Inadvertent Filing of Form 10-IF Under Section 115BAD Allows

Inadvertent Filing of Form 10-IF Under Section 115BAD Allows Recomputation of Taxable Income Under Old Regime

Issue

Whether a co-operative society that mistakenly exercised the option under Section 115BAD by filing Form 10-IF is entitled to have its taxable income recomputed under the old regime to claim deductions under Section 80P, provided the option was not exercised in any prior assessment year.

Facts

Return of Income & Claim: For Assessment Year 2024-25, the assessee, a co-operative society, filed its return of income claiming statutory deductions under Section 80P of Chapter VI-A.
CPC Summary Disallowance: While processing the return under Section 143(1), the Central Processing Centre (CPC) disallowed the Section 80P deduction and assessed the total income accordingly.
CIT(A) Findings: The CIT(A) upheld the disallowance, reasoning that the assessee had filed Form No. 10-IF to exercise the concessional tax regime option under Section 115BAD, which strictly precludes Chapter VI-A deductions and cannot be withdrawn.
Assessee’s Defense: The assessee contended that Form No. 10-IF was filed inadvertently/by mistake and requested that tax liability be computed under the old tax regime to allow the Section 80P deduction.

Decision

The Tribunal/Court held that where Form No. 10-IF under Section 115BAD was submitted inadvertently or by mistake, the tax authorities must treat the assessee as if the option had not been exercised.
The Assessing Officer was directed to recompute the taxable income under the old regime, ensuring the assessee is granted allowable Section 80P deductions.
This relief is subject to the condition that the assessee had not opted for or availed the Section 115BAD regime in any previous assessment year.

Key Takeaways

Bona Fide Mistake in Statutory Options: Inadvertent or mistaken filing of Form 10-IF for opting into Section 115BAD does not permanently lock a co-operative society out of Chapter VI-A deductions under the old regime.
Condition for Relief: Reversion to the old tax regime and grant of Section 80P deductions is permissible provided the society has not legitimately chosen or claimed benefits under Section 115BAD in earlier assessment years.
Substantive Benefit Over Procedural Errors: Tax authorities must compute income based on the true intention and eligibility of the assessee rather than rigidly enforcing an erroneous procedural opt-in form.

IN THE ITAT AHMEDABAD BENCH ‘SMC’

Suryakiran Co-operative Housing Service Society Ltd.

Income-tax Officer

Dr. B.R.R. Kumar, Vice President

IT Appeal No. 2448 (AHD) 2025
[Assessment year 2024-25]

JULY 22, 2026

Pritesh L. Shah, AR for the Appellant. Deependra Kumar, Sr. DR for the Respondent.

ORDER

1. This appeal has been filed by the Assessee against the order dated 29.10.2025 passed by the Addl./JCIT(A)-11, Delhi (hereinafter referred to as ‘Ld. CIT (A)’ in short), under Section 250 of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’ in short) for Assessment Year 2024-25.

2. The Assessee has raised the following grounds of Appeal:-

1. The Learned Commissioner of Income Tax (Appeals) erred in law and on facts in confirming the section 80P deduction disallowance of Rs.5,59,600/-such deduction is requested to be allowed.

3. The facts of the case are that the assessee, a co-operative society, filed its return of income for the Assessment Year 2024-25 on 03.07.2024 declaring Nil income after claiming deduction of Rs.5,59,660/- under section 80P of the Income-tax Act, 1961. While processing the return under section 143(1) of the Act, the Central Processing Centre (CPC), Bengaluru, disallowed the deduction claimed under section 80P and assessed the total income at Rs.5,59,660/-Aggrieved by the intimation issued under section 143(1) of the Act, the assessee preferred an appeal before the learned CIT(A). During the appellate proceedings, it was noticed that the assessee had exercised the option under section 115BAD by filing Form No. 10-IF. The Ld.CIT(A) observed that once the option under section 115BAD is exercised, the assessee becomes ineligible to claim deduction under section 80P and such option cannot be withdrawn. The contention of the assessee that Form No. 10-IF had been filed inadvertently was also rejected. Accordingly, the Ld.CIT(A) confirmed the action of the CPC in disallowing the deduction under section 80P.

4. Aggrieved by the order of the Ld. CIT(A), the assessee is in appeal before the Tribunal. The provisions reads as under:

Tax on income of certain resident co-operative societies. Finance Act, 2020, w.e.f. 1-4-2021 :

115BAD. (1) Notwithstanding anything contained in this Act but subject to the provisions of this Chapter, the income-tax payable in respect of the total income of a person, being a co-operative society resident in India, for any previous year relevant to the assessment year beginning on or after the 1st day of April, 2021, shall, at the option of such person, be computed at the rate of twenty-two per cent, if the conditions contained in sub-section (2) are satisfied:

Provided that where the person fails to satisfy the conditions contained in sub-section (2) in computing its income in any previous year, the option shall become invalid in respect of the assessment year relevant to that previous year and subsequent assessment years and other provisions of the Act shall apply, as if the option had not been exercised for the assessment year relevant to that previous year and subsequent assessment years.

(2) For the purposes of sub-section (1), the total income of the co-operative society shall be computed,—

(i) without any deduction under the provisions of section 10AA or clause (iia) of sub-section (1) of section 32 or section 32AD or section 33AB or section 33ABA or sub-clause (ii) or sub-clause (iia) or sub-clause (iii) of sub-section (1) or sub-section (2AA) of section 35 or section 35AD or section 35CCC or under any of the provisions of Chapter VI-A other than the provisions of section 80JJAA;

(ii) without set off of any loss carried forward or depreciation from any earlier assessment year, if such loss or depreciation is attributable to any of the deductions referred to in clause (i); and

(iii) by claiming the depreciation, if any, under section 32, other than clause (iia) of sub-section (1) of the said section, determined in such manner as may be prescribed.

(3) The loss and depreciation referred to in clause (ii) of sub-section (2) shall be deemed to have been given full effect to and no further deduction for such loss or depreciation shall be allowed for any subsequent year:

Provided that where there is a depreciation allowance in respect of a block of asset which has not been given full effect to prior to the assessment year beginning on the 1st day of April, 2021, corresponding adjustment shall be made to the written down value of such block of assets as on the 1st day of April, 2020 in such manner as may be prescribed, if the option under subsection (5) is exercised for a previous year relevant to the assessment year beginning on the 1st day ofApril, 2021.

(4) In case of a person, having a Unit in the International Financial Services Centre, as referred to in sub-section (1A) of section 80LA, which has exercised option under sub-section (5), the conditions contained in subsection (2) shall be modified to the extent that the deduction under the said section shall be available to such Unit subject to fulfilment of the conditions contained in that section.

Explanation.—For the purposes of this sub-section, the term “Unit” shall have the meaning assigned to it in clause (zc) of section 2 of the Special Economic Zones Act, 2005 (28 of 2005).

(5) Nothing contained in this section shall apply unless option is exercised by the person in such manner as may be prescribed on or before the due date specified under sub-section (1) of section 139 for furnishing the return of income for any previous year relevant to the assessment year commencing on or after the 1st day of April, 2021 and such option once exercised shall apply to subsequent assessment years:

Provided that once the option has been exercised for any previous year, it cannot be subsequently withdrawn for the same or any other previous year.

5. I have gone through the material available on record. It is an undisputed fact that the assessee exercised the option under section 115BAD by filing Form No. 10-IF. The plea of the assessee that Form No. 10-IF was filed by mistake can be accepted. The Assessing Officer shall determine the tax as if Form No. 10-IF has not been filed and recompute the taxable income under the old regime provided the assessee has not opted for the new regime in any previous year.

6. In the result, the appeal filed by the assessee is allowed for statistical purposes.