Section 115BAA(1)

Section 115BAA(1) — the law in short

What the courts have decided on section 115BAA(1), in one screen. Read this first; open an entry when you need the facts, the reasoning and the source.

• ITO v Western Developers Private Limited — once the s.115BAA option stands, s.115JB has no application at all ITATHelps taxpayerValidity unconfirmed
  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?
  No. Sub-section (5A) of s.115JB says in terms that the section shall not apply to a person who has exercised the option under s.115BAA or s.115BAB. Once the option is held good, the MAT provisions cease to apply and the tax liability must be computed under s.115BAA without invoking s.115JB — and here the option was held good because it had been accepted for three earlier years on a Form 10-IC filed in March 2021.
• Brahmos Realty Private Limited v ITO ITATHelps taxpayerValidity unconfirmed
  My staff filed Form 10-IC by mistake, then I filed the return under the normal provisions and set off my brought-forward MAT credit. CPC has taxed me under s.115BAA and wiped the credit out. Section 115BAA says the option cannot be withdrawn. Am I stuck?
  Not necessarily. The Tribunal held that the option cannot be WITHDRAWN, but it can FAIL: because s.115JAA(8) bars MAT credit to a company that has exercised the s.115BAA option, a company that claims MAT credit in its return has not satisfied the conditions in s.115BAA(2), and the proviso to s.115BAA(1) then makes the option invalid as if it had never been exercised. The Form 10-IC was construed as invalidated and the matter was restored to the CIT(A) to compute the tax under the old regime and allow the legitimate MAT credit.

Listed strongest first: Supreme Court, then High Court, then Tribunal, then CBDT. Nothing here has yet been read in full by a chartered accountant — open an entry to see where it came from.