New tax regime option continues for later years without fresh Form 10IE where earlier election remains valid and unwithdrawn.

A taxpayer who had validly opted for the new tax regime under section 115BAC in an earlier year was held entitled to continue that option in the subsequent year without filing a fresh Form 10IE, provided the earlier option had not been withdrawn and the return for the year under appeal was filed within the due date under section 139(1). The belated filing of Form 10IE in the earlier year did not invalidate the exercise of option itself. On that basis, the adjustment made while processing the return under section 143(1) to deny the concessional regime was unsustainable, and the consequential demand based on the normal regime could not be sustained.

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Issues: (i) Whether the assessee was entitled to claim the benefit of the new tax regime under section 115BAC despite not filing a fresh Form 10IE for the assessment year under appeal. (ii) Whether the adjustment made while processing the return under section 143(1) to deny the new tax regime was sustainable.

Issue (i): Whether the assessee was entitled to claim the benefit of the new tax regime under section 115BAC despite not filing a fresh Form 10IE for the assessment year under appeal.

Analysis: The option under section 115BAC(5)(i) for a person having income from business or profession is to be exercised in the prescribed manner and, once exercised, applies to subsequent assessment years. The assessee had earlier opted for the new regime and filed Form 10IE for the preceding year. The Tribunal followed coordinate bench decisions holding that the belated filing of Form 10IE in the earlier year did not invalidate the exercise of option itself, and that no fresh Form 10IE was required for the subsequent year so long as the earlier option had not been withdrawn and the return for the year under appeal was filed within the due date under section 139(1).

Conclusion: The assessee was entitled to continue under the new tax regime, and denial of the benefit for want of a fresh Form 10IE was unjustified.

Issue (ii): Whether the adjustment made while processing the return under section 143(1) to deny the new tax regime was sustainable.

Analysis: Since the assessee's option under section 115BAC continued to operate for the relevant year, the computation of tax under the normal regime and the resulting demand were based on an incorrect denial of that option. The adjustment under section 143(1) could not be sustained on the premise that the assessee was ineligible for the concessional regime merely because no fresh Form 10IE was filed for the year under appeal.

Conclusion: The processing adjustment and the consequential demand were not sustainable.

Final Conclusion: The denial of the new tax regime was set aside and the assessment was directed to be modified by allowing the assessee's claim under section 115BAC.

Ratio Decidendi: Where the assessee had validly opted for the new tax regime in an earlier year and had not withdrawn that option, the benefit continues for subsequent years under section 115BAC(5)(i), and the absence of a fresh Form 10IE for the later year does not by itself invalidate the claim.

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