SAMBAIAH DARA, ONGOLE vs. ITO, WARD-1, ONGOLE

आदेश / O R D E R PER MANJUNATHA.G, AM:

These appeals filed by the assessee are directed against the orders

of the Commissioner of Income Tax (Appeals), National Faceless Appeal

Centre (NFAC), Delhi, both dated 13.10.2025, and pertain to assessment

years 2021-22 & 2023-24.

income for AY 2021-22 on 10.02.2022 declaring total income of :: 2 :: Rs.17,93,423/- and opted to pay tax under new tax regime in terms of

Section 115BAC of the Income Tax Act, 1961 (in short “the Act“) by filing

Form No.10-IE on 31.01.2022. The RoI has been processed and

intimation u/s.143(1) of the Act has been issued on 04.08.2022, where

the AO/CPC denied the benefit of lower rate of tax u/s.115BAC of the Act

and tax was computed under the old regime resulting in a demand of

Rs.95,080/- on the ground that the assessee has not furnished RoI on or

before due date provided u/s.139(1) of the Act along with Form No.10-IE

as required u/s.115BAC of the Act indicating option to pay tax under new

regime of lower rate of taxes. The assessee filed application u/s.154 of

the Act and the same has been rejected by the AO/CPC on the ground

that there is no prima facie mistakes in the order passed u/s.143(1) of

the Act.

27.05.2025, the assessee preferred an appeal before the Ld.CIT(A) and

challenged denial of new regime of taxes u/s.115BAC of the Act and

claimed that filing of Form No.10-IE on or before due date provided

u/s.139(1) of the Act is only a directory, but not mandatory and if such

form is made available to the AO, before he passed the assessement

order, the AO ought to have considered the claim of the assessee. The

assessee had cited certain judicial precedents including the decision of the

ITAT, Pune Bench in the case of Akshay Devendra Birari v. DCIT, CPC,

Bangalore in ITA No.782/PUN/2024 order dated 05.06.2024.

:: 3 :: 4. The Ld.CIT(A) after considering the relevant submissions of the

assessee and also taken note of provisions of Sec.115BAC of the Act and

Rule 21AG of the Income-tax Rules, 1962 (in short “the Rules“) observed

that the combined reading of Section 115BAC of the Act & Rule 21AG of

IT Rules makes it abundantly clear that the option to be taxed under new

Regime which is conditional & time bound and for making a claim,

assessee has to file Form No.10-IE on or before due date provided

u/s.139(1) of the Act. The Ld.CIT(A) further noted that as per the

decision of the Hon’ble Supreme Court in the case of CIT v. Calcutta

Knitwears reported in [2014] 362 ITR 673 (SC), “the Law is well settled in

as much as when statutes are clear, no interpretation is required”.

Therefore, held that since filing Form No.10-IE on or before due date

provided u/s.139(1) of the Act is mandatory, the AO/CPC has rightly

computed tax under old regime of taxes as against new regime claimed

by the assessee for not filing relevant Form No.10-IE along with RoI on or

before due date provided u/s.139(1) of the Act

appeal before this Tribunal.

submitted that there is no dispute with regard to the fact that the

assessee has filed belated RoI within the due date provided u/s.139(4) of

the Act and also filed Form No.10-IE on 31.01.2022 which is before the date when the AO passed order u/s.143(1) of the Act on 04.08.2022.

Since the assessee filed Form No.10-IE and the same was made available

to the AO, when he has passed the order u/s.143(1) of the Act, the AO

ought to have considered new regime of taxation as per Section 115BAC

of the Act. In this regard, he relied on the following decisions of various

Tribunals:

• Arun Gopilal Samnani v. ITO reported in [2025] 174 taxmann.com 33 (Ahmedabad-Trib.) • Sonea Dhir v. CIT reported in [2025] 176 taxmann.com 827 (Delhi-Trib.) • Meenaben Maheshchandra Patel v. ITO reported in [2025] 181 taxman.com 800 (Surat-Trib.) • Harbans Singh v. AO, CPC reported in [2024] 165 taxmann.com 146 (Amritsar – Trib.) • Shrikant Joshi v. ITO reported in [2025] 170 taxmann.com 123 [Jaipur-Trib.) 7. The Ld.SR-AR for Revenue, on the other hand, supporting the order

of the Ld.CIT(A) submitted that as per provisions of Sec.115BAC(5) of the

Act, filing Form No.10-IE on or before due date provided u/s.139(1) of the

Act is mandatory and if assessee doesn’t file relevant forms within the

due date, he can’t claim new regime of taxation and therefore, the AO has

rightly computed tax as per old regime and the same has been upheld by

the Ld.CIT(A). Therefore, he submitted that the order of the Ld.CIT(A)

should be upheld.

record and had gone through orders of the authorities below. The

provisions of Sec.115BAC of the Act, deals with concessional rate of

taxation of individuals and HUF subject to fulfillment of certain conditions.

:: 5 :: Sub-section (5) of Section 115BAC of the Act lays down a condition of

filing declaration in Form No.10-IE on or before due date provided

u/s.139(1) of the Act for any previous year relevant to the assessement

year commencing after the 1st day of April, 2021 and such option once

exercised shall apply to subsequent assessement years. As per first

proviso to Section 115BAC of the Act, exercised by the assessee shall be

invalid, if the assessee fails to satisfy the conditions mentioned in Sub-

section (2). In other words, the claim of the assessee shall be invalid, if

conditions specified in sub-section (2) are not satisfied, but not belated

filing of relevant declaration in Form No.10-IE as per Rule 21AG of the

Income Tax Rules, 1962. In the present case, although, the assessee has

filed belated RoI u/s.139(4) of the Act and also exercised option to pay

tax under new regime in terms of Section 115BAC of the Act by filing

Form No.10-IE as required under Rule 21AG of the IT Rules, before the

AO passed order u/s.143(1) of the Act but the AO denied concessional

rate of tax only on the ground that the assessee has not exercised option

by filing relevant Form No.10-IE on or before due date provided

u/s.139(1) of the Act.

Benche of ITAT Ahmedabad has considered an identical issue in the case

of Arun Gopilal Samnani v. ITO reported in [2025] 174 taxmann.com 33

(Ahmedabad-Trib.), where it has been clearly held that failure to file Form

No.10-IE within the prescribed due date doesn’t invalidate, assessee’s :: 6 :: claim of option to pay taxes under new regime and mandate of filing Form

No.10-IE is only directory in nature but not mandatory. A similar view

has been taken by ITAT Delhi Bench in the case of Sonea Dhir v. CIT

reported in [2025] 176 taxman.com 827 (Delhi-Trib.). The decision of

the ITAT Surat Bench in the case of Meenaben Maheshchandra Patel v.

ITO reported in [2025] 181 taxmann.com 800 (Surat-Trib.) had also

considered an identical issue and held that where the assessee opted

taxation under new regime for AY 2023-24 and filed Form No.10-IE on

08.11.2022, option once exercised shall be apply for subsequent years

including relevant assessement year. The sum and substance of ratio laid

down by various benches of the Tribunal is that filing Form No.10-IE as

required under Rule 21AG of the IT Rules is directory in nature but not

mandatory and if such form is filed and made available to the AO before

he passed order u/s.143(1)/143(3) of the Act, then the AO ought to have

considered the claim of the assessee in terms of Sec.115BAC of the Act.

In the present case, since the assessee has filed relevant declaration in

Form No.10-IE, although belatedly, but before the AO passed order

u/s.143(1) of the Act, therefore, in our considered view, the AO ought to

have considered the claim of the assessee for payment of taxes under

new regime in terms of Section 115BAC of the Act. The Ld.CIT(A) without

considering the relevant facts simply upheld the reasons given by the AO

for denial of the benefit u/s.115BAC of the Act. Thus, we set aside the :: 7 :: order of the Ld.CIT(A) and direct the AO to allow the benefit of new

regime as per Section 115BAC of the Act as claimed by the assessee.

allowed.

provisions of Sec.115BAC of the Act and levied tax as per old regime of

taxation only on the ground that the option exercised by the assessee for

AY 2021-22 was invalid in the base year and further, there was no fresh

option filed by the assessee for the year under consideration and thus,

the assessee is not entitled for the benefit of concessional rate of taxation

in terms of Section 115BAC of the Act. The Ld.CIT(A) upheld the reasons

given by the AO/CPC on the very same ground by considering provisions

of Sec.115BAC of the Act & Rule 21AG of the IT Rules and observed that

filing of relevant Form No.10-IE is mandatory on or before due date

provided u/s.139(1) of the Act. In other words, Form No.10-IE filed by

the assessee on 31.01.2022, exercising option to pay tax as per

Sec.115BAC of the Act was not disputed by the AO and if we consider the

above Form No.10-IE for the assessement year under consideration, it is

much before the due date for filing of RoI u/s.139(1) of the Act. Further,

the assessee had also furnished RoI for the assessement year under

consideration on 21.07.2023 which is on or before due date provided

u/s.139(1) of the Act. Since the assessee has filed RoI on or before due :: 8 :: date provided u/s.139(1) of the Act and also exercised option to pay tax

as per Sec.115BAC of the Act, in our considered view, the AO/CPC ought

to have allowed the claim of the assessee for payment of taxes as per

Sec.115BAC of the Act. Further, for AY 2021-22 very same issue has

been considered by the Tribunal in ITA No.2463/Hyd/2025 where the

Tribunal by following certain judicial precedents including the decisions of

various benches of the Tribunal held that filing of Form No.10-IE is

directory in nature and if such form is filed and made available to the AO

before he passed order u/s.143(1) of the Act, then the AO ought to have

considered the claim of the assessee for payment of taxes as per

Sec.115BAC of the Act. Since the option exercised by the assessee is

considered to be valid for AY 2021-22, in our considered view, the

assessee is eligible for claiming benefit of lower rate of taxes as per

Sec.115BAC of the Act for the subsequent assessement years and thus,

the AO is directed to allow the benefit of lower rate of taxes as per

Sec.115BAC of the Act for the assessement year under consideration and

compute the tax as per new regime in terms of Sec.115BAC of the Act.

allowed.

:: 9 :: 13. In the result, appeals filed by the assessee for AYs 2021-22 & 2023-

24 are allowed.

Order pronounced on the 15th day of July, 2026, in Hyderabad.

Sd/- Sd/- (िवजय पाल राव) (मंजूनाथा. जी) (VIJAY PAL RAO) (MANJUNATHA.G) उपा�� /VICE-PRESIDENT लेखा सद�/ACCOUNTANT MEMBER

Hyderabad, dated 15.07.2026. TLN

आदेशकी �ितिलिप अ�ेिषत/ Copy of the order forwarded to:

िनधा�रती/The 1 : Sambaiah Dara, Flat No.G-4 Golden Enclave, Mangamuru, Ongole- 523 002 Assessee राज�/ The Revenue 2 : The ITO, Ward-1, Ongole. 3 The Principal Commissioner of Income Tax, Guntur. िवभागीय�ितिनिध, आयकर अपीलीय अिधकरण, हैदराबाद / DR, ITAT Hyderabad. 4 गाड�फ़ाईल / Guard file 5

आदेशानुसार / BY ORDER

TUMMALACHARLA Digitally signed by TUMMALACHARLA LAKSHMI NARAYANA DN: cn=TUMMALACHARLA LAKSHMI LAKSHMI NARAYANA, c=IN, o=INCOME TAX APPELLATE TRIBUNAL, ou=INCOME TAX NARAYANA APPELLATE TRIBUNAL, CHENNAI BENCH Date: 2026.07.15 15:42:21 +05'30'

Sr. Private Secretary ITAT, Hyderabad