 487 ITR 235 (SC); SLP Appeal (C) No. 26539 of 2025, dismissing the special leave petition against Sarla Holdings (P.) Ltd. v. Pr. CIT [2025] 179 taxmann.com 83 (Delhi) / [2026] 487 ITR 225 (Delhi), W.P.(C) No. 325 of 2024, 28 May 2025. Binding on every court and authority in India. A Supreme Court decision binds every assessing officer, every Commissioner (Appeals), every bench of the Income Tax Appellate Tribunal and every High Court in India. An officer who declines to follow it is acting contrary to law, and that refusal is itself a ground of appeal. On section 115BAA, section 115BAA(2), section 115BAA(5), section 115JB, section 139(1), section 143(3), section 144B, section 264, section 119(2)(b), 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 department, and it appears in this library for that reason — you need to know what the Assessing Officer will cite against you. The Supreme Court's order runs to three sentences: it heard senior counsel for the petitioner, said it was not inclined to interfere with the impugned judgment and order of the High Court, and dismissed the special leave petition (Supreme Court order, paras 1 to 3). It gave no reasons, so it decides nothing beyond leaving the High Court's judgment undisturbed between the parties. The reasoning is the Delhi High Court's. That court held that there is no ambiguity in s.115BAA(5): the section does not apply unless an option is exercised in the prescribed manner and before the due date under s.139(1) (para 10). The company had filed within time but had expressly indicated that it was not opting; the contention that the return contained no box for the option was clearly erroneous, the entry having been answered 'none of above' (paras 11, 12). The contention that it had in fact opted but inadvertently failed to say so was unpersuasive (para 13). Reliance on Circular 6/2022 was misplaced: the Board extended time for filing Form 10-IC but did not relax the requirement of exercising the option affirmatively before the s.139(1) due date, and clause (ii) of paragraph 3 of the circular condones delay only where the company has opted for s.115BAA in Part A-GEN of the return, a condition this company did not satisfy (paras 14 to 16). The writ petition was dismissed (para 17). It arises in Deductions & Disallowances and How Tax Law Is Read matters, on section 115BAA, section 115BAA(2), section 115BAA(5), section 115JB, section 139(1), section 143(3), section 144B, section 264, section 119(2)(b) of the Income Tax Act 1961, and was decided by Pamidighantam Sri Narasimha J and Atul S. Chandurkar J (Supreme Court, dismissing the special leave petition); below, Vibhu Bakhru J and Tejas Karia J (Delhi High Court). 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. If the field says 'None of the above', do not run a hardship argument on a return that was filed within time; that is what was rejected here. Do not argue that a circular issued under s.119 can relax the statutory conditions in s.115BAA(5) — both the prescribed manner and the s.139(1) deadline were held cumulative and indispensable. Where the option was not exercised, plan for the general corporate rate and the s.115JB computation rather than contesting the denial.
Still good law. The Supreme Court dismissed the special leave petition against this judgment (SLP Appeal (C) No. 26539 of 2025), so the Delhi High Court's view is final between the parties; the Delhi High Court judgment itself is dated 28 May 2025. The Supreme Court order was not opened on a primary route — it is not on indiankanoon and the Supreme Court's own site could not be queried — so its date is taken from the entry's own record and has not been independently verified. There is a competing line in which courts and Tribunals have treated a delayed Form 10-IC as a curable procedural lapse and allowed the concessional rate, and CBDT has itself repeatedly condoned such delays (Circular 6/2022 for AY 2020-21, Circular 19/2023 for AY 2021-22) — but only where the option was in fact exercised in the return. That finding was checked against a published source, which is linked on this page, on 2026-08-25. 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.
Cite this carefully: the Supreme Court order of 26 September 2025 is a bare dismissal of the special leave petition with no reasons - 'We are not inclined to interfere with the impugned judgment and order passed by the High Court' - so it settles the matter between the parties but lays down no law. Every proposition here is the Delhi High Court's, in Sarla Holdings (P.) Ltd. v. Pr. CIT [2025] 179 taxmann.com 83 / [2026] 487 ITR 225 (Delhi), 28 May 2025, and should be cited as such. Note that the return was filed within time - the due date having been extended to 15 February 2021 - so this is not a late-return case; what defeated the company was the answer 'none of above' in the filing status. There is a competing line in which courts and Tribunals have treated a delayed Form 10-IC as a curable procedural lapse and allowed the concessional rate, but only where the option was actually exercised in the return, so it does not conflict with this decision on these facts. The High Court noted that the company's computation of depreciation was not strictly in accordance with s.115BAA(2) but expressly treated that as of little relevance (para 13), so it is not a second ground of decision and should not be cited as one. No authority specific to s.115BAC was located in this reading; the individual regime became the default with an opt-out by Form 10-IEA before the return due date, but the first year of that default was not established here and should be checked before it is stated. 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 Supreme Court's order runs to three sentences: it heard senior counsel for the petitioner, said it was not inclined to interfere with the impugned judgment and order of the High Court, and dismissed the special leave petition (Supreme Court order, paras 1 to 3). It gave no reasons, so it decides nothing beyond leaving the High Court's judgment undisturbed between the parties. The reasoning is the Delhi High Court's. That court held that there is no ambiguity in s.115BAA(5): the section does not apply unless an option is exercised in the prescribed manner and before the due date under s.139(1) (para 10). The company had filed within time but had expressly indicated that it was not opting; the contention that the return contained no box for the option was clearly erroneous, the entry having been answered 'none of above' (paras 11, 12). The contention that it had in fact opted but inadvertently failed to say so was unpersuasive (para 13). Reliance on Circular 6/2022 was misplaced: the Board extended time for filing Form 10-IC but did not relax the requirement of exercising the option affirmatively before the s.139(1) due date, and clause (ii) of paragraph 3 of the circular condones delay only where the company has opted for s.115BAA in Part A-GEN of the return, a condition this company did not satisfy (paras 14 to 16). The writ petition was dismissed (para 17).
TaxSphere, “Sarla Holdings P Ltd v PCIT”, https://taxnotice.vittsphere.com/caselaw/case/sarla-holdings-v-pcit-115baa/ (validity last checked 2026-08-25)
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We filed the original return under MAT claiming MAT credit, then filed a revised return within the due date opting for s.115BAA. The Assessing Officer says that is a prohibited withdrawal of the option. Is it, and what happens to the MAT credit and our brought-forward losses?
CPC has processed our return under s.143(1), rejected the s.115BAA option because Form 10-IC was late, and raised a demand by computing book profit under s.115JB. Can it do both?
My client company has a large MAT credit and wants the 22 per cent rate under s.115BAA. Does the credit survive the switch?
The portal would not accept Form 10-IC for FY 2019-20 before the Circular 6/2022 cut-off of 30 June 2022, and I filed it physically eleven days late. Is the s.115BAA benefit lost?
