Minor Nine-Day Delay in Filing Form 10-IE Due to Portal Glitches

Minor Nine-Day Delay in Filing Form 10-IE Due to Portal Glitches Cannot Deny Section 115BAC Benefit

Issue

Whether a technical and minor delay of nine days in filing Form No. 10-IE due to e-filing portal glitches can justify the denial of concessional tax regime benefits under Section 115BAC.

Facts

Return & Regime Selection: The assessee initially filed an original return under the old tax regime claiming Chapter VI-A deductions for Assessment Year 2021-22, and subsequently chose to opt for the concessional tax regime under Section 115BAC.
Belated Form 10-IE & Revised Return: The assessee filed Form No. 10-IE on 24-03-2022 with a minor delay of approximately nine days and submitted a revised return opting for Section 115BAC.
Reason for Delay: The delay in submitting Form No. 10-IE was attributed to technical difficulties encountered on the official e-filing portal, which were consistently pleaded and not effectively controverted by the Revenue.
CPC Summary Disallowance: The Central Processing Centre (CPC), while processing the return under Section 143(1), rejected the Section 115BAC claim on the ground that Form No. 10-IE was not filed on or before the prescribed due date, assessing tax liability under the old regime.

Decision

Technical Delay Cannot Defeat Substantial Justice: Held in favour of the assessee. A venial procedural delay of nine days in filing Form No. 10-IE cannot be used to deny substantive tax benefits under Section 115BAC when the taxpayer actually exercised the option [Paras 9 & 10].
Consistent Explanation Accepted: Held in favour of the assessee. Since the assessee’s explanation regarding portal technical glitches remained consistent and uncontroverted, the Section 115BAC claim deserved acceptance [Para 10].
Direction for Recomputation: Held in favour of the assessee. The AO/CPC was directed to consider Form No. 10-IE filed on 24-03-2022, allow the Section 115BAC regime, and recompute the tax liability and interest accordingly [Para 11].

Key Takeaways

Substance Over Procedural Hyper-Technicality: Minor procedural delays in submitting statutory election forms (like Form 10-IE) cannot override substantive statutory rights granted to taxpayers under Section 115BAC.
System Glitches Excusable: When non-compliance or delay arises from technical glitches on the official e-filing portal, tax authorities cannot penalize the assessee by denying beneficial tax regimes.
Validity of Belated Statutory Forms: If a statutory form is available on record before the final processing or assessment is completed, it should be taken into account to determine the true tax liability.

IN THE ITAT AMRITSAR BENCH

Amit Arora

ITO

Laliet Kumar, Judicial Member
and Manoj Kumar Aggarwal, Accountant Member

IT APPEAL No. 423 (ASR) OF 2025
[Assessment year 2021-22]

SEPTEMBER 8, 2026

Rohit Kapoor, Adv. for the Appellant. Mrs. Neerja Sharma, Sr. DR for the Respondent.

ORDER

Laliet Kumar, Judicial Member.-This appeal by the assessee is directed against the order of the learned Addl./JCIT(A), passed under section 250 of the Income-tax Act, 1961 (“the Act”), arising out of the intimation issued under section 143(1) of the Act for Assessment Year 2021-22.

2. The brief facts of the case are that the assessee filed the original return of income under the old tax regime, claiming deductions under Chapter VI-A of the Act. Subsequently, the assessee opted for taxation under the new regime prescribed under section 115BAC of the Act. The due date applicable for the relevant compliance stood extended up to 15.03.2022. The assessee, however, furnished Form No. 10-IE on 24.03.2022, resulting in a delay of approximately nine days. The assessee also filed the revised return opting for taxation under section 115BAC. The case of the assessee is that the delay in filing Form No. 10-IE occurred due to technical glitches/difficulties in the income-tax e-filing portal prevailing during the relevant period. It was submitted that immediately upon the relevant utility becoming functional, the assessee filed Form No. 10-IE along with the revised return. The assessee also relied upon the successive CBDT circulars extending the statutory timelines on account of difficulties in electronic filing. While processing the return under section 143(1), the CPC denied the benefit of the lower rate of tax under section 115BAC on the ground that Form No. 10-IE had not been filed by the prescribed due date. The assessee carried the matter in appeal before the learned CIT(A), who confirmed the action of the CPC. Hence, the present appeal.

3. The assessee has raised various grounds challenging the denial of the benefit of section 115BAC. In substance, the grievances are that the lower authorities erred in denying the benefit merely because Form No. 10-IE was filed after the due date; that the delay was only nine days and was occasioned by technical glitches in the e-filing portal; that the requirement of filing the form within the prescribed time was directory; and that the revised return and Form No. 10-IE, having been furnished and being available before the Department, ought to have been considered. The assessee has also raised grounds concerning the scope of adjustment under section 143(1), consequential computation of tax and levy of interest. The grounds are reproduced in substance in the appellate record.

4. The learned AR submitted that the assessee had substantially complied with the requirements of section 115BAC. It was submitted that the due date for the relevant compliance was 15.03.2022 whereas Form No. 10-IE was filed on 24.03.2022, involving a delay of only nine days. It was contended that the delay was not deliberate but occurred due to technical glitches in the income-tax efiling portal. The assessee had initially filed the return under the old regime and, after the relevant utility became functional, immediately filed Form No. 10-IE and the revised return opting for taxation under section 115BAC. The learned AR further submitted that the CBDT had itself recognised the difficulties being faced by taxpayers in electronic filing during the relevant period and had issued successive circulars extending the due dates. Circular No. 1/2022 extended the due date for AY 2021-22 to 15.03.2022 on consideration of difficulties reported by taxpayers and stakeholders in electronic filing. It was further submitted that the prescribed form had ultimately been filed and was available before the Department. Therefore, a minor procedural delay should not result in denial of the substantive benefit of the new tax regime.

5. The learned AR relied upon various decisions, including the decision of the coordinate Bench in Ravi Kant Luthra v. ADIT, CPC, Bengaluru, ITA No. 444/Asr/2024, wherein, on materially similar facts, the Tribunal considered a nine-day delay in filing Form No. 10-IE and directed that the form be taken into cognizance for allowing the benefit of section 115BAC.

6. The learned Departmental Representative supported the orders of the lower authorities. The learned DR submitted that the assessee was required to exercise the option under section 115BAC in the prescribed manner within the stipulated time. Since Form No. 10-IE was admittedly filed after the prescribed due date, the benefit of the concessional tax regime had rightly been denied by the CPC and confirmed by the learned CIT(A). The learned DR, therefore, relied upon the reasoning recorded by the learned CIT(A) and submitted that the appeal deserved to be dismissed. However, when specifically confronted with the submission of the learned AR regarding the technical glitches in the e-filing portal which allegedly prevented timely filing of Form No. 10-IE, the learned DR could not effectively controvert the said factual submission. This aspect is also recorded in the coordinate Bench decision in Ravi Kant Luthra (supra).

7. The CPC denied the benefit of section 115BAC on the ground that Form No. 10-IE was not furnished within the prescribed due date. The learned CIT(A) noted that the assessee had filed Form No. 10-IE after the due date and held that, for AY 2021-22, the assessee was required to specify his intention to opt for the new tax regime by filing the prescribed form within the stipulated time. Accordingly, the learned CIT(A) concluded that the tax liability was rightly determined under the old regime and dismissed the grounds of appeal.

8. We have carefully considered the rival submissions and perused the material available on record. The undisputed facts are that the assessee intended to opt for the tax regime under section 115BAC; Form No. 10-IE was in fact furnished; the form was filed on 24.03.2022 against the due date of 15.03.2022; and the delay was thus approximately nine days. The assessee has consistently explained that the delay was occasioned by technical difficulties in the e-filing portal. The question is whether such a short and explained delay should, in the facts of the present case, result in complete denial of the substantive benefit of section 115BAC. Section 115BAC undoubtedly prescribes the manner in which the option is to be exercised. We do not dilute the statutory requirement. However, the issue before us has to be considered in the factual circumstances in which the default occurred. The assessee did not abandon the option, nor was there a complete failure to furnish the prescribed form. The assessee subsequently furnished Form No. 10-IE and also filed the revised return opting for the new regime. We find considerable force in the contention of the learned AR that the delay was only nine days and that the same occurred during a period in which substantial difficulties were being faced by taxpayers in complying with electronic filing requirements. The CBDT itself had issued successive circulars recognising difficulties in electronic filing and extending various statutory timelines. More importantly, we find that the issue is squarely covered by the reasoning adopted by the coordinate Bench of this Tribunal in Ravi Kant Luthra (supra). (. In that case also, the original return was filed under the old regime, the assessee subsequently opted for section 115BAC, and Form No. 10-IE was filed on 24.03.2022 against the due date of 15.03.2022. The delay was nine days and was attributed to technical glitches in the portal. The coordinate Bench took note of the fact that the form had been filed along with the revised return and was available before the Assessing Officer. It held that the benefit of the new regime could not be denied merely on that account and directed the Assessing Officer to take cognizance of Form No. 10-IE for the purpose of assessment. We respectfully concur with the aforesaid view.

9. In our considered opinion, the object of the requirement is substantially fulfilled when the assessee has actually exercised the option and furnished the prescribed form, though belatedly, and the delay is only nine days in circumstances where technical difficulties in the electronic filing system have been specifically pleaded and are not effectively controverted by the Revenue. The distinction between a complete failure to comply with a statutory condition and a minor procedural lapse is material. In the present case, there is no dispute about the assessee’s intention to opt for section 115BAC and no allegation of any abuse of the provision. The assessee completed the prescribed compliance shortly after the due date. We are therefore of the view that such a venial and technical delay cannot be permitted to defeat substantial justice. A procedural requirement, in the peculiar facts before us, cannot be elevated to a level where the assessee is deprived altogether of the substantive tax regime which he had admittedly opted for and for which the prescribed form was subsequently furnished.

10. We also find that the Revenue has not brought any material on record to demonstrate that the assessee deliberately withheld Form No. 10-IE or that the subsequent filing was made with a view to obtain an impermissible advantage. On the contrary, the assessee’s explanation has remained consistent throughout the proceedings. We accordingly hold that the assessee’s claim under section 115BAC deserves to be accepted and the mere delay of nine days in filing Form No. 10-IE, in the facts and circumstances of the case, cannot justify denial of the substantive benefit. Consequently, the order of the learned CIT(A) confirming denial of the benefit under section 115BAC is not sustainable.

11. In view of the foregoing discussion, Ground Nos. 1 to 8 of the assessee are allowed. The Assessing Officer/CPC is directed to take into consideration Form No. 10-IE filed by the assessee on 24.03.2022 and allow the benefit of the tax regime opted for under section 115BAC, notwithstanding the delay of nine days in furnishing the said form. The consequential tax liability shall be recomputed accordingly. Any consequential interest under sections 234A, 234B and 234C shall also be recomputed in accordance with law.

12. Ground No. 9 relating to levy of interest is consequential and is accordingly allowed for statistical purposes. Ground No. 10, being general in nature, does not require separate adjudication.

13. In the result, the appeal of the assessee is allowed.