Loading judgment…
Facts
The assessee e-filed ITR-3 for AY 2023-24, opting for the New Tax Regime u/s 115BAC by filing Form 10IE on 21.09.2022. However, the CPC processed the ITR under the Old Tax Regime and Section 115JC (AMT provisions), resulting in a reduced refund. The Addl. CIT(A) confirmed the processing, stating the assessee did not meet the conditions for the new tax regime, particularly regarding the timely filing of Form 10IE and had not consistently opted for the new regime in a revised return for AY 2022-23.
Held
The Tribunal observed that a small and rectifiable mistake should not deny the assessee a rightful claim and emphasized the Revenue's duty to provide adequate opportunity. It decided to remand the case back to the CIT(A) for fresh adjudication on merits, instructing to provide the assessee a full and fair opportunity of hearing and to consider all submissions and relevant material.
Key Issues
Whether the CPC correctly processed the ITR under the Old Tax Regime and Section 115JC despite the assessee opting for the New Tax Regime u/s 115BAC, and whether adequate opportunity of hearing was provided before confirming the assessment.
Sections Cited
139(1), 115BAC, 115JC, 115BAD, 80C, 80TTA, 80D, 80G, 143(1), 154
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, CHANDIGARH BENCH, ‘A’, CHANDIGARH
Before: SHRI RAJPAL YADAV & SHRI KRINWANT SAHAY
Order Per Krinwant Sahay, AM: Appeal in this case has been filed by the Assessee against the order dated 10.01.2025 of Addl./JCIT(A)-7, Kochi for A.Y. 2023-24.
2. Grounds of appeal are as under: -
1. 1. That the Ld. AA/AO is wrong in not appreciating the facts that the appellant filed Audited ITR on 27.09.2023 vide R. No.
195-Chd-2025 Aditi Gupta, Ludhiana 2 316478021270923 u/s 139(1) opting New Tax Regime u/s 115BAC. ITR processed under Old Tax Regime is illegal, bad in law, against law and facts on the file.
That the Ld. AA/AO is wrong in not appreciating the facts that Form 10IE was filed on 21.09.2022 vide R. No. 513947610210922, which is applicable for subsequent years, unless another Form 101E is filed withdrawing the consent of regime change.
3. That the Ld. AA/AO is wrong in not appreciating the facts that due date for filing Audit ITR u/s 139(1), Explanation 2(iii) is 31 day of October of the Assessment Year. Processing of ITR under Old Tax Regime is illegal, bad in law, against law and facts on the file.
That the Ld. AA/AO is wrong in not appreciating the provisions of s. 115BAC(5) which clearly says that the option under clause (i), once exercised for any previous year can be withdrawn only once for a previous year other than the year in which it was exercised. The appellant never filed Form 101E for withdrawal. Action of the Ld. AA/AO is against law and facts on the file.
That the Ld. AA/AO is wrong in not appreciating the facts that as per ss. 5 of s. 115JC, the provisions of this sec. shall not apply to a person who has exercised the option referred to in sec. 115BAC or s.
195-Chd-2025 Aditi Gupta, Ludhiana 3 115BAD. Action of the Ld. AA/AO is bad in law, unwarranted, illegal.
6. That the Ld. AA/AO is wrong in not appreciating the facts that the appellant is entitled for statutory deductions u/s 80C, 80TTA, 80D, 80G or as admissible under the 1.T. Act while processing the ITR under Old Tax Regime.
7. That in the facts and circumstances of the case and in law, the order passed by the Ld. AA(NFAC) is arbitrary, whimsical, intractable and without any substance.
That in the facts and circumstances of the case and in law, the Ld. AA(NFAC) erred in confirming the order passed u/s 143(1) by the Ld. AO as no opportunity was afforded which action is against law and facts on the file.
9. That the Ld. AA(NFAC) is wrong in not appreciating the facts that the appellant e- filed adjournment application on 24.12.2024 vide Transaction Ref. No. FOS006087890987 and thereafter again e-filed adjournment application on 02.01.2025 vide Transaction Id No. FOS006124451456 stating therein that my counsel is out of India and is expected in India around 15the day of January, 2025. The Ld. AA dismissed the appeal in a haste and hurried manner which action is unwarranted.
195-Chd-2025 Aditi Gupta, Ludhiana 4 10. That the appellant reserve the right to add, amend, delete any grounds of appeal before the same is heard or disposed off.
11. That in the facts and circumstances of the case and in law, the Ld. AA(NFAC) erred in confirming the order passed by AO u/s 143(1) without thoughtfully going into the facts of the case.
12. That without prejudice to any adverse consequences that may follow, the appellant in the facts and circumstances of the case and in law presses into force for the due adjudication of the matter for due consideration of the Hon'ble Bench.
13. That any other relief as the Hon'ble Bench may feel appropriate in the facts and circumstances of the case and in law.
Brief facts of the case, as filed by the Assessee, are as under:
"ITR-3 was e-filed along with Audited Accounts Statements declaring Business Income of Rs. 20,92,510/- and STCG of Rs.992/- The appellant filed Form 10IE on 21.09.2022 vide Ack. No. 513947610210922. The CPC processed the ITR u/s 115JC without affording any opportunity of being heard.
195-Chd-2025 Aditi Gupta, Ludhiana 5 It is well settled law that the AO has no power to change the method of processing since the appellant opted for 115BAC. Refund of Rs.1,41,500/- is reduced to Rs. 69,540/- is without jurisdiction, illegal, bad in law, against law and facts on the file. The CPC has failed to provide the details of deemed income assessed u/s 115JC. It is a non- speaking order which has no legality in the eye of law.
4. The Addl. CIT(A)/JCIT(A) in his appellate order has given his findings on the issue as under:-
“4.1 I have carefully considered the submissions of the appellant. grounds of appeal
, Statement of facts, Return of Income filed for the AY: 2023-24 as well as the Returns of Income filed for the AY: 2022-23, Intimation u/s 143(1) for the A.Y: 2023-24 and AY: 2022-23 and Rectification Order u/s 154 dated 14/11/2024 for the AY: 2023-24. 4.2 The Ground of Appeal is against the intimation u/s 143(1) issued by the CPC, Bengaluru dated 14/10/2024 for processing of return of income filed for the AY: 2023-24. The appellant's contention is that though the New Tax regime was opted by her for the RI filed for the AY: 2022-23 itself and Form 10IE was filed on 21/09/2022, the CPC has processed the 195-Chd-2025 Aditi Gupta, Ludhiana
6. RI filed for the AY: 2023-24 in the Old Tax regime instead of the New Tax regime u/s 115BAC thereby reducing the refund claim of the appellant. 4.3 The submissions made by the appellant on this ground are considered and thereupon the original return of income filed by the appellant on 21/09/2022, the revised return filed on 24/11/2022 for the AY: 2022-23 and the Return of Income filed on 27/09/2023 for the AY: 2023-24 have been duly verified. Accordingly, the grounds are decided as under:- 4.4 The appellant has filed the original return of income for the AY: 2022-23 on 21/09/2022 opting for the New Tax Regime u/s 115BAC and filed Form 10IE on the very same date i.e, on 21/09/2022. Later, the appellant filed a revised return of income on 24/11/2022 not opting for the new tax regime u/s 115BAC as admitted in Column No. (A23) of the first page of ITR-4. 4.5 Accordingly, CPC has processed the return of income in the old tax regime as the Form 101E was filed on 21/09/2022 which is beyond the due date of 31/07/2022 for filing of return of income u/s 139(1) of the IT Act for the AY: 2022-23. 4.6 While filing the return of income for the AY: 2023-24, the appellant opted for the New Tax Regime in the Return of Income filed stating that the appellant started opting for the New Tax Regime from the AY: 2022-23 onwards, which is a mistake
195-Chd-2025 Aditi Gupta, Ludhiana 7 on the part of the appellant, as pointed out in the earlier Para Nos.4.4 and 4.5 as she had not opted for New Tax Regime in the Revised ITR for the AY: 2022-23, and the CPC has also processed the Return for the A.Y 2022-23 under the Old Tax Regime. 4.7 Therefore, on the basis of all the above, it is observed that the CPC, Bengaluru has rightly processed the return of income in the Old Tax Regime for the AY:2023-24 as the appellant has not opted for the New Tax Regime in the Revised Return of Income filed on 24/11/2022 for the AY: 2022-23. 4.8 Moreover, it is also observed that for the A.Y 2023-24, the assessee vide rectification request No.655945630281024 dated 28/10/2024 has requested the CPC for rectification as there is a mistake in the said intimation u/s 143(1). And the CPC has passed the rectification order u/s 154 of the IT Act, 1961 dated 14/11/2024 for the AY: 2023- 24 computing the tax in the Old Tax Regime.
4.9. It is pertinent to mention here on merits of the case that the appellant has not satisfied the twin conditions of exercising the option of new tax regime in the return of income as well as by filing the Form No.10-IE, on or before the due date of furnishing of return of income u/s 139(1) of the I.T. Act, 1961. In view of the above,
195-Chd-2025 Aditi Gupta, Ludhiana 8 the grounds of the appeal of the appellant is dismissed. 4.10 In the result, the appeal is dismissed.”
The ld. Counsel for the Assessee requested that the 5. matter may be remanded back to the Ld. CIT(A) with the direction to decide the appeal afresh on merit after taking into consideration the grounds raised by the Assessee in the appellate proceedings.
Per contra, the ld. DR relied on the orders of the authorities below.
We have considered the findings given by the authorities and the arguments made by the Ld. counsel as well as by the ld. DR during the proceedings before us. We are of this considered view that a small and rectifiable mistake committed by the Assessee should not deprive it from its rightful claim. Therefore, it is the duty of the Revenue to provide full opportunity to the Assessee to explain its rightful claim provided under the Income Tax Act, 1961. Accordingly, in order to provide
195-Chd-2025 Aditi Gupta, Ludhiana 9 natural justice to the Assessee, we are inclined to remand this case back to the file of the Ld. CIT(A) for fresh adjudication on merit after giving due and adequate opportunity of hearing to the Assessee.
8. Accordingly, the case is remanded back to the file of the CIT(A) for adjudication afresh on merit, by considering the submissions and documents produced by the Assessee and the relevant material available on record. Needless to say, that the CIT(A) shall afford due, reasonable and adequate opportunity of hearing to the Assessee. The Assessee, no doubt, shall cooperate in the fresh proceedings before the CIT(A). All pleas available under the law shall remain so available to the assessee. Ordered accordingly.
In the result, Assessee’s appeal is allowed for Statistical Purposes.
Order pronounced on 03. 09.2025.