ITAT Ruling: No Need to Re-file Form 10-IE Every Year!
- tax comply
- 5 days ago
- 2 min read
🧑⚖️ Case Summary & Legal Issue
Facts:
Section 115BAC allows individuals and HUFs to pay tax at concessional rates without availing exemptions/deductions—commonly known as the new tax regime. To opt for this, taxpayers with business or professional income must file Form 10-IE before the due date of filing their return.
The assessee had opted for the new tax regime u/s 115BAC and filed Form 10-IE in the preceding assessment year (AY 2022–23).
However, the form was filed after the due date, leading to denial of benefit by CPC for that year.
In the subsequent year (AY 2023–24), the assessee again opted for the new regime but did not file Form 10-IE again.
CPC, Bangalore rejected the assessee’s claim once more and computed tax as per the old regime.
The CIT(A) upheld CPC’s view. The matter went to the Income Tax Appellate Tribunal (ITAT).
Legal Issue: Whether the assessee was required to file Form 10-IE again in the following year, even if it was already filed once in a prior year (albeit late), and the option was previously denied.
⚖️ Key Observations by ITAT
Section 115BAC(5) lays down that:
"A person with business/professional income must exercise the option for the new regime on or before the due date of filing the return via Form 10-IE."
Once exercised, the option is valid for subsequent years, unless withdrawn.
Section 115BAC(2) specifies the conditions for computing income under the new regime (no deductions, exemptions, etc.).
Only non-fulfilment of these conditions invalidates the option—not the mere delay in filing Form 10-IE.
ITAT clarified:
“Failure to file Form 10-IE within the prescribed due date does not invalidate the assessee’s option to be taxed under the new regime… The mandate of filing Form No.10-IE is directory, not mandatory, for the purpose of sustaining the option.”
Since the assessee had filed Form 10-IE in the preceding year, and the conditions under Section 115BAC(2) were fulfilled, there was no requirement to file it again in the following year.
The ITAT emphasized that substance must prevail over form and directed the Assessing Officer to allow the option of the new tax regime.
📚 Conclusion
This landmark ruling by ITAT Ahmedabad reinforces the principle that procedural lapses should not override substantive rights, especially when the intent to comply is evident.
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