NEW TAX REGIME ALLOWED DESPITE INADVERTENT SELECTION OF OLD REGIME

 

Here is one judgement wherein CIT(A) has allowed the assessee’s claim under the New Tax Regime u/s 115BAC, even though the Old Regime was inadvertently selected, and deleted the consequential demand. Though the order by CIT (A) don’t set the precedent, still the content may be relevant for the tax professionals and taxpayers.

Facts of the Case:
1. The assessee consistently followed the New Tax Regime in earlier years.

2. From FY 2023–24, the New Regime became the default regime, and Form 10-IE is required only to opt out.

3. For AY 2023–24, due to a clerical mistake, Form 10-IE was filed again, resulting in an unintended opt-out and wrong application of the Old Regime.

4. CPC processed the return under the Old Regime and raised a demand, which was also upheld in rectification u/s 154.

5. On appeal, it was demonstrated that the ITR and Audit Report clearly reflected computation under the New Regime, and the wrong selection of the Old Regime was purely inadvertent.

6. The Hon’ble CIT(A) held that technical errors cannot defeat a bona fide claim and that substance must prevail over form.

New Regime allowed despite wrong selection & resultant demand deleted.

Key Takeaway:
A bona fide claim cannot be denied merely because of an inadvertent or technical selection.

The copy of the order is as under:

1766580011194