Speed Post Dispatch Date Counts for ITR-V Verification; Return Deemed Timely u/s 139(1), New Regime Allowed

ITAT Chandigarh-AT allowed the assessee's appeal, holding that for purposes of verification of ITR/ITR-V under the relevant CBDT systems notification, the critical date is the date of dispatch of the duly signed ITR-V by Speed Post, not the date of its physical delivery. Based on the postal receipt showing dispatch on 21-08-2023, the Tribunal held that verification occurred within 30 days from electronic transmission on 24-07-2023. Accordingly, the return was deemed filed within the due date under section 139(1), and CPC was directed to allow the assessee the benefit of the new tax regime as originally claimed in the return.

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1. ISSUES PRESENTED AND CONSIDERED

1.1 Whether, for an electronically filed return accompanied by ITR-V sent by speed post, the denial of benefit of the new tax regime under section 115BAC was justified on the ground that e-verification/ITR-V was not completed within 30 days of electronic transmission.

1.2 Whether, in view of the applicable CBDT Notification concerning e-verification and ITR-V dispatch, the return was to be treated as filed within the due date under section 139(1) for the purpose of eligibility to opt for the new tax regime under section 115BAC.

2. ISSUE-WISE DETAILED ANALYSIS

Issue 1 & 2: Validity of denial of new tax regime under section 115BAC due to alleged delayed verification and determination of date of filing under CBDT Notification

Legal framework

2.1 The judgment considers the CBDT framework on e-filing and verification of income-tax returns, including:

(a) Circular No. 3/2009 dated 21-05-2009 introducing electronic filing with subsequent submission of ITR-V within a prescribed period, and treating the date of transmitting data electronically as the date of furnishing the return if ITR-V is submitted within the stipulated time.

(b) Extension of time limit for filing ITR-V to 120 days from uploading, as per Press Release dated 27-01-2010.

(c) Centralised Processing of Returns Scheme, 2011, notified vide Notification No. 2/2012 dated 04-01-2012, particularly Rule 14, delegating power to specify mode, manner and time for verification of ITR-V.

(d) Notification No. 05 of 2022 dated 29-07-2022 issued by DGIT (Systems), CBDT, effective from 01-08-2022, prescribing a 30-day time limit for e-verification/submission of ITR-V from the date of electronic transmission of return data, and clarifying:

  (i) If e-verification/ITR-V submission is within 30 days, the date of electronic transmission is the date of furnishing the return.

  (ii) If e-verification/ITR-V submission is beyond 30 days, the date of e-verification/ITR-V submission is the date of furnishing the return and consequences of late filing follow.

(e) Para 8 of Notification No. 05 of 2022, which states that the date of dispatch of speed post of duly verified ITR-V shall be considered for determining the 30-day period from the date of electronic transmission of return data.

Interpretation and reasoning

2.2 The CPC denied the benefit of the new tax regime under section 115BAC on the ground that the return was not e-verified within 30 days from the date of filing and that the e-verification was beyond such prescribed time.

2.3 The appellate authority sustained the denial, holding that e-verification on 24-08-2023 was after the due date for filing the return (31-07-2023) and, relying on Notification No. 05 of 2022, treated the date of verification as the date of filing of the return.

2.4 The Tribunal examined Para 8 of Notification No. 05 of 2022, which provides that, for determination of the 30-day period from the date of transmitting the return data electronically, the relevant date is the date of dispatch of the duly verified ITR-V by speed post.

2.5 On facts, the assessee had electronically filed the return on 24-07-2023 and produced the postal receipt showing that the duly verified ITR-V was dispatched by speed post on 21-08-2023.

2.6 Applying Para 8, the Tribunal treated 21-08-2023 (date of dispatch of ITR-V) as the reference date for determining whether verification was within the 30-day limit counted from 24-07-2023 (date of electronic transmission).

2.7 Since 21-08-2023 falls within 30 days from 24-07-2023, the Tribunal held that the requirement of e-verification/ITR-V submission within 30 days was satisfied in terms of the Notification.

2.8 Consequently, in line with the Notification, the Tribunal held that the date of furnishing the return is deemed to be the date of electronic transmission, i.e., 24-07-2023.

2.9 As 24-07-2023 is before the due date under section 139(1), the return was to be treated as filed within time, thereby preserving the assessee's valid exercise of option for the new tax regime under section 115BAC.

Conclusions

2.10 The return, though e-verified/ITR-V processed later, was deemed to have been furnished on 24-07-2023 because the ITR-V was dispatched by speed post within 30 days from the date of electronic transmission, in accordance with Para 8 of Notification No. 05 of 2022.

2.11 The return was thus filed within the due date under section 139(1), and the assessee's option to be taxed under the new regime under section 115BAC was validly exercised.

2.12 The denial of the benefit of the new tax regime by CPC and its confirmation by the appellate authority were unsustainable; the Tribunal directed CPC to grant the benefit of the new tax regime as claimed.

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