Aarti Sachdev Vs ITO (ITAT Delhi)
Belated filing of return of income cannot by itself deprive an assessee of the concessional new tax regime under section 115BAC where Form 10-IE has been filed within time; procedural requirements regarding Form 10-IE and related compliance are directory and delay is condonable.
Summary: The appeal arose from the order dated 18.02.2026 passed under Section 250 of the Income-tax Act, 1961 by the Ld. Addl./JCIT(Appeals)-2, Pune. The assessee’s return was processed under Section 143(1), determining total income of Rs.8,59,770/- instead of Rs.4,96,400/- declared in the return. Applications under Section 154 were rejected. The Ld. Addl./JCIT(Appeals) held that although Form 10IE was filed on 31.07.2024 within the prescribed due date, the return was filed belatedly on 13.01.2025 and therefore the benefit of Section 115BAC was not available. The ITAT noted coordinate bench decisions treating such delays as directory rather than mandatory, including Arun Kumar Sharma, reported in 176 taxmann.com 927 (Del. – Trib.) [2025], and Harbans Singh vs. AO, CPC, reported in [2024] 165 com 146/208 ITD 151 (Amritsar – Trib.). Following the principle stated in those decisions, the Tribunal held that the delay in filing the return of income, while Form 10-IE had actually been filed in time, deserved to be condoned and that the assessee’s claim to be taxed under Section 115BAC deserved to be allowed. The assessee’s appeal was accordingly allowed.
Core Issue: Whether an assessee could be denied the benefit of the new concessional tax regime under section 115BAC merely because the return of income was filed after the due date prescribed under section 139(1), despite the assessee having filed Form 10-IE within the prescribed due date.
Facts: The assessee filed her return of income declaring total income of ₹4,96,400, whereas the return was processed under section 143(1) by determining income at ₹8,59,770. The assessee’s claim for taxation under section 115BAC was denied. Form 10-IE had been filed on 31.07.2024, i.e., within the prescribed due date under section 139(1). However, the return of income was subsequently filed belatedly on 13.01.2025. Applications for rectification under section 154 were filed before CPC but were rejected.
AO/CIT(A) Findings: The CPC rejected the assessee’s rectification applications and denied the benefit of section 115BAC. The Addl./JCIT(Appeals) also upheld the denial on the ground that although Form 10-IE had been filed within the prescribed due date, the return of income itself had not been filed by the due date of 31.07.2024 under section 139(1). The appellate authority therefore held that the assessee was not eligible for the concessional tax regime under section 115BAC.
ITAT Finding: The Tribunal reversed the findings of the lower authorities and held that various coordinate Bench decisions had consistently treated procedural requirements concerning the filing of Form 10-IE as directory rather than mandatory. Applying the same broad principle, the Tribunal held that delay in filing the return of income could also be condoned for the purpose of granting the benefit of section 115BAC. Significantly, in the present case, Form 10-IE itself had been filed within time. Therefore, the Tribunal held that the assessee’s substantive claim for taxation under the new tax regime could not be defeated merely because the return of income was filed belatedly.
Cases Relied Upon: The Tribunal principally relied upon Arun Kumar Sharma v. ITO, [2025] 176 taxmann.com 927 (Delhi–Trib.) / 2025 (7) TMI 1732, wherein the Delhi Bench held that the requirement relating to timely filing of Form 10-IE is directory and not mandatory. Reliance was also placed on Harbans Singh v. AO, CPC, [2024] 165 taxmann.com 146 / 208 ITD 151 (Amritsar–Trib.) / 2024 (8) TMI 535, which held that delayed filing of Form 10-IE is a procedural and directory requirement and that the form could even be furnished before the Assessing Authority during assessment proceedings.
Outcome: The ITAT Delhi held that the delay in filing the return of income deserved to be condoned and that the assessee was entitled to taxation under the concessional regime of section 115BAC. The denial of the benefit merely because of belated filing of the return was set aside, and the appeal of the assessee was allowed.
Ratio: The procedural conditions relating to exercise of the option under section 115BAC, including compliance connected with Form 10-IE, are directory in nature and should not defeat a substantive claim merely because of delay. Where the assessee has opted for the concessional regime and substantially complied with the prescribed requirements—particularly where Form 10-IE was filed within time—the benefit under section 115BAC cannot be denied solely because the return of income was filed after the due date under section 139(1).
FULL TEXT OF THE ORDER OF ITAT DELHI
This appeal arises from order dated 18.02.2026, passed u/s 250 of the Income Tax Act, 1961 (hereafter as “the Act”), by Ld. Addl./JCIT(Appeals)-2, Pune.
1.1 In this case, the assessee’s return of income was processed u/s 143(1) of the Act, determining a total income of Rs.8,59,770/- instead of Rs.4,96,400/- as per the return of income. The aggrieved assessee filed an application u/s 154 of the Act, which was rejected by the Ld. AO-CPC, vide order dated 25.07.2025. It is seen that the assessee filed a second rectification application which was also rejected vide order dated 22.08.2025.
1.2 The aggrieved assessee approached the Ld. Addl./JCIT(Appeals) where also he could not succeed on the basis of finding that Form 10IE was filed on 31.07.2024 and the return of income for the said assessment year was filed belatedly on 13.01.2025. It was held that the due date for filing returned of income u/s 139(1) of the Act was 31.07.2024. It was further held that while Form 10IE was filed within the prescribed due date, but the return was filed belatedly and on this basis, the Ld. Addl./JCIT(Appeals) held that the benefit of Section 115BAC would not available to the assessee.
1.3 Further aggrieved, the assessee has approached the ITAT with two grounds challenging this action of the authorities below.
2. We have considered the submissions of Ld. DR and have gone through the records before us. We are aware that there are a number of coordinate bench orders, whereby such delays have been held to be directory and not mandatory. It is seen that through such orders the coordinate benches have been condoning the delay in filing Form 10-IE and on the same principle, even delayed filing of return of income and have been granting relief to the assessee’s concerned. As an example, we may rely on the case of Arun Kumar Sharma reported in 176 taxmann.com 927 (Del. – Trib.) [2025]. The following is the operative portion of this order: –
“2. A perusal of both the learned lower authorities’ respective findings indicates that they have held the assessee’s claim shifted to the new tax regime under section 115BAC of the Act for the sole reason that he had not submitted the corresponding prescribed Form 10-IE within the due date up to 31st July, 2023 since filed later on 07.08.2023.
3. It is in this factual backdrop that the Tribunal’s recent decision in Harbans Singh vs. AO, CPC [2024] 165 com 146/208 ITD 151 (Amritsar – Trib.) has already concluded that the delay in filing of above Form 10-IE is only directory provision than a mandatory one which could even be filed before the assessing authority later on during assessment. I adopt the above detailed reasoning mutandis to accept the assessee’s instant sole substantive grievance in principle and leave it open for the learned Assessing Officer to frame his consequential computation after verifying all the relevant facts.
4. This assessee’s appeal is allowed.”
We can do no better than to follow this order and hold, on the basis of broad principle, that the delay in filing return of income or even Form 10-IE (which was actually filed in time in this case) deserves to be condoned and the claim of the assessee for being taxed u/s 115BAC of the Act deserves to be allowed.
3. In the result, the appeal of the assessee is allowed.
Order pronounced in the open court on 24.08.2026
