In a significant relief to taxpayers, the Central Board of Direct Taxes (CBDT) has issued Circular No. 17/2024 dated November 17, 2024, permitting the condonation of delays in filing Form 10-IC and Form 10-ID for Assessment Years 2020-21, 2021-22, and 2022-23. This move aims to alleviate genuine hardships faced by assessees in exercising their option for concessional tax rates under Sections 115BAA and 115BAB of the Income Tax Act, 1961.
Key Highlights of the Circular
Delegation of Powers:
- Principal Commissioners (Pr. CIT) and Commissioners of Income Tax (CIT) can handle condonation applications for delays up to 365 days.
- Principal Chief Commissioners (Pr. CCIT), Chief Commissioners of Income Tax (CCIT), and Directors General of Income Tax (DGIT) are authorized to manage applications for delays exceeding 365 days.
Eligibility Criteria for Condonation:
To qualify for condonation, the following conditions must be satisfied:
- The income tax return for the relevant assessment year must have been filed on or before the due date under Section 139(1).
- The assessee must have opted for concessional tax rates under Section 115BAA (Form 10-IC) or Section 115BAB (Form 10-ID) in their ITR-6.
- There must be a reasonable cause for the delay, demonstrating genuine hardship.
Time Limit for Applications:
- Applications for condonation cannot be entertained beyond three years from the end of the relevant assessment year.
- For applications filed on or after this circular’s issuance, the three-year time limit will apply.
Timely Disposal:
- Authorities are encouraged to resolve condonation applications within six months from the end of the month in which the application is received.
Pending Applications:
- This circular applies to all condonation applications currently pending with tax authorities.
Text of the circular has been mentioned below
In exercise of the powers conferred under section 119(2)(b) of the Income-tax Act, 1961 ('the Act'), the Central Board of Direct Taxes ('CBDT') by Circular No. 6/2022 dated 17.03.2022 and Circular No. 19/2023 dated 23.10.2023 condoned the delay in filing of Form No. 10-IC as per Rule 21AE of the Income-tax Rules, 1962 ('the Rules') for Assessment Years 2020-21 and 2021- 22 in cases where the conditions mentioned in the said Circulars are satisfied.
Representations have been received by the CBDT stating that Form No. 10-IC or Form No. 10-ID could not be filed for various assessment years on or before the due date or extended due date, as the case may be. It has been requested that the delay in filing of these Forms for respective assessment years may be condoned.
With a view to avoid genuine hardship to the assessees in exercising the option, under section 115BAA of the Act read with Rule 21AE of the Rules or under section 115BAB of the Act read with Rule 21AF of the Rules, the CBDT in exercise of the powers conferred under section 119(2)(b) of the Act, hereby authorizes: -
a) the Pr. Commissioners of Income Tax ('Pr. CsIT')/ Commissioners of Income Tax ('CsIT') to admit and deal with the applications for condonation of delay in filing of Form No. 10-IC or Form No. 10-ID for Assessment Years 2020-21, 2021-22 and 2022-23 where there is a delay of upto 365 days.
b) the Pr. Chief Commissioners of Income Tax ('Pr. CCsIT')/ Chief Commissioners of Income Tax ('CCsIT')/ Directors General of Income Tax ('DsGIT') to admit and deal with the applications for condonation of delay in filing of Form No. 10-IC or Form No. 10-ID for Assessment Years 2020-21, 2021-22 and 2022-23 where there is a delay of more than 365 days.
The Pr. CCsIT/ CCsIT/ DsGIT/ Pr. CsIT/ CsIT while deciding such applications for condonation of delay in furnishing of Form No. 10-IC or Form No. 10-ID to exercise the option, under section 115BAA of the Act read with Rule 21AE of the Rules or under section 115BAB of the Act read with Rule 21AF of the Rules, shall satisfy themselves that the applicant's case is a fit case for condonation under the existing provisions of the Act. The Pr. CCsIT/CCsIT/DSGIT/Pr. CsIT/ CsIT shall ensure that the following conditions are satisfied, while deciding such applications:-
(1) The return of income for relevant assessment year has been filed on or before the due date specified under section 139(1) of the Act;
(ii) The assessee has opted for taxation, u/s 115BAA of the Act in case condonation of delay is for Form No. 10-IC and u/s 115BAB of the Act in case condonation of delay is for Form No. 10-ID, in "Filing Status" in "Part A-GEN" of the Form of Return of Income ITR-6; and
(iii) The assessee was prevented by reasonable cause from filing such Form before the expiry of the time allowed and the case is of genuine hardship on merits.
No application for condonation of delay in filing of Form No. 10-IC or Form No. 10-ID shall be entertained beyond three years from the end of the assessment year for which such application is made. The time limit for filing of such application within three years from the end of the assessment year will be applicable for application filed on or after the date of issue of this Circular. A condonation application should be disposed of, as far as possible, within six months from the end of the month in which such application is received by the Competent Authority.
The delegation of powers, as per para 3 of this Circular shall cover all such applications for condonation of delay under section 119(2)(b) of the Act which are pending as on date of issue of this Circular.
Official copy of the circular has also been attached
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