M MALARVIZHI,VIRUDHUNAGAR V. DCIT, NCC-2, , MADURAI

ITA 361/CHNY/2025

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Ms. Malarvizhi, the appellant, filed her income tax return for the assessment year 2023-24 under the new tax regime, despite not being eligible as she had opted out in the previous year. The CPC processed her return under the old tax regime but did not allow deductions under Chapter VIA due to the incorrect filing. The First Appellate Authority (FAA) upheld this decision, leading Ms. Malarvizhi to appeal to the Income Tax Appellate Tribunal. The Tribunal, after reviewing the submissions and evidence, allowed the deductions claimed under sections 80C and 80TTA, recognizing the CPC's correct application of the old tax regime in computing her tax liability.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 668755 (ITAT-CHENNAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-06-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2023-2024
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KUMAR CHANDAN
• Assessee Lawyers: S. SASHANK SRIVATSAN

Judgement Text

"आयकर अपीलȣय अͬधकरण, ‘ए’ Ûयायपीठ, चेÛनई IN THE INCOME TAX APPELLATE TRIBUNAL ‘A’ BENCH, CHENNAI Įी जॉज[ जॉज[ क े, उपाÚय¢ एवं Įी एस.आर.रघुनाथा, लेखा सदèय क े सम¢ BEFORE SHRI GEORGE GEORGE K, VICE PRESIDENTAND SHRI S.R. RAGHUNATHA, ACCOUNTANT MEMBER आयकर अपील सं./ITA No.:361/CHNY/2025 िनधाᭅरण वषᭅ/Assessment Year:2023-24 Ms. M. Malarvizhi, 443, Main Bazaar, Virudhunagar – 626 001. PAN: ADTPM 6586M Vs. The Deputy Commissioner of Income Tax, Non-Corporate Circle-2, Madurai. (अपीलाथᱮ/Appellant) (ᮧ᭜यथᱮ/Respondent) अपीलाथᱮ कᳱ ओर से/Appellant by : Shri S. Sashank Srivatsan, CA ᮧ᭜यथᱮ कᳱ ओर से/Respondent by : Shri Kumar Chandan, JCIT सुनवाई कᳱ तारीख/Date of Hearing : 19.06.2025 घोषणा कᳱ तारीख/Date of Pronouncement : 23.06.2025 आदेश /O R D E R PER GEORGE GEORGE K, VICE PRESIDENT: This appeal filed at the instance of the assessee is directed against the order of Addl/JCIT(A)-10, Mumbai dated 02.12.2024 passed under section 250 of the Income Tax Act, 1961 (hereinafter called ‘the Act’). The relevant Assessment Year is 2023-24. - 2 - ITA No.361/CHNY/2025 2. There is a delay of 3 days in filing this appeal. The assessee has filed condonation petition along with affidavit stating therein the reason for delay in filing the appeal. On perusal of the same and due to smallness of delay, we condone the delay in filing the appeal and proceed to dispose off the appeal on merits. 3. The solitary issue that was argued is whether the First Appellate Authority (FAA) was justified in not granting the deduction under Chapter VIA of the Act. 4. Brief facts of the case are as follows: The assessee is an individual. For the assessment year 2023-24, the assessee filed her return of income on 21.10.2023 declaring total income of Rs.26,65,060 under the New Tax Regime. In this context, it is to be noted that assessee had filed the return of income in the earlier assessment year namely 2021-22 opting for New Tax Regime. However, the assessee for assessment year 2022-23, the said option was withdrawn u/s.115BAC(5)(i) of the Act. For the relevant assessment year namely 2023-24, the assessee ought to have filed the return of income under the old regime (since assessee has withdrawn the option exercised opting for the new tax regime on 18.10.2022). However, assessee by mistake filed the return of - 3 - ITA No.361/CHNY/2025 income under the new tax regime. An intimation u/s.143(1) of the Act was issued on 09.03.2024 raising a demand of Rs.87,860/- under the Old Tax Regime, without providing for any deductions under Chapter VIA as the details were not available in the return of income filed. 5. Aggrieved by the intimation issued u/s.143(1) of the Act, the assessee filed an appeal before the FAA. It was submitted that the assessee in return of income has wrongly opted for new tax regime for the assessment year namely 2023-24 and CPC had processed the return of income by computing tax under the old regime of tax without allowing deduction under chapter VIA. The FAA rejected the claim of deduction under Chapter VIA by observing that assessee has never made the claim in the return of income and the above question of considering the same in the appellate proceedings does not arise. 6. Aggrieved by the said order of the FAA, the assessee filed the present appeal before the Tribunal. The Ld.AR reiterated the submissions made before the FAA. 7. The Ld.DR supported the order of the First Appellate Authority. - 4 - ITA No.361/CHNY/2025 8. We have heard rival submissions and perused the material available on record. The solitary issue for our consideration is whether the assessee is entitled to claim of deduction under Chapter VIA of the Act. The assessee had made the claim of deduction u/s.80C (PPF contribution) of Rs.25,000/- and deduction u/s.80TTA with regard to SB interest of Rs.1,602/-. The assessee while filing the return of income had wrongly opted for the ‘new regime’ of taxation, though she was not eligible. Hence, she was not eligible for deduction under Chapter VIA of the Act. However, while processing the return of income u/s.143(1) of the Act, the CPC rejected the ‘new regime’ and computed the tax in accordance with ‘old regime’. 9. We note that the assessee had chosen ‘new regime’ though not eligible and hence had no option to provide the details of deductions u/s.80C and 80TTA of the Act. The assessee has placed on record, the receipt of SB interest of Rs.1,602/- which is entitled to claim of deduction u/s.80TTA of the Act and also the payment of PPF, which is entitled to deduction u/s.80C of the Act. Since the CPC has correctly computed the tax under the old tax regime for the assessment year 2023-24, the assessee is entitled to claim of deduction u/s.80C and 80TTA of the Act. Accordingly, we allow the deductions claimed - 5 - ITA No.361/CHNY/2025 u/s.80C amounting to Rs.25,000/- and u/s.80TTA amounting to Rs.1,602/-. It is ordered accordingly. 10. In the result, the appeal filed by the assessee is allowed. Order pronounced in the open court on 23rd June, 2025 at Chennai. Sd/- Sd/- (एस.आर. रघुनाथा) (S.R. RAGHUNATHA) लेखा सदèय/ACCOUNTANT MEMBER (जॉज[ जॉज[ क े) (GEORGE GEORGE K) उपाÚय¢ /VICE PRESIDENT चेÛनई/Chennai, Ǒदनांक/Dated, the 23rd June, 2025 RSR आदेश कȧ ĤǓतͧलͪप अĒेͪषत/Copy to: 1. अपीलाथȸ/Appellant 2. Ĥ×यथȸ/Respondent 3. आयकर आयुÈत /CIT, Madurai 4. ͪवभागीय ĤǓतǓनͬध/DR 5. गाड[ फाईल/GF. "