No bar to upload Form 10IE, for opting New Tax Regime in subsequent Assessment Year, even after one Form 10IE for previous Assessment Year stands rejected due to its late submission i.e. beyond the due date – ITAT
In a recent judgment, ITAT Jaipur has asked CBDT to consider modification in the system to enable assessees to claim benefit of New Tax Regime in the following year whose Form 10 IE submitted for preceding Assessment Year was not accepted only because it was not uploaded by the due date.
ABCAUS Case Law Citation:
4353 (2024) (12) abcaus.in ITAT
In the instant case, the assessee had challenged the order passed by the CIT(A) in confirming the denial of the benefits of new tax regime only because his Form 10IE furnished in relation to preceding assessment year was uploaded late.
The appellant assessee was a senior citizen of about 84 years of age. For the AY 2023-24 he was disallowed the benefit of New Tax Regime due to the only reason that Form 10IE required to be submitted before or at the time of filing of ITR, was submitted late for the preceding AY i.e. 2022-23.
Before the Tribunal the assessee contended that even if Form 10IE as regards the preceding Assessment Year was submitted late i.e. after the due date, the department could not deprive the assessee of the benefits of the new tax regime during the concerned year as the assessee had specified in the return for the year under consideration that he was opting to continue for new tax regime u/s 115BAC(5)(i) for the said year:
The Tribunal framed the following interesting question for adjudication
Whether an option to be exercised by an assessee for an Assessment Year to avail of benefit of new tax regime as provided under sub-section (5) of section 115BAC of Income Tax Act, 1961, by furnishing Form 10IE, on non acceptance of said Form by the department due to its submission beyond the due date, is deemed to have rejected thereby disallowing such an assessee from exercising said option, even for the following Assessment Year, especially when the assessee specifies in the ITR for the subsequent Assessment Year to continue to so opt i.e. or the new tax regime on the basis of the option already expressed in the only Form 10 IE not considered by the department ?”
The assessee also submitted that he tried his best to upload Form 10 IE afresh for the year under consideration but the system did not allow him to upload the same. It was also urged that the requirement of furnishing of Form 10IE within the prescribed period i.e. before or on the date of filing of ITR is merely directory and not mandatory, and as such the department should have considered the option expressed to be exercised for the year under consideration. In support of his contention, assessee relied on several decisions by Co-ordinate Benches of ITAT.
The Department contended that as per provisions of sub-section (5) of Section 115BAC, in order to avail of such benefits under new tax regime, such Form is required to be uploaded only once. It gives option to the assessee to only withdraw the same.
The Tribunal observed that under sub-section (5) of section 115BAC(5)(i) whenever, an assessee intends to avail of benefits of new tax regime, he or she is required to furnish Form 10 IE within the prescribed period.
The Tribunal observed that Co-ordinate Bench of Kolkata condoned the delay filing Form 10 IE and directed the Assessing Officer to grant benefits of concessional rate u/s 115BAC(5)(i) of the Act even though the assessee had failed to file Form 10 IE within the prescribed period. It was observed that because of the procedural lapse on the part of the assessee, there was no loss to the revenue so as to disentitle the assessee to claim the concessional rate benefits. Similarly, Co-ordinate Bench of ITAT Pune had observed that it is not mandatory requirement and rather same is directory in nature. Also, ITAT Amritsar also allowed the appeal filed by the assessee who had failed to furnish Form 10IE within time allowed under the law.
The Tribunal observed that the question was as to whether provision requiring the assessee to submit form 10IE before or on the due date is mandatory or directory, as contended on behalf of the appellant. Also, whether an assessee is debarred from uploading Form 10IE even in the subsequent Assessment year, in case, for certain reasons the assessee was unable to furnish said Form in time, as regards the previous Assessment Year, or when same was rejected by the department only on the ground of same having been submitted or uploaded late i.e. beyond the prescribed period/date.
The Tribunal observed that admittedly, the assessee never opted to withdraw said Form 10 IE after having uploaded the same. The Tribunal opined that in this regard, the expression “for furnishing the returns of income for any previous year relevant to the assessment year commencing on or after the 1st day of April, 2021,” appearing in clause (i) of sub-section (5) of Section 115 BAC of the Act is of much significance.
According to Tribunal, as per said expression, due date relates to furnishing of returns of income for any previous year, relevant to the assessment year commencing on or even after 1.4.2021. From said provision, it cannot be said that law debars such an assessee from uploading of said Form, before or on the due date of ITR for the subsequent Assessment Year, even after one Form 10 IE for the previous Assessment Year stands rejected from consideration by the department due to its late submission i.e. beyond the due date. In other words, once said Form submitted for an Assessment Year is not accepted by the department only because same was uploaded beyond the due date, the abovesaid provision does not debar the assessee from repeating his option or desire to continue to opt to avail benefits of new tax regime in the very next Assessment Year, by furnishing fresh Form 10 IE before or on the due date for furnishing of ITR for the very next Assessment Year.
The Tribunal opined that there is nothing to suggest that permitting an assessee to continue to opt on the basis of previously submitted Form or allowing him to furnish fresh Form for the very next assessment year, is going to cause any loss of revenue to the State.
Accordingly, the Tribunal set aside the order passed by Commissioner of Income Tax (Appeal) and the department was directed to consider the option already expressed to be exercised in the previous Assessment Year, on the basis of Form 10 IE then submitted, subject to the condition that the assessee fulfills all other requirements of law as available u/s 115BAC(5)(i) of the Act.
The Tribunal added that CBDT shall consider modification in the system in order to enable an assessees whose Form 10 IE submitted for one Assessment Year is not accepted only because it was not uploaded by the due date, to upload such Form in the very next Assessment Year, so as to opt to avail of the benefits of the new tax regime.
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