Benefit of new tax regime under 115BAC disputed; matter remanded to AO to verify alternative old regime deductions.

Challenge to denial of the new tax regime option due to late filing of Form 10-IE and return was considered; the legal position that a mere procedural lapse should not deprive a taxpayer of the new regime was noted, but a short delay in filing the return propelled reconsideration. The matter was remanded to the Assessing Officer for fresh adjudication and opportunity to substantiate claims, and the Tribunal directed verification of alternative claims for deductions under the old regime so that allowable deductions are granted if the new regime is not available.

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1. ISSUES PRESENTED AND CONSIDERED

1) Whether the assessee could be granted the benefit of the new tax regime under section 115BAC where both the return of income and Form 10-IE were filed beyond the due date prescribed under section 139(1).

2) If the option under section 115BAC is not available due to belated compliance, whether the assessee-being assessed under the old tax regime-must be allowed to claim deductions under sections 80C and 80TTA upon verification, and whether denial of such deductions required restoration to the Assessing Officer.

2. ISSUE-WISE DETAILED ANALYSIS

Issue 1: Eligibility to exercise option under section 115BAC when return/Form 10-IE filed beyond due date

Legal framework: The Court noted that section 115BAC(5) provides that section 115BAC shall not apply if the option is not exercised in the prescribed manner on or before the due date specified under section 139(1) for furnishing the return.

Interpretation and reasoning: The Court recorded that the return of income was filed on 16.03.2022 against the due date of 15.03.2022, and Form 10-IE was also filed beyond the stipulated time. While the assessee argued that tax had been paid on 15.03.2022 and that delay in filing Form 10-IE is a procedural lapse, the Court treated the belated filing of the return itself (along with belated Form 10-IE) as material to the validity of the option. The Court accepted that there was "admittedly" delay in filing both the return and Form 10-IE and proceeded on the basis that the assessee could not be granted the benefit of section 115BAC in these circumstances.

Conclusion: The option to be taxed under section 115BAC was not treated as allowable because the return of income and Form 10-IE were filed beyond the due date under section 139(1).

Issue 2: Allowability of deductions under the old tax regime and remand for verification

Legal framework: The Court considered the assessee's alternative claim that, if assessed under the old tax regime, deductions under sections 80C and 80TTA should be allowed subject to lawful verification.

Interpretation and reasoning: The Court noted that the return had in fact been processed under the old tax regime after rejection of the section 115BAC option. It further observed that, despite such assessment under the old regime, the deductions under sections 80C and 80TTA were denied. Accepting the alternative submission, the Court held that the appropriate course was to restore the matter to the Assessing Officer for necessary verification of the deduction claims and to grant relief in accordance with law.

Conclusion: The matter was restored to the Assessing Officer to verify and allow, as per law, the deductions claimed under sections 80C and 80TTA under the old tax regime, since the assessee was being assessed under that regime and the deductions had been denied without such verification.

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