ITAT Rules On Interplay Between Section 115BAA And Section 112 Of ITA

To promote growth and investment, the Legislature by way of the Taxation Laws (Amendment) Act, 2019, inter alia, inserted Section 115BAA in the Income-tax Act, 1961 ('ITA') with effect from April 1, 2020 to allow an existing domestic company to opt to pay tax at the effective rate of 25.17 %, if it does not claim any incentive/ deduction. Section 115BAA forms part of Chapter XII of ITA, namely 'Determination of tax in certain special cases', which contains provisions such as tax on short-term and long-term capital gains.

The text of Section 115BAA of the ITA starts with 'notwithstanding anything contained in this Act but subject to the provisions of this Chapter', thereby meaning that while Section 115BAA of the ITA overrides conflicting provisions of the ITA, it cannot override the provisions contained in Chapter XII of the ITA.