NIRBHAY NAINISH WADIWALA,SURAT vs. ITO 2(2)(1), SURAT., SURAT

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ITA 424/SRT/2026Status: DisposedITAT Surat14 July 2026AY 2021-227 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal held that Form 10-IE is not mandatory for opting into the new tax regime when income is from salary and other sources, not business or profession. The assessee had validly exercised the option in the revised return.

What were the facts?

The assessee filed an original return under the old tax regime and later a revised return opting for the new tax regime (Section 115BAC). The CPC processed the revised return, denying the new regime benefits and standard deduction, leading to a demand. The assessee's rectification applications were rejected.

What were the issues?

Whether the assessee could validly opt for the new tax regime in a revised return without filing Form 10-IE, and whether the CPC's partial acceptance of the revised return was legal.

Which sections of the Income-tax Act were involved?

Section 115BAC,Section 139(5),Section 154,Section 143(1),Section 16(ia)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, SURAT ‘SMC’ BENCH, SURAT

For Appellant: Shri Rushin Patel, AR
For Respondent: Shri Ashish Kumar, Sr. DR
Hearing: 11.06.2026Pronounced: 14.07.2026

IN THE INCOME TAX APPELLATE TRIBUNAL SURAT ‘SMC’ BENCH, SURAT BEFORE MS. SUCHITRA KAMBLE, JUDICIAL MEMBER AND SHRI BHAGIRATH MAL BIYANI, ACCOUNTANT MEMBER ITA No.424/SRT/2026 (Assessment Year: 2021-22) Mr. Nirbhay Nainish Wadiwala, ITO 2(2)(1), 9/2003-04, Vishnu Priya, Aykar Bhavan, Limda Chowk, Vs. Near Majura Gate, Main Road, Surat Surat PAN: ADUPW5659G (Appellant) : (Respondent) Assessee by : Shri Rushin Patel, AR Respondent by : Shri Ashish Kumar, Sr. DR Date of Hearing : 11.06.2026 Date of Pronouncement : 14.07.2026 O R D E R PER : SUCHITRA KAMBLE, J M: The appeal filed by the assessee is against the order passed by the Learned Commissioner of Income Tax (Appeals), ADDL/JCIT(A) [in short “CIT(A)”], Mumbai dated 14.01.2026 for the Assessment Year (in short “AY”) 2021-22.

2.

The assessee has raised the following grounds of appeal: “1. The learned Commissioner of Income Tax (Appeals) [CIT(A)] erred in law and on facts in confirming the order passed u/s 154 of the Income Tax Act, 1961, and dismissing the appeal filed by the appellant. 2. The learned CIT(A) erred in law and on facts in confirming denial of the new tax regime u/s 115BAC while processing the revised return filed u/s 139(5) on 15/01/2022.

ITA No.424/SRT/2026 Mr. Nirbhay Nainish Wadiwala 3. For an assessee having no income from business or profession, the option u/s 115BAC can be validly exercised in a revised return u/s 139(5). Filing of Form No. 10-IE is not mandatory in such cases. The CIT(A) wrongly held otherwise. 4. While processing the revised return, the CPC could either accept it in totality (including new regime computation) or reject it in toto as defective. Partial acceptance (accepting higher income but rejecting new regime rates and denying standard deduction) is illegal and unsustainable. 5. The orders u/s 143(1) and u/s 154 were passed without issuing any show cause notice or granting opportunity of hearing, thereby violating principles of natural justice. 6. The appellant craves leave to add, alter, amend, modify, substitute, delete or rescind any of the grounds on or before final hearing.” 3. The assessee was having income under the head “Salary and income from other sources”. Original Return of Income filed on 23/09/2021 (under old tax regime). Total income & Tax in the original return of income filed was as under: Computation of Income Heads of Income Amount Rs. Income from Salary 6,00,055 Income from Other Sources 7,64,453 Gross Total Income 13,64,508 Less: Deduction under chapter VI A 80C Deduction Rs.1,50,000 80D Deduction Rs. 1,79,103 25,000 80TTA Deduction Rs. 4,103 Total Deductions Total Income 11,85,405

Computation of Tax on Total Income Tax on Rs.250000 Nil Tax on Rs.250000 12500 (500000-250000) @ 5% Tax on Rs.500000 100000 (1000000-500000)@ 20% Tax on Rs.185410 55623 168123

ITA No.424/SRT/2026 Mr. Nirbhay Nainish Wadiwala (1185410-1000000)@ 30% Add:- Health & 6725 Education Cess @ 4% 174848 Less:- TDS 77301 97547 Add:- Interest u/s. 234- 10770 B & C 108317 Less:- Self assessment 108320 tax Tax Payable Nil

Above return was processed and intimation u/s.143(1) of the Act was issued. Thereafter Revised return of income had been filed on 15/01/22 (under New Tax Regime). As there was no income under the head of Income from Business & Profession, the assessee did not file Form No.10IE. Therefore, the assessee filed Revised Return of income thereby obtaining New Regime as under.

Computation of Income as per Revised Return Heads of Income Amount Rs. Income from Salary 6,50,055 Income from Other 7,64,453 Sources Gross Total Income 14,14,508

Computation of Tax as per Revised Return Tax on Rs.250000 Nil Tax on Rs.250000 12500 (500000-250000) @ 5% Tax on Rs.250000 25000 (750000-500000)@ 10% Tax on Rs.250000 37500 (1000000-750000)@ 15% Tax on Rs.250000 50000 (1250000-1000000)@ 20% Tax on Rs. 164510 41128 166128 (1414510-1250000)@ 25%

ITA No.424/SRT/2026 Mr. Nirbhay Nainish Wadiwala Add:- Health & Education 6645 Cess @ 4% 172773 Less:- TDS 77301 95472 Add:- Interest u/s.234-B 10542 & C 106014 Less:- Self assessment 116110 tax Refund (10096)

Revised Return was processed and Intimation u/s.143(1) of the Income Tax Act, 1961 (in short “the Act”) was issued with demand. The assessee filed Rectification Application u/s. 154 of the Act. Last Rectification order u/s.154 of the Act has been passed with demand of Rs.76,260/-. The reason behind the Demand was Return Income considered as per New Tax Regime without Standard Deduction of Rs.50000 u/s. 16(ia) from Salary Income and All the deductions under Chapter VI - A of Rs.1,79,103 (like 80C Deduction of Rs. 1,50,000/- + 80D Deduction of Rs.25,000/- + 80TTA Deduction of Rs.4,103). The assessee filed rectification application u/s.154 of the I.T. Act. for the Asst. Year 21-22 twice, which was rejected.

4.

Being aggrieved by the rectification order, the assessee filed appeal before the CIT(A). The CIT(A) dismissed the appeal of the assessee.

5.

The Ld. Authorised Representative (in short “Ld. AR”) for the assessee submitted that the Assessing Officer (in short “the AO”) should have accepted the entire revised return with consideration of new tax regime or could have rejected the entire revised return. Revised return was filed without any deduction with subject to tax at new tax regime by the assessee. The AO should have issued notice for defective return because original return of income was already filed and processed within the due course. In assessee’s case, the AO made addition and finalized the addition without giving any show cause notice or intimation to the assessee before finalizing the order and making the addition. The Ld. AR has also filed the decision of Hon’ble

ITA No.424/SRT/2026 Mr. Nirbhay Nainish Wadiwala Jurisdictional High Court in case of Kunal Structure (India) Pvt Ltd v. Dy. CIT (2020) 422 ITR 482422 ITR 482 wherein it is categorically mentioned that date of filing of original return u/s 139(1) of the Act has to be considered for purpose of computing period of limitation under sub section (2) of section 143 of the Act and not date on which defects actually came to be removed u/s 139(9) of the Act. The Ld. AR also relied upon the decision of the Tribunal in case of Subhash Sukdeo Chaudhary vs. DCIT ITA No.354/Pun/2024 which is squarely applicable in assessee’s case.

6.

The Ld. Departmental Representative (in short “Ld. DR”) relied upon the assessment order and the order of the Ld. CIT(A). The Ld. DR further submitted that the CIT(A) has categorically mentioned that since the benefit of new tax regime has been denied while processing the revised return, it was natural for the AO to compute the tax liability by applying old tax regime.

7.

We have heard both the parties and perused all the relevant materials available on record. It is pertinent to note that the assessee has filed return u/s 139(1) of the Act on 23.09.2021 within due date of filing original returns under the old tax regime which was processed u/s 143(1) of the Act without any variations. The assessee filed a revised return of income u/s 139(5) of the Act on 15.01.2022, opting for taxation under the new tax regime u/s 115BAC of the Act. The CPC processed the revised return and passed intimation order dated 22.03.2022 denying the standard deduction u/s 16(ia) of the Act and applied the income tax rates as applicable under old tax regime, raising demand of Rs.76,260/-. The assessee filed rectification applications and the CPC vide rectification orders dated 08.09.2025, 11.11.2025 & 18.11.2025 returning the adjustments made while processing the revised return u/s 143(1) of the Act. The reasoning given by the CIT(A) was that the assessee failed to file Form 10IE along with the original return declaring benefit as per the new tax regime u/s 115BAC of the Act. But the fact remains that the assessee has filed the revised return within the stipulated due date for revised return to be filed and has claimed the new tax regime u/s 115BAC of the Act. As regards to

ITA No.424/SRT/2026 Mr. Nirbhay Nainish Wadiwala Form 10IE, the assessee has given the details of frequently asked questions wherein the Form 10IE to be filed as a mandatory provision to offer new tax regime when the income is derived under the head “profit & gains of business and profession”. But in the case of assessee, the assessee is deriving the “income from salary” and “income from other sources”, where Form 10IE is not mandatory to opt for new tax regime. Thus, the assessee has rightly claimed in the revised return which was well within the due date of filing revised return and opted for the new tax regime as well as the assessee has not claimed any deduction with subject to tax at new tax regime. This should have been considered by the AO but both the AO as well as the CIT(A) has failed to follow their own instructions that Form 10IE is not mandatory in cases where the assessee is deriving income under the head “salary” and “income from other sources”. Thus, the AO is directed to take cognizance of the assessee’s revised return and consider the assessee for new tax regime and accordingly finalize the assessee’s assessment.

8.

In result, the appeal of the assessee is partly allowed.

Order pronounced in the open court on 14.07.2026

Sd/- Sd/- (B.M. BIYANI) (SUCHITRA KAMBLE) ACCOUNTANT MEMBER JUDICIAL MEMBER Surat; Dated: 14.07.2026 * Kishore, Sr. P.S.

Copy of the Order forwarded to: 1. The Appellant 2. The Respondent 3. CIT- concerned 4. DR, ITAT, Surat

ITA No.424/SRT/2026 Mr. Nirbhay Nainish Wadiwala 5. Guard File By order,

Assistant Registrar/Sr.PS/PS ITAT, Surat Bench

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