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Facts
The assessee filed an appeal against the order of the CIT(A) which confirmed the action of the AO/CPC in rejecting the option for the new tax regime u/s.115BAC for AY 2022-23. The assessee had exercised this option in the return of income for AY 2022-23, but the same was rejected because the Form 10-IE filed for AY 2021-22 was belated.
Held
The Tribunal held that the rejection of the option for the new tax regime for AY 2021-22 due to belated filing of Form 10-IE should not preclude the assessee from opting for the new tax regime in AY 2022-23, especially when the return for AY 2022-23 was filed within the due date. The Tribunal relied on a co-ordinate bench decision which held that the form filing is directory in nature.
Key Issues
Whether the assessee can opt for the new tax regime under section 115BAC for AY 2022-23 when the Form 10-IE for the preceding year AY 2021-22 was filed belatedly?
Sections Cited
115BAC, 139(1), 143(1), 139(4)
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Income Tax Appellate Tribunal, ‘C’ BENCH, CHENNAI
Before: SHRI MAHAVIR SINGHAND SHRI MANOJ KUMAR AGGARWAL
O R D E R
PER MAHAVIR SINGH, VICE PRESIDENT:
This appeal by the assessee is arising out of the order of the Commissioner of Income Tax (Appeals), Addl/JCIT(A)-5, Mumbai in Order No.ITBA/APL/S/250/2023-24/1061416737(1) dated 23.02.2024. The return of income was processed and intimation u/s.143(1) of the Income Tax Act, 1961 (hereinafter the ‘Act’) was issued by the CPC, Bengaluru for the assessment year 2022-23 vide order dated 23.02.2023.
2. At the outset, it is noticed that this appeal is barred by limitation by six days. The facts are that the order of CIT(A) dated 23.02.2024 was received by assessee on 23.02.2024 through e-mail as per Form No.36. The appeal should have been filed on or before 23.04.2024 but appeal was actually filed on 29.04.2024, thereby there is a delay of six days. The assessee has stated the reasons in its affidavit as under:- “3. The Petitioner states that the order of the CIT(A) was received by him 23.02.2024 vide email. The Petitioner states that the last day for filing an appeal before this Hon'ble Tribunal expired on 23.04.2023.
The Petitioner states that he sent the signed appeal documents to his Counsel's office for filing the appeal before this Hon'ble Tribunal and there was some delay in transit and the counsel could not receive it before 23.04.2023.
The petitioner has filed an appeal against the order of the CIT(A) on 29.04.2024 before this Hon'ble Tribunal and there is a delay of 6 days.”
The ld.Senior DR has objected for condonation of delay but by going through the smallness of delay and reason stated, we feel that there is sufficient cause for condonation of delay and hence, we condone the delay and admit the appeal.
The only issue in this appeal of assessee is against the order of CIT(A) confirming the action of the DDIT, CPC, Bengaluru while processing return u/s.143(1) of the Act rejected the option exercised
We noted that the sole issue in this appeal of assessee is as regards to rejection of option exercised u/s.115BAC of the Act and for that the facts are that, the assessee files his return of income for the relevant assessment year 2022-23 u/s.139(1) of the Act on 02.11.2022. The extended due date for filing of return of income as per CBDT notification was 07.11.2022. The assessee in its return of income exercised the option for taxing the income u/s.115BAC of the Act. The AO as well as the CIT(A) admitted that the assessee in the return form in clause “A19 (b) of part A-Gen” has clearly mentioned that he is opting for new tax regime for relevant assessment year 2022-23. The CIT(A) noted in his order that the assessee for assessment year 2021-22 has opted for new tax regime u/s.115BAC of the Act by filing Form No.10IE for assessment year 2021-22 and claimed that he is continuing to opt the new tax regime for the assessment year 2022-23 but the Form 10IE filed on 28.03.2022 is beyond the time prescribed u/s.139(1) of the Act for the relevant assessment year 2021-22 as provided in section 115BAC(5) of the Act. It was mentioned by the CIT(A) that the option exercised u/s.115BAC for the assessment year 2021-22 was rejected by the AO, CPC and consequently in assessment year 2022-23 also rejected the option exercised u/s.115BAC of the Act and asked order, processing the return u/s.143(1) of the Act under old regime. The CIT(A) dismissed the assessee’s appeal confirming the action of the AO, CPC in rejecting the option exercised for opting new tax regime u/s.115BAC of the Act by observing as under:- “From the plain reading of the section 115BAC(5) of the Act, it is clear that the lower tax u/s 115BAC of the Act can be opted only when the option is exercised in the prescribed manner on or before the due date of filing of return of income u/s 139(1) of the Act. In the instant case, the appellant filed the form 101E for AY 2021-22 beyond the period prescribed u/s 139(1) of the Act and hence the option was not exercised in the manner prescribed u/s 115BAC(5). Thus the option for AY 2021-22 was not a valid option and hence the appellant was required to make the fresh option by filing form 10IE for AY 2022-23 before the due date provided u/s 139(1) of the Act. It is seen that in the return for AY 2022-23 the appellant has exercised the option u/s115BAC, based on invalid filing of form 10 IE filed for AY 2021- 22. Therefore, the as per provisions of section 115BAC (5) of the Act, the appellant was not eligible for the option claimed u/s 115BAC for AY 2021- 22 and for the same very reason the appellant is not eligible for the option claimed u/s 115BAC for AY 2022-23. An option which was not valid for the year in which it was filed cannot be the basis for continuation of beneficial provision u/s 115BAC for the next and succeeding years. Therefore the denial of claim u/s115BAC by the CPC for AY 2022-23 is in accordance with the provisions of statute.
The appellant has also argued that there is no provision in the Income tax e–filing portal to file form 10!E every year to exercise the option. It may be mentioned that in the return the appellant has ticked in clause(A19)(b)that it had opted for new tax regime u/s 115BAC and had filed form 101E in AY 2021-22, hence the system has not provided the option of filing new form 10IE. As the form 10IE for AY 2021-22 was not valid, appellant was required to make a new claim of option under section 115BAC in AY 2022- 23 in the return, Therefore, there is not merit in the contention of the During the Video conference and also in its submission the appellant has submitted that adjustment has been made without giving an opportunity as envisaged in the provision of section 143(1). The provision of section 143(1)(a)provides prior to making an adjustment, intimation is required to be given to the assessee. Further, the appellant has also stated that the adjustment made by the CPC on account of denial of option u/s.115BAC of the Act is beyond the scope of section 143(1)(a) of the Act. The submissions made are considered however the same are not accepted as no adjustment to the income or loss returned has been made by the CPC. In this regard, the relevant provisions of section 143(1)(a) of the Act is reproduced herein as under: ……………… ……………… ……………… From the above, it is clear that section 143(1)(a) pertains to adjustments made on the income or loss returned. In this case no such adjustment has been made by the AO CPC as income returned has been accepted u/s 143(1) (a), hence there was no requirement of issue of any prior intimation to the assessee. It may be pertinent to mention here that section 143(1)(b) provides that "the tax interest and fee if any shall be computed on the basis of total income computed under clause (a)". Thus the AO CPC has correctly taxed the income in accordance with the provisions of the statute. It is admitted fact that the appellant had filed the form 10!E after due date in violation of section 115BAC of the Act for AY 2021-22 and hence was not eligible for continuing the option u/s 115BAC for AY 2022-23. It is a trite law that if a thing is said to be done in a particular manner, it shall be done in that manner and its performance in any other mode or fashion shall be of no consequence. Therefore, in view of the mandated provisions of the statute, the Assessing Officer has rightly denied the option claimed us 115BAC. Accordingly, I am not inclined to interfere with the decision of the Assessing Officer.”
Aggrieved, assessee is in appeal before us.
5. We have heard rival contentions and gone through facts and circumstances of the case. We noted that the Co-ordinate Bench of this Tribunal in the case of Shri Ranganathan Anantharaman vs. DCIT in and the Pune Bench of this Tribunal in the case of Akshay Devendra Birari reported in 164 Taxmann.com 58 has taken a view that even if concessional rate benefit was not allowed in earlier assessment year for the reason that the return of income for earlier year i.e., assessment year 2021-22 was filed belatedly u/s.139(4) of the Act will not preclude the assessee from claiming / opting for new tax regime u/s.115BAC of the Act. The Co-ordinate Bench of Chennai in the case of Shri Ranganathan Anantharaman, supra, has considered this issue and held as under:-
The sole grievance of the assessee, in the captioned appeal, is application of correct rates of taxes. The impugned order has been passed by Learned Addl. / JCIT Commissioner of Income Tax (Appeals)- 2, Gurugram [CIT(A)] on 29-03-2024 in the matter of an intimation issued by CPC u/s 143(1) of the Act on 22-02-2023 raising certain demand against the assessee. This was on account of the fact that the assessee claimed concessional rate of tax u/s 115BAC which was computed by CPC under old regime i.e., at normal rates. The assessee laid its claim on the strength of Form 10-IE which was filed on 22-03-2022 starting from AYs 2021-22. The assessee submitted that it was not required to exercise this option every year since option once exercised, would apply to subsequent years as well. However, CPC denied the benefit of the same. The Ld. CIT(A) confirmed the action of CPC on the ground that the return of income for AY 2021-22 was filed belatedly u/s 139(4). The benefits of Sec.115BAC would not be applicable for belated filings. Given the fact that the claim for the provisions of Sec.115BAC was not valid for AY 2021-22, the assessee did Form in this year. Aggrieved, the assessee is in further appeal before us. The Ld. AR has submitted that this form could be filed only once and since the assessee had already filed this form once, it could not file another form on the system / ITBA portal. In other words, the assessee is precluded from claiming the benefits in all the subsequent years also.
It is quite clear that the assessee, in clear terms, want to claim concessional benefit from AY 2021-22 onwards. For the said purpose, it has filed requisite Form No.10-IE on 22-03-2022. The said benefit has been denied for AY 2021-22 since the return of income has been filed belatedly. However, this benefit has been denied for AY 22-23 also despite the fact that the return of income has been filed in time. The same could not be held to be justified from any angle. If the view of Ld. CIT(A) is accepted, the assessee would be precluded forever to claim this concession. The Pune Bench of Tribunal in Akshay Devendra Birari (164 Taxmann.com 58) held that filing of this form was directory in nature. Since the form was made available to CPC at the time of processing of return of income, the benefit thereof would be available to the assessee. Under these circumstances, we direct CPC to provide the impugned benefit and amend the intimation issued to the assessee taking into consideration Form No.10-IE as filed by the assessee on 22-03-2022.
Since the facts are exactly identical and in the present case before us, the assessee in assessment year 2021-22 filed Form No.10IE and exercised option u/s.115BAC of the Act though belatedly, the Revenue will not preclude the assessee from opting under the new tax regime u/s.115BAC of the Act for the assessment year 2022-22 unless and until the assessee withdraws the option. In the present case, the assessee has not withdrawn the option rather he has claimed the option and the return of income for the relevant assessment year 2022-22 was within the time allowed u/s.139(1) of the Act. Hence, we find that the CPC, Bengaluru as well as CIT(A) erred in not allowing the claim of option u/s.115BAC of the Act to the assessee. We direct the AO / CPC to allow the assessee to opt for new tax regime u/s.115BAC of the Act for the relevant assessment year 2022-23. This issue of assessee’s appeal is allowed.
In the result, the appeal filed by the assessee is allowed.
Order pronounced in the open court on 20th September, 2024 at Chennai.