DR. ARUNA JONATHAN,SALEM vs. CIRCLE 1(1), SALEM

The brief facts of the case are that the assessee an individual, filed his return of income on 04.02.2022 for the A.Y. 2021-22, declaring a total income of Rs.25,83,960/- after exercising the option to be taxed u/s.115BAC of the Act by electronically filing Form No.10IE on the same date. The return so filed was processed by the CPC u/s.143(1) of the Act on 22.03.2022, wherein the benefit of the new tax regime was denied and tax was computed under the old regime, since the assessee had filed the return of income after the due date u/s.139(1) of the Act, which was due on 31.12.2021 as extended by the CBDT. Thereafter, the assessee filed applications for rectification u/s.154 of the Act, which came to be disposed of by the CPC on 13.06.2024 and 30.01.2025, rejecting the assessee’s claim.

Being aggrieved, the assessee carried the matter in appeal before the Ld.CIT(A). However, vide impugned appellate order dated 17.12.2025, the Ld.CIT(A) dismissed the appeal holding that the option for taxation under the new regime by filing Form No.10IE was not exercised on or before the due date prescribed u/s.139(1) of the Act and, consequently, held that the assessee was not eligible to claim the benefit u/s.115BAC of the Act.

Aggrieved by the said order, the assessee is in further appeal before us.

None appeared for the assessee during the hearing before us. However, the assessee had filed the grounds of appeal by relying on various Tribunal decisions of the coordinate bench held in favour of the assessee in the similar set of facts.

Per contra the ld.DR supported the order of the ld.CIT(A) and submitted that the provisions of the Act has very clearly mandates the assessee to file form 10IE on or before the due date provided u/s.139(1) of the Act to claim the benefit u/s.115BAC of the Act. Hence, prayed for not to interfere in the order of the ld.CIT(A).

Admittedly, the assessee did not file Form No.10IE on or before the due date prescribed for filing the return of income. However, it is an undisputed fact that the assessee had furnished the said Form No.10IE along with the return of income on 04.02.2022, which was much prior to the processing of the return of income u/s.143(1) of the Act by the CPC.

In our considered view, the requirement of filing Form No.10IE is directory in nature and not mandatory. Once the assessee had exercised the option and the Form No.10IE was available on record before the return was processed, the CPC ought to have taken cognizance of the same and extended the benefit of the New Tax Regime. Denial of such benefit merely on technical grounds, despite the form being available prior to processing, is not justified.

We note that in the similar set of facts and circumstances the Tribunal has decided the issue in favour of the assessee in the following decisions : - ITA No.3379/Chny/2025 dated 27.01.2026 – Bhuvana Rajeswari Vijaysankar Vs. ITO - ITA No.3496/Chny/2025 dated 30.01.2026 – Mary Vs. ITO - ITA No.2480 & 2481/Chny/2025 dated 21.01.2026 – Murugapandian (HUF) Vs. ITO In the case of Murugapandian (HUF) (supra), the Tribunal held as under :

In the present facts and circumstances of the case and respectfully following the decisions of the coordinate benches of the Tribunal, we direct the Jurisdictional Assessing Officer/CPC to amend the intimation issued u/s.143(1) of the Act by duly considering Form No.10IE and to allow the assessee the option of the New Tax Regime u/s.115BAC for the impugned assessment year.

In the result, the grounds raised by the assessee are allowed.