Rajiv Madhaorao Khobragade Vs ITO (ITAT Nagpur)
E-Verification Delay Cannot Derail New Tax Regime Benefit — ITAT Nagpur Grants Relief u/s 115BAC Despite Procedural Lapse
Summary:
Facts of the Case
The assessee, an individual, filed his return of income for AY 2023-24, declaring a total income of ₹21,98,660. In the return, he opted for taxation under the new tax regime provided u/s 115BAC.
The return was uploaded on the Income Tax portal before the statutory due date of 31.07.2023. The order records that it was uploaded on 27.07.2023, bearing acknowledgment no. 726415070270723. At another place, the Tribunal refers to the relevant information being furnished on 29.07.2023. Either way, it was undisputed that the return and the option for the new tax regime were furnished before the due date u/s 139(1).
However, the assessee did not complete the prescribed e-verification within 30 days of uploading the return. The return was ultimately e-verified on 27.09.2023.
While processing the return u/s 143(1), the CPC treated the delay in e-verification as fatal and denied the assessee the benefit of the new tax regime u/s 115BAC. Consequently, the assessee’s tax liability was computed without applying the concessional regime selected in the return.
The assessee challenged the adjustment before the Additional/Joint CIT(A), Madurai, contending that the delay had occurred because of technical glitches on the Income Tax portal. The CIT(A), however, upheld the CPC’s action.
Aggrieved, the assessee approached the ITAT.
Delay in Filing Appeal Condoned
The appeal before the Tribunal was delayed by 125 days. The assessee filed a condonation application supported by an affidavit.
After examining the explanation and hearing both sides, the Tribunal found that the delay was neither intentional nor deliberate. In the interest of substantial justice, it condoned the delay by drawing guidance from:
- Collector, Land Acquisition, Anantnag v. Mst. Katiji & Ors. [1987 (2) SCC 107]; and
- Inder Singh v. State of Madhya Pradesh, 2025 INSC 382.
The appeal was consequently admitted for adjudication on merits.
Issue Before the Tribunal
Whether a return uploaded before the due date, containing a valid option for the new tax regime u/s 115BAC, could be denied that benefit merely because its e-verification was completed beyond the prescribed 30-day period.
Assessee’s Case
The assessee maintained that he had exercised the option under the new tax regime within time. Only the subsequent act of e-verification was delayed.
The delay was attributed to technical problems concerning the Income Tax portal, including difficulties with Form 26AS, filing of returns & the e-verification mechanism during the relevant period.
Thus, the delay constituted only a procedural irregularity and should not destroy a substantive tax option exercised within the statutory time.
ITAT’s Findings
The Tribunal noted that an assessee opting for the new tax regime gives up several exemptions and deductions in exchange for taxation at lower rates. Therefore, the option carries substantive financial consequences.
For the relevant year, the requirement under section 115BAC was that the assessee should exercise the option and furnish the return on or before the due date prescribed u/s 139(1). This fundamental requirement stood satisfied because the assessee’s return, containing the option, was available on the Income Tax portal before 31.07.2023.
The Tribunal distinguished the filing and exercise of the tax option from the subsequent e-verification process. It observed that e-verification is essentially procedural in nature.
The verification process itself has evolved over time—from sending a signed acknowledgment to CPC Bengaluru by post to verification through a digital signature, Aadhaar-linked OTP or bank-account-based OTP. Assessees also commonly depend upon tax consultants for filing and completing associated formalities.
The Tribunal further acknowledged that the portal had experienced practical and technical difficulties during the relevant period. The CBDT itself has, on various occasions, issued circulars extending timelines for e-verification in recognition of such difficulties.
Accordingly, when the return and the option u/s 115BAC were furnished before the due date, a bona fide delay in completing e-verification could not be used to deprive the assessee of the selected tax regime.
Decision
The ITAT held that the delay in e-verification was merely a procedural lapse and could not debar the assessee from claiming the benefit of the new tax regime u/s 115BAC.
The CIT(A)’s finding was reversed. The Jurisdictional AO was directed to recompute the assessee’s tax liability by applying the new tax regime opted for in the return.
The assessee’s appeal was allowed.
Authors’ Comments
The ruling reinforces the principle that procedural requirements should facilitate tax administration, not defeat substantive rights. Where the assessee has filed the return and unmistakably exercised the statutory option within time, a later technical lapse in authentication should ordinarily remain curable.
The decision is particularly useful in cases where CPC denies a beneficial tax regime solely because of delayed e-verification. However, taxpayers should still preserve evidence of timely uploading, portal errors, correspondence and eventual verification, since relief will depend upon demonstrating a bona fide procedural delay rather than deliberate non-compliance.
Cases Discussed
- Collector, Land Acquisition, Anantnag v. Mst. Katiji & Ors. [1987 (2) SCC 107]
- Inder Singh v. State of Madhya Pradesh, 2025 INSC 382
FULL TEXT OF THE JUDGMENT/ORDER OF ITAT, NAGPUR BENCH
This appeal by the assessee is directed against the order of Ld. ADDL/JCIT (Appeals), Madurai (for short, “Ld.CIT(A)”) dated 30.12.2025 passed u/sec. 250 of the Income Tax Act, 1961 (for short, “Act”) which is arising out of intimation dated 18.12.2023 issued u/sec. 143(1) of the Act by the Centralized Processing Center (CPC) for the Assessment Year (A.Y.) 2023-24.
2. Registry has informed that there is a delay of 125 days in filing the present appeal. Application for condonation of delay along with an affidavit is placed on record. Perusal of the same and after hearing both the sides, I find that the delay is neither intentional nor deliberate and therefore, in the interest of justice and taking guidance from the judgments of Hon’ble Apex Court in the case of Collector Land Acquisition, Anantnag vs. Mst. Katiji & Ors [1987 (2) SCC 107] and also in the case of Inder Singh vs. State of Madhya Pradesh dated 21.03.2025 [(2025) INSC 382)], I hereby condone the delay and admit the appeal for adjudication.
3. Sole grievance of the assessee is that Ld.CIT(A) erred in confirming the action of CPC denying the benefit of new tax regime u/sec. 115BAC on the ground of delay in e-verification of the return which is claimed to have occurred due to technical glitches on the Income Tax portal.
4. I have heard the rival submissions and perused the material placed before me. The assessee, an individual, prepared the return for A.Y. 2023-24 and uploaded on the website on 27.07.2023 bearing acknowledgment No.726415070270723, declaring income of Rs. 21,98,660/- opting for new tax regime u/sec. 115BAC of the Act, under which the assessee has given up various exemptions and deductions and lower rate of income tax is payable. The due date prescribed under the Act for the category of assessee is 31.07.2023 and the return has been furnished on the Income Tax portal on 27.07.2023. The assessee is required to e-verify the return within 30 days from the date of its submission. Under the e-verification process, assessee had to send the signed acknowledgment by post to the CPC, Benguluru or it has to be e-verified through the OTP generated based on the bank account/Aadhar.
Admittedly, in the case of assessee, this action of e-verification took some time and was e-verified beyond 30 days on 27.09.2023. For the said delay, the CPC has denied the benefit of scheme under 115BAC and against such action of CPC, assessee filed appeal before the Ld.CIT(A), but failed to succeed.
Records indicate that there were certain technical glitches appearing in the e-filing portal regarding downloading the Form No.26AS, filing of income tax returns and e-verification mechanism for the year under consideration.
Further, under the provisions of section 115BAC of the Act, assessee having opted for the new tax regime is required to exercise such option and furnish the return of income on or before the due date prescribed under section 139(1) of the Act. The assessee has undisputedly furnished the information about the return opting new tax regime on 29.07.2023 which is prior to the due date i.e. 31.07.2023.
Now the data about the assessee is very much available on the income tax portal much before the due date i.e. 31.07.2023. Now, e-verification process is a procedural activity, which is also witnessing changes from time to time and in the past, it was mainly by way of sending signed acknowledgment through post which has been subsequently upgraded by way of filing return with digital signature as well as through e-verification by one time password linked to Aadhar/bank account.
As it is evident that assessee is dependent on the Tax Consultant, who assists in furnishing the income tax returns and there might have been some bonafide reasons for such delay in e-verification of return. Even the Central Board of Direct Taxes (CBDT) comes with various circulars extending the date of e-verification of return considering the practical and technical difficulties faced by various assessees.
5. Considering all these aspects, I am of the considered view that the delay in e-verification is merely a procedural lapse which should not debar the assessee from claiming the benefit of new tax regime u/sec. 115BAC of the Act. Therefore, the finding of Ld.CIT(A) is reversed and the effective grounds of appeal raised by the assessee are allowed. Ld. Jurisdictional Assessing Officer (JAO) is directed to re-compute the tax liability of the assessee applying the new tax regime u/sec. 115BAC of the Act opted by the assessee.
6. In the result, appeal of the assessee is allowed.
Order pronounced on 02nd September, 2026 under Rule 34(5) of the Income Tax (Appellate Tribunal) Rules, 1963
