Delhi High Court Refuses To Condone Delay In Late Filing To Opt Lower Corporate Tax Regime

The Delhi High Court has recently refused to condone delay by a company in opting for a concessional corporate tax regime, holding that its application filed beyond the three-year limit prescribed under a CBDT circular was not maintainable.

The division bench of Justices Dinesh Mehta and Vinod Kumar thus dismissed the writ petition filed by a company challenging the rejection of its application under Section 119(2)(b) of the Income Tax Act seeking condonation of delay in filing Form 10-IC for Assessment Year 2020–21.

Petitioner contended that the delay occurred due to COVID-19, as both its directors were infected and unable to comply with filing requirements. It relied on the CBDT Circular dated November 18, 2024, which was issued to mitigate genuine hardships faced by taxpayers.

However, the court noted that the circular clearly prescribed an outer time limit of three years from the end of the relevant assessment year for filing such condonation applications. For AY 2020–21, this deadline expired on March 31, 2024, whereas the petitioner filed its application only on January 20, 2025.

Thus rejecting the plea, the court observed,

“True it is that the beneficial Circular should be interpreted liberally, but this principle of interpretation is required to be applied carefully. Once a subject falls within the Circular, full play should be given to it but if an assessee fails to fall within the ambit of the Circular, an interpretation which is beyond the clear language cannot be given.”

In the present case however, the Court observed, the petitioner did not come out of its “hibernation” for 4 years and 10 months.

“Petitioner has woken up from its slumber after more than four years and almost 5 years from the end of relevant financial year…If the petitioner kept on sleeping over its rights for years, it cannot curse the Commissioner,” the Court said.

Accordingly, it upheld the rejection of the condonation application and dismissed the writ petition.

For Petitioner: Advocates Amit Kumar Pathak, Yash Kotak & Rohan Khanna

For Respondent: Gaurav Gupta, SSC with Shivendra Singh, JSC, Yojit Pareek, JSC & Advocate Surya Jindal, Adv.