AKSHAY NITIN MALU,SANGLI V. INCOME TAX OFFICER, SANGLI

ITA 1651/PUN/2024

AI Insights

The case revolves around the appellant, Akshay Nitin Malu, who initially opted for the new tax regime under section 115BAC of the Income Tax Act by filing Form No.10-IE but later filed his income tax return under the old regime, declaring a lower income. The Central Processing Center (CPC) processed his return under the new regime, leading to a higher assessed income. The appellant contested this decision, leading to an appeal before the Tribunal. The primary legal contention was whether the appellant could withdraw his option for the new tax regime within the same assessment year, despite having filed the requisite form.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 471210 (ITAT-PUNE)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-01-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAMNATH P MURKUNDE
• Assessee Lawyers: PRAMOD S SHINGTE
• Keywords: Set aside; Revised return; Depreciation; Additional depreciation
• Section: 139

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH “A”, PUNE BEFORE SHRI R. K. PANDA, VICE PRESIDENT AND MS. ASTHA CHANDRA, JUDICIAL MEMBER ITA No.1651/PUN/2024 Assessment year : 2022-23 Akshay Nitin Malu 301, Mangalwar Peth, Madhavnagar, S.O. Sangli, Sangli – 416406 Vs. ITO, Ward 1, Sangli PAN: BWXPM6863P (Appellant) (Respondent) Assessee by : Shri Pramod S Shingte Department by : Shri Ramnath P Murkunde Date of hearing : 01-01-2025 Date of pronouncement : 03-01-2025 O R D E R PER R. K. PANDA, VP : This appeal filed by the assessee is directed against the order dated 25.07.2024 of the Ld. Addl./JCIT(A)-3, Ahmedabad relating to assessment year 2022-23. 2. Facts of the case, in brief, are that the assessee is an individual and engaged in business of manufacturing of cloth on looms. He filed his return of income on 20.07.2022. Before filing of his ITR the assessee had decided to opt for the new regime of taxation u/s 115BAC as applicable for assessment year 2022-23 and accordingly had filed Form No.10-IE on 18.07.2022 as per requirement u/s 115BAC(5)(i) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’). However, while filing the return of income on 20.07.2022 i.e. after filing Form 2 ITA No.1651/PUN/2024 No.10-IE, the assessee realized that the new regime of taxation u/s 115BAC is not beneficial to him for which he filed the return of income declaring total income at Rs.24,01,740/- as per the old regime. The Assessing Officer, CPC processed the return on 07.08.2023 determining the total income at Rs.64,41,940/- as per the new regime of taxation on the ground that the assessee had exercised the option by filing the requisite form i.e. Form No.10-IE. 3. The assessee filed an appeal before the Ld. Addl./JCIT(A), who held that as per provisions of section 115BAC of the Act, the said section does not provide for withdrawal of exercised option for the same year, it only provides for withdrawal of the option only for the year subsequent to the year of exercising of the option. He accordingly upheld the action of the CPC in making an adjustment of Rs.71,31,899/- by denying the claim of additional depreciation u/s 32(1A) of the Act. The Ld. Addl./JCIT(A) also upheld the action of the CPC in disallowing the deduction claimed under Chapter VI-A amounting to Rs.1,63,260/-. 4. Aggrieved with such order of the Ld. Addl./JCIT(A), the assessee is in appeal before the Tribunal by raising the following grounds: 1. On the facts and circumstances of the case and in law the Addl. CIT(A), NFAC erred in confirming the action of the Asst. Director of Income Tax, CPC, Bengaluru (hereinafter referred to as the AO) of thrusting the new regime of taxation as prescribed under section 115BAC even though the appellant had not opted for the same in the ITR filed by him and thereby denying the following deductions to the appellant: a. Additional Depreciation u/s 32(1A) on new plant machinery acquired and put to use during the year Rs.71,31,899 b. Deduction under Chapter VIA Rs.1,63,260 3 ITA No.1651/PUN/2024 The appellant craves leave to add to, amend, alter, delete or modify all or any of the above ground of appeal or raise a new ground of appeal before or at the time of hearing. 5. The Ld. Counsel for the assessee at the outset submitted that the assessee had originally decided to opt for the new regime of taxation u/s 115BAC of the Act and accordingly had filed the Form No.10-IE. However, on realizing that the old regime of taxation is beneficial to the assessee, the assessee filed his return of income on 20.07.2022 declaring total income of Rs.24,01,740/-. He submitted that at the time of processing of the return, the assessee had already filed the return as per old regime of taxation and therefore, the CPC was not justified in not considering the return of income since the assessee had not fulfilled all the conditions laid down in section 115BAC of the Act. He submitted that the Ld. Addl./JCIT(A) without appreciating the provisions properly has upheld the action of the CPC which is not correct. He drew the attention of the Bench to the provisions of sub-section (5) of section 115BAC, which read as under: “115BAC(1)…. (5) Nothing contained in this section shall apply unless option is exercised in the prescribed manner by the person,— (i) having income from business or profession, on or before the due date specified under sub-section (1) of section 139 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, and such option once exercised shall apply to subsequent assessment years; (ii) having income other than the income referred to in clause (i), along with the return of income to be furnished under sub-section (1) of section 139 for a previous year relevant to the assessment year: Provided that the option under clause (i), once exercised for any previous year can be withdrawn only once for a previous year other than the year in which it was exercised and thereafter, the person shall never be eligible to exercise option under this section, except where such person ceases to have any income from business or profession in which case, option under clause (ii) shall be available. 4 ITA No.1651/PUN/2024 Provided further that the provisions of this sub-section shall not apply for any previous year relevant to the assessment year beginning on or after the 1st day of April, 2024.” 6. He submitted that when the assessee has not fulfilled all the conditions laid down in the said provision and has not filed the return of income under the new regime of taxation but has opted to file the return exercising its option for the old regime of taxation, the Ld. Addl./JCIT(A) was not justified in upholding the action of the CPC. 7. The Ld. DR on the other hand while supporting the order of the Ld. Addl./JCIT(A) submitted that section 115BAC of the Act does not provide for withdrawal of the exercised option for the same year, it provides for withdrawal of the option only for the year subsequent to the year of exercising of the option, therefore, the grounds raised by the assessee should be dismissed. 8. We have heard the rival arguments made by both the sides and perused the orders of the Assessing Officer and Ld. Addl./JCIT(A). It is an admitted fact that the assessee had decided to opt for the new regime of taxation u/s 115BAC of the Act as applicable for assessment year 2022-23 and accordingly had filed Form No.10-IE on 18.07.2022 as per requirement u/s 115BAC(5)(i) of the Act. However, we find the assessee filed his return of income on 20.07.2022 under the old regime of taxation declaring total income of Rs.24,01,740/-. We find the CPC vide order dated 07.08.2023 processed the return of income and determined the total income at Rs.64,41,940/- as per the new regime of taxation on the ground that 5 ITA No.1651/PUN/2024 the assessee had exercised the option by filing the requisite Form No.10-IE. It is the submission of the Ld. Counsel for the assessee that although the assessee had filed the Form No.10-IE on 18.07.2022, however, the assessee exercised the option under the old regime of taxation and filed the return of income on 20.07.2022 which is much before processing of the return by the CPC i.e. 07.08.2023. It is also his submission that since the assessee has not fulfilled all the conditions as mentioned in section 115BAC, therefore, the Ld. Addl./JCIT(A) was not justified in upholding the action of the CPC in treating the return filed by the assessee as under the new regime of taxation. 9. We find some force in the above arguments of the Ld. Counsel for the assessee. It is an admitted fact that although the assessee had originally exercised the option for taxation u/s 115BAC by filing the Form No.10-IE on 18.07.2022, however, the assessee has filed the return of income on 20.07.2022 declaring total income at Rs.24,01,740/- under the old regime of taxation. It is also an admitted fact that the return was processed on 07.08.2023 which is much after the date of filing of the return. It is not a case that the assessee has filed Form 10-IE and also filed the return under the new tax regime and thereafter filed a revised return withdrawing the option which according to us is not permissible in the said previous year and the assessee can change the option only in the next year. However, in the instant case, the assessee after filing the Form 10-IE has opted for the old regime of taxation in the return filed. Therefore, we are of the opinion that the assessee cannot be forced to adopt for the new regime. We, therefore, find 6 ITA No.1651/PUN/2024 merit in the arguments of the Ld. Counsel for the assessee that the Ld. Addl./JCIT(A) was not justified in upholding the action of the CPC in processing the return of income determining the total income at Rs.64,41,940/- under the new regime of taxation. Accordingly, the order of the Ld. Addl./JCIT(A) is set aside and the grounds raised by the assessee are allowed. 10. In the result, the appeal filed by the assessee is allowed. Order pronounced in the open Court on 3rd January, 2025. Sd/- Sd/- (ASTHA CHANDRA) (R. K. PANDA) JUDICIAL MEMBER VICE PRESIDENT पुणे Pune; दिन ांक Dated : 3rd January, 2025 GCVSR आदेश की प्रतितिति अग्रेतिि/Copy of the Order is forwarded to: 1. अपीलार्थी / The Appellant; 2. प्रत्यर्थी / The Respondent 3. 4. The concerned Pr.CIT, Pune DR, ITAT, ‘A’ Bench, Pune 5. गार्ड फाईल / Guard file. आदेशानुसार/ BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अधिकरण ,पुणे / ITAT, Pune 7 ITA No.1651/PUN/2024 S.No. Details Date Initials Designation 1 Draft dictated on 01.01.2025 Sr. PS/PS 2 Draft placed before author 02.01.2025 Sr. PS/PS 3 Draft proposed & placed before the Second Member JM/AM 4 Draft discussed/approved by Second Member AM/AM 5 Approved Draft comes to the Sr. PS/PS Sr. PS/PS 6 Kept for pronouncement on Sr. PS/PS 7 Date of uploading of Order Sr. PS/PS 8 File sent to Bench Clerk Sr. PS/PS 9 Date on which the file goes to the Head Clerk 10 Date on which file goes to the A.R. 11 Date of Dispatch of order "