Old tax regime applies where the return was filed before processing despite an earlier new-regime opt-in form

A prior Form No. 10-IE opting into the new tax regime under section 115BAC did not, by itself, compel assessment under that regime where the assessee later filed the return of income under the old regime before processing. The decisive factor was the regime reflected in the return as filed, not the earlier opt-in form alone. On these facts, the restriction on withdrawal of the option was treated as inapplicable, and the CPC could not force the new regime merely because Form No. 10-IE had been filed earlier.

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Issues: Whether an assessee who had filed Form No. 10-IE opting for the new tax regime under section 115BAC(5)(i) of the Income-tax Act, 1961 could nevertheless be assessed under the old regime where the return of income was filed under the old regime before processing.

Analysis: The assessee had initially exercised the option for the new regime by filing Form No. 10-IE, but subsequently filed the return of income declaring income under the old regime before the return was processed by the CPC. The decisive consideration was that the return as filed did not reflect the new regime, and the processing occurred much later. The restriction on withdrawal of the option was treated as inapplicable to a case where the assessee, after filing Form No. 10-IE, filed the return under the old regime itself rather than filing a revised return after adopting the new regime. The option under section 115BAC could not be enforced against the assessee in these circumstances.

Conclusion: The assessee was entitled to be assessed under the old regime, and the CPC was not justified in thrusting the new regime on the basis of the earlier Form No. 10-IE.

Ratio Decidendi: Where an assessee has filed the return of income under the old regime before processing, a prior Form No. 10-IE opting for the new regime does not by itself compel assessment under the new regime.

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