Section 115BAB(7) — the law in short
What the courts have decided on section 115BAB(7), in one screen. Read this first; open an entry when you need the facts, the reasoning and the source.
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Khalsae-Vehicles Pvt. Ltd. v DCIT, Circle-3(1)(1)
ITATHelps taxpayerValidity unconfirmed
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.
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Statutory position — s.115BAB(2) conditions, the Form 10-ID option and the s.115BAB(6) more-than-ordinary-profit adjustment
CBDT Circulars & InstructionsCuts both ways
My client wants the 15 per cent rate for a new manufacturing company. What exactly must it satisfy, and what is the exposure once it is in?
Section 115BAB requires that the company was set up and registered on or after 1 October 2019 and commenced manufacturing or production of an article or thing on or before 31 March 2024, that it is not formed by splitting up or reconstruction, that it uses no previously used machinery or plant and no building previously used as a hotel or convention centre in respect of which s.80-ID was claimed, that it carries on no business other than manufacture or production and research in relation to, or distribution of, what it makes, and that its total income is computed without the excluded deductions. The option is exercised under s.115BAB(7) in Form 10-ID on or before the s.139(1) due date for the first return, and once exercised it cannot be withdrawn for that or any other previous year.
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.