Chola Business Services Ltd. Vs ITO (ITAT Chennai)

In case Chola Business Services Ltd. Vs. income tax officer (ITO)The Income Tax Appellate Tribunal (ITAT) Chennai ruled in favor of the assessee, Chola Business Services, on concessional tax rate under section 115BAA of the Income Tax Act, 1961 for the assessment year (AY) 2021 -22. The company filed its income statement declaring a total income of ₹ 55,49,770 and a refund claim of ₹ 4,25,390. However, the Central Processing Center (CPC), Bengaluru, issued a notice under Section 143(1) of the Act, calculating tax at 30% rather than the rate of 22% opted by the assessee. The company filed Form 10IC on 15.12.2020, in accordance with the requirements to benefit from the concessional tariff.

However, the CPC calculated the tax at the ordinary rate of 30% and the Commissioner of Income Tax (Appeals) upheld this decision stating that the company had not opted for the concessional tax rate. However, the ITAT found that the very insinuation of the CPC admitted the company’s choice of the concessional rate. The Tribunal held that filing of form 10IC and its confirmation by the CPC has confirmed the company’s eligibility for concessional tax rate under section 115BAA. The ITAT therefore set aside the order of the CIT(A) and directed the Assessing Officer to calculate the tax at the concessional rate as initially claimed by the company. Therefore, the appeal was allowed.

FULL TEXT OF ITAT CHENNAI ORDER

The aforesaid appeal filed by the assessee for the Assessment Year (AY) 2021-22 arises out of the order of the Learned Commissioner of Income Tax, Appeal, Addl/JCIT(A)-2, Gurugram (hereinafter referred to as “CIT(A)”) dated 23.02. . .2024 vide summons u/s. 143(1) of the Income-tax Act, 1961 (hereinafter referred to as “the Act”) issued by the CPC, Bengaluru dated 20.10.2022.

2. The only effective ground in this appeal of the assessee is against the confirmation of the notice of referral issued by the CPC, Bengaluru wherein the CPC has not allowed the concessional rate of taxation even though the assessee has opted for the concessional rate u/s. 115BAA of the Act and submitted the required form within the deadline.

3. The assessed company was established on 09.12.2004 and carried out the activity of providing labor services to various companies. The assessee e-filed its return of income for AY 2021-22 on 02.03.2022 declaring a total income of Rs. 55,49,770/- and seeks refund of Rs.4,25,390/-. CPC, Bengaluru in order passed u/s. 143(1) of the Act computed tax @ 30% instead of 22% computed by the assessee. The assessee claimed to have filed Form-10IC on 15.12.2020 opting for concessional tax rate u/s. 115BAA of the law. The CPC, Bengaluru in the referral also mentioned that the assessee has opted for a concessional rate of tax u/s 115BAA of the Act, despite this, the CPC has calculated the tax @ 30%. Ld. CIT(A), observing in para 5.2 that the assessee filed Form-10IC on time and also filed return of income u/s. 139 of the Act, held that the assessee did not opt ​​for taxation u/s. 115BAA of the law.

4. Ld. The Authorized Representative (AR) of the assessee submitted that it is clear from the notice itself that the assessee has opted for concessional rate of tax u/s 115BAA of the Act which is mentioned in Sr. No.1 of the notice.

5. Ld. The departmental representative (DR), on the other hand, relied on orders from lower authorities.

6. We have heard the rival submissions and perused the materials available on record. The assessee submitted Form-10IC on 15.12.2020 opting for the concessional tax rate u/s. 115BAA of the law. The notice of referral u/s 143(1) for AY 2021-22 also clearly mentions at Sr. No.1 that the assessee has opted for concessional tax rate u/s 115BAA of the Act. Therefore, the Ld. CIT(A) was not justified in holding that the assessee did not opt ​​for a concessional rate of tax u/s 115BAA. Accordingly, I set aside the order of the Ld. CIT(A) and directs the AO to calculate the tax at a concessional rate as opted by the assessee.

7. In the result, the assessee’s appeal is allowed.

Order pronounced on the 25th^th October 2024.