Gujarat High Court
M/S Camino Herbal Remedies Pvt. Ltd vs Pr Commissioner Of Income Tax, Vadodara … on 15 July, 2025
Author: Bhargav D. Karia
Bench: Bhargav D. Karia
NEUTRAL CITATION
C/SCA/20564/2023 JUDGMENT DATED: 15/07/2025
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 20564 of 2023
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR. JUSTICE BHARGAV D. KARIA
and
HONOURABLE MR. JUSTICE PRANAV TRIVEDI
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Approved for Reporting Yes No
✔
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M/S CAMINO HERBAL REMEDIES PVT. LTD.
Versus
PR COMMISSIONER OF INCOME TAX, VADODARA 1 & ANR.
==========================================================
Appearance:
KRUTARTH K DESAI(9662) for the Petitioner(s) No. 1
KARAN G SANGHANI(7945) , SR.STANDING COUNSEL for the
Respondent(s) No. 1,2
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CORAM:HONOURABLE MR. JUSTICE BHARGAV D. KARIA
and
HONOURABLE MR. JUSTICE PRANAV TRIVEDI
Date : 15/07/2025
ORAL JUDGMENT
(PER : HONOURABLE MR. JUSTICE PRANAV TRIVEDI)
1. Heard learned advocate Mr. Krutarth Desai
for the petitioner and learned Senior Standing
Counsel Mr.Karan Sanghani for the respondents.
2. Rule, returnable forthwith. Learned Senior
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Standing Counsel Mr.Karan Sanghani waives
service of notice of rule for and on behalf of
the respondents.
3. By way of this petition, the petitioner
has challenged the order dated 12.7.2023
passed by the Principal Commissioner of Income
Tax, Vadodara-1 while exercising jurisdiciton
under Section 119(2)(b) of the Income Tax Act,
1961 (for short ‘the Act’) rejecting the
application dated 16.10.2022 filed by the
petitioner to condone the delay in filing Form
10-IC along with the return of income by
considering the Form 10-IC filed within due
date for Assessment Year 2020-2021.
4. Considering the controversy in narrow
compass, the matter is heard finally with the
consent of the learned Advocates of the
parties.
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5. The brief facts of the case are that the
petitioner is a Private Limited Company
incorporated under the provisions of Companies
Act, 1956 and filed its return of income under
the provisions of Section 139(1) on 4.11.2020
declaring total income of Rs.1,16,230/- for
the Assessment Year 2020-2021.
5.1. The petitioner exercised the option
under Section 115BAA of the Act while filing
the return of income to pay the reduced rate
of tax at 22% excluding the surcharge and
education cess.
5.2. It is the case of the petitioner that
the requirement of filing of Form 10-IC is on
or before filing due date of Return under
section 139(1) of the Income Tax Act 1961.
However, the Central Board of Direct Tax, vide
its circular dated 06/2022 dated 17.03.2022
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has condoned the delay in filing the Form 10-
IC till 30.06.2022 or from the end of month in
which the circular is issued. The conditions
stated in the circular are stated as under:
The return of Income for the
Assessment Year 2020-21-has been filed on
or before the due date specified under
section 139(1) of the Act.
The assessee company has opted for
taxation u/s 115BAA of the Act in (e) of
“Filing Status” in “Part-AGEN” of the Form
of Return of Income ITR-6 and
Form 10-IC is filed electronically on
or before June 30, 2022 or 3 months from
the end of the month in which this
Circular is issued, whichever is later.
5.3 It is the case of the petitioner that
the Chartered Accountant of the petitioner had
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made compliance of all the requirements as
stated in Circular No. 6/2022 dated 17.3.2022.
The petitioner company has inadvertently
failed to electronically file Form 10-IC along
with the return of income under the provisions
of Section 139(1) of the Act. It was bonafide
belief of the Chartered Accountant being
statutory auditor of the petitioner Company
that he had already filed form 10-IC. However,
after having realised the fact of its non-
filing, the Chartered Accountant had filed
filed Form 10-IC on 15.9.2022 i.e. after two
and half months of specified dated 30.6.2022.
5.4 It is also the case of the petitioner that
they realised the fact that benefit of
concessional rate of tax of 22% has not been
given due to non-filing of Form 10-IC.
Therefore, the petitioner made an application
before the Office of respondents under the
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provisions of Section 119(2)(b) of the Act.
However, the respondent rejected the
application under Section 119(2)(b) of the Act
on the ground that he was not empowered to
condone delay in view of the Circular No. 6/22
and therefore the same cannot be considered
and, therefore, the application was rejected.
This has led to filing of the present petition
under Article 226 of the Constitution of
India.
6. Learned advocate Mr. Krutarth Desai for
the petitioner submitted that the respondents
had adopted a pedantic, hypertechnical and
narrow approach while considering the
Application filed by the petitioner to treat
the Form 10IC filed for Assessment Year 2021-
2022 as if the same is filed for Assessment
Year 2021 so as to enable the petitioner to
take the advantage of option of payment of
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reduced rate of tax as opted by the petitioner
in the return of income. However, it was due
to mistaken belief and human error of
Chartered Accountant of the petitioner that
the Form 10IC was filed after two and half
months.
6.1. It was therefore submitted that
respondent No.1 ought to have considered the
Form 10IC and the application filed by the
petitioner for Year 2021-2022.
6.2. Learned advocate Mr. Krutarth Desai in
support of his submissions referred to and
relied upon the decision of this Court in case
of V.M.Procorn Private Limited Versus
Assistant Director of Income Tax and Another
in Special Civil Application No.9707 of 2024
rendered on 23rd August, 2024 wherein, in
similar facts, when the assessee in the said
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case could not opt for an option in the return
of income, was permitted to file Form 10IC so
as to take the benefit of reduced rate of tax
under Section 115BAA of the Act.
6.3. Learned advocate Mr. Krutarth Desai
further referred to and relied upon the
decision of this Court in case of Gujarat
Electric Company Limited versus Commissioner
of Income Tax reported in [2002] 255 ITR 396
(Guj) wherein, after taking into consideration
the decision of the Madras High Court in case
of R. Seshammal vesus Income Tax Officer and
Another reported in [1999] 237 ITR 185 held
that in view of the provisions of 119(2)(b) of
the Act, the phrase “genuine hardship” should
have been construed liberally.
6.4. It was therefore submitted that the
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respondent No.1 ought to have condoned the
delay in filing Form 10IC by considering the
Form filed for Assessment Year 2021-2022 as
that for Assessment Year 2021 so as to enable
the petitioner to take the benefit of reduced
rate of tax as per the provisions of Section
115BAA of the Act.
7. On the other hand, learned Senior Standing
Counsel Mr.Karan Sanghani for the respondent-
Authority submitted that admittedly the
petitioner has not filed any Form 10IC as
required under the provisions of Sub-section
(5) of Section 115BAA of the Act in the
prescribed manner and therefore, the
petitioner has failed to comply with the twin
conditions of filing Form 10IC along with the
return of income under Section 139(1) of the
Act for the Assessment Year 2021.
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7.1. In support of his submissions,
reliance was placed on the decision of the
Hon’ble Apex Court in case of Principal
Commissioner of Income Tax versus Wipro
Limited reported in [2022] 446 ITR Page 1
(SC) wherein, in the facts of the said case,
the Hon’ble Apex Court did not permit the
assessee to exercise the option as per
provisions of Section 10B(8) of the Act at the
time of filing of the revised return under
Section 139(5) of the Act. It was submitted
that the language of the Section 10B(8) of the
Act is pari materia to that of the Sub-section
(5) of Section 115BAA of the Act. It was
therefore submitted that the respondent No.1
has rightly rejected the Application filed by
the petitioner to consider the Form 10IC filed
for Assessment Year 2021-2022 as that of
Assessment Year 2021.
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7.2. It was further submitted that the
petitioner has also not provided any document/
evidence in support of the reason which has
been furnished by the petitioner which would
justify that the circumstances were beyond the
control of the petitioner and therefore, the
respondent No.1 has rightly relied upon the
Circular No.6 of 2022 issued by the CBDT to
hold that the petitioner has no case of
genuine hardship.
8. Considering the submissions made by the
learned Advocates for both the sides and on
perusal of the facts and material available on
record, it is revealed from the return of
income filed by the petitioner in Form ITR-6
that the petitioner had adopted the option for
taxation under Section 115BAA of the Act which
is further fortified from the intimation
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issued under Section 143 of the Act,
computation of income of the petitioner placed
on record wherein also, the petitioner has
computed the tax payable at the rate of 22%
instead of 30% as well as the intimation
issued by the CPC under Section 143(1) of the
Act accepting the return of income.
9. The relevant provisions of Section 115BAA
of the Act reads as under :
“115BAA(1): Notwithstanding anything
contained in this Act but subject to
the provisions of this Chapter, other
than those mentioned under section
115BA and section 115BAB, the income-
tax payable in respect of the total
income of a person, being a domestic
company, for any previous year relevant
to the assessment year beginning on or
after the 1st day of April, 2020,
shall, at the option of such person, be
computed at the rate of twenty-two perPage 12 of 28
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cent., if the conditions contained in
sub-section (2) are satisfied:
Provided that where the person fails to
satisfy the conditions contained in
sub-section (2) in any previous year,
the option shall become invalid in
respect of the assessment year relevant
to that previous year and subsequent
assessment years and other provisions
of the Act shall apply, as if the
option had not been exercised for the
assessment year relevant to that
previous year and subsequent assessment
years.
115BAA(5) Nothing contained in this
section shall apply unless the option is
exercised by the person in the
prescribed manner on or before the due
date specified under sub-section (1) of
section 139 for furnishing the returns
of income for any previous year relevant
to the assessment year commencing on or
after the 1st day of April, 2020 andPage 13 of 28
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such option once exercised shall apply
to subsequent assessment years:
Provided that in case of a person,
where the option exercised by it under
section 115BAB has been rendered
invalid due to violation of conditions
contained in sub-clause (ii) or sub-
clause (iii) of clause (a), or clause
(b) of sub-section (2) of said section,
such person may exercise option under
this section:
Provided further that once the option
has been exercised for any previous
year, it cannot be subsequently
withdrawn for the same or any other
previous year.”
10. As per the provisions of Sub-section (5)
of Section 115BAA of the Act, the option is
required to be exercised in prescribed manner
at the time of filing of return of income
under Section 139(1) of the Act. The
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prescribed manner is provided in Rule 21AE of
the Rules for filing of Form 10IC to avail the
benefit of provisions under Section 115BAA of
the Act.
11. Considering the confusion and technical
issues, the CBDT has issued the Circular No.6
of 2022 on 17.3.2022 permitting the assessees
to file Form 10IC for the Assessment Year 2021
meaning thereby, the filing of Form 10-IC is
only to confirm that the petitioner has
exercised the option while filing the return
of income under Section 139(1) of the Act as
prescribed in Rule 21AE of the Rules which was
relaxed by the CBDT. The Circular No.6 of 2022
reads as under :
“Sub: Condonation of delay under section
119(2)(b) of the Income-tax Act, 1961 in
filing of Form 10IC for Assessment Year
2020-21- Reg.
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Section 115BAA of the Income-tax Act,
1961 (the Act) was inserted by the
Taxation Laws (Amendment) Act, 2019
w.e.f. 01.04.2020. As per the Section,
the income-tax payable in respect of
the total income of a person, being a
domestic company, for any previous year
relevant to the assessment ycar
beginning on or after the Ist day of
April, 2020, shall, at the option of
such person be computed at the rate of
twenty-two per cent subject to
satisfaction of conditions contained in
sub-section (2) of the Section.
1.2 As per subsection (5) of section
115 BAA of the Act read with Rule 2lAE
of the Income-tax Rules, 1962 (the
Rules), the assessee company is
required to submit Form 10- IC
electronically on or before the due
date of filing of return of income w/s
139(1) of the Act and such option once
exercised shall apply to subsequent
assessment years.
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1.3 Failure to furnish such option in
the prescribed form on or before the due
date specified u/s 139(1) of the Act
results in denial of concessional rate
of tax of twenty-two per cent 10) such
person.
2. Representations have been
received by the Board stating that Form
10-IC could not be filed along with the
return of income for AY 2020-21, which
was the first rear of fling of this
form. It has been requested that the
delay in filing of form 1o- may he
condoned.
3. On consideration of the matter, with
a view to avoid genuine hardship to the
domestic companies in exercising the
option u/s 11SBAA of the Act, the
Central Board of Direct Taxes, In
excreise of the powers conferred under
section 119(2)(b) of the Act, hereby
directs that :-
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The delay in filing of Form 10-IC as
per Rule 21AE of the Rules for the
previous year relevant to A. Y 2020-21
is condoned in cases where the
following conditions are satisfied:
(i) The return of income for AY 2020-21
has been filed on or before the due
date o specified under section 139(1)
of the Act;
(ii) The assessee company has opted for
taxation u/s 1ISBAA of the Act in (e) of
“Filing Status” in “Part A-GEN” of the
Form of Return of Income ITR-6 and
(iii) Forn 10-1C is filed clectronically
on or before 30.06.2022 or 3 months from
the end of the month in which this
Circular is issued, whichever is later.”
12. On perusal of the above circular, it
appears that on receipt of the representation,
the CBDT has exercised the powers under
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Section 119(2)(b) of the Act to avoid the
genuine hardships to the domestic companies in
exercise of the option under Section 115BAA of
the Act on fulfilling the above three
conditions. The petitioner, however, could not
file the Form electronically on or before 30th
June, 2022 because of genuine mistake of
Chartered Accountant. The petitioner, however,
was entitled to file the Form as per the
aforesaid Circular but the petitioner has not
filed the Form 10IC for the Assessment Year
2021-2022. The petitioner therefore had no
option but to make an application under
Section 119(2)(b) to treat the Form 10IC filed
for Assessment Year 2021-2022 as if the same
is filed for Assessment Year 2021 as per the
aforesaid Circular.
13. The contention raised on behalf of the
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respondent that in view of the decision of the
Hon’ble Apex Court in case of Wipro Limited
(Supra), the petitioner is not entitled to
file Form 10IC belatedly after the filing of
the return under Section 139(1) of the Act is
concerned, the said aspect is taken into
consideration by this Court in case of
Commissioner of Income Tax versus Gujarat
Energy Developement Agency by considering the
decison of the Wipro Limited (Supra) vis-a-vis
the filing of Form 10B to claim the exemption
under Sections 11 and 12 of the Act as under :
“5. Reliance placed by the learned
advocate for the appellant on the
decision of M/s.Wipro Limited (supra)
would not be applicable in the facts of
the case, as in the facts of the
present case, the assessee has claimed
the exemption under Section 11 read
with Section 12A(1)(b) of the Act which
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report in Form of 10B which has nothing
to do with claiming 100% exemption of
total income in respect of newly
established 100% Export Oriented
Undertakings under Section 10B. Section
10B(8) requires the assessee to file an
undertaking before the due date of
furnishing of return of income under
sub-section (1) of Section 139 before
the Assessing Officer in writing that
the provision of Section 10B may not be
made applicable to him, otherwise the
provision of this Section shall not
apply to him for any of the relevant
assessment year.
6. Considering the language of the
provision of Section 10B(8) of the Act,
the Hon’ble Supreme Court held that it
was mandatory on part of the assessee
to file declaration before the due date
of filing of return under sub-section
(1) of Section 139 of the Act, whereas
in the facts of the said case the
assessee filed such undertaking along
with the revised return under sub-
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section (5) of Section 139 of the Act
and in such facts the Hon’ble Supreme
Court held that the twin conditions
prescribed under Section 10B(8) of the
Act was mandatory to be fulfilled and
it cannot be said that though the
declaration is mandatory, the filing of
such declaration within the due date of
filing of return under sub-section (1)
of Section 139 would be directory.
7. Reference to the aforesaid decision
has no connection whatsoever remotely
to the facts of the present case and
therefore, in the facts of the present
case, the Tribunal has rightly followed
the decision of this Court in case of
Sarvodaya Charitable Trust v. Income
Tax Officer (Exemption) in Special
Civil Application No.6097 of 2020
decided on 09th December, 2020 as well
as the decision in case of Social
Security Scheme of GICEA (supra) to
uphold the decision of the CIT
(Appeals), wherein this Court has held
that the approach of the authority in
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such type of cases should be equitable,
balancing and judicious and respondent
No.2 might be justified in denying the
exemption under Section 11 of the Act
being a technical in nature by
rejecting such application. But, in the
facts of the case, when the assessee
has already uploaded the audit report
in Form 10B as required under Section
10(23)C read with Section 12A(1)(b) of
the Act before the Assessing Officer
prior to the original assessment order
under Section 143(3) passed on 06th
April, 2021.”
14. Learned advocate Mr.Krutarth Desai for the
petitioner also invited the attention of the
Court to paragraph No.10 of the decision of
the Hon’ble Apex Court in case of Wipro
Limited (Supra) wherein, the Hon’ble Apex
Court has held as under :
“10. Even the submission on behalf of
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the assessee that it was not necessary
to exercise the option under section
10B (8) of the IT Act and even without
filing the revised return of income,
the assessee could have submitted the
declaration in writing to the assessing
officer during the assessment
proceedings has no substance and the
same cannot be accepted. Even the
submission made on behalf of the
assessee that filing of the declaration
subsequently and may be during the
assessment proceedings would have made
no difference also has no substance.
The significance of filing a
declaration under section 10B (8) can
be said to be co-terminus with filing
of a return under section 139(1), as a
check has been put in place by virtue
of section 10B (5) to verify the
correctness of claim of deduction at
the time of filing the return. If an
assessee claims an exemption under the
Act by virtue of Section 10B, then the
correctness of claim has already been
verified under section 10B(5).
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Therefore, if the claim is withdrawn
post the date of filing of return, the
accountant’s report under section
10B(5) would become falsified and would
stand to be nullified.”
15. On perusal of the above observation of the
Hon’ble Apex Court, it is also apparent that
the Hon’ble Apex Court has considered the
significance of filing declaration under
Section 10B(8) of the Act considering the
provisons of Section 10B(5) of the Act being a
check to verify the correctness of the claim
of deduction at the time of filing of return
so that if an assessee claims an exemption
under the Act by virtue of Section 10B of the
Act, then the correctness of the claim has
already been verified under Sub-section (5) of
Section 10B and therefore, if the claim is
withdrawn post the date of filing of return,
the report of the Accountant filed under
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Section 10B(5) of the Act would become
falsified and would stand to be nullified.
However, the provisions of Section 115BAA of
the Act are in a way granting relief to the
assessee-Companies to enable them to pay the
reduced rate of tax at rate of 22% on exercise
of the option on the various conditions
mentioned therein.
16. In such circumstances, the respondent No.1
was required to consider the facts of the case
by permitting the petitioner to file a fresh
Form 10IC and condoning the delay in filing
such Form by molding the prayer made by the
petitioner to treat the Form 10IC filed by the
petitioner for Assessment Year 2021-2022 to be
treated as that of for Assessment Year 2021.
The provisions of Section 119(2)(b) of the Act
are meant for redressal of the grievance and
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hardships caused to the petitioner as held by
the Hon’ble Madras High Court in case of R.
Seshammal (Supra) as under :
“This is hardly the manner in which the
State is expected to deal with the
citizens, who under anxiety to comly
with all the requiremnts of the Act pay
monies as advance tax to the State, even
though the monies were not actually
required to be paid by them and
thereafter seek refund of the monies so
paid by mistake after the proceedings
under the Act are dropped by the
authorities concerned. The State is not
entitled to plead the hypertechnical
plea of limitation in such a situation
to avoid return of the amounts. Section
119 of the Act vests ample power in the
Board to render justice in such a
situation. The Board has acted
arbitrarily in rejecting the
petitioner’s request for refund.”
17. Considering the above facts as well as the
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NEUTRAL CITATION
C/SCA/20564/2023 JUDGMENT DATED: 15/07/2025
undefined
settled legal position, the petition succeeds
and accordingly allowed. The petitioner is
permitted to obtain Form 10IC for Assessment
Year 2021 in the facts of the case and after
obtaining such Form, the petitioner shall make
a fresh Application to condone the delay for
the same and the respondent No.1 is directed
to consider such Application in light of the
observations made in this Order within a
period of twelve weeks from the date of filing
of such Application by the petitioner. Rule is
made absolute. No orders as to cost.
(BHARGAV D. KARIA, J)
(PRANAV TRIVEDI,J)
SAJ GEORGE
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