Telangana High Court
Ms Radiant Digital Solutions Private … vs The Principal Chief Commissioner Of … on 2 July, 2026
Author: P.Sam Koshy
Bench: P.Sam Koshy
IN THE HIGH COURT FOR THE STATE OF TELANGANA
AT HYDERABAD
THE HON'BLE SRI JUSTICE P.SAM KOSHY
AND
THE HON'BLE SRI JUSTICE NARSING RAO NANDIKONDA
WRIT PETITION No.18691 of 2026
DATE: 02.07.2026
Between:
M/s. Radiant Digital Solutions Private Limited.
...Petitioner
AND
The Principal Chief Commissioner of Income Tax,
AP and Telangana, Room No. 1031, 10th Floor,
'C' Block, I.T. Tower, AC Guards,
Masab Tank, Hyderabad and 3 Others.
...Respondents
ORDER:
(per Hon’ble Sri Justice P.Sam Koshy)
Heard Kailash Nath PSS, learned counsel for the petitioner;
and Ms. B. Sapna Reddy, learned Senior Standing Counsel for
Income Tax Department appearing on behalf of the respondents.
2. The instant Writ Petition under Article 226 of the Constitution
of India has been filed by the petitioner challenging the order dated
06.03.2026, issued by respondent No.1, rejecting the petitioner’s
application for condonation of delay in filing Form 10-IC under
Section 119(2)(b) of the Income Tax Act, 1961 (for short the ‘Act’)
for the assessment year 2020-21.
Page 2 of 15
3. Vide the impugned order, respondent No.1 denied
condonation of delay in filing the Form 10-IC for the assessment
year 2020-21 and consequentially denied the benefit under 115BAA
of the Act to the petitioner.
4. The brief facts of the case are that the petitioner is a private
limited company promoted by non-resident Indians and its
administrative affairs, accounts, and tax compliance for the
assessment year 2020-21 were handled entirely by its then Finance
Manager, who was responsible for all the tax-related filings. That,
for assessment year 2020-21, the petitioner filed its Return of
Income (ITR-6) on 15.02.2021 within the due date prescribed
under Section 139(1) of the Act, declaring total income of
Rs.1,37,48,490/-. In the said return, the petitioner availed the
benefit of concessional tax rate of 22% under Section 115BAA of
the Act. The Tax Auditor also confirmed the same in the Tax Audit
Report in Form 3CD. Accordingly, taxes were computed and paid at
the concessional rate of 22%, resulting in a refund of
Rs.11,53,930/- to the petitioner.
5. That since the assessment year 2020-21 was the first year of
introduction of the provision, the petitioner was under a bona fide
and honest belief that the declaration of the option under Section
115BAA in the Return of Income and its confirmation in the Tax
Page 3 of 15
Audit Report (Form 3CD) was sufficient compliance with the
requirements of the law, and that no separate prescribed form was
required to be filed. Accordingly, Form 10-IC, which is the
prescribed electronic form for exercise of the option under Section
115BAA under Rule 21AE of the Income Tax Rules, was not filed
separately along with the Return of Income. Due to non-filing of
Form 10-IC, the Centralized Processing Centre (CPC) processed the
petitioner’s return under Section 143(1)(a) of the Act and denied
the benefit of Section 115BAA and raised a demand of Rs.1,320/-
and further denied a refund eligible of Rs.11,53,930/- by its
intimation dated 18.12.2021 under Section 143(1) of the Act,
computing tax liability of the petitioner at a regular corporate tax
rate.
6. Thereafter, upon discovering the aforesaid demand on the
Income Tax Portal in late December 2022, the petitioner
immediately took steps to rectify the position and attempted to file
the Form 10-IC for the relevant assessment year, but failed
because the option was disabled on the ITBA Portal. Therefore, on
03.01.2023, the petitioner filed a formal application for
condonation of delay under Section 119(2)(b) of the Act before
respondent No.3, admitting the inadvertent lapse. The application
clearly set out the circumstances of the inadvertent lapse, the bona
Page 4 of 15
fide nature of the omission, and the genuine hardship suffered by
the petitioner on account of additional demand Rs.1,320/- by
denying refund eligible of Rs.11,53,930/-. On 28.10.2025, the
respondent No.3 issued a show-cause letter (DIN:
ITBA/COM/F/17/2025-26/1082054249(1)) calling upon the
petitioner to demonstrate genuine hardship with supporting
documentary evidence, wherein the petitioner respectfully filed a
detailed written submissions setting out the facts, the bona fide
nature of the lapse, and the genuine hardship caused by the denial
of the Section 115BAA benefit and also relied on CBDT Circular
No.17/2024, dated 18.11.2024, and CBDT Circular No.19/2023,
dated 23.10.2023, to prove that the petitioner satisfied all the
substantive conditions for availing the benefit under Section
115BAA. However, the respondent No.1 passed the impugned order
of rejecting the condonation of delay and denied the benefit sought
for by the petitioner on account that filing of Form 10-IC is a
mandatory statutory requirement and a substantive requirement
and not a mere procedural formality, and that ignorance of law,
procedural oversight, or negligence on the part of a consultant of
the petitioner cannot be treated as circumstances beyond the
control of the petitioner.
Page 5 of 15
7. It is this rejection of condonation of delay application by
respondent No.1 which is under challenge in the instant Writ
Petition.
8. Learned counsel of the petitioner submitted that the
respondents proceeded on an erroneous footing that filing of Form
10-IC is a mandatory statutory requirement and a substantive
requirement and not a mere procedural formality and that the
petitioner demonstrated substantial compliance with Section
115BAA as it declared the option for the concessional tax rate of
22% in its Return of Income (ITR-6) and the same was also
confirmed by the Tax Auditor of the petitioner in Form 3CD and
that the taxes were paid at 22% without claiming any deduction or
incentive barred under Section 115BAA.
9. Learned counsel of the petitioner also argued that the
petitioner has satisfied all the conditions specified in Sub-Section
(2) of Section 115BAA for availing the concessional rate benefit
under Section 115BAA of the Act, and as such, mere non-filing of
Form 10-IC should not be a ground to deny the petitioner a
substantial benefit in law and the respondent No.1 has wrongly and
narrowly interpreted the expression “genuine hardship” under
Page 6 of 15
10. Learned counsel of the petitioner further argued that the
impugned order is contrary to the beneficial intent of CBDT Circular
No.17/2024, dated 18.11.2024, which was specifically issued to
provide relief in Form 10-IC for filing cases for the assessment year
2020-21 where genuine hardship is demonstrated and that the
respondent No.1’s conclusion that the petitioner’s case falls beyond
the boundaries of the Circular amounts to reading a beneficial
circular restrictively.
11. On the Contrary, the learned Senior Standing Counsel for
Income Tax Department solely argued that since the relevant
assessment year of the claim of benefit was for the financial year
2019-20, and that the actions of the petitioner were during the
assessment year 2020-21, essentially during COVID-19, the
petitioner didn’t satisfy the requirement of genuine hardship to
respondent No.1 and hence, was rightly denied the benefit under
section 115BAA. Further, it was argued that merely because the
tax auditor / manager of the petitioner failed to exercise caution
and due diligence, would not give the petitioner a benefit of
genuine hardship and would not satisfy the requirements under
Section 119(2)(b) of the Act.
12. Having heard the contentions put forth on either side and on
perusal of records, the question of law which arises for
Page 7 of 15consideration is, whether the petitioner is eligible to claim the
benefit under section 115BAA after failing to file the requisite form
10-IC due to hardships caused and whether the case of the
petitioner falls squarely within the ambit of section 119(2)(b) of the
Act.
13. The petitioner’s arguments are two-fold, firstly, he
demonstrated the statutory compliance and satisfied all the
requirements under Section 115BAA and chose the option of
concessional rate of tax of 22% in return of income and the same
were duly paid under the aforementioned rate to the Department.
Since assessment year 2020-21 was the first year of introduction of
the provision of 115BAA, the tax auditor was under a bona fide
impression that there was no requirement of filing Form 10-IC
which was genuine and inadvertent error of procedural
requirement. To support this stance, the learned counsel for the
petitioner relied upon the case of Cell Com Teleservices (P) Ltd.
vs. Union of India 1 wherein the Allahabad High Court had relied
upon a judgment of the High Court of Madras in the case of MRF
Ltd. vs. Central Board of Direct Taxes 2. For ready reference,
paragraph Nos.5 and 8 of the MRF Ltd. (supra) for ready reference
are reproduced hereunder:
1
(2026) 487 ITR 47
2
[2025] 172 taxmann.com 776 (Madras)
Page 8 of 15“5. In this regard. it was submitted by the learned counsel for the
petitioner that Section 119(2)(b) has been considered by various
High Courts including Hon’ble Supreme Court and it has
consistently been held that the discretion under this provision
ought to be exercised liberally. It was then submitted by the
learned counsel for the petitioner that the belated filing of Form
10-1C in support of the option exercised under Section 115BAA of
the Act had been dealt with by this Court in Axe Bpo Services
(P) Ltd. v. Director [W.P. No. 3425 of 2024, dated 13-11-2024]
wherein after referring to various case laws on the scope of the
expression “genuine hardship”, it was found that there was
substantial compliance inasmuch while filing the return it was
stated that the petitioner had opted to pay taxes under Section
115BAA of the Act which is the case here as well. In this regard, it
may be relevant refer to the following order.
13. The expression “genuine hardship” had come up for
consideration on more than one occasion before various Court,
including this Court and the Apex Court. It appears that it has
been consistently held that the power conferred under Section
119(2)(b) of the Act, ought to be exercised liberally provided
circumstances set out therein exist. Here it may be relevant to
keep in view the decision of the High Court of Bombay in the
case of Pankaj Kailash Agarwal v. CIT, reported (2024)
4641TR 65, wherein it was held that no assessee would stand
to benefit by lodging its claim late. More so, where the
assessee would get tax advantage/benefit. It was held that the
fact that an assessee feels that he would be paying more tax if
he does not get the advantage of deduction will certainly
constitute “genuine hardship”. The phrase “genuine hardship”
used in section 119(2)(b) of the Act should be construed
liberally. The Legislature has conferred the power to condone
the dela, to enable the authorities to do substantial justice to
the parties by disposing of the matters on merits.”
8. This Court, after carefully considering the submissions and
examining the scope, purport and object of Section 119(2)(6),
Page 9 of 15
finds that identical submissions were made before this Court and
the same was rejected in W.P. No. 3425 of 2024, dated 13-11-
2024. The relevant portion is extracted here under:
10. Section 119(2)(6) vests power in the Board to admit
an application or claim for any exemption, deduction,
refund or any other relief under the Act after the period
specified under the said Act, for making such application
or claim, if it is considered by the Board to be desirable or
expedient so to do for avoiding genuine hardship in any
case or class ofcases.
11.If the circumstances set out under Section 119(2)(6) of
the Actexists, a duty is caston the Assessing Officer to
exercise its power under Section 119(2)(b) of the Act. It is
trite law that vesting ofpower in an authority results in
imposition of duties on that authority to exercise that
power in a manner which would advance the purpose for
granting/vesting of such power. In other words, this Court
is of the view that the power under Section 119(2)(6)
though seemingly an enabling provision, conferring
discretionary power, such power is coupled with duty.
16. I also find that, there has been substantial compliance
of the requirement under Section 115BAA of the Act, as
evident from the fact that while filing the returns, it was
declared/stated by the petitioner that the option to
discharge the tax was exercised under Section 115BAA of
the Act and taxes were in fact paid@ 22% without
claiming deductions as contemplated under Section
115BAА of the Act. In this regard, it may be relevant to
refer to the Hon’ble Supreme Court, in the case of Dilip
Kumar (2018) 9 SCC, wherein while deciding the Doctrine
of Substantial Compliance held as under:
“33. A fiscal statute generally seeks to preserve the need
to comply strictly with regulatory requirements that are
Page 10 of 15important, especially when a party seeks the benefits of
an exemption clause that are important. Substantial
compliance with an enactment is insisted, where
mandatory and directory requirements are lumped
together, for in such a case, if mandatory requirements
are complied with, it will be proper to say that the
enactment has been substantially complied with
notwithstanding the non-compliance of directory
requirements. In cases where substantial compliance has
been found, there has been actual compliance with the
statute, albeit procedurally faulty. The doctrine of
substantial compliance seeks to preserve the need to
comply strictly with the conditions or requirements that
are important to invoke a tax or duty exemption and to
forgive non-compliance for either unimportant and
tangential requirements or requirements that are so
confusingly or incorrectly written that an earnest effort at
compliance should be accepted.”
14. In the case of Cell Com Teleservices (P) Ltd. (supra) it
was emphasized that the clause “genuine hardship” must be
purposefully interpreted in the light of legislative intent behind it.
For ready reference, paragraph Nos.19 and 20 of the said
judgment are reproduced hereunder:
“19. The arbitrary rejection of the condonation of delay in filing
form 10-IC are strongly supported by various judgments that
widely interpret “genuine hardship” under section 119(2)(b) of the
Act. The hon’ble Supreme Court in B.M.
Malani v. CIT [(2008) 306 ITR 196 (SC); (2008) 10 SCC
617; 2008 SCC OnLine SC 1488.] emphasised that “genuine
hardship” signifies “genuine difficulty” and requires a
purposeful interpretation of the provision, mandating a
Page 11 of 15judicious exercise of discretion by statutory authorities.The
hon’ble Gujarat High Court in Gujarat Electric Co.
Ltd. v. CIT [(2002) 255 ITR 396 (Guj); 2001 SCC OnLine Guj
331.] held that “genuine hardship” must be construed
liberally. The hon’ble Bombay High Court in K.S. Bilawala v. Pr.
CIT [(2024) 463 ITR 766 (Bom); 2024 SCC OnLine Bom 1276.]
and Sitaldas K. Motwani v. DGIT [(2010) 323 ITR 223 (Bom);
2009 SCC OnLine Bom 2195.] further consolidated this liberal
interpretation, asserting that the power to condone delay is
for substantial justice and refusing it can defeat the interest
of justice.The hon’ble Gujarat High Court in Deepak
Pragjibhai Gondaliya v. Pr. CIT [(2026) 486 ITR 458 (Guj).]
held that the filing of forms for claiming benefits is
procedural and no assessee benefits from late filing. The
hon’ble Bombay High Court in Pankaj Kailash Agarwal v. Asst.
CIT [(2024) 464 ITR 65 (Bom); 2024 SCC OnLine Bom 1025,]
recited by the Madras High Court in MRF Ltd. v. CBDT [(2026) 486
ITR 81 (Mad).], firmly stated that the “an assessee feels that he
would be paying more tax if he does not get the advantage of
deduction will certainly constitute genuine hardship”.
20. The judgments discussed hereinabove collectively
stress that when substantial justice and technical
considerations are aligned against each other, preference
should be given to the cause of substantial justice and the
authorities’ approach should be justice-oriented on the
merits. The clear and repeated position of law is that even if
a procedural delay occurs due to “genuine hardship”, it
should not prevent an assessee from receiving a rightful tax
benefit. Therefore, in the light of the aforesaid judgments of the
hon’ble Supreme Court and the hon’ble High Courts, we are of the
view that filing of form 10-IC prior to filing of return is not
mandatory and if “genuine hardship” is shown then delay may be
condoned and in this respect the provision of law shall be taken as
a beneficial piece of legislation.”
Page 12 of 15
15. Secondly, the petitioner has relied upon two Circulars issued
by the CBDT, namely, Circular No. F.No.173/32/2022-ITA-1 issued
on 23.10.2023, and the subsequent Circular No.
F.No.173/32/2022-ITA-1 issued on 18.11.2024, wherein it was
categorically held as under:
1. 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.
2. With a view to avoid genuine hardship to the assessees in
exercising the option, under section 115BAA of the Act read with
Rule 21 AE 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. 10-1C 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.
3. 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 21 AF of the Rules,
Page 13 of 15
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:-
a) 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;
b) 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
c) 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.”
16. It is an undisputed fact that the filing of Form 10-IC is a
mandatory statutory requirement to avail the benefit of
concessional tax rate of 22% under section 115BAA which the
petitioner failed to submit. This was due to the inadvertent lapse
by the petitioner’s tax manager / consultant. But, the two
Circulars which were issued on 23.10.2023 and 18.11.2024 on
record shows that the CBDT witnessed a huge number of
representations wherein taxpayers / assessees across the country
like the petitioner have failed to fulfil the statutory mandatory
requirement of submitting the Form 10-IC for the financial year of
2019-20 and the relevant assessment year of 2020-21, which was
a duration of peak COVID-19 and the two Circulars directed the
respondents to condone the delay in cases of non-submission of
Page 14 of 15
the Form 10-IC. Admittedly, the petitioner had filed an application
for condonation of delay on 03.01.2023 on the grounds of genuine
hardships under Section 119(2)(b) which was rejected by the
respondent No.1 which is against the legislative intent behind the
two Circulars issued by the CBDT. The primary reason the CBDT
issued the two Circulars was that during COVID-19, many
taxpayers, like the petitioner, across the country faced obstacles
and hardships in filing the requisite form 10-IC as the provision of
Section 115BAA of the Act was newly introduced immediately
before COVID-19. The respondents ought to have allowed the
application of condonation of delay in light of ‘genuine hardship’
caused to the petitioner under Section 119(2)(b) of the Act,
especially when the petitioner made attempts to rectify its mistake
by making representations immediately after discovering the
defect in availing the concessional tax rate under Section 115BAA
of the Act.
17. Additionally, the relevant time of the petitioner’s assessment
year, i.e., 2020-21, was during COVID-19 due to which the
petitioner and his consultants’ were unable to comply with the
statutory compliance and file Form 10-IC along with the return of
income in the ITBA portal as the same was shutdown, which
although would not strictly fall within genuine hardship, but upon a
Page 15 of 15
conjoint reading of the two Circulars and the judgments relied
upon by the petitioner, the petitioner had bona fide intention since
the inception of its actions, the benefit under Section 119(2)(b) of
the Act must extend to the petitioner as well. Hence the impugned
order rejecting the petitioner’s application for condonation of delay
in filing Form 10-IC passed by respondent No.1, deserves to be
and is accordingly, set aside. Accordingly, Writ Petition No.18691
of 2026 stands allowed.
18. As a sequel, miscellaneous petitions pending if any, shall
stand closed. However, there shall be no order as to costs.
______________
P. SAM KOSHY, J
_________________________
NARSING RAO NANDIKONDA, J
Date: 02.07.2026
GSD
