New Regime can be taken even if Form 10IEA filed to opt Old regime : ITAT
The Income Tax Appellate Tribunal (ITAT), Bangalore Bench,in 2026 ruled that the tax regime chosen in the Return of Income (ROI) supersedes an inadvertently filed Form 10-IEA.
Case Background
-
Assessee & AY: Adit Nilesh Shah, an individual practicing law; Assessment Year 2025–26.
-
Procedural Conflict: The assessee’s consultant inadvertently submitted Form 10-IEA on September 30, 2025, to opt out of the New Tax Regime. However, the subsequent ROI filed on October 24, 2025, declared total income of ₹32,55,050 computed strictly under the New Tax Regime (Section 115BAC(1A)), claiming no deductions or exemptions exclusive to the Old Tax Regime.
-
CPC Action & CIT(A): The CPC processed the return under Section 143(1) using the Old Tax Regime based on Form 10-IEA, raising a tax demand of ₹1,23,770. The CIT(A) upheld the demand, reasoning that Form 10-IEA had been digitally signed/verified and could not be treated as non-est merely due to an inadvertent error.
Key Findings & Tribunal Ruling
-
Subsequent Conduct Prevails: The statutory return of income is the primary declaration of tax liability. When a return filed after Form 10-IEA unambiguously reflects the New Tax Regime, the assessee’s actual intent must be honored.
-
Precedent Applied: The Bench followed the Pune ITAT ruling in Akshay Nitin Malu v. ITO [2025] holding that procedural mistakes in filing a regime form cannot force an assessee into an unintended tax regime contrary to what was filed in the ROI.
-
No Dual Benefit: The assessee did not claim benefits or deductions exclusive to the Old Tax Regime while seeking New Tax Regime rates; hence, revenue was not prejudiced.
-
Final Verdict: The CIT(A) order was set aside. The Assessing Officer/CPC was directed to process the return under the New Tax Regime u/s 115BAC(1A) and delete the consequential tax demand of ₹1,23,770. The appeal was allowed.