SUNIL ANAND RAO,MUMBAI vs. INCOME TAX OFFICER- WARD 27(3)(1), IT-OFFICE

ITA 2955/MUM/2026Status: DisposedITAT Mumbai25 September 2026AY 2022-235 pages
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What were the facts?

The assessee, Sunil Anand Rao, is challenging the order of the National Faceless Appeal Centre (NFAC), Delhi, which confirmed the Assessing Officer's (AO) refusal to rectify an intimation under Section 143(3) of the Income Tax Act, 1961. The assessment year in question is 2022-23. The dispute arises from the assessee's claim to be taxed under the old regime, despite not furnishing Form 10IE, which is typically required to opt out of the new tax regime introduced by Section 115BAC. The assessee had salary income, professional receipts, and income from other sources. For AY 2021-22, the assessee had opted for the new regime. However, for AY 2022-23, the assessee indicated opting out of the new regime in the return and claimed deductions permissible only under the old regime. The Central Processing Unit (CPC) adjusted the return, refusing the old regime benefit, leading to additional tax liability. The assessee's rectification application under Section 154 was rejected by the AO and subsequently by the CIT(A).

What did the Tribunal hold?

The Tribunal held that the issue is no longer res integra, referring to decisions of co-ordinate benches. It was held that filing of Form 10IE is directory and not mandatory. The Central Processing Unit (CPC) should not deny the benefit of the old regime merely on account of non-filing of the form if the intention of the assessee is clear. The Tribunal noted that for AY 2022-23, the new regime was the default regime. However, in the present case, the assessee had opted out of the new regime while filing the return and claimed deductions permissible only under the old regime. This provided sufficient indication on record that the assessee was willing to be governed by the old regime. Therefore, following the co-ordinate benches, the assessee was entitled to the benefit of the old regime. The appeal was allowed, and the impugned order was set aside, directing the AO/CPC to re-compute the appellant's income under the old regime as declared in the return and determine the tax liability accordingly. No issue was expressly left undecided.

What were the issues?

1. Whether, on account of the purported failure to furnish Form 10IE, the benefit of the old tax regime can be denied to the assessee for AY 2022-23, turning on Section 115BAC and Rule 21AG of the Income Tax Rules, 1962. Assessee's contentions: The assessee argued that the return of income clearly indicated opting out of the new regime by ticking the relevant part and claiming deductions permissible only under the old regime. It was submitted that neither Section 115BAC(5) nor Rule 21AG(2) prescribes a specific manner of withdrawal. The assessee relied on the principle of 'substance over form' and cited CBDT Circular No. 14 (XL-35) dated 11.04.1955, along with decisions from the ITAT Pune Bench in Akshay Devendra Birari and ITAT Bangalore Bench in Vinayaka Murthy. Revenue's contentions: The revenue supported the impugned order, submitting that filing of Form 10IE is mandatory, and without it, the benefit of the old regime cannot be extended to the assessee.

Which sections of the Income-tax Act were involved?

Section 115BAC,Section 143(3),Section 154,Section 10(13A)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI BENCHES “G”, MUMBAI

Before: Justice (Retd.) C V Bhadang & Shri Prabhash Shankar

For Appellant: Shri Dinesh Kukreja
For Respondent: Shri Rajgopal K Parhsarthy
Hearing: 01.09.2026Pronounced: 25.09.2026

Per Justice (Retd.) C V Bhadang, President:

By this appeal, the assessee is challenging the order dated 08.01.2026 passed by the National Faceless Appeal Centre (NFAC), Delhi (‘CIT(A)’ for short) thereby confirming the order passed by the Assessing Officer (‘AO’ for short) refusing to rectify the intimation u/s. 143(3) of the Income Tax Act, 1961 (‘Act’ for short). The appeal relates to assessment year 2022-23. 2. The issue in the present appeal is whether on account of the purported failure of the appellant to furnish the option in Form 10IE, the benefit of the old regime claimed by him can be denied.

ITA 2955/Mum/2026 Sunil Anand Rao

3.

It may be mentioned that by virtue of Fi

The order continues below.

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