Salaried employee wins appeal for New Tax Regime benefit under section 115BAC without Form 10-IE filing requirement

The ITAT Visakhapatnam allowed the assessee's appeal against CPC's denial of special taxation rate under section 115BAC. The Revenue denied the benefit claiming Form 10-IE was not filed for opting the New Tax Regime. The Tribunal held that Form 10-IE filing requirement under section 115BAC(5)(1) applies only to assessees with business/profession income, not salaried employees. Since the assessee was a salaried employee who properly exercised the option under section 115BAC(5)(ii) following prescribed procedures, the Tribunal set aside the Revenue's order and granted the New Tax Regime benefit.

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Issues:
- Condonation of delay in filing appeal before the Tribunal
- Denial of special rate of taxation under section 115BAC of the Act

Condonation of Delay:
The appeal was filed with a delay of 71 days, attributed to unforeseen circumstances surrounding the health of the assessee. The affidavit filed by the assessee, supported by medical records, explained that the delay was not due to negligence but due to a fractured ankle and subsequent bed rest. The Tribunal, after considering the reasons provided, condoned the delay of 71 days and proceeded to adjudicate the appeal on merits.

Denial of Special Rate of Taxation under Section 115BAC:
The assessee had opted for the New Tax Regime under section 115BAC of the Act, but the benefit was denied by the Centralized Processing Centre (CPC) stating that Form-10-IE was not filed. The contention was based on the requirement of filing Form-10-IE for individuals having income from business or profession, not for salaried employees. Section 115BAC(5)(i) explicitly states that the option under the New Tax Regime is applicable for individuals with income from business or profession. In contrast, section 115BAC(5)(ii) allows individuals with income other than business or profession to exercise the option along with the return of income. As the assessee, being a salaried employee, fell under the latter category, the Tribunal set aside the order of the Revenue Authorities and allowed the appeal, recognizing that the assessee followed the prescribed procedure under the Act.

In conclusion, the Tribunal allowed the appeal filed by the assessee, emphasizing that the denial of the special rate of taxation under section 115BAC was incorrect as the assessee, being a salaried employee, did not need to file Form-10-IE. The judgment highlighted the importance of adhering to statutory timelines while also considering genuine reasons for delay in filing appeals before the Tribunal.

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