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Facts
The assessee, a Hindu Undivided Family (HUF), filed its return for AY 2021-22 and 2023-24 opting for the new tax regime under Section 115BAC by filing Form No.10IE. However, the CPC denied the benefit of the new tax regime, stating the form was not filed by the due date. Rectification petitions and appeals were dismissed by the Ld.JCIT(A).
Held
The Tribunal held that the requirement of filing Form No.10IE is directory and not mandatory. Once the form is available before processing, the benefit of the new tax regime should be extended. The same option is valid for subsequent assessment years.
Key Issues
Whether the assessee is entitled to the benefit of the New Tax Regime under Section 115BAC when Form No.10IE was filed after the due date but before the processing of the return.
Sections Cited
115BAC, 143(1), 154, 139(1)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, ‘B’ BENCH, CHENNAI
Before: SHRI GEORGE GEORGE K & SHRI S.R. RAGHUNATHA
आदेश /O R D E R
PER S. R. RAGHUNATHA, AM :
These two appeals, preferred by the assessee, are directed against separate orders dated 07.07.2025 passed by the Learned Additional/Joint Commissioner of Income Tax (Appeals)-1, Pune [hereinafter referred to as “the Ld.JCIT(A)”], arising out of the intimations passed by the Centralized Processing Centre, Bengaluru [hereinafter referred to as “the CPC”], pertaining to the Assessment Years 2021-22 and 2023-24, respectively.
The assessee, a Hindu Undivided Family (HUF), filed its return of income on 21.03.2022 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 11.04.2022, wherein the benefit of the new tax regime was denied and tax was computed under the old regime. Thereafter, the assessee filed an application for rectification u/s.154 of the Act on 02.04.2024, which came to be disposed of by the CPC on 13.06.2024, rejecting the assessee’s claim. Subsequently, the assessee preferred another rectification petition on 27.02.2025, which was also disposed of by the CPC on the same date, again rejecting the assessee’s claim.
Being aggrieved, the assessee carried the matter in appeal before the Ld.JCIT(A). However, vide impugned appellate order dated 07.07.2025, the Ld.JCIT(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.
We have carefully considered the rival submissions and perused the material available on record. The solitary issue that arises for adjudication in the present appeal is whether the CPC was justified in denying the assessee the benefit of the New Tax Regime u/s.115BAC of the Act.
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 subsequently furnished the said Form No.10IE on 21.03.2022, which was much prior to the processing of the return of income u/s.143(1) of the Act by the CPC.
& 2481 /Chny/2025 7. 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.
Accordingly, 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.
ITA No.2481/Chny/2025 (A.Y.2023-24)
We have considered the rival submissions and perused the material available on record. The facts, in brief, are that the assessee filed its return of income for A.Y.2023-24 on 29.07.2023, opting for taxation under the new tax regime prescribed u/s.115BAC of the Act, having already exercised such option by filing Form No.10IE in A.Y. 2021-22. The CPC, while processing the return u/s.143(1) of the Act on 14.12.2023, computed the tax liability under the old tax regime on the ground that the assessee’s option u/s.115BAC stood rejected due to delay in filing Form No.10IE in A.Y. 2021-22.
Against the said intimation, the assessee filed multiple rectification applications before the CPC. However, the CPC, vide order passed u/s.154 of the Act dated 05.03.2025, declined to grant the benefit of the new tax regime u/s.115BAC of the Act. Aggrieved by the same, the assessee preferred an appeal before the Ld.JCIT(A), who, vide impugned order dated 07.07.2025, confirmed the action of the CPC. Being aggrieved, the assessee is in further appeal before us.
We note that for A.Y. 2021-22, we have already adjudicated the issue in favour of the assessee, holding that filing of Form No.10IE is directory in nature & 2481 /Chny/2025 and not mandatory, and consequently the assessee is entitled to be taxed under the new tax regime u/s.115BAC of the Act. Further, we are of the considered view that once Form No.10IE is filed exercising the option for the new tax regime, the same continues to be valid for subsequent assessment years, and there is no statutory requirement to file Form No.10IE afresh every year.
In view of the above findings, we hold that the assessee is also entitled to taxation under the new tax regime for the assessment year under consideration, i.e.,A.Y.2023-24. Accordingly, we direct the Jurisdictional Assessing Officer/CPC to amend the intimation passed u/s.143(1) of the Act and grant the benefit of taxation u/s.115BAC of the Act for the impugned assessment year.
In the result, the grounds raised by the assessee are allowed.
In the result both the appeals of the assessee in & 2481 / Chny / 2025 stands allowed. Order pronounced in the court on 21st January, 2026 at Chennai.