9-Day Delay in Form 10IE Due to Technical Glitch Cannot Deny Section 115BAC Benefit: ITAT Amritsar

Ravi Kant Luthra Vs ADIT (ITAT Amritsar)

ITAT Amritsar allowed the appeal of the assessee, Ravi Kant Luthra, and held that the benefit of the lower tax rates under the new tax regime prescribed under section 115BAC could not be denied merely because Form 10IE was filed nine days after the prescribed due date, particularly when the delay was attributed to technical glitches in the income-tax portal and the form was available with the Assessing Officer/CPC before processing of the return. The assessee had originally filed his return of income on 11.01.2022 declaring total income of Rs.16.80 lakhs under the old tax regime and claimed deductions under Chapter VI-A. He subsequently filed a revised return on 24.03.2022 opting for taxation under the new regime under section 115BAC and filed Form 10IE on the same date, claiming a refund of Rs.26,000/-. The prescribed due date for filing Form 10IE was 15.03.2022, being the extended date pursuant to CBDT Circular No. 1/2022. CPC rejected the claim under section 143(1) on 05.07.2022 on the ground that Form 10IE had not been filed before the due date for filing the return under section 139(1).

Before the first appellate authority, the assessee explained that technical glitches in the portal had prevented timely filing of Form 10IE and that the delay was only nine days. The CIT(A), however, rejected the contention, observing that section 115BAC(5) stipulated that the benefit would not apply unless the option was exercised in the prescribed manner within the due date for filing the return. Before the Tribunal, the assessee emphasised that several CBDT circulars issued during the relevant period themselves recognised difficulties faced by taxpayers and stakeholders in electronic filing. Reference was made to Circular No. 9/2021, Circular No. 17/2021 and Circular No. 01/2022. The assessee contended that once the technical problems were resolved and the utility started functioning, Form 10IE and the revised return were immediately filed on 24.03.2022. Significantly, both were filed before processing of the original return on 27.03.2022. It was therefore argued that the revised return validly filed under section 139(5), as well as Form 10IE already available with CPC, could not be ignored.

The assessee relied upon the Amritsar Tribunal decision reported at [2024] 165 taxmann.com 146, where the requirement of filing Form 10IE was treated as directory and it was held sufficient if the form was available before the Assessing Officer at the time of assessment. Reliance was also placed on Akshay Devendra Birari v. DCIT, CPC, Bengaluru, 2024 (6) TMI 272 (ITAT Pune), where the Tribunal directed CPC to consider Form 10IE and allow the new tax regime benefit when the form was available at the time of processing the return. To substantiate the difficulties caused by portal glitches, reliance was further placed upon The Southern Gujarat Income Tax Bar Association, Surat v. Union of India and another, 2022 (1) TMI 947 (Gujarat High Court), concerning technical difficulties in the income-tax portal, and Matrix Publicities and Media India Pvt. Ltd. v. DCIT Circle-16(1), Mumbai & Ors., 2023 (11) TMI 656 (Bombay High Court), where difficulties arising from CPC/system-related technical problems were considered.

The Department relied upon the CIT(A)’s order but, as recorded by the Tribunal, could not counter the assessee’s arguments regarding the technical glitches which had prevented filing of Form 10IE within the stipulated period. The Tribunal noted the sequence of material dates: the original return was filed on 11.01.2022; the due date for Form 10IE was 15.03.2022; Form 10IE was filed on 24.03.2022; the original return was processed on 27.03.2022; and the claim for refund was rejected by CPC on 05.07.2022. Thus, Form 10IE was delayed only by nine days and had been filed before processing of the original return.

ITAT further observed that the revised return had been considered by AO, CPC, Bangalore while completing assessment under section 143(1) on 05.07.2022. However, CPC denied the benefit of the lower tax rates under section 115BAC and, at the same time, did not allow the Chapter VI-A deductions available under the old regime. Considering the facts and the nine-day delay attributable to technical glitches, the Tribunal held that the benefit of the new tax rates prescribed under the new regime could not be denied. The Assessing Officer was accordingly directed to take cognizance of Form 10IE filed by the assessee under section 115BAC for the purpose of assessment. The assessee’s appeal was allowed. The order was pronounced on 27.11.2025 under Rule 34(4) of the Income Tax Appellate Tribunal Rules, 1963.

Cases Discussed

• Singh v. AO, [2024] 165 taxmann.com 146 (ITAT Amritsar) — Relied upon by the assessee for the proposition that the requirement of filing Form 10IE was directory in nature and that sufficient compliance existed where Form 10IE was before the Assessing Officer at the time of assessment. The cited decision concerned an assessee who initially filed the return under the old scheme and subsequently opted for the new tax regime through a revised return and Form 10IE.
• Akshay Devendra Birari v. DCIT, CPC, Bengaluru, 2024 (6) TMI 272 (ITAT Pune) — Relied upon in support of allowing the new tax regime benefit despite belated submission of Form 10IE. The Tribunal in that case found that Form 10IE was available with CPC at the time of processing the return and treated the filing requirement as directory.
• The Southern Gujarat Income Tax Bar Association, Surat v. Union of India and 1 Other(s), 2022 (1) TMI 947 (Gujarat High Court) — Cited regarding technical glitches in the income-tax portal and difficulties faced by taxpayers in electronic filing of returns and tax audit reports.
• Matrix Publicities and Media India Pvt. Ltd. v. Deputy Commissioner of Income Tax Circle-16(1), Mumbai & Ors., 2023 (11) TMI 656 (Bombay High Court) — Cited in relation to technical/system problems at CPC, Bangalore and the difficulties faced by taxpayers on account of such system-related issues.

FULL TEXT OF THE ORDER OF ITAT AMRITSAR

This appeal is filed by the assessee against the order of ld. Addl. CIT (A)-11, Delhi, passed u/s 250 of the Act, 1961 vide order dated 29.06.2024 which has emanated from the order of AO, CPC, Bangalore passed u/s 143(1) of the Act, vide assessment order dated 05.07.2022.

2. The grounds of appeal taken by the assessee in Form No. 36 are as follows:

“1. That the Ld. CIT(A) vide order u/s 250(6) dated 29.06.2024 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 101E was not filed before the due date of filing of return u/s 139(1).

2. That the Ld. CIT(A) vide order u/S’ 250(6) dated 29.06.2024 has erred in confirming the action of the AO without appreciating that form 101E 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 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.

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 Vl- A of the income tax act 1961.

6. That the Ld. CIT(A) has erred in not accepting the form 101E and revised return filed on 24.03.2022 without considering the fact that it was filed before the processing of original return i.e on 27.03.2022.”

3. Brief facts emerging from records are that the assessee has filed his return of income on 11.01.2022 disclosing total income of Rs.16.80 lakhs which was processed u/s 143(1) on 27.03.2022 accepting the returned income.

3.1 In the instant case, the assessee filed this return under old regime claiming deductions under Chapter-VI A. which was subsequently revised on 24.03.2022 in which he opted for taxation under the new regime as per provision of section 115BAC, after filing form 10 IE claiming refund of Rs.26,000/-. However, the said claim has been rejected vide order dated 05.07.2022 u/s 143(1) of the Act, due to the fact that the appellant had failed to file form 10 IE before the due date of filing of return i.e. by 15.03.2022 (being the extension dates made by CBDT vide Circular No. 1/2022 during Covid period).

4. The assessee carried the matter before the ld. first appellate authority claiming that the mandatory form 10 IE filed as per provision of section 115BAC should have been accepted, considering the fact that during that period of time there were technical glitches in the portal which has prevented the assessee from filing the mandatory form in time and the same was belatedly filed by only 9 (nine) days. 4.1 The ld. first appellate authority has decided against the assessee by observing as follows:

“8. On perusal of the submission and facts furnished in support of the contention raised in the grounds of appeal, it is evident that the appellant had faced technical difficulty in opting new tax regime vide Form No. 10-IE while exercising the option under clause(i) of subsection (5) of section 115BAC of the Act.

However, clause (5) of section 115BAC specifically mentions that the “Nothing contained in this section shall apply unless option is exercised in the prescribed manner by the person” within the due date of filing of the return of the income.

9. In view of the above discussion, the appea l raised the appellant is hereby dismissed.”

5. Now the assessee is in appeal before the tribunal on the ground contained in the memorandum of appeal and in course of hearing the ld. AR of the assessee submitted that in the instant case, the delay in filing the statutory form was only nine days and that too because of technical glitches which was prevalent in the system at that period of time and he also referred to various circulars which were issued by the Board extending the time period for compliance.

Circular No. Date Extended Reason for extension of date as explained by to CBDT in Circulars

Circular No. 30th Difficulties reported by the taxpayers and other 9/2021 September, stakeholders in electronic filing of Income-tax dated 20 -5- 2021 returns and various reports of audit

6. He further submitted that after the technical glitches has been resolved and the utility started working, the assessee immediately filed Form 10 IE alongwith a revised return, on 24th March, 2022 under the new regime which was filed before processing of the original return and said revised return could not have been ignored, as per provision of law, as stipulated u/s 139(5) of the Act, and since the Form 10 IE was also available with the CPC Bangalore at the time of processing the return the said form also could not have been ignored by the AO.

6.1 Before concluding his argument he reiterated that it is a case, where Form

10IE has been filed which was just belated by nine days due to technical glitches in the portal and the said Form was available before the AO in course of assessment which should not have been ignored and the assessee should get the benefit of the new regime because the said filing is directory in nature as held by various courts and tribunals.

6.2 In support of his contention the ld. AR relied on various decisions of various tribunals: “(a) [20241165 taxmann.com 146 (Amritsar – Trib.) IN THE ITAT AMRITSAR BENCH Singh v. AO* 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 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-IE had not been filed within time 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]

(b) 2024 (6) TMI 272 – ITAT PUNE AKSHAY DEVENDRA BIRARI VERSUS DCIT, CPC, BENGALURU

Issues involved: Appeal against denial of benefit of New Tax Regime due to late submission of Form No.10IE.

Summary:

The appeal was filed by the assessee against the order of Addl./JCIT(A)-2, Chennai for the assessment year 2023-24. The appellant, an individual deriving income under the head “Salaries” and income from Futures and Options in shares, filed the Return of Income under section 115BAC in the New Tax Regime on 31.07.2023 declaring income of Rs. 40,54,450/-. The income was assessed at the same amount by the CPC under section 143(l)(a) on 10.01.2024, denying the benefit of the New Tax Regime. The CIT(A)/NFAC confirmed the CPC’s action, stating that the appellant submitted Form No.10IE after the prescribed due date of 31.07.2023. The appellant then appealed before the Tribunal. Despite due notice, the appellant did not appear for the appeal hearing. The Senior DR argued that the New Tax Regime was optional from A.Y. 2023-24 onwards, and the appellant failed to file Form No. 10IE before the income tax return, leading to the denial of benefits. However, the Tribunal found that the Form No.10IE 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. 10IE and allow the benefit of the New Tax Regime.”

6.3 He further referred to the following decisions of various tribunal in the matters on technical glitches:

“(g) [2022 (l) TMI 947 – GUJARAT HIGH COURT THE SOUTHERN GUJARAT INCOME TAX BAR ASSOCIATION, SURAT VERSUS UNION

OF INDIA AND 1 OTHER (S) Extension of due date of filing of Tax Audit Report and the Income Tax Returns for the assessment year 2021-2022 till March 31, 2022 – seeking order or direction, directing the respondents not to levy interest under section 234A till the revised due dates provided vide Circular 17/2021 dated 09.09.2021 – appropriate directions to authorities for accepting the TAR and/ or ITR in physical form till the New Income Tax Portal stabilizes and becomes glitch free – HELD THAT:- All necessary steps shall be taken to ensure that the assesses are able to upload their Income Tax Returns/Tax Audit Reports online smoothly and without any difficulties. They have also assured that in the event of any technical glitch, the same shall be attended at the earliest and taken care of as explained in the affidavit filed today. Having regard to the stance of the CBDT as it emerges from the affidavit, we are convinced that no further adjudication is required in the present litigation. We appreciate the efforts put in by the CBDT to ensure that the assesses do not have to face any hardships or difficulties on account of the technical glitches in the portal.

We take notice of one pertinent feature emerging from the affidavit and i.e.

the E- mail ID, which has been created to assist the filing of Tax Audit

Report. A team of six members or if need be, more are to examine and resolve the E-mails received at this E-mail ID. Our suggestion to Mr. Singh

as well as to Mr. Krishnamurthy is that one such E-mail ID may also be created for the Income Tax Returns. Our suggestion has been graciously

accepted by Mr. Singh and Mr. Krishnamurthy. They have assured that the needful shall be done in this regard also.

We are convinced that with the cooperation of one and all, we have been able to resolve the controversy as regards the technical glitches in the Income Tax Portal. At this stage, Mr. Hemani, the learned Senior Counsel submitted that by and large all issues can be said to have been taken care of with view of what has been stated in the affidavit except the issue as regards the lew of interest under Section 234A of the Income Tax Act. We do not intend to look into the above controversy in the present litigation as we are informed that one writ application as regards Section 234A is already pending before this High Court. This issue shall be looked into as and when the pending writ application is taken up for hearing by this Court. We close both the writ applications and dispose of the same accordingly. The affidavit, which has been filed today on behalf of the respondents Nos.l and 2 shall be taken on record.

(h) 2023 (11) TMI 656 – BOMBAY HIGH COURT MATRIX PUBLICITIES AND MEDIA INDIA PVT. LTD. VERSUS DEPUTY COMMISSIONER OF INCOME TAX CIRCLE-16 (1), MUMBAI & ORS

Delay in issuing refund – ACIT said that the system (under the control of CPC, Bangalore) needs to capture the refund already approved via web service rectification order and till this issue is resolved proceedings in this case cannot be completed – HELD THAT:- This is the standard excuse given by the Department when it comes to giving refunds. The excuse used is that the system under the control of Centralized Processing Center (“CPC”), Bangalore has some issues and, therefore, amount is not being released to assessees. Interest is payable in law until the date of refund and the Department does not realize that it is public money that is used to pay interest. That is a waste and burden on the exchequer. We would only hope that the Finance Ministry looks into it with seriousness and tries to put an end to the problem faced by all assessees and the Income Tax Officers. A copy of this order be sent to the PMO, the Hon’ble Finance Minister GOI, the Hon’ble Law Minister GOI, the Central Board of Direct Taxes and to the Attorney General for India for information and necessary action. We only hope this problem gets resolved at the earliest. Had the department sorted out its technical issues, totally unrelated to any substantial legal issue, nevertheless contravening the fundamental right of Petitioner to receive undisputed amount of refund, the present proceedings would not have crept into the litigation arena. Respondents either by itself or through CPC shall ensure that the amount is credited to Petitioner’s account on or before 4th November 2023 with interest upto the date of payment in accordance with law.”

7. As such, referring to all the above judgments, the ld. AR prayed that the benefit of new regime may please be allowed to the assessee and the mandatory form filed 10IE may please be considered for the purpose of assessment because the same was available before the AO in course of assessment proceedings.

8. The ld. DR relied on the order of the ld. CIT(A), but he could not counter the arguments of the ld. AR relating to the technical glitches in the portal which has prevented the assessee from filing the mandatory Form 10IE within the stipulated period.

9. We have heard the rival submission and considered the material on record and we find that in the instant case, the original return was filed on 11.01.2022 under the old regime claiming deduction under Chapter VIA and subsequently, the said return has been revised on 24th March 2022 under the new regime and the mandatory Form 10IE as per provisions of section 115BAC has been dully filed on 24th March 2022 (placed in paper book page 18-19, alongwith the revised return of income itself filed u/s 139(5) claiming refund of 26,000/-. The sequence is as under):

9.1 It is also observed that the due date of filing the statutory Form 10IE was 15thMarch 2022 which is belated by nine days on account of technical glitch in the portal.

9.2 We also observed that the said revised return has been considered by the AO CPC, Bangalore and assessment has been completed u/s 143(1) on 5THJuly 2022 but without giving the benefit of the new regime by denying the benefit of lower rate of taxes u/s 115BAC and at the same time the benefit of deduction under Chapter-VI A has also not been allowed.

10. As such, we are opinion that the benefit of the new rate of taxes as prescribed under the new regime cannot be denied and the AO is directed to take into cognizance the Form 10IE filed by the assessee as per section 115BAC for the purpose of assessment.

11. In the result, the appeal of the assessee is allowed.

Order pronounced on 27.11.2025 under Rule 34(4) of the Income Tax Appellate Tribunal Rules 1963.