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Facts
The assessee, Veena Khindri, initially filed an ITR for AY 2021-22 under the old regime. A revised return was filed belatedly opting for Section 115BAC along with Form 10IE, with the delay attributed to a technical glitch. The CPC and subsequently the CIT(A) denied the benefit of Section 115BAC and rejected the refund claim due to the belated filing of Form 10IE.
Held
The ITAT found that the assessee had sufficient cause for the delay due to a technical glitch and that Form 10IE was available with the CPC before the original return was processed. The Tribunal held that the requirement to file Form 10IE by the due date under section 139(1) is directory, not mandatory, and thus allowed the benefit of Section 115BAC to the assessee.
Key Issues
Whether the benefit of lower tax under section 115BAC can be denied if Form 10IE is filed belatedly but before the processing of the original return, especially when the delay is due to a technical glitch on the tax portal; and whether the requirement to file Form 10IE by the due date of filing return under section 139(1) is directory or mandatory.
Sections Cited
115BAC, 139(1), 139(5), 143(1), 250(6), 119, Chapter VI-A
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Income Tax Appellate Tribunal, DIVISION BENCH, AMRITSAR
Before: SHRI UDAYAN DAS GUPTA & SHRI KRINWANT SAHAY
Assessment Year : 2020-21 Veena Khindri, बनाम The ADIT, Indra Nagar, CPC, Srinagar, Bengluru Jammu & Kashmir 190001 स्थधयी लेखध सं./PAN NO: ABSPK3032D अपीलधथी/Appellant प्रत्यथी/Respondent ( Hybrid Hearing ) निर्धाररती की ओर से/Assessee by : Shri Rohit Kapoor, CA रधजस्व की ओर से/ Revenue by : Mrs. Neelam Sharma, Sr. DR सुिवधई की तधरीख/Date of Hearing : 23.12.2024 उदघोर्णध की तधरीख/Date of Pronouncement : 10.03.2025 आदेश/Order Per Krinwant Sahay, AM: Appeal in this case has been filed by the Assessee against the order dated 30.05.2024 passed by ld. Addl. / Joint Commissioner of Income Tax (Appeals)-1, Pune [ herein referred to as ‘Addl CIT(A)’] .
2. Grounds of appeal
are as under:-
1. That the Ld. CIT(A) vide order u/s 250(6) dated 30.05.2024 has erred in confirming the action of the AO in not providing the benefit of lower tax as per section 115BAC due to the fact that form 10 IE was not filed before the due date of filing of return u/s 139(1).
443-Asr-2024 Veena Khindri, Srinagar 2 2. That the Ld. CIT(A) vide order u/s 250(6) dated 30.05.2024 has erred in confirming the action of the AO without appreciating that form 10 IE could not be filed before the due date of filing of return u/s 139(1) due to technical glitch.
3. That the order passed u/s 250(6) of the Income Tax Act, is bad in law as the requirement of filing of form 10 IE before the due date of filing of return u/s 139(1) is directory in nature and as such the benefit of lower tax rate cannot be denied.
4. That the order passed u/s 250(6) of the Income Tax Act, is bad in law as since the adoption of lower tax rate as per section 115BAC cannot be brought under the ambit of adjustment u/s 143(1) which covers 'arithmetical error, incorrect claim, disallowance of loss, disallowance of expenditure, disallowance of deduction or addition of income appearing in form 26AS or form 16A’.
5. Without prejudice to the aforesaid grounds, the Ld. CIT(A) has erred in not appreciating that even if the benefit of lower tax rate as per section 115BAC is denied to the assessee, then, in such a case, the assessee is entitled to avail deduction under chapter VI-A of the income tax act 1961.
6. That the Ld. CIT(A) has erred in not accepting the form 10 IE and revised return filed on 25.03.2022 without considering the fact that it was filed before the processing of original return i.e on 26.05.2022.
7. That the appellant craves leave to add or amend the grounds of appeal
before the appeal is heard and disposed off.
3. Registry has brought to the notice that filing of appeal in this case is time barred by 10 days. The Assessee has already filed a letter dated 8.8.2024 for condonation of delay in this case, which is reproduced as under:-
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443-Asr-2024 Veena Khindri, Srinagar 6 4. We have considered the reasons for delay in filing the appeal and we find that the delay should be condoned keeping in view the issue discussed in the letter.
5. The ld. DR had no objection to the condonation of delay.
6. Brief facts of the case as per the order of the Addl. CIT(A) is as under:- “The appellant is an individual and has filed its return of income for A.Y. 2021-22 on 25/03/2022 (revised return) showing taxable income of Rs. 12,65,180/-. The Assessing Officer vide order u/s 143(1) of the Income Tax Act, 1961 hereinafter referred to as the Act dated 28.10.2022 and raised the disputed demand of Rs. 3,770/- The appellant is in appeal against the said order.”
During the course of hearing before us, the ld. Counsel for the Assessee has filed written submissions on this issue which is reproduced as under:
The appellant, Veena Khindri was an individual having PAN ABSPK3032D. During the year under consideration, the appellant had earned House Property income amounting to Rs.10,92,413/- , business income amounting to Rs. l,04,588/-and income from other sources amounting to Rs. 68,180/- which is duly disclosed in the return of income filed on 11.01.2022. The said return was 443-Asr-2024 Veena Khindri, Srinagar 7 processed on 26.05.2022 accepting the returned income filed on 11.01.2022. That there were difficulties faced by the taxpayers in electronic filing of Income-tax returns and various forms. In present case, the assessee was not able to opt new regime as there was technical glitch in filing Form 10-IE and as such assessee filed the return in old regime claiming the deductions. The said fact has been admitted by board that the whole portal was revamped on 01.06.2021 and the due date for filing the return of income and various Forms has been extended multiple times due to technical glitch in the new portal.
Later on, the appellant filed a revised return of income on 25.03.2022 in which he had opted for taxation as per the provisions of section 115BAC and also filed Form 10 IE. The appellant in his revised return of income had claimed a refund of Rs. 67610/-. However, the claim of refund in return filed on 25.03.2022 was rejected by the CPC, Bengaluru vide order passed u/s 143(1) dated 28.10.2022. The refund was rejected merely due to the fact that the appellant had failed to file form 10IE before the due date of filing of return i.e. 15.03.2022. In the present case, the delay in filing the Form was only by ten days that to only due to technical glitch.
The summary of date extensions made by CBDT admitting the technical glitch in the online portal is tabulated as under:
Circular No Date Reason for extension of date as Extended to explained by CBDT in circulars Circular No. 30th Difficulties reported by the 9/2021 dated September, taxpayers and other stakeholders 20-5-2021 2021 in electronic filing of Income-tax
443-Asr-2024 Veena Khindri, Srinagar 8 returns and various reports of audit CITCULAR NO. 31st Difficulties reported by the 17/2021 December, taxpayers and other stakeholders 2021 in electronic filing of Income-tax returns and various reports of audit CIRCULAR 15th On consideration of difficulties NO. March 2022 reported by the taxpayers and 01/2022 other stakeholders due to COVID and in electronic filing of various reports of audit under the provisions of the Income-tax Act,1961 (Act), the Central Board of Direct Taxes (CBDT), in exercise of its powers under Section 119 of the Act, provides relaxation in respect of the following compliances: 4. The due date of furnishing of Return of Income for the Assessment Year 2021-22, which was 31st October 2021 under sub- section (1) of section 139 of the Act, as extended to 30th November 2021 and 15th February 2022 bv Circular No.9/2021 dated 20-5- 2021 and Circular No.17/2021 dated 9-9-2021 respectively, is hereby further extended to 15th March, 2022
That immediately when the technical glitch regarding the portal was resolved and utility for filing FORM 10IE got started working, assessee acted responsibly and filed the Form 10IE along with revised ITR on 25.03.2022 Copy of Form 10-IE is enclosed at page No. 16-17 of paper book. Therefore, there was no delay in uploading the form as it was beyond the control of 443-Asr-2024 Veena Khindri, Srinagar 9 the assessee to file the same on or before 15.03.2022. Thus the technical glitch would seriously prejudice the rights of the assessee to file the income tax return under the new tax regime u/s 115BAC. That before going into the merits of the case, it is pertinent to appraise your goodself with the sequence of events which is produced hereunder:
S.NO Events Date 1. Original return filed 11.01.2022 2. Original return processed 26.05.2022 3. Due date of filing form 10IE 15.03.2022 4. Revised return of Income filed 25.03.2022 5. Form 10IE filed 25.03.2022 25.03.2022 6. Claim of refund rejected by CPC 28.10.2022
The said revised return was filed by the appellant before processing of the original return on 25.03.2022 and by no stretch of imagination, could have been ignored in view of the following facts: - 5.1 That Revised Income Tax Return under Section 139(5) refers to the opportunity provided to taxpayers to correct errors, omissions, or any inaccuracies in their originally filed income tax returns by filing a revised return. Section 139(5) of the Income Tax Act 1961 grants taxpayers the right to file a revised return in case they discover any mistakes or need to update information that was not included in the original filing.
5.2 There are key aspects and features of a Revised Income Tax Return under Section 139(5): • Correction of Errors: The primary purpose of filing a revised return is to rectify any errors or omissions present in the originally filed return. This could
443-Asr-2024 Veena Khindri, Srinagar 10 include inaccuracies in reporting income, claiming deductions, or providing other financial details.
• Timeframe for Filing: Taxpayers can file a revised return within a specified timeframe; the revised return must be filed before tie end of the relevant assessment year or before the completion of the assessment, whichever is earlier.
• Voluntary and Involuntary Revision: Taxpayers can file a revised return voluntarily if they discover mistakes on their own. Additionally, the income tax department may request a taxpayer to file a revised return if discrepancies are identified during the assessment process.
• Replacing the Original Return: The revised return replaces the original return filed for a particular assessment year. Once the revised return is submitted, it is considered the final return for that year.
5.3 That any individual or entity that has filed an original income tax return under Section 139(1) of the Income Tax Act, 1961, can file a revised income tax return under Section 139(5).
5.4 That Revised Return can be filed before the fast date of filing the return (upto end of Assessment Year) or before the completion of the assessment, whichever is earlier.
443-Asr-2024 Veena Khindri, Srinagar 11 5.5 Your Honor will appreciate that the appellant had filed a valid revised return and the same could not have been ignored by the CPC.
5.6 That it was found that Form No. 10IE was available with the Centralized Processing Centre (CPC) at the time of processing the return. The existence of Form No. 10IE with tine CPC clearly indicates the appellant's intention to opt for the New Tax Regime. That the /submission of Form No. 10IE is directory in nature and not a mandatory requirement. The non-mandatory nature implies that as long as the form is available and the intention to opt for the New Tax Regime is clear, the benefit should not be denied on technical grounds.
Furthermore, it is also not the case where no such FORM 10IE was filed by assessee. It is just a case in which FORM 10IE was filed by assessee, which was belated only by ten days (25.03.2022) due to the reason beyond the control of the assessee of technical glitch on web portal. It is also to be noted here that FORM 10IE was filed by assessee before any defect was pointed out by the department. Therefore, the ADIT (CPC) has erred in law cy denying the benefit u/s 115BAC while processing the return u/s 143(1). That the denial of benefit u/s 115BAC by CPC u/s 143(1) is beyond the inherent scope in section 143(1). That the option under section 115BAC has rightly been opted by the appellant and being a genuine claim the same may kindly be allowed.
7. Aggrieved by the order of Ld. ADIT (CPC), the appellant filed an appeal before the CIT(A) vide form 35 dated 22.11.2022 challenging the disallowance made by the Ld. ADIT (CPC).
443-Asr-2024 Veena Khindri, Srinagar 12 However, the Ld. CIT(A) passed an order u/s 250 on 30.05.2024 dismissing the appeal.
8. Subsequently, the appellant filed an appeal before ITAT Amritsar Bench vide from 36 on 30.05.2024 against the order of CIT (A) on the following grounds: -
9. SUBMISSIONS IN RESPECT OF GROUND NO 1 Ground No 1 That the Ld. CIT(A) vide order u/s 250(6) dated 30.05.2024 has erred in confirming the action of the AO in not providing the benefit of lower tax as per section 115BAC due to the fact that form 10IE was not filed before the due date of filing of return u/s 139(1).
9.1 That Ground No 1 is general in nature and stands covered in subsequent grounds of appeal.
10. SUBMISSIONS IN RESPECT OF GROUND NO 2 and 3 and 6 Ground No. 2 That the Ld. CIT(A) vide order u/s 250(6) dated 30.05.2024 has erred in confirming the action of the AO without appreciating that form 10IE could not be filed before the due date of filing of return u/s 139(1) due to technical glitch. Ground No. 3 That the order passed u/s 250(6) of the Income Tax Act, is bad in law as the requirement of filing of form 10IE before the due date of filing of return u/s 139(1) is directory in nature and as such the benefit of lower tax rate cannot be denied.
Ground No. 6
443-Asr-2024 Veena Khindri, Srinagar 13 That the Ld. CIT(A) has erred in not accepting the form 10IE and revised return filed on 25.03.2022 without considering the fact that it was filed before the processing of original return i.e. on 26.05.2022.
10.1 The only objection of ADIT (CPC) is that the assessee has not filed Form 10-IE electronically before due date for filing return of income under section 139(1) of the Act. /That Form 10-IE could not be uploaded on ITBA Portal due to the technical glitch as submitted above. The ADIT (CPC) had failed to consider that the minor technical lapse cannot disentitle the assessee from substantial benefit. It is a matter of record that form 10IE was available with CPC at the time of processing return u/s 143(1). Further, filing of form 10IE is directory and not mandatory. In this regard your kind attention is drawn towards the following case of - "ITAT PUNE AKSHAY DEVENDRA BIRARI VERSUS PCIT. CPC. BENGALURU. 2024 f6) TMI 272” where it was held that that the Form No. l0 IE was available with the CPC at the time of processing the return, and it was not a mandatory requirement but directory in nature. Therefore, the Tribunal directed the CPC to consider the Form No. l0 IE and allow the benefit of the New Tax Regime.
(a) [2024] 165 taxmann.com 146 (Amritsar - Trib.) IN THE ITAT AMRITSAR BENCH Singh v. A.O.
Section 115BAC of the Income-tax Act, 1961 - Income of individuals and Hindu Undivided Family - Tax on total income (Option for new tax regime) - Assessment year 2021- 22 - Assessee-individual filed return claiming deduction under Chapter VI-A under old scheme - Subsequently, assessee filed revised return, wherein assessee opted for new scheme of taxation under section 115BAC and also 443-Asr-2024 Veena Khindri, Srinagar 14 submitted Form 10-IE on date of filing revised return - Assessing Officer completed assessment under section 143(1) without allowing benefit of tax rate prescribed under new scheme of taxation on ground that Form 10-IF had not been filed within e allowed under section 139(1) - Whether since requirement of filing Form 10-IE was directory in nature and not mandatory and it was sufficient compliance if said form was before Assessing Officer at time of assessment, Assessing Officer was to be directed to take into consideration Form 10-IE filed by assessee - Held, yes [Para 10.6] [In favour of assessee].
The ld. Counsel of the Assessee has filed different case laws as under : a) [2024] 165 taxmann.com 146 (Amritsar -Trib) in ITAT Amritsar Bench vs. A.O. b) 2024 (6) TMI 272 – ITAT Pune Akshay Devendra Birari vs. DCIT, CPC, Bengaluru c) 2025 (5) TMI 23 – ITAT Jaipur Jagdish Sone, Prop. of Dhruv Jewels vs. ITO, Jaipur. d) [2024] 158 taxmann.com 114 (Ahmedabad- Trib) ITO (Exemptions) vs. Ramji Mandir Religious and Charitable Trust. e) 2020 (7) TMI 625 – ITAT Cochin M/s Krythium Solutions Pvt Ltd C/o Menon & PAI Advocates Vs. the ACIT, Circle 1(2), Kochi.
Besides these two case laws, the Counsel of the Assessee has filed other case laws on this issue. The Counsel of the Assessee also brought on record the order of the Hon'ble Delhi High Court in the case
443-Asr-2024 Veena Khindri, Srinagar 15 of ‘CIT vs. Web Commerce (India) Ltd [2008 (12) TMI 13. In this order the Hon'ble Delhi High Court has held that the provision regarding the filing of audit report along with return of income is only directory and not mandatory. The Audit Report can be filed either during the course of assessment or during the appellate proceedings.
The ld. Counsel has also filed case laws on technical glitch which are as under:- 1) 2022 (1) TMI 947 – Gujarat High Court in the Southern Gujarat Income Tax Bar Association, Surat Vs. Union of India and 1 other(s); and II) 2023 (11) TMI 656 – Bombay High Court Matrix Publicities and Media India Pvt Ltd. vs. DCIT, Circle 16(1), Mumbai & Ors.
We have considered the findings of the Addl. CIT(A) on the issue raised by the Assessee and we have also gone through the written submissions as well as arguments preferred by the Counsel of the Assessee during the proceedings before us.
The ld. DR relied on the order of the ld. CIT(A).
We find that the Assessee could not file its return of income on or before the date of filing of return of income as required u/s 139 of the Act but filed its ITR within the extended period of time ( extended by CBDT ). But in this case, there was some technical glitch on the part of 443-Asr-2024 Veena Khindri, Srinagar 16 the CPC and Income Tax Portal of filing of return of income. The Counsel of the Assessee has already brought on record different case laws in its favour passed by different authorities. We find that the Assessee has filed its return during the extended period (as already extended for filing of the return by the CBDT vide its different Circulars mentioned above). A copy of form 10 IE was also filed before the processing of the return. Therefore, keeping in view different case laws brought on record, we find that the Assessee has fulfilled its duty as required under the law. Accordingly, the findings given by the Addl. CIT(A) on different issue raised by the Assessee cannot be sustained. Thus, Assessee’s appeal filed before us on all the issues is allowed.
In the result, Assessee’s appeal is allowed. Order pronounced on 10.03.2025 Sd/- Sd/- ( UDAYAN DAS GUPTA ) ( KRINWANT SAHAY ) Judicial Member Accountant Member “आर.के.” आदेशकीप्रनतनलपपअग्रेपर्त/ Copy of the order forwarded to : 1. अपीलधथी/ The Appellant 2. प्रत्यथी/ The Respondent 3. आयकरआयुक्त/ CIT 4. पवभधगीयप्रनतनिनर्, आयकरअपीलीयआनर्करण, चण्डीगढ़/ DR, ITAT, CHANDIGARH 5. गधडाफधईल/ Guard File आदेशधिुसधर/ By order, सहधयकपंजीकधर/ Assistant Registrar
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