2024 (8) TMI 111 - AT - Income Tax

Denial of special rate of taxation u/s 115BAC as opted by the assessee - CPC has denied the benefit stating that the Form-10-IE was not filed by the assessee opting for New Tax Regime - HELD THAT - As per section 115BAC sub-section (5) clause (1) assessee who is having income from business or profession shall only exercise option under the New Tax Regime by filing Form 10-IE of the Act and it is not applicable for the salaried employees. In the instant case, the assessee as per provisions of section 115BAC(5)(ii) has exercised his option to opt for new tax regime and hence has followed the procedure laid down under the Act. We therefore have no hesitation to set-aside the order of the Revenue Authorities and allow the appeal of the assessee.

Summary

Issues:
- Condonation of delay in filing appeal before the Tribunal
- Denial of special rate of taxation under section 115BAC of the Act

Condonation of Delay:
The appeal was filed with a delay of 71 days, attributed to unforeseen circumstances surrounding the health of the assessee. The affidavit filed by the assessee, supported by medical records, explained that the delay was not due to negligence but due to a fractured ankle and subsequent bed rest. The Tribunal, after considering the reasons provided, condoned the delay of 71 days and proceeded to adjudicate the appeal on merits.

Denial of Special Rate of Taxation under Section 115BAC:
The assessee had opted for the New Tax Regime under section 115BAC of the Act, but the benefit was denied by the Centralized Processing Centre (CPC) stating that Form-10-IE was not filed. The contention was based on the requirement of filing Form-10-IE for individuals having income from business or profession, not for salaried employees. Section 115BAC(5)(i) explicitly states that the option under the New Tax Regime is applicable for individuals with income from business or profession. In contrast, section 115BAC(5)(ii) allows individuals with income other than business or profession to exercise the option along with the return of income. As the assessee, being a salaried employee, fell under the latter category, the Tribunal set aside the order of the Revenue Authorities and allowed the appeal, recognizing that the assessee followed the prescribed procedure under the Act.

In conclusion, the Tribunal allowed the appeal filed by the assessee, emphasizing that the denial of the special rate of taxation under section 115BAC was incorrect as the assessee, being a salaried employee, did not need to file Form-10-IE. The judgment highlighted the importance of adhering to statutory timelines while also considering genuine reasons for delay in filing appeals before the Tribunal.