Notices u/s 119(2)(b) being issued to companies for AY 2020-21. But Why?
Finance Ministry has introduced a new lower tax regime for the first time in AY 2020-21 for companies, wherein they were allowed to pay tax at 25.17% flat irrespective of their total income or total income. Section 115BAA was introduced.
However, to opt for such a lower tax regime companies had to file Form 10-IC before the due date of filing of income tax return u/s 139(1). AY 2020-21.
AY 2020-21 being the first year many companies failed or forgot to file Form 10-IC within due time which lead to disallowance of lower tax regime for companies.
Later, CBDT has allowed condonation in filing Form 10-IC to all the companies who could not file Form 10-IC within due time.
To read more about condonation CLICK HERE: [Breaking news] CBDT has allowed Condonation in filing of Form 10-IC for section 115BAA for Assessment Year 2020-21 – Taxontips
In relation to the above delay in filing Form 10-IC, many companies had filed Form 10-IC under condonation and has also applied for condonation before Income tax department.
Considering the above delay in filing Form 10-IC and condonation filed by assessee it can be seen that the notices being received from Income tax department by companies is nothing but notice u/s 119(2)(b) in relation to condonation request for Form 10-IC.
Companies can file response by stating that as mentioned by CBDT under the above circular, assessee should be allowed condonation and provide benefit u/s 115BAA of the Act.