New tax regime option under Form 10-IE cannot be ignored at processing stage when already on record.

The option to opt for the new tax regime through Form 10-IE was treated as directory rather than mandatory where the form was available with the processing authority at the time of intimation under Section 143(1). The assessee's belated filing within the processing record could not be ignored, and rectification under Section 154 was not to be refused solely on that basis. The intimation processed under the old tax regime was therefore incorrect, and the return was directed to be amended by giving effect to Form 10-IE and applying the new tax regime. The issue was decided in favour of the assessee, with the alternative ground rendered infructuous.

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Issues: Whether the intimation under Section 143(1) of the Income-tax Act, 1961 could be processed under the old tax regime despite Form 10-IE being available on record, and whether the assessee was entitled to the benefit of the new tax regime.

Analysis: The assessee had not filed Form 10-IE within the due date under Section 139(1), but the form was on record when the return was processed. The option to adopt the new tax regime was treated as directory rather than mandatory, and the form ought to have been considered while issuing the intimation. The rectification route under Section 154 was therefore not to be rejected merely because the form had been filed belatedly, so long as it was available with the processing authority.

Conclusion: The processing under the old tax regime was held to be incorrect, and the intimation was directed to be amended by giving effect to Form 10-IE and applying the new tax regime; this issue was decided in favour of the assessee.

Final Conclusion: The appeal succeeded on the main issue and was only partly allowed, while the alternative ground did not survive.

Ratio Decidendi: Where the option for the new tax regime is on record at the time of processing, its consideration cannot be denied on a rigid mandatory view of the filing requirement.

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