Section 115BAC Option Continues to Subsequent Assessment Years: ITAT Nagpur

Kishor Kewalram Zamtani HUF Vs ITO (ITAT Nagpur)

New-Regime Option Is Not an Annual Subscription — Once Validly Exercised by a Business Assessee, It Continues Automatically

The Nagpur Bench of the ITAT has held that where an assessee having business income exercises the option for the new tax regime u/s 115BAC, the option continues to apply to subsequent assessment years. The benefit cannot be denied merely because a fresh Form 10-IE was not filed for the succeeding year.

The assessee, Kishor Kewalram Zamtani HUF, filed its return of income for AY 2023-24 on 28.07.2023, declaring a total income of ₹16,51,740. Since the return was filed before the due date of 31.07.2023, it was a timely return u/s 139(1).

The HUF had income chargeable under the head “Profits & gains of business or profession”. It calculated its tax liability under the concessional new tax regime u/s 115BAC at ₹2,42,343.

The CPC, however, denied the benefit of the new regime and processed the return under the old tax regime. It computed the tax liability at ₹3,20,343, resulting in an additional demand of ₹78,000.

The assessee filed a rectification application u/s 154, pointing out that it had already exercised the option for the new regime by filing Form 10-IE on 14.10.2022 along with the return for AY 2022-23. The option exercised in the earlier year continued to govern the subsequent year and was not required to be exercised afresh.