HEMAVATHI NAYAK TALWAR ,MAHADEVAPURA BENGALURU V. INCOME TAX OFFICER WARD 4(2)(1) BANGALORE, BENGALURU

ITA 93/BANG/2025

AI Insights

Mrs. Hemavathi Nayak Talwar, the appellant, contested the rectification order passed by the Deputy Director of Income Tax, CPC Bangalore, which was upheld by the CIT(Appeals). The dispute centered on the denial of benefits under section 115BAC of the Income-tax Act, 1961, after the appellant opted for the new tax regime in her revised return. The Tribunal found that the appellant was not granted the deductions available under the old tax regime when she opted for the new regime, which was contrary to the provisions of section 115BAC(2) & (3). The Tribunal's decision emphasized the need to allow deductions under the old regime if the assessee is not taxed under the new regime, despite opting for it in a revised return.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 633072 (ITAT-BANGALORE)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-06-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2022-2023
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: GANESH R. GHALE; STANDING COUNSEL
• Assessee Lawyers: SIDDESH NAGARAJ GADDI
• Keywords: Opportunity of being heard; Revised return; Depreciation; Tax effect; Principle of natural justice; Rectification of order
• Section: 154

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH : BANGALORE BEFORE SHRI PRASHANT MAHARISHI, VICE PRESIDENT ITA No.93/Bang/2025 Assessment year : 2022-23 Mrs. Hemavathi Nayak Talwar, Flat No.001, Sharadhi Apartment, No.05, 1st Cross, 1st Main, Anugraha Layout, Mahadevapura, Bengaluru – 560 048. PAN: AOBPT 8658Q Vs. The Income Tax Officer, Ward 4(2)(1), Bangalore. APPELLANT RESPONDENT Appellant by : Shri Siddesh Nagaraj Gaddi, CA. Respondent by : Shri Ganesh R. Ghale, Standing Counsel. Date of hearing : 03.06.2025 Date of Pronouncement : 09.06.2025 O R D E R 1. This appeal is filed by Hemavathi Nayak Talwar (the assessee/appellant) for the assessment year 2022-23 against the appellate order passed by the CIT(Appeals)-2, Chennai [ld. CIT(A)] dated 03.12.2024 wherein the appeal filed by the assessee against the rectification order passed u/s. 154 of the Income-tax Act, 1961 [the Act] dated 20.5.2024 by the DDIT, CPC, Bengaluru [ld. AO] was dismissed. ITA No.93/Bang/2025 Page 2 of 6 2. The assessee is aggrieved and has preferred the following grounds of appeal:- “1. The impugned intimation passed by the Deputy Director of Income Tax, CPC Bangalore (Learned Officer) and CIT(A), to the extent prejudicial to the Appellant, is not justified in law and on the facts and circumstances of the case. 2. The Learned Officer and CIT(A) has exceeded jurisdiction in incorporating adjustment which is not covered within the scope of section 143(1)/154 of the Act. 3. The impugned intimation without granting an opportunity to be heard is against the principles of natural justice and is liable to be quashed in its entirety. 4. The learned Officer and CIT(A) has erred in law and on facts in not considering the revised return of income thereby erred in denying the benefit of section 115BAC of the Act. 5. While denying the benefit of section 115BAC, the learned Officer and CIT(A) should have considered the revised return of income as it replaces the original return. 6. The learned Officer and CIT(A) have erred in law and on facts in not considering the Appellant is eligible for the benefit of the provisions of section 115BAC of the Act 7. The order is liable to be quashed as it is riddled with mistakes and passed without application of mind. 8. Without prejudice to the above, in the event of denial of the benefit of the new regime (115BAC), the Ld AO/CIT(A) should have allowed the benefit of deductions under the old regime. 9. The impugned adjustments being merely based on presumption and surmises, are to be deleted. 10. The learned Officer and CIT(A) has erred in raising demand vide issue of notice under section 156 of the Act ITA No.93/Bang/2025 Page 3 of 6 11. The learned Officer and CIT(A) has erred in law and on facts in levying higher fee under section 234A/B/C of the Act. (Total tax effect: Rs.34,490/ -) On the basis of the above grounds and other grounds which may be urged at the time of hearing with the consent of the Honorable Tribunal, it is prayed that the order passed under section 250 upholding the order passed u/s 154 of the Act, to the extent it is against the Appellant, be quashed and the relief sought to be granted.” 3. The brief facts of the case show that assessee is an individual earning salary and income from other sources. She filed return of income on 1.7.2022 at a total income of Rs.4,86,100 under old regime. Subsequently the assessee filed a revised return of income on 12.8.2022 declaring total income of Rs.7,53,980 and opted for taxation under the provisions of section 115BAC and paid taxes. 4. The original return was processed by DDIT, CPC, Bengaluru, by passing the intimation u/s. 143(1) on 9.8.2022 accepting the return of income. 5. As there was an error in claiming the refund, the assessee filed the revised return. This revised return was processed by the AO on 23.1.2023 by denying the benefit of section 115BAC and raising a demand. The assessee requested for rectification of intimation which was passed on 10.2.2023 and self-assessment credit was not allowed to the assessee. Subsequently once again rectification application was made on 31.1.2024 wherein the benefit of section 115BAC was denied. Thus total income of assessee was assessed finally at Rs. 7,53,980. ITA No.93/Bang/2025 Page 4 of 6 6. The assessee preferred the appeal before the ld. CIT(Appeals) against the rectification order passed on 20.5.2024. The assessee submitted that in the original return filed by the assessee, the assessee opted for old regime and in the revised return she opted for new regime of taxation. The assessee was denied benefit of taxation u/s. 115BAC of the Act. The claim of assessee was also that even if the assessee is denied benefit of section 115BAC for revised return, then the assessee must be granted deduction available to her in the old regime. It was submitted that it cannot be the case that assessee is denied the benefit of provisions of section 115BAC and assessee is also denied the benefit of deductions claimed and allowable under Chapter VIA of the Act. The ld. CIT(A) did not consider this aspect and dismissed the appeal of the assessee. 7. The ld. AR referred to the grounds of appeal and submitted that if the assessee is denied the benefit of section 115BAC of the Act, then at least where assessee is being taxed under the old tax regime, the deduction under Chapter VIA of the Act, which was not available in the new regime, but available in the old regime, should be allowed to the assessee. He further submitted that when the assessee has filed the original return of income, what are the claims available to the assessee under the old regime are mentioned therein and same have been allowed to the assessee while processing the original return of income. But when the revised return was filed claiming deduction u/s. 115BAC of the Act, the assessee was denied the new tax regime benefit as well ITA No.93/Bang/2025 Page 5 of 6 as denied the benefit available under the old tax regime. Therefore, the order of the ld. CIT(A) in not considering the same is not correct. 8. The ld. DR vehemently supported the orders of ld. lower authorities. 9. We have carefully considered the rival contentions and perused the orders of ld. lower authorities. The simple facts in this case show that assessee originally opted for old tax regime taxation. Subsequently the assessee opted for new tax regime by filing a revised return. The original return was processed and assessee was granted benefit available to the assessee as deduction under Chapter VIA of the Act in the old regime. When the revised return was processed, the assessee was denied the benefit of new regime as well as was not allowed the deductions which assessee should have been allowed in the old tax regime. Therefore even on appeal before the ld. CIT(A), assessee submitted that if assessee is to be taxed under the old regime, then the benefit of tax/ deduction available to the assessee in the old regime should be allowed. 10. According to the provisions of section 115BAC(2), if income of the assessee is chargeable to tax under that section, assessee is not allowed the benefit of items specified in sub-section (2). The assessee is also deemed to have been allowed the deduction for losses and depreciation as per sub-section (3). However, if the assessee is assessed to tax in the old regime and not u/s. 115BAC, assessee is to be allowed the benefit of items specified in sub-sections (2) & (3) of section 115BAC of the Act. ITA No.93/Bang/2025 Page 6 of 6 11. In this case, assessee has been taxed not in the new regime, but in the old regime, assessee must be allowed the claim under the sub-sections (2) & (3) of section 115BAC. These details are available in the original return processed by the CPC. In view of this, we direct the ld. AO to grant the benefit of deductions available to the assessee which are denied in the new regime as mentioned in sub-sections (2) & (3) of section 115BAC of the Act. As per ground No.8, this prayer of the assessee is justified and therefore allowed. 12. No other grounds of appeal were pressed and therefore the same are dismissed. 13. In the result, the appeal of the assessee is partly allowed. Pronounced in the open court on this 9th day of June, 2025. Sd/- ( PRASHANT MAHARISHI ) VICE PRESIDENT Bangalore, Dated, the 9th June, 2025. /Desai S Murthy / Copy to: 1. Appellant 2. Respondent 3. Pr. CIT 4. CIT(A) 5. DR, ITAT, Bangalore. By order Assistant Registrar ITAT, Bangalore. "